CHARLESTON – The state Supreme Court has rebuked a Berkeley County attorney for his lack of communication with a bankruptcy trustee.
The Court on Nov. 9 voted 3-2 to admonish D. Michael Burke, a partner in the Martinsburg firm of Burke Schultz Harman and Jenkinson. In its decision, the Court said while not intentional, Burke failed to timely keep the trustee in a woman’s bankruptcy case informed of a lawsuit she hired Burke to file.
Chief Justice Menis E. Ketchum and Justice Margaret A. Workman cast the dissenting votes.
According the decision, Margaret Ann Miller hired Burke on Feb. 5, 2004, to file a medical malpractice suit on behalf of her deceased husband. Seven months later, Miller filed for Chapter 7 bankruptcy in which Robert Trumble was appointed trustee.
In January 2005, Trumble sent Burke a letter asking for a valuation of the medical malpractice case. Burke replied later that month saying he and co-counsel Barry Nace, of the Washington, D.C., firm of Paulson and Nace, could not place a value on it until completion of a medical review.
On Jan. 27, Trumble sent both Burke and Nace affidavits to sign accepting employment as Trumble’s special counsel. They did, and the bankruptcy court approved Trumble’s motion to employ Burke and Nace on March 4.
Eventually, the suit was filed on June 17, 2005. A month later, Burke notified that because one of his employees was one of the co-defendant’s neighbors, he was withdrawing from the case because of a conflict of interest.
Despite his withdrawal, Burke told Miller Nace would remain as her attorney. However, Burke not only failed to file a motion to withdraw from the suit, but also to provide Trumble a notice of his withdrawal.
In September 2006, a partial settlement was reached in which one of the defendants agreed to pay Miller $75,000. A month later, the case against the remaining defendants went to trial, and a jury awarded Miller $500,000.
According to the decision, the disbursement of funds was made without Trumble’s “approval, knowledge or authority.” When Trumble sent him a letter in July 2007 requesting an update on the lawsuit, Burke forwarded it to Nace and later left a message with Trumble’s secretary he was no longer on the case and to contact Nace.
After the Court on Feb. 12, 2008, declined to hear the defendants’ appeal, Nace the next month tendered a check to Miller for her share of the proceeds of $220,467.45. According to the decision, this, too, was done without informing or getting approval from Trumble.
Later in October, Trumble sent both Burke and Nace a letter not only reminding them of their roles as special counsel to him, but also requesting all documents in the malpractice suit. In addition to later filing ethics complaints against them, Trumble filed an adversarial proceeding against Burke and Nace in Bankruptcy Court.
Following an evidentiary hearing last October, the hearing panel subcommittee of the Lawyer Disciplinary Board, the Court’s prosecutorial arm, dismissed three of the counts filed against Burke in the statement of charges. Finding that he did violate rules dealing with diligence and communication, the panel recommended Burke be admonished.
While admitting he was negligent in not filing a motion to withdraw from Miller’s suit, Burke said his was an isolated error of judgment that should not have involved any disciplinary action. However, the Court disagreed.
In its opinion, which is unsigned, the Court said Burke owed Trumble a duty to keep him informed of not only the suit, but also his participation in it. The lack of communication, the Court said, resulted in unnecessary litigation.
“As special counsel for the trustee of the bankruptcy estate,” the Court said, “Mr. Burke had a duty to Mr. Trumble. Mr. Trumble had a reasonable expectation that Mr. Burke would represent the interests of the estate."
“Mr. Trumble relied on Mr. Burke to his detriment,” the Court added, “and now the bankruptcy estate has been forced to seek civil action to recoup what Mr. Trumble contends is a substantial sum of money.”
In addition to the admonishment, the Court ordered Nace to pay the costs of the disciplinary proceeding and satisfy any obligations in the pending adversarial proceeding against him in Bankruptcy Court. He was represented by Morgantown attorney Allan N. Karlin.
According to the decision, the admonishment is the first formal disciplinary action brought against Burke since his admission to the state Bar on June 26, 1979.
West Virginia Supreme Court of Appeals, case number 11-0813