Attorney Who Took Loan from Administrator of Estate Is Suspended for Two Years

Iowa's highest court rules that a lawyer who took a loan from the administrator of an estate that he was representing violated professional rules of conduct and should be suspended for two years due to his history of disciplinary action. Iowa Supreme Court Disciplinary Board v. Powell (Iowa, No. 17–0254, Sept. 15, 2017).

Attorney Rodney Powell was suspended in 2006 for six months for unethical actions involving the collection of attorneys' fees. In 2013, the court suspended him for seven months for prematurely withdrawing attorneys' fees from his trust account. He has also been privately admonished twice for fee-related issues.

An administrator of an estate hired Mr. Powell to be the estate’s attorney. The administrator was the beneficiary of a $40,000 life insurance policy. The insurance company paid the proceeds to Mr. Powell who deposited the funds in his trust account. The administrator orally agreed to loan Mr. Powell $20,000, and Mr. Powell withdrew the money before a written contract was executed. When Mr. Powell made only sporadic payments on the loan, the administrator sued Mr. Powell. The disciplinary board charged Mr. Powell with violating rules of professional conduct related to improperly entering into a business relationship with a client. The board recommended Mr. Powell be suspended for six months.

The Iowa Supreme Court suspends Mr. Powell for two years. The court rules that Mr. Powell violated the rule of professional conducting preventing a business relationship with a client, holding that the "terms of the agreement were not fair or fully disclosed and the critical requirements to enter into the transaction were ignored, including the duty of documentation." The court determines a sanction greater than six months is justified because of Mr. Powell's prior disciplinary actions. The court notes that "at some point, public protection and the reputation of the profession justify the revocation of a license to practice law. [Mr.] Powell is approaching this point. He continues to fail to honor the ethical boundaries of the profession." Because this was only a single incident, the court determines that revocation is not appropriate.

For the full text of this decision, click here.

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