October 20, 1988
IN RE HAROLD J. GREEN, ATTORNEY, RESPONDENT 1988.IL.1538
SUPREME COURT OF ILLINOIS
JUSTICE CUNNINGHAM delivered the opinion of the court. JUSTICE CLARK, Concurring in part and Dissenting part
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE CUNNINGHAM
This matter is before the court upon exceptions of respondent, Harold J. Green, to the reports of the Hearing Board and the Review Board recommending disbarment.
On June 26, 1986, the Administrator of the Attorney Registration and Disciplinary Commission filed with the Hearing Board a single-count complaint against respondent for his conduct in connection with a loan of $24,000 to Judge Reginald Holzer.
The complaint charges respondent with giving or lending a thing of value to a Judge in violation of Rule 7-110(a) of the Code of Professional Responsibility (Code) (107 Ill. 2d R. 7-110(a)); engaging in conduct circumventing a disciplinary rule through actions of another in violation of Rule 1-102(a)(2) of the Code (107 Ill. 2d R. 1-102(a)(2)); engaging in illegal conduct involving moral turpitude in violation of Rule 1-102(a)(3) of the Code (107 Ill. 2d R. 1-102(a)(3)); engaging in conduct prejudicial to the administration of Justice in violation of Rule 1-102(a)(5) of the Code (107 Ill. 2d R. 1-102(a)(5)); failing to report knowledge of a violation of Rule 1-102(a)(3) or Rule 1-102(a)(4) in violation of Rule 1-102(a) of the Code (107 Ill. 2d R. 1-103(a)); and engaging in conduct involving the appearance of impropriety in violation of Canon 9 of the Code (107 Ill. 2d Canon 9).
On January 7, 1987, the Hearing Board found that each allegation of misconduct had been proved by clear and convincing evidence, and recommended that respondent be disbarred. On May 27, 1987, the Review Board unanimously concurred with the Hearing Board's finding of facts and Conclusions of law, and recommended that respondent be disbarred.
The evidence regarding the facts in issue consisted of certain admissions of respondent, certain prior testimony which respondent had given to a grand jury in proceedings against Judge Holzer, and testimony at the hearing. The witnesses at the hearing testifying regarding the facts in issue were respondent and Hans Eigner, director of Harris Bank and Trust Company (Harris Bank). We herein summarize the evidence in the record regarding the sequence of events in question, and also regarding respondent's knowledge and motive relating to his actions.
The evidence establishes that respondent, now 83 years old, was born in 1905. He graduated from the University of Chicago Law School and was admitted to practice law in Illinois in 1928. He engaged in the practice of law with his brother under the firm name of Green & Green for 10 to 15 years. Since his brother's retirement, respondent has had only one client, the Bank of Commerce and Industry . Respondent owns 95% of the stock in BCI. Respondent is primarily engaged in the business of banking but does still render some legal service to BCI. In none of the litigation relating to this disciplinary proceeding, however, did respondent represent either himself or BCI as legal counsel.
At all times relevant hereto, respondent knew Judge Holzer as a Judge but not as a social friend. On one occasion, sometime prior to June 1981, respondent encountered Holzer by chance at a social and dining club in Chicago, where each was a member and each was waiting to be seated. Respondent and Judge Holzer had a brief conversation, which respondent recounted as follows:
"HOLZER: How are you?
HOLZER: How's your bank doing?
RESPONDENT: I'm satisfied. How do you know I own a bank?
HOLZER: Everybody knows. [Would you or could you] make me a loan?
RESPONDENT: I have the money, but I wouldn't make you a loan, not because of you, but I don't like to lend money to politicians because you always have trouble trying to collect."
In September 1981, Robert Berliner of the firm of Levy and Erens filed a suit for BCI against Harry Iseberg. (Bank of Commerce & Industry v. Iseberg et al. (Cir. Ct. Cook Co.), No. 81-CH-4878.) The suit was filed to foreclose on the beneficial interest of a land trust pledged as collateral for a loan of approximately $900,000 which defendants allegedly had failed to repay. The case was assigned to Judge Holzer.
Between September 10, 1981, and October 4, 1981, Alvin Becker, an attorney who represented BCI in other matters, informed respondent that William Harte had been retained by Iseberg and Horwitz to file a third-party complaint against respondent individually in case No. 81-CH-4878.
Respondent told Becker to inform Harte that it would not be necessary to serve him personally with a summons in the third-party action and that Becker would file an appearance on respondent's behalf. (The third-party complaint was not actually filed until October 16, 1981.)
On October 4 or 5, 1981, respondent met Alvin Becker by chance in the lobby of the Brunswick Building, the building in which Becker's office is located. Becker informed respondent that Judge Holzer was in urgent need of a $24,000 bank loan, and Becker asked whether respondent could arrange a loan for the Judge. Respondent recalls that Becker further suggested, "If you can arrange it, don't arrange it with your bank . . . don't do it yourself." Respondent agreed to attempt to arrange the loan.
The parties dispute several factual issues relating to respondent's state of mind at the time he agreed to attempt to arrange the loan. Specifically, the parties disagree regarding whether at this point respondent knew that Judge Holzer was assigned to case No. 81-CH-4878, and also regarding respondent's motive for making this agreement.
At the hearing respondent testified that he agreed to arrange the loan only as a favor to attorney Becker, and that he (respondent) was not then aware that Judge Holzer was assigned to the case. Respondent indicated that he relied fully on his attorneys to handle the case and that he did not inquire regarding the identity of the assigned Judge. Respondent submits that his testimony in this respect is buttressed by his uncontradicted testimony that he authorized attorney Becker to accept service of the third-party complaint. This testimony regarding his knowledge and motive is, however, inconsistent with his statement at another point during the hearing as follows: "I felt that if the loan was not made, Holzer couldn't be certain that Becker asked me to arrange it and then Becker might not get a fair trial."
Respondent's self-exculpatory statements at the hearing regarding his knowledge and motive also differed substantially from prepared testimony which he had read to a grand jury investigating charges against Judge Holzer. Respondent had testified to the grand jury on November 8, 1985, as follows:
"I had several reasons for arranging the loan. My principal reasons were as follows:
Initially I thought that Holzer could somehow deal or otherwise obviate an agreed settlement if he believed that Becker failed to get the loan he requested. Also, I felt that Alvin Becker may have other cases before Holzer unrelated to myself or BCI and that I was doing him a favor by arranging for Holzer the loan. Furthermore, I thought that in the future Holzer might have other cases before him involving either myself or BCI and that he might be prejudiced against our position if he believed that I did not help Becker get the loan for Holzer.
In addition, Becker had told me that he was concerned about his new law office association and so I assumed he wanted to get the loan for Holzer to enhance his relationship with Holzer and in turn with his new association.
I thus arranged to have Harris Bank make the loan in question and left my check for $24,000 with Harris Bank to back the loan."
Although the parties disagree regarding respondent's knowledge and motive in arranging the loan, they do agree that (as the testimony unequivocally establishes) respondent, on October 4 or 5, called Hans Eigner, vice-president of Harris, a bank at which respondent is a long-standing customer and through which BCI handles numerous matters. As respondent recalls, he said to Eigner, "Hans, I want you to do me a favor. I'm doing a favor for my lawyer, who wants to do a favor for a Judge, and the Judge wants to borrow $24,000 as my friend." Respondent testified that during this telephone conversation he did not mention Judge Holzer by name and did not discuss the terms of the loan. Eigner, however, testified that respondent did specifically mention Judge Holzer and that respondent also requested certain loan terms, namely, repayment in quarterly installments of $3,000 plus interest, and an interest rate of 15%.
In any event, it is clear from consistent testimony of respondent and Eigner that shortly after the telephone conversation respondent visited Eigner at Harris Bank and that, by the end of the conversation, it had been agreed that Harris Bank would, on an expedited basis, make the $24,000, two-year loan and that respondent would somehow guarantee payment. As respondent explained at the hearing, "I put up $24,000 at their choice, collateral or selling me the note, and they chose to sell me the note."
There is testimony from both respondent and Eigner indicating that during this conversation respondent told Eigner to make the loan "based solely on Holzer's financial statements." However, both witnesses acknowledged that during this meeting respondent gave Eigner a $24,000 check, which was cashed within approximately one day, at approximately the same time that the loan was made. Moreover, according to Eigner, the loan was made without any credit check having been made. Further, according to Eigner, the 15% interest rate used was substantially below the prime rate, which was the best rate that Harris Bank was offering to any of its other customers. According to Eigner, he agreed to have Harris Bank make the loan expeditiously and on such favorable terms simply because Green asked him to do so. Eigner also testified that he would not have approved the loan based solely on the financial statements. He also said that no committee at Harris Bank would have approved the loan based on Holzer's financial statements.
Consistent testimony of Eigner and respondent indicates that during the meeting between respondent and Eigner, respondent told Eigner to withhold from Judge Holzer the fact that respondent was guaranteeing the loan. In this regard Eigner testified that when he called Judge Holzer he told the Judge not that respondent had requested that Harris Bank call him but only that respondent had suggested such a call. As Eigner recalled, he said to Judge Holzer, "I'm calling you at the suggestion of Mr. Green and I understand that you need a loan, and I'm here to help you if I can." Eigner also noted that he did not disclose the fact that respondent was guaranteeing the loan. Further, it appears that on October 7, 1981, Eigner wrote a memorandum to a Harris Bank staff person regarding the loan and stating as follows:
"The attached represents a note in the amount of $24,000 at the rate of 15% to mature the 6th of October, 1983. This note was purchased by Harold J. Green as of October 6, 1981.
Would you please arrange to have the principal and interest collected from Judge Holzer on a quarterly basis (see attached schedule) but make certain that on whatever advice or bill we send to the borrower, Mr. Green's name does not appear. When you receive payment, credit Harold J. Green's checking account #644-256-0 and send to him the appropriate advice.
When the total amount is collected, please cancel the note and mail it to Judge Reginald Holzer without the attached schedule and endorsement. Thank you very much for handling this item on an exception basis."
It thus appears that respondent did tell Eigner not to tell Holzer that he (respondent) was guaranteeing or purchasing the promissory note. This apparent fact, of course, does not necessarily negate the possibility that respondent used Eigner as an unwitting conduit for accomplishing an impropriety. Nor does it necessarily shed light on such factual questions as (1) whether respondent was using his influence to arrange the loan, (2) whether respondent intended for Judge Holzer to know that Holzer was using such influence, and (3) whether respondent intended to help attorney Becker influence Judge Holzer. In fact, regarding Judge Holzer's knowledge of attorney Becker's influence, respondent himself testified at the hearing as follows:
"Q. Now, do you, sir, have any doubt that Judge Holzer knew that Mr. Becker had arranged for the Harris Trust to call Judge Holzer to come and get his money? Do you have any doubt about that at all, sir?
A. No. Somebody had to call him and it wasn't I."
Shortly after the loan was made, Harris Bank endorsed the note over to respondent. Harris Bank, however, retained the note for collection on respondent's behalf. Harris Bank either credited the loan payments to respondent's account or (on at least one occasion) issued respondent a cashier's check for the amount of a loan payment.
By September 1, 1982, a settlement agreement was reached in case No. 81-CH-4878, and on that date an order dismissing all complaints and counterclaims was entered, not by Judge Holzer but by Judge Harold Siegan. The settlement order in this case was entered while the Holzer loan was still outstanding.
In January 1983, while the Holzer loan was still outstanding, another case involving BCI came before Judge Holzer. (Sutton Place v. Bank of Commerce & Industry et al. (Cir. Ct. Cook Co.), No. 83-CH-219.) Holzer presided at a number of pretrial hearings in this case. Respondent testified that he tried to attend one of these hearings but Judge Holzer excluded him, telling respondent that the hearing was to be attended only by the counsel of record. The circuit court eventually lost jurisdiction over Sutton Place v. BCI et al. due to the bankruptcy of Sutton Place. The date on which the circuit court lost jurisdiction does not appear in the record now before us.
There is evidence that during September 1983, Judge Holzer was told (while at Harris Bank apparently on another matter) that his promissory note had been assigned to respondent. Judge Holzer then (on September 19, 1983) wrote to Harris Bank, stating that he was shocked to learn that the note had been sold without his knowledge, and further commenting, "If I were a doctor or a clergyman, I suppose such a sale to a third party would be of little consequence, but I am a Judge. I am barred by certain ethical canons from borrowing, from having my loans guaranteed by certain classes of persons." Judge Holzer further requested a statement of "all interest due on that $20,000 note" so that he could "promptly pay it in full." (It appears from the record that Judge Holzer paid off the loan in December 1983.)
We now address the specific violations alleged by the Administrator. We agree with the Hearing and Review Boards that respondent violated Rule 7-110(a) (107 Ill. 2d R. 7-110(a)), which prohibits the giving or lending of a thing of value to a Judge. We reject respondent's argument that he did not actually give Judge Holzer anything of value. Clearly, by using his influence and agreeing to purchase the promissory note, respondent enabled Judge Holzer to expeditiously obtain, without collateral, a loan which the loan officer himself acknowledged Judge Holzer did not qualify for, and a loan at a finance charge substantially below the rate which Harris Bank would ordinarily charge even its best customers. As a practical matter, Harris Bank's actions were analogous to those of an agent (albeit ostensibly an undisclosed agent) of respondent who was the real party in interest and who, as the assignee of the note, stood to lose money if Holzer defaulted.
Respondent submits that at the time he arranged the loan, Judge Holzer did not know that he was involved, and that Rule 7-110(a) should be read so as not to encompass anonymous activities. Although we strongly question the prudence of interpreting this prophylactic rule in such a way, we need not here address whether anonymity can negate the existence of a Rule 7-110(a) violation. The reason is that the Hearing Board made several findings, supported by the evidence summarized above, indicating that respondent's conduct was not anonymous. For example, the Hearing Board found, "[t]he evidence is clear that Holzer did know that Respondent was behind the $24,000 loan, that respondent intended for Holzer to know this and that Respondent did what he did to influence Judge Holzer."
Reading this factual finding in view of the record, we believe the Hearing Board concluded that Holzer knew that respondent used his influence with Harris Bank to expeditiously obtain for Holzer a substantial unsecured loan at a below-market rate. Indeed, if Holzer initially knew respondent was involved at all, Holzer must have known that respondent was not merely vouching for his reliability honesty or credit worthiness, since (as respondent testified) the two individuals hardly knew each other and since respondent had earlier told Holzer at a social and dining club, "I have the money, but I wouldn't make you a loan, not because of you, but I don't like to lend money to politicians because you always have trouble trying to collect."
Although respondent's testimony is conflicting regarding the above-quoted factual finding, the finding is certainly supported by the evidence, including respondent's statement at the hearing, "I felt that if the loan was not made, Holzer couldn't be certain that Becker asked me to arrange it and then Becker might not get a fair trial." The hearing panel was in a better position than this court to determine which of respondent's inconsistent explanations were truthful, and the credibility of the testimony is to be determined by those who hear and observe the witnesses. (In re Woldman (1983), 98 Ill. 2d 248, 254.) We accept this well-supported factual finding, although we do not mean thereby to indicate that a finding of an intent to unduly influence is required to support a finding that a Rule 7-110(a) violation has occurred. See In re Corboy (1988), 124 Ill. 2d 29 (indicating that a dishonest intent in a Rule 7-110(a) violation is generally only relevant to determine the nature and extent of the discipline imposed).
In accepting this finding, we have not overlooked the apparent fact that respondent instructed Eigner not to tell Judge Holzer about the scope of respondent's role in arranging the loan. However, even assuming that respondent so instructed Eigner, such an instruction would not necessitate a finding that respondent's role was truly anonymous. Rather, such an instruction to Eigner could well indicate only a desire on respondent's part to keep persons other than himself, Becker and Holzer from recognizing the impropriety.
We agree with the Hearing and Review Boards that respondent's conduct also was prejudicial to the administration of Justice in violation of Rule 1-102(a)(5) (107 Ill. 2d R. 1-102(a)(5)). A hallmark of our judicial system is the fairness and impartiality of Judges, an impartiality which is impeded by conduct such as that of respondent. We also agree that the conduct involved the appearance of impropriety, and that Canon 9 (107 Ill. 2d Canon 9) directs that "a lawyer should avoid even the appearance of impropriety." We note, however, that it is the violation of specific rules contained within Canon 9, rather than conduct perceived to be inconsistent only with the above-quoted general statement, which gives rise to discipline.
We next turn to the allegation that respondent violated Rule 1-102(a)(2) (107 Ill. 2d R. 1-102(a)(2)), which prohibits circumventing a disciplinary rule through the actions of another. The Administrator has failed to specify what rule was allegedly circumvented. We refuse to speculate about an allegation which the Administrator made no effort to pursue, but which he instead merely "lumped together" with other allegations in a single-count complaint.
We next address the allegation that respondent violated Rule 1-102(a)(3) of the Code (107 Ill. 2d R. 1-102(a)(3)), which rule prohibits engaging in "illegal conduct" involving moral turpitude. We must reject this allegation. In so doing, we conclude neither that respondent did or did not engage in illegal conduct. Rather, with regard to this alleged violation we note only that the Administrator has not only failed to brief this point but has also failed to even articulate what particular law has been broken. Particularly in view of the Administrator's burden to prove alleged violations by clear and convincing evidence (107 Ill. 2d R. 753(c)), we simply refuse to speculate as to what particular law or laws the Administrator was contemplating.
We next turn to the allegation that respondent violated Rule 1-103(a) (107 Ill. 2d R. 1-103(a)) by failing to report a violation of Rules 1-102(a)(3) or 1-102(a)(4). We must here determine whether there is sufficient evidence of a violation of either Rule 1-102(a)(3) or Rule 1-102(a)(4). Rule 1-102(a)(3) is expressly limited to illegal conduct, and we have already indicated that we shall not here speculate as to what unspecified law or laws may have been violated. Rule 1-102(a)(4) applies to conduct involving dishonesty, fraud, deceit or misrepresentation. Although both respondent's and Becker's conduct involved moral turpitude, there is not, in our view, clear and convincing evidence regarding whom, if anyone, either respondent or Becker was attempting to deceive or defraud. Accordingly, we cannot say that a Rule 1-103(a) violation was clearly and convincingly established. In reaching this Conclusion we express no opinion regarding any arguable duty under Rule 1-102(a)(3) to report one's own violation of Rules 1-102(a)(3) or (a)(4).
We next turn to the extremely difficult task of imposing an appropriate sanction. In this regard we note that the sanction proposed by the Hearing and Review Boards (disbarment) is advisory only. (In re Mitan (1979), 75 Ill. 2d 118, 124, cert. denied (1979), 444 U.S. 916, 62 L. Ed. 2d 171, 100 S. Ct. 231; In re Hallett (1974), 58 Ill. 2d 239, 250.) The decision of what sanction is appropriate in a disciplinary matter rests with this court. (In re Chernoff (1982), 91 Ill. 2d 316, 324; In re Hooper (1981), 85 Ill. 2d 318, 323.) Moreover, although fairness requires a reasonable degree of consistency and predictability in imposing discipline, each disciplinary matter is unique and must be decided on its own facts. In re Hooper (1981), 85 Ill. 2d 318, 324.
Fairness dictates that in imposing discipline we consider mitigating circumstances. (In re Neff (1980), 83 Ill. 2d 20.) In this regard we note that respondent presented three character witnesses of undeniable integrity whose testimony we have reviewed in full. These witnesses were Gerhard Casper, Dean of the University of Chicago Law School, William Z. Novick, a rabbi who is not affiliated with a temple, and Martin E. Janis, head of the public relations firm of Martin E. Janis & Co. These witnesses attested to respondent's reputation for honesty and integrity and respondent's philanthropy in making gifts to worthy projects, some of which gifts were anonymous. We also note that the misconduct which occurred was a single instance, and this court has often recognized long periods of untainted practice as a mitigating factor in disciplinary proceedings. See In re Kutner (1979), 78 Ill. 2d 157, 166; In re Sherman (1975), 50 Ill. 2d 590, 593.
We recognize that "the 'purpose of a disciplinary proceeding . . . is to safeguard the public, maintain the integrity of the legal profession and to protect the administration of Justice from reproach.' [Citation.]" (In re Smith (1976), 63 Ill. 2d 250, 256.) Taking all these factors into consideration, we conclude that the discipline recommended by the hearing panel and the Review Board is warranted. Respondent has failed to advance mitigating considerations sufficient to justify a lesser sanction. It is therefore the order of this court that the respondent be disbarred.
JUSTICE CLARK, Concurring in part and Dissenting in part:
I agree with the majority that the respondent violated the Code of Professional Responsibility and should be subject to discipline. I cannot agree, however, that the Draconian sanction of disbarrment is appropriate in this case. The respondent is 83 years old and has practiced law in this State for 60 years, without engaging, up until this incident, in professional misconduct. And while his advanced age, standing alone, might not otherwise sway me, in combination with the evidence of his hitherto unblemished reputation for honesty integrity, and charity it suggests that the respondent should not be disbarred.
The respondent is just one of the many attorneys who have been dragged to the bottom by Greylord's black wake. I do not in any way excuse or condone his conduct, and acknowledge that some sanction is only just. But Justice should be tempered by mercy. (W. Shakespeare, The Merchant of Venice, act. IV, scene 1.) Since I would season the Justice of discipline by subjecting the respondent only to some term of suspension, I respectfully Dissent from that part of the majority's well-reasoned opinion which disbars the respondent from the practice of law.
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