Board of Professional Responsibility v. Connie Reguli

IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

October 1, 2015 Session

BOARD OF PROFESSIONAL RESPONSIBILITY v. CONNIE REGULI

Appeal as of Right from the Circuit Court for Williamson County

Nos. 20149 and 201430 Robert L. Jones, Judge

No. M2015-00406-SC-R3-BP – Filed December 28, 2015

A Board of Professional Responsibility hearing panel determined that an attorney

violated multiple rules of professional conduct and imposed a suspension to be served on

probation subject to certain conditions. The trial court affirmed the hearing panel‟s

findings but modified the sanction by requiring the attorney to pay restitution, shortening

the term of the suspension and probation, and eliminating and modifying other conditions

of probation. Upon careful consideration, we affirm the trial court‟s order of restitution,

but otherwise reinstate the decision of the hearing panel.

Appeal Pursuant to Tenn. Sup. Ct. R. 9, § 1.3; Judgment of the Circuit Court

Affirmed in Part, Reversed in Part

SHARON G. LEE, C.J., delivered the opinion of the Court, in which CORNELIA A. CLARK

and HOLLY KIRBY, JJ., and FRANK G. CLEMENT, JR., SP.J., joined. JEFFREY S. BIVINS, J.,

not participating.

Connie Reguli, Brentwood, Tennessee, Pro Se.

Krisann Hodges, Brentwood, Tennessee, for the appellee, Board of Professional

Responsibility of the Supreme Court of Tennessee.

OPINION

I.

This is an attorney discipline case involving Connie Reguli, who maintains a law

office in Brentwood, Tennessee. On July 16, 2012, the Board of Professional

Responsibility (“the Board”) filed a petition for discipline against Ms. Reguli based on

three complaints of misconduct.1 The complaints arose out of Ms. Reguli‟s

1

The Board‟s petition was filed pursuant to Tennessee Supreme Court Rule 9, section 8.2.

representation of Robert Castleman, representations on Ms. Reguli‟s website regarding

her professional certification, and Ms. Reguli‟s representation of Sayuri Pope. The Board

alleged that Ms. Reguli‟s conduct violated Tennessee Supreme Court Rule 8, Rules of

Professional Conduct (RPC) 1.4(a) and (b), Communication; 1.5(a) and (f), Fees; 1.16(d),

Declining or Terminating Representation; 7.4(b), Communication of Fields of Practice

and Specialization; 8.1(b), Bar Admission and Disciplinary Matters; and 8.4(a), (c), and

(d), Misconduct.

Ms. Reguli answered the petition and denied any misconduct. In her answer and

in pretrial motions, she asserted, among other things, that the United States and

Tennessee Constitutions require that the Board‟s allegations be proven by clear and

convincing evidence, that the Board be required to produce documentation confirming

that the Board‟s Chair selected panel committee members on a rotating basis, that the

hearing panel members be recused, and that Disciplinary Counsel Krisann Hodges be

disqualified. Ms. Reguli filed numerous other motions and objections, including, but not

limited to, an objection to holding the hearing in a private facility, a counterclaim against

the Board alleging the Petition for Discipline was unsupported by fact and law and had

been brought to harass Ms. Reguli, a motion to strike exhibits, a motion to bifurcate the

Petition for Discipline‟s allegations and assign them to separate panels, an Americans

with Disabilities Act accommodation request, a motion for a declaratory ruling as to

whether Panel members are judges, a motion to stay the disciplinary proceeding pending

disposition of a declaratory judgment action filed by Ms. Reguli against the Board in

Davidson County Chancery Court, and a motion to dismiss the alleged RPC 1.5(f)

violation.

A hearing panel (“the Panel”) was appointed pursuant to Tennessee Supreme

Court Rule 9.2 On July 16, 2013, the Panel ruled on a number of Ms. Reguli‟s

pre-hearing motions and objections. The Panel denied Ms. Reguli‟s request that the

Panel employ a clear and convincing evidence standard and also denied her motion to

disqualify Ms. Hodges. The Panel also dismissed Ms. Reguli‟s counterclaim and took

under advisement her requests for disclosures regarding the manner in which Panel

members are appointed. Ms. Reguli continued to file a number of other motions and

objections until the hearing.

Effective January 1, 2014, this Court adopted substantial changes to Tennessee Supreme Court Rule 9.

Because this case was initiated before January 1, 2014, it is governed by the pre-2014 version of

Tennessee Supreme Court Rule 9. All references in this opinion to Tennessee Supreme Court Rule 9

refer to the pre-2014 version.

2

The Panel‟s membership was altered twice in the proceeding following the motions for recusal

by Ms. Reguli. The Panel in its final form was assembled on February 27, 2013.

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II.

The Panel conducted a hearing on November 13 and 14, 2013. Ms. Reguli, Robert

Castleman, Kathryn Wright, and David Johnson testified before the Panel.

On July 21, 2011, Ms. Reguli and Mr. Castleman entered into a written fee

agreement for Ms. Reguli to represent Mr. Castleman in his divorce proceeding. Mr.

Castleman paid Ms. Reguli $10,000 and signed the fee agreement. The agreement

provided that the “$10,000 will be held in escrow and the hourly fees will be charged

against this retainer”; that “[o]nce the full amount of the retainer has been used for legal

services, an additional retainer may be required, depending on the status of the case”; and

that “[i]f services are completed or ended prior to the expiration of the funds held in

escrow, the return of the funds will be at the discretion of the firm in accordance with

Formal Ethics Opinion 92-F-128.”3

Ms. Reguli testified that she understood that Formal Ethics Opinion 92-F-128

provided that nonrefundable retainers are acceptable if they are in writing. Ms. Reguli

believed the language “at the discretion of the firm” in the fee agreement made the

retainer nonrefundable. She testified that she reviewed the fee agreement with Mr.

Castleman, but did not provide him with a copy of the ethics opinion. Mr. Castleman

testified that he did not know the contents of Formal Ethics Opinion 92-F-128 when he

signed the agreement. Mr. Castleman stated that he only read two paragraphs of the

agreement and that he did not feel the need to ask questions about the contract because he

trusted Ms. Reguli as an attorney. Ms. Reguli testified that she assumed she placed the

$10,000 in her escrow account and that she most likely withdrew amounts from the

retainer as she worked on Mr. Castleman‟s case.

About three or four weeks after signing the agreement, Mr. Castleman discharged

Ms. Reguli as his lawyer. Mr. Castleman testified he tried to contact Ms. Reguli to get an

accounting of the time Ms. Reguli spent on his case and to recoup the unearned portion of

the fee. He stated that he called Ms. Reguli‟s office several times and left messages that

were not returned and also called Ms. Reguli‟s cell phone without a return call. On

September 20, 2011, Mr. Castleman sent Ms. Reguli a letter requesting an itemized

billing and a refund of the balance of the retainer. According to Mr. Castleman, he did

not receive an accounting or a refund from Ms. Reguli. Mr. Castleman stated that his

address at the time he sent the September 2011 letter was a different address than when

he signed the fee agreement.

3

Formal Ethics Opinion 92-F-128 states, in pertinent part, “All pre-paid, advanced or retainer

fees are ethically deemed to be refundable in the absence of a clear understanding by the client to the

contrary, preferably in writing.” Tenn. Bd. of Prof‟l Responsibility, Formal Ethics Op. 92-F-128 (1992).

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Ms. Reguli testified that in September 2011, she provided Mr. Castleman with an

accounting of the time she spent on his case. Ms. Reguli stated that she mailed Mr.

Castleman the requested information, but by that time, Mr. Castleman had changed his

address. At the hearing, Ms. Reguli produced an accounting that listed billed hours and

corresponding fees of $2,082.50 and expenses of $116.75, for a total of $2,199.25

charged against the $10,000 retainer. Ms. Reguli did not refund the balance of the

retainer to Mr. Castleman.

Kathryn Wright, an administrative assistant at Ms. Reguli‟s law firm, testified that

she answers phones in Ms. Reguli‟s office. Ms. Wright stated that she transfers calls to

attorneys if they are available, and if not, she takes a message. Ms. Wright records

messages in a computerized system. She testified that someone is always available to

answer the office phone during working hours, even if she is temporarily unavailable.

Ms. Wright does not answer Ms. Reguli‟s cell phone calls. Ms. Wright acknowledged

receiving Mr. Castleman‟s September 20, 2011 letter. Ms. Wright stated that she scans

letters and places them in attorneys‟ inboxes upon receipt, but she did not recall what she

did with Mr. Castleman‟s letter. Ms. Reguli testified that she reviewed her office‟s

computerized message system and did not see any notations of messages left for her by

Mr. Castleman from August through October 2011.

The Board received a complaint from Mr. Castleman regarding Ms. Reguli on

October 18, 2011. The Board forwarded the complaint to Ms. Reguli in a letter dated

October 27, 2011, and requested that she submit a response to the Board. Ms. Reguli

responded to the Board on November 3, 2011, stating that the fee agreement provided

that any refund would be at her discretion. In letters dated January 13, 2012, and

February 9, 2012, the Board specifically requested billing records or a detailed summary

of Ms. Reguli‟s work in Mr. Castleman‟s case. Ms. Reguli responded on February 12,

2012, referring to her initial response to Mr. Castleman‟s complaint and declining to

provide the requested documents. Ms. Reguli did not produce the billing records to the

Board until the November 2013 hearing.

On or about November 1, 2011, attorney David Johnson filed a complaint with the

Board about Ms. Reguli‟s website. Mr. Johnson alleged that Ms. Reguli‟s website

misrepresented Ms. Reguli as a certified specialist in family law and divorce. Ms.

Reguli‟s website listed the following information on her attorney profile page:

“Certification/Specialties: . . . Family Law[,] Divorce.” Ms. Reguli admitted that she was

not certified as a specialist in family law and divorce.

Ms. Reguli testified that since 2006, she had a website hosted by a company called

FirmSite and in 2007, she approved information for public posting by FirmSite. Ms.

Reguli testified that she did not put the certification information on her website and was

not aware that the website described her as being certified or being a specialist in family

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law and divorce until receiving Mr. Johnson‟s complaint in 2011. Ms. Reguli stated that

she checked her website periodically before 2011, but never noticed the incorrect

information. Ms. Reguli noted at the hearing that the website also falsely stated that she

was licensed in the United States District Court for the Middle District of Pennsylvania

and that she graduated from Purdue University in “Lafayette, Tennessee.” 4 Ms. Reguli

testified that when she received the Johnson complaint, she was very ill with cancer. She

contacted the FirmSite company to correct the website in early spring of 2012.

The third complaint was filed by Janson Pope. Ms. Reguli represented Sayuri

Pope in a divorce proceeding against Janson Pope. Mr. Pope alleged that Ms. Reguli

drafted and filed an order with a court that did not accurately reflect a judgment against

her client, Ms. Pope. Ms. Reguli testified that the trial court awarded Mr. Pope periodic

alimony payments but did not prescribe when the payments would commence. Mr.

Pope‟s attorney filed a petition for contempt alleging that Ms. Pope was in contempt for

failure to make the alimony payments. The court held a hearing on the motion and issued

a ruling from the bench. Mr. Pope‟s attorney and Ms. Reguli submitted different orders

to the trial court. The trial court judge signed an order prepared by Ms. Reguli. Mr. Pope

later filed a Tennessee Rule of Civil Procedure 59 motion, which alleged that the order

Ms. Reguli drafted did not accurately reflect the court‟s decision. The court modified its

earlier ruling and awarded Mr. Pope $1,000 for attorney fees related to his Rule 59

motion.

The Panel entered its findings on November 18, 2013, and its amended findings on

December 27, 2013. With respect to the Castleman complaint, the Panel found that

(1) Mr. Castleman sought to discharge Ms. Reguli and requested an accounting of fees

earned; (2) Ms. Reguli‟s failure to provide the Board with an accounting showed that no

accounting existed; and (3) the “some seven thousand dollars” of the fee that Ms. Reguli

did not refund was unreasonable for the work she provided. The Panel found that this

constituted violations of RPCs 1.4(a)(4)5 and (b),6 1.5(f),7 1.16(d)(4) and (6),8 8.1(b),9

and 8.4(a) and (d).10

4

Purdue University is located in West Lafayette, Indiana.

5

RPC 1.4(a)(4) states, “A lawyer shall . . . (4) promptly comply with reasonable requests for

information[.]”

6

RPC 1.4(b) states, “A lawyer shall explain a matter to the extent reasonably necessary to permit

the client to make informed decisions regarding the representation.”

7

RPC 1.5(f) states, “A fee that is nonrefundable in whole or in part shall be agreed to in a

writing, signed by the client, that explains the intent of the parties as to the nature and amount of the

nonrefundable fee.”

8

RPC 1.16(d) states, in pertinent part:

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The Panel found that Ms. Reguli‟s website falsely stated that she had

“Certification/Specialties:” in “Family Law and Divorce” and therefore Ms. Reguli had

violated RPC 7.4(b).11 The Panel dismissed the Board‟s claim regarding alleged

misconduct in the Pope divorce matter, finding insufficient proof.

The Panel concluded the aggravating circumstances applicable were (1) prior

professional discipline of Ms. Reguli;12 (2) Ms. Reguli‟s bad faith failure to respond to

requests for information by the Board; (3) dishonest or selfish motives of Ms. Reguli;

(4) Ms. Reguli‟s refusal to recognize the wrongful nature of her conduct; and (5) Ms.

Reguli‟s substantial experience in the practice of law.13 The Panel found Ms. Reguli‟s

cancer and chemotherapy treatments during the period of her misconduct to be a

mitigating circumstance.

(d) A lawyer who is discharged by a client, or withdraws from representation of a

client, shall, to the extent reasonably practicable, take steps to protect the client‟s

interests. Depending on the circumstances, protecting the client‟s interests may

include: . . . (4) promptly surrendering papers and property to which the client is entitled

and any work product prepared by the lawyer for the client and for which the lawyer has

been compensated . . . and (6) promptly refunding any advance payment of fees that have

not been earned or expenses that have not been incurred.

9

RPC 8.1 states, in pertinent part:

An applicant for admission to the bar, or a lawyer in connection with a bar

admission application or in connection with a disciplinary matter, shall not:

....

(b) fail to disclose a fact necessary to correct a misapprehension known by the

person to have arisen in the matter, or knowingly fail to respond to a lawful demand for

information from an admissions or disciplinary authority, except that this Rule does not

require disclosure of information otherwise protected by RPC 1.6.

10

RPC 8.4 states, in pertinent parts:

It is professional misconduct for a lawyer to:

(a) violate or attempt to violate the Rules of Professional Conduct, knowingly

assist or induce another to do so, or do so through the acts of another;

....

(d) engage in conduct that is prejudicial to the administration of justice[.]

11

RPC 7.4(b) states, in pertinent part, “[A] lawyer shall not state that the lawyer is a specialist,

specializes, or is certified or recognized as a specialist in a particular field of law.”

12

In 2011, Ms. Reguli received a public censure for professional misconduct.

13

Ms. Reguli has been licensed to practice law in Tennessee since 1994.

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The Panel imposed an eleven month, twenty-nine day suspension, to be served on

probation subject to certain conditions. The probation conditions required Ms. Reguli to

practice subject to extensive supervision of a probation monitor pursuant to Tennessee

Supreme Court Rule 9, section 8.5, participate in an evaluation by the Tennessee Lawyer

Assistance Program (“TLAP”), and comply with any monitoring requirement TLAP

deemed necessary. The Panel did not order Ms. Reguli to pay restitution to Mr.

Castleman. Both parties appealed the Panel‟s decision.

Following a review of the record and a hearing where no new evidence was

introduced, the trial court affirmed the Panel‟s findings but modified its sanctions by

(1) reducing Ms. Reguli‟s eleven month, twenty-nine day suspension to sixty days, all of

which the court suspended with no active time served; (2) placing Ms. Reguli on

probation for one year subject to supervision of a probation monitor; (3) requiring Ms.

Reguli to serve a six-month active suspension should she violate the terms of her

probation; (4) reducing the scope of the probation monitor‟s supervision of Ms. Reguli‟s

law practice; (5) eliminating the Panel‟s requirement that Ms. Reguli undergo a TLAP

evaluation; and (6) ordering Ms. Reguli to pay restitution to Mr. Castleman in the amount

of $7,800, with the condition that if she pays the restitution within six months, some of

her monitoring requirements will be eliminated. Both Ms. Reguli and the Board appealed

to this Court.

III.

“The Supreme Court of Tennessee is the source of authority of the Board of

Professional Responsibility and all its functions.” Mabry v. Bd. of Prof’l Responsibility,

458 S.W.3d 900, 903 (Tenn. 2014) (citing Brown v. Bd. of Prof’l Responsibility, 29

S.W.3d 445, 449 (Tenn. 2000)). We have the duty to regulate the practice of law and to

enforce the rules of the legal profession. Id. (citing Doe v. Bd. of Prof’l Responsibility,

104 S.W.3d 465, 470 (Tenn. 2003)). “In furtherance of this duty, we have established a

system where attorneys charged with disciplinary violations have a right to an evidentiary

hearing before a hearing panel, which must determine the disciplinary penalty.” Bd. of

Prof’l Responsibility v. Cowan, 388 S.W.3d 264, 267 (Tenn. 2012) (citing Tenn. Sup. Ct.

R. 9, § 8.2). “We review [hearing panel] judgments under our „inherent power and

essential and fundamental right to administer the rules pertaining to the licensing of

attorneys.‟” Mabry, 458 S.W.3d at 903 (quoting Skouteris v. Bd. of Prof’l Responsibility,

430 S.W.3d 359, 362 (Tenn. 2014)).

When reviewing the decision of a disciplinary hearing panel, we employ the same

standard of review as the trial court. Moncier v. Bd. of Prof’l Responsibility, 406 S.W.3d

139, 150 (Tenn. 2013) (citing Cowan, 388 S.W.3d at 267). Accordingly, we will reverse

or modify the decision of a hearing panel only if

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the rights of the petitioner have been prejudiced because the panel‟s

findings, inferences, conclusions or decisions are: (1) in violation of

constitutional or statutory provisions; (2) in excess of the panel‟s

jurisdiction; (3) made upon unlawful procedure; (4) arbitrary or capricious

or characterized by abuse of discretion or clearly unwarranted exercise of

discretion; or (5) unsupported by evidence which is both substantial and

material in the light of the entire record.

Tenn. Sup. Ct. R. 9, § 1.3. We do not substitute our judgment for that of the hearing

panel as to the weight of the evidence or questions of fact. Bd. of Prof’l Responsibility v.

Allison, 284 S.W.3d 316, 323 (Tenn. 2009) (citing Bd. of Prof’l Responsibility v. Love,

256 S.W.3d 644, 653 (Tenn. 2008)). We review questions of law de novo with no

presumption of correctness. Cowan, 388 S.W.3d at 267 (citing Sneed v. Bd. of Prof’l

Responsibility, 301 S.W.3d 603, 612 (Tenn. 2010)).

The issues Ms. Reguli raises for our review are (1) whether the Panel‟s findings

are void because the Panel Chair exceeded his authority; (2) whether the Panel erred in

denying Ms. Reguli‟s disclosure requests regarding the Board‟s

panel-member-appointment process and whether the Board‟s appointment procedure is

unlawful; (3) whether the Panel erred in declining to disqualify Ms. Hodges; (4) whether

the Panel‟s findings of fact and conclusions of law were arbitrary and capricious,

characterized by an abuse of discretion, or unsupported by substantial and material

evidence; (5) whether the imposition of probation and restitution was arbitrary and

capricious or inconsistent with American Bar Association (“ABA”) standards; and

(6) whether Tennessee‟s attorney disciplinary system is unconstitutional. The Board

raises a single issue—whether the trial court erred by modifying the Panel‟s probationary

period and requirements.

Ms. Reguli contends that the Panel‟s findings are void because the Panel Chair

acted unilaterally and outside his scope of authority. In support of this contention, Ms.

Reguli presents arguments that the Chair (1) made unilateral evidentiary rulings;

(2) abused his discretion in evidentiary rulings; (3) made rude and derogatory prejudicial

remarks; and (4) signed the judgment form for the other Panel members.

Ms. Reguli‟s claim as to the actions of the Panel Chair is without merit.

Tennessee Supreme Court Rule 9, section 5.5(b) allows the Board to adopt written

guidelines, subject to approval by this Court, to ensure efficient and timely disciplinary

proceedings. Under the guidelines applicable to Ms. Reguli‟s proceeding, the Panel

Chair had the authority to rule on evidentiary issues with the advice and consent of the

other Panel members. Policies and Rules of the Board of Professional Responsibility of

the Supreme Court of Tennessee, § 2.5, adopted December 14, 2012, available at

https://www.yumpu.com/en/document/view/27067404/policies-and-rules-of-the-board-of

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-professional-responsibility/3 (“The Chair of the hearing panel will preside at the hearing

and with the advice and consent of the other members of the hearing panel will rule on all

issues of law, evidence and procedure arising during the hearing.”). The record

demonstrates that the other Panel members were actively engaged in the proceeding,

including evidentiary rulings. The Panel members had the opportunity to fully

participate. We conclude that the Panel Chair acted appropriately within the bounds of

his authority.

Ms. Reguli further contends that a number of the Panel Chair‟s evidentiary rulings

constitute abuses of discretion. A Panel abuses its discretion by “appl[ying] an incorrect

legal standard, or reach[ing] a decision which is against logic or reasoning that causes an

injustice to the party complaining.” Sallee v. Bd. of Prof’l Responsibility, 469 S.W.3d 18,

42 (Tenn. 2015) (quoting Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)) (internal

quotation marks omitted). This is a deferential standard of review, Sanford v. Waugh &

Co., 328 S.W.3d 836, 847 (Tenn. 2010) (citing Biscan v. Brown, 160 S.W.3d 462, 468

(Tenn. 2005)), and we will uphold the Panel‟s rulings “so long as reasonable minds can

disagree as to propriety of the decision[s] made[,]” Sallee, 469 S.W.3d at 42 (quoting

State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000); State v. Gilliland, 22 S.W.3d 266, 273

(Tenn. 2000)) (internal quotation mark omitted). As the party challenging the rulings,

Ms. Reguli has the burden to show the Panel abused its discretion. Ballard v. Herzke,

924 S.W.2d 652, 659 (Tenn. 1996) (citing Rachels v. Steele, 633 S.W.2d 473, 475 (Tenn.

Ct. App. 1981)). Upon review of the record, we conclude that Ms. Reguli has failed to

show that the Panel or its Chair abused its discretion regarding evidentiary rulings.

As for Ms. Reguli‟s claim that the Panel Chair made rude and derogatory

prejudicial remarks, our review of the record finds no indication that the Panel Chair

acted inappropriately. The Panel Chair was engaged and questioned Ms. Reguli as a

witness and an advocate. The Tennessee Rules of Evidence apply to attorney disciplinary

proceedings, Tenn. Sup. Ct. R. 9, § 23.3, and Tennessee Rule of Evidence 614 allows the

Panel to interrogate witnesses. By choosing to represent herself in this proceeding, Ms.

Reguli submitted herself to questioning from the Panel, both as a witness and as an

advocate. The Panel Chair had the authority to limit testimony or arguments that were

repetitive. The Panel Chair was balanced in his rulings and sometimes ruled in Ms.

Reguli‟s favor on evidentiary objections. We conclude that the Panel Chair‟s rulings and

conduct were reasonable and not an abuse of discretion.

Next, Ms. Reguli argues that the Panel Chair exceeded his authority by signing the

order for the other Panel members. Ms. Reguli offered no evidence that the Panel Chair

signed on behalf of the other Panel members without their permission or their knowledge.

This argument has no merit.

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In her second issue, Ms. Reguli asserts that the Panel erred in failing to allow

discovery on the appointment of Panel members on a “rotating basis,” as required by

Tennessee Supreme Court Rule 9, section 8.2. Ms. Reguli filed a “Demand for

Compliance on Hearing Panel Appointment,” requesting certain documents be provided

to her. At a hearing on June 4, 2013, the Panel took the demand under advisement. The

matter proceeded to trial in November 2013 without a ruling on the demand. Ms. Reguli

did not pursue it further. There is no decision from which to appeal, and Ms. Reguli,

therefore, waived appellate review. See Nashville, Chattanooga & St. Louis Ry. v. Hayes,

99 S.W. 362, 366 (Tenn. 1907) (“It is the duty of the litigant . . . to invoke the action of

the lower court upon [his or her respective] motions, and, failing to do so, . . . will not

[b]e heard to complain in this court . . . .”); see also State ex rel. Jones v. Looper, 86

S.W.3d 189, 202 (Tenn. Ct. App. 2000); Kendricks v. State, 13 S.W.3d 401, 403 (Tenn.

Crim. App. 1999).

Ms. Reguli argues that the Panel‟s decision is unlawful and should be vacated

because Panel members were selected based on a “random” selection process as opposed

to a “rotating” selection process. Tennessee Supreme Court Rule 9, section 6.4 provides

that panel members are to be selected from district committee members in accordance

with Tennessee Supreme Court Rule 9, section 8.2. In response, the Board contends that

no functional difference exists between a random or a rotating panel member selection

process due to the many reasons members may turn down appointments. The Board

argues that district committee members serve voluntarily and can turn down an

appointment for any reason. Additionally, the Board cites Tennessee Supreme Court

Rule 9, section 6.5, which precludes district committee members from serving on a panel

if “a judge, similarly situated, would have to recuse himself or herself.” Ms. Reguli‟s

challenge to the selection process is without merit. The trial court may hear additional

proof to resolve allegations of procedural irregularity before a hearing panel. Tenn. Sup.

Ct. R. 9, § 1.3. Ms. Reguli did not present proof of an irregular procedure to the trial

court, nor are the documents she references in her brief part of the evidentiary record

before this Court. Even if there was evidence in the record showing that the Board

appointed the Panel members on a “random” basis, this would not warrant vacating the

Panel‟s decision. No substantial right is implicated by the use of a “random” selection

process as opposed to a “rotating” process, and we agree with the Board that no

meaningful difference exists between the two. We find no error in the manner in which

Panel members were selected nor any unlawful procedure.

The day before oral argument before this Court, Ms. Reguli filed a document

alleging unlawful procedure in the trial court. Specifically, Ms. Reguli relies on a

transcript of a telephone message that the trial judge, while connected to Ms. Reguli via

telephone, left on Ms. Hodges‟ voice mail. The message concerned a post-judgment

motion the Board filed in the trial court seeking modification of the trial court‟s sanction.

The trial judge orally denied the Board‟s motion and noted that he had discussed the

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Board‟s motion with the Panel Chair. Ms. Reguli objects to the trial judge‟s

communication with the Panel Chair. The trial judge disclosed the communication as he

denied the Board‟s motion. We find no error, and even if there was error, there is no

showing that this communication more probably than not affected the final judgment of

the trial court or that Ms. Reguli was prejudiced. See Tenn. R. App. P. 36(b).

Ms. Reguli next contends that the Panel erred in failing to disqualify Ms. Hodges

because Ms. Hodges sent an e-mail to members of the Disciplinary Counsel‟s office

informing them that Ms. Reguli had cancer. In response to the e-mail, Nancy Jones,

Chief Disciplinary Counsel, sent Ms. Reguli a letter expressing Ms. Jones‟ condolences

and suggesting that Ms. Reguli consider whether disability inactive status of her law

license would be appropriate. Ms. Reguli argues that Disciplinary Counsel are held to the

same ethical standards that apply to prosecutors in criminal proceedings. In criminal

proceedings, a conflict of interest can disqualify a prosecutor where circumstances exist

which render the prosecutor incapable of “exercis[ing] his or her independent

professional judgment free of „compromising interests and loyalties.‟” State v.

Culbreath, 30 S.W.3d 309, 312 (Tenn. 2000) (citation omitted). An appearance of a

conflict of interest may also require disqualification. Id. at 313. The determination of

whether to disqualify an attorney is within the discretion of the trial court, and review is

under an abuse of discretion standard. Id. We need not decide if Disciplinary Counsel is

held to the same ethical standards that apply to prosecutors in criminal proceedings.

Even if so, the circumstances here fail to show an actual or the appearance of a

disqualifying interest of Ms. Hodges. Ms. Hodges‟ e-mail does not indicate any

malicious intent or improper purpose. The letter from Ms. Jones fails to demonstrate any

disqualifying interest of Ms. Hodges. Instead, the letter represents only an expression of

concern regarding Ms. Reguli‟s health. Ms. Reguli‟s illness was a relevant consideration

because an illness can justify delaying a disciplinary proceeding and can make disability

inactive status appropriate for that attorney. Tenn. Sup. Ct. R. 9, § 21.3. Illness can

likewise be a mitigating factor in determining an appropriate disciplinary sanction under

the ABA Standards for Imposing Lawyer Sanctions (“ABA Standards”). ABA Standard

9.32. The Panel did not abuse its discretion in declining to disqualify Ms. Hodges.

Ms. Reguli next contends that the Panel‟s findings of fact and conclusions of law

were arbitrary and capricious, an abuse of discretion, or unsupported by substantial and

material evidence. A decision that lacks substantial and material evidentiary support is

arbitrary and capricious. Allison, 284 S.W.3d at 322. Evidence is sufficient to support a

factual finding “if it furnishes a reasonably sound factual basis for the decision being

reviewed.” Id. (quoting City of Memphis v. Civil Serv. Comm’n of Memphis, 216 S.W.3d

311, 316-17 (Tenn. 2007)) (internal quotation marks omitted). This “has . . . been

described as requiring „something less than a preponderance of the evidence . . . but more

than a scintilla or glimmer.‟” Id. at 322-23 (quoting Jones v. Bureau of TennCare, 94

S.W.3d 495, 501 (Tenn. Ct. App. 2002)). Like the trial court, this Court must not

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substitute its judgment for that of the Panel. Id. at 323. Nor will we re-weigh the

evidence before the Panel, as the Panel “is uniquely suited to make credibility

determinations of witnesses.” Long v. Bd. of Prof’l Responsibility, 435 S.W.3d 174, 181

(Tenn. 2014) (quoting Culp v. Bd. of Prof’l Responsibility, 407 S.W.3d 201, 208 (Tenn.

2013)) (internal quotation marks omitted). Thus, we defer to the Panel‟s witness

credibility determinations. Id.

With respect to the complaint regarding the Castleman fee, there was material and

substantial evidence to support the Panel‟s findings that Ms. Reguli violated RPC

1.4(a)(4), which requires an attorney to promptly comply with reasonable requests for

information. There was proof that Ms. Reguli failed to respond to Mr. Castleman‟s

requests for information about an accounting and refund of the fee he paid. Ms. Reguli

testified she sent Mr. Castleman an accounting; he said he did not receive one. We defer

to the Panel‟s finding that it was “highly unlikely” that Ms. Reguli ever sent Mr.

Castleman an accounting. RPC 1.4(b) requires an attorney to explain a matter to a client

to the extent reasonably necessary for the client to make an informed decision about the

representation. The proof indicated Ms. Reguli failed to fully and adequately explain to

Mr. Castleman her understanding of the fee agreement.

There was also substantial and material evidence that Ms. Reguli failed to return

unearned fees pursuant to RPC 1.16(d)(6). The fee agreement signed by Mr. Castleman

did not provide for a nonrefundable fee. Ms. Reguli retained the unearned fee and failed

to refund the balance to Mr. Castleman. The term “retainer” is often used to describe

three variations of fee arrangements. See Douglas R. Richmond, Understanding

Retainers and Flat Fees, 34 J. Legal Prof. 113, 114-18 (2009). One type of retainer is the

general retainer, sometimes called a “true” or “classic” retainer. Id. at 114. This fee

merely ensures a lawyer‟s availability to a client. Id. at 114-15. The client must pay the

lawyer additional fees for actual legal services performed by the lawyer should the client

wish to employ the lawyer for a particular matter. Id. at 115. The Tennessee Rules of

Professional Conduct recognize that general retainer fees are earned upon receipt,

assuming the lawyer remains available to serve the client. Tenn. Sup. Ct. R. 8, RPC 1.5

cmt. 4a. Because this fee is earned upon receipt, the fee should not be placed in a client

trust account, as the fee becomes the lawyer‟s property. See Tenn. Sup. Ct. R. 8, RPC

1.15 cmt. 10. Another type of retainer is the “advance fee retainer,” which “is a present

payment to a lawyer as compensation for the provision of specified legal services in the

future.” Richmond, supra, at 118. This fee is intended to compensate the lawyer for all

work to be done on a matter, and is more commonly known as a “fixed” or “flat” fee. Id.

(emphasis added). This fee is also earned upon receipt, assuming the lawyer is available

to perform the services. Tenn. Sup. Ct. R. 8, RPC 1.5 cmt. 4a. Accordingly, an earned

fixed fee should not be placed in a client trust account. Tenn. Sup. Ct. R. 8, RPC 1.15

cmt. 10. A remaining retainer fee is the “security retainer,” which “is intended to secure

the client‟s payment of fees for future services that the lawyer is expected to perform.”

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Richmond, supra, at 116. A “lawyer who collects a security retainer draws it down

pursuant to an agreed hourly rate as the lawyer earns the fees by performing legal

services for the client.” Id. at 117. Retainer funds paid pursuant to a security retainer

agreement “remain the client‟s property until the lawyer applies them to charges for

services that are actually performed.” Id. Thus, a lawyer must initially place such fees

into a client trust account and only withdraw the fees as the lawyer earns them. Tenn.

Sup. Ct. R. 8, RPC 1.15 cmt. 10. Any portion of such a fee not earned by the lawyer

upon termination of the lawyer‟s representation must be returned to the client pursuant to

RPC 1.16(d)(6). See also Tenn. Sup. Ct. R. 8, RPC 1.5 cmt. 4; Tenn. Sup. Ct. R. 8, RPC

1.15 cmt. 10.

As shown by the fee agreement, the fee Mr. Castleman paid to Ms. Reguli was not

earned upon receipt by Ms. Reguli. The fee agreement provided that the fee would be

held in escrow and Ms. Reguli‟s hourly fees would be charged against the retainer. The

payment therefore was considered as security to ensure payment for legal services to be

provided in the future and not merely to assure Ms. Reguli‟s availability. Accordingly,

the $10,000 was not a general retainer earned by Ms. Reguli upon receipt. See

Richmond, supra, at 114; Tenn. Sup. Ct. R. 8, RPC 1.5 cmt. 4a. The fee agreement

additionally provided that once the full amount of the retainer had been used for legal

services, an additional retainer would be required, depending on the status of the case.

This language clearly precludes the possibility that the $10,000 was a “fixed fee” earned

by Ms. Reguli upon receipt. See Richmond, supra, at 118; Tenn. Sup. Ct. R. 8, RPC 1.5

cmt. 4a.

Ms. Reguli admitted that she did not refund any part of the $10,000, which was in

excess of the fees for which she billed Mr. Castleman. Ms. Reguli had an ethical duty to

return the unearned portion of the fee when Mr. Castleman terminated her services.

Tenn. Sup. Ct. R. 8, RPC 1.16(d)(6). There was substantial and material evidence to

support the Panel‟s finding that Ms. Reguli violated RPC 1.16(d)(6).

Ms. Reguli maintains that the fee she collected from Mr. Castleman was a

nonrefundable fee. However, RPC 1.5(f) requires “[a] fee that is nonrefundable in whole

or in part [to] be agreed to in a writing, signed by the client, that explains the intent of the

parties as to the nature and amount of the nonrefundable fee.” The fee agreement was in

writing and signed by Mr. Castleman, but failed to adequately explain that it was

nonrefundable. The reference in the fee agreement that the funds would be returned “at

the discretion of the firm” is inadequate to make it clear that the fee was nonrefundable.

Cf. In re Disciplinary Proceeding Against Van Camp, 257 P.3d 599, 612 (Wash. 2011)

(holding that attorney could not justify contention that he charged a “flat fee” where his

“fee agreement contain[ed] both [an] „earned retainer‟ phrase and listed hourly rates,

which suggest[ed] that hourly rates may be charged against the „earned retainer‟

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amount”). Accordingly, there was substantial and material evidence to support the

Panel‟s finding that Ms. Reguli violated RPC 1.5(f).

Ms. Reguli admitted that she never provided the Board, as requested, with an

accounting of her time on the Castleman matter. This supports the Panel‟s finding that

she violated RPC 8.1(b), which prohibits an attorney from knowingly failing to respond

to a lawful demand for information from a disciplinary authority. The various violations

described above also support the Panel‟s finding that Ms. Reguli violated RPC 8.4(a) and

(d), which prohibit an attorney from violating any rule of professional conduct and

engaging in conduct prejudicial to the administration of justice.

With respect to the complaint about her website, it is undisputed that Ms. Reguli‟s

website represented her as having “Certification/Specialties” in “Family Law[,] Divorce.”

Ms. Reguli admitted she was not certified as a specialist in any field of law. This is

substantial and material evidence to support the Panel‟s finding that she violated RPC

7.4(b). Even though Ms. Reguli may not have provided the false information to her

website company, she is responsible for the contents of her website. Attorney advertising

includes all potential ways in which attorneys can communicate information about their

services to the public, including communication through websites. See Tenn. Sup. Ct. R.

8, RPC 7.2 cmt. 1 (“The Rule [on advertising] encompasses all possible media through

which such communications may be directed to the public.”). Whether websites are

maintained by the attorney or a third party, the attorney has the ultimate responsibility for

monitoring and reviewing the advertisement to ensure compliance with ethical rules. See

In re Hyderally, 32 A.3d 1117, 1122 (N.J. 2011) (dictum) (“Whether a website is created

by an outside consultant or developed and maintained by an attorney or his or her staff,

all language and design that appears on it should be reviewed frequently for compliance

with . . . all Rules of Professional Conduct.”); cf. In re Anonymous, 689 N.E.2d 434, 435

(Ind. 1997) (disciplining attorney for misleading advertising even though communication

of misleading information was “unintentional”); Columbus Bar Ass’n v. Dugan, 865

N.E.2d 895, 897-98 (Ohio. 2007) (disciplining attorney in part for improper statements

on the attorney‟s website entered by the attorney‟s secretary without the attorney‟s

consultation). Ms. Reguli bears the responsibility for the misrepresentation on her

website. Accordingly, the Panel‟s finding that she violated RPC 7.4(b) was supported by

substantial and material evidence.

Ms. Reguli next contends that the imposition of suspension and probation in this

case was arbitrary and capricious or inconsistent with the ABA Standards. Specifically,

Ms. Reguli challenges the trial court‟s modification of the sanctions because the trial

court did not reference the ABA Standards as required by Tennessee Supreme Court Rule

9, section 8.4. The Board contends in its sole issue that the trial court correctly modified

the Panel‟s sanction by requiring Ms. Reguli to pay restitution, but otherwise erred in

modifying the Panel‟s suspension and probation conditions. The Board argues that

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(1) the trial court‟s modified sanction of a sixty-day suspension (all of which is to be

suspended with no active time served), coupled with a one-year probationary period,

effectively and inappropriately imposes two suspensions at the same time; (2) the trial

court erred by preemptively determining the length of active suspension should Ms.

Reguli fail to meet her probation conditions; (3) the trial court‟s decision to eliminate the

Panel‟s TLAP evaluation condition is arbitrary and capricious; and (4) the trial court had

an insufficient basis to modify the responsibilities of the probation monitor.

When determining the level of discipline to impose upon an attorney for

misconduct, a hearing panel must consider relevant provisions of the ABA Standards.

Tenn. Sup. Ct. R. 9, § 8.4. The ABA Standards represent “guideposts,” as opposed to

bright-line rules when determining sanctions for professional misconduct. Bailey v. Bd.

Prof’l Responsibility, 441 S.W.3d 223, 232 (Tenn. 2014). The ABA Standards provide

that when imposing a sanction, a court should consider “[(1)] the duty violated; [(2)] the

lawyer‟s mental state; [(3)] the potential or actual injury caused by the lawyer‟s

misconduct; and [(4)] the existence of aggravating or mitigating factors.” ABA Standard

3.0. Aggravating factors include prior discipline, a dishonest or selfish motive, a pattern

of misconduct, multiple offenses, bad faith obstruction of disciplinary proceedings,

refusal to acknowledge the wrongful nature of conduct, and substantial experience in the

practice of law. ABA Standard 9.22. Mitigating factors include personal or emotional

problems. ABA Standard 9.32. When reviewing disciplinary sanctions, this Court

reviews comparable cases to ensure consistency in discipline. Bailey, 441 S.W.3d at 236.

The Panel properly considered the factors in ABA Standard 3.0 when determining

Ms. Reguli‟s sanction. The Panel appropriately made findings of five aggravating factors

and a single mitigating factor, all of which are supported by the record. Taking these

considerations into account, the Panel properly imposed an eleven month, twenty-nine

day suspension, to be served on probation subject to various conditions.

The trial court correctly determined that the Panel‟s failure to order Ms. Reguli to

pay restitution was arbitrary. The Panel made a specific factual finding that Ms. Reguli

charged Mr. Castleman an unreasonable fee based on the work Ms. Reguli performed and

that Ms. Reguli failed to refund the unearned portion of the fee. Tennessee Supreme

Court Rule 9, section 4.7 provides for restitution when a lawyer‟s misconduct financially

injures a person or entity. ABA Standard 2.8 also provides for restitution. As the trial

court noted, unless Ms. Reguli makes restitution to Mr. Castleman, she will gain a

windfall at the expense of Mr. Castleman. Accordingly, the trial court‟s modification of

the Panel‟s sanction requiring Ms. Reguli to make restitution to Mr. Castleman in the

amount of $7,800 was proper.

However, the trial court erred in modifying the rest of the Panel‟s sanction. First,

the trial court erred in eliminating the Panel‟s probation condition that Ms. Reguli

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undergo a TLAP evaluation by determining that the requirement was not necessary. The

trial court did not see or hear Ms. Reguli testify at the hearing. The Panel‟s judgment

reflected that it “saw evidence” during the hearing that a TLAP evaluation was

warranted. In eliminating the TLAP evaluation, the trial court impermissibly substituted

its judgment for that of the Panel. See Mabry, 458 S.W.3d at 903 (noting that a trial court

must refrain from substituting its judgment for that of a hearing panel as to the weight of

evidence). In the same manner, the trial court impermissibly substituted its judgment for

the Panel in reducing the scope of the probation monitor‟s supervision of Ms. Reguli14

and by restructuring the Panel‟s eleven month, twenty-nine day suspension. The Panel

properly considered the ABA Standards, including making findings of aggravating and

mitigating factors. Accordingly, the Panel acted appropriately in imposing its sanction,

aside from its failure to provide for restitution.

A review of comparable cases demonstrates that the Panel‟s eleven month,

twenty-nine day suspension to be served on probation, coupled with the trial court‟s order

of restitution, is consistent with sanctions ordered in other cases. See Sallee, 469 S.W.3d

at 40-41 (upholding a one-year suspension where attorney charged an unreasonable fee,

failed to inform clients of inaccurate fee estimate, and refused to recognize wrongful

nature of conduct); Threadgill v. Bd. of Prof’l Responsibility, 299 S.W.3d 792, 799-800,

810 (Tenn. 2009) (affirming a one-year suspension where attorney failed to deliver

accounting to client, among other ethical violations), overruled on other grounds by

Lockett v. Bd. of Prof’l Responsibility, 380 S.W.3d 19, 27-28 (Tenn. 2012); see also

People v. Weisbard, 35 P.3d 498, 509 (Colo. 2000) (ordering an eighteen-month

suspension where attorney refused to account and refund unearned funds, failed to return

client calls for extended period of time, and committed other violations); In re Schmidt,

130 So. 3d 908, 910, 913 (La. 2013) (one-year and a day suspension imposed, along with

requirement that attorney resolve fee disputes with clients, where attorney failed to

provide an accounting, refund unearned funds, and cooperate with disciplinary authority).

The Panel‟s original sanction is reinstated, along with the additional requirement that Ms.

Reguli pay Mr. Castleman restitution in the amount of $7,800.

Finally, Ms. Reguli contends that Tennessee‟s attorney discipline system is

unconstitutional for several reasons. Ms. Reguli first contends that the preponderance-of-

the-evidence standard in attorney disciplinary proceedings is unconstitutional. She

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The Panel‟s decision provided that Ms. Reguli must employ and meet with a probation monitor

on a monthly basis to review her billing practices, including review of her fee arrangements and of any

refunds due to clients in the case of termination or conclusion of services. Additionally, the Panel‟s

decision required Ms. Reguli to inform her practice monitor of any complaint by attorneys or judges

regarding pleadings drafted by Ms. Reguli. The probation monitor was required to provide monthly

reports of Ms. Reguli‟s compliance to the Board. In contrast, the trial court‟s probation monitor

requirement provided that the practice monitor review all engagement letters and fee agreements or

contracts to ensure compliance with the Rules of Professional Conduct.

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argues that due process demands a standard of proof at least as stringent as the clear and

convincing evidence standard. Ms. Reguli also argues that the combined investigative,

enforcement, and adjudicative functions of the Board violate due process. Ms. Reguli‟s

various remaining arguments allege that the Board is an unconstitutional body because of

the financial interests of its members in the outcome of disciplinary proceedings and that

the system otherwise lacks adequate due process safeguards.

We foreclosed each of these arguments in our recent holding in Walwyn v. Board

of Professional Responsibility, No. M2015-00565-SC-R3-BP, 2015 WL 7770161 (Tenn.

Dec. 3, 2015). There, we held the preponderance-of-evidence standard of proof in

attorney disciplinary proceedings is constitutional. Id. at *15. We addressed Ms.

Reguli‟s further arguments by reaffirming our previous holdings in Long, 435 S.W.3d at

186-88, and Moncier, 406 S.W.3d at 156. Walwyn, 2015 WL 7770161, at *16. In Long,

we held that because the Board‟s multiple responsibilities “are functionally separate

within the Board, Rule 9 does not violate due process principles.” 435 S.W.3d at 187.

We also noted in Long that Panel members “receive no compensation, other than

reimbursement for travel expenses, for sitting as the adjudicatory body in a disciplinary

matter.” Id. at 188. Further, in Moncier, we highlighted the extensive procedural

protections Tennessee‟s attorney discipline system affords attorneys. 406 S.W.3d at 156.

Ms. Reguli‟s constitutional objections lack merit.

Ms. Reguli has submitted as supplemental authority North Carolina Board of

Dental Examiners v. F.T.C., ___ U.S. ___, 135 S. Ct. 1101 (2015), in support of her

claim that Tennessee‟s attorney discipline system is unconstitutional and violative of

antitrust laws. The North Carolina Board of Dental Examiners decision does not support

her constitutional claims. Ms. Reguli did not raise issues of antitrust violations before the

trial court or the Panel. Any such claim is now waived.

IV.

The Panel‟s findings of fact and conclusions of law are affirmed. The Panel‟s

sanction is reinstated, with the additional requirement that Ms. Reguli make restitution to

Mr. Castleman in the amount of $7,800. Accordingly, Ms. Reguli is suspended from the

practice of law in Tennessee for eleven months and twenty-nine days, all of which Ms.

Reguli may serve on probation subject to the conditions that Ms. Reguli (1) pay

restitution to Mr. Castleman in the amount of $7,800; (2) submit to a probation monitor

in accordance with the Panel‟s judgment; and (3) submit to an evaluation by

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TLAP and comply with any monitoring requirement TLAP deems necessary. Costs of

this appeal are taxed to Connie Reguli and her surety, for which execution may issue if

necessary.

_________________________________

SHARON G. LEE, CHIEF JUSTICE

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