Lawyers in 2 states sanctioned for association with national bankrupt law firm
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Update: Lawyers in Iowa and Virginia have been disciplined for associating with a national bankruptcy law firm accused of using high-pressure tactics to recruit clients.
Dubuque, Iowa, attorney Christopher Soppe was reprimanded by the Iowa Supreme Court in a November 2021 order for his work with the Connecticut Bankruptcy firm. The reprimand included a July 2021 letter of reprimand sent to Soppe by the Iowa Supreme Court prosecutors’ disciplinary board.
The reprimanding letter warned bankruptcy attorneys of their ethical responsibilities when working with the Chicago-based firm, which does business as UpRight Law and Law Solutions. the Iowa Capital Dispatch published an article about the reprimand last week.
In Virginia, attorney John Carter Morgan Jr. of Warrenton, Va., was suspended from practicing law for a year because of his work for an UpRight Law client. The Fauquier Times covered the January 2022 stay order by a three-judge Fauquier County Circuit Court panel in a story last week.
UpRight Law uses non-attorneys to screen callers, determine which type of bankruptcy is right for them, send fee agreements and accept fees, according to the Iowa Supreme Court Attorneys’ Disciplinary Board. New clients are then assigned to partner attorneys in the states where the clients reside.
The Iowa rebuke alleged UpRight Law was slow to process refunds. The Virginia case that led to Morgan’s reprimand involved a “car custody program” that used the sale of customers’ cluttered cars to pay for legal costs.
UpRight Law said in a statement that it was under new ownership and had “made significant improvements to all of its client systems.”
The statement said the Iowa case was “based on a series of unsubstantiated allegations” and that the Virginia case relates to events that occurred more than six years ago.
UpRight Law also denied using high-pressure sales tactics. The reference to such tactics was made in a 2018 bankruptcy court ruling, and the description comes from a training manual that was never used, the statement said.
UpRight Law operates in nearly every state and the District of Columbia. The Iowa Supreme Court Prosecutors’ Disciplinary Board first heard of UpRight Law when a complainant said she called the insolvency firm in March 2019. She was told that the law firm Lawyers needed her credit card for their records, but learned days later that she had been charged $500 without authorization, she alleged.
She filed for a refund on March 4, 2019, but was told UpRight Law couldn’t process it until mid-May. She didn’t actually receive a refund until July 12, 2019, a 92-day wait, the Disciplinary Board said.
The Iowa Attorney General investigated and discovered that several Iowa residents had requested reimbursements from UpRight Law and had not received them promptly. A client of UpRight Law said that when she threatened to call the Better Business Bureau, UpRight Law replied that she “doesn’t scam anyone” and that she doesn’t “specialize in refundsâ. We file bankruptcies.
The investigation revealed that only one attorney in Iowa had registered an IOLTA account in connection with UpRight Law. Sopp was not that lawyer. UpRight Law’s client funds were managed and managed by accountants and attorneys in Chicago, and Soppe did not have access to or oversight of that account, according to the July 2021 letter of reprimand.
Soppe declined to comment when contacted by the Iowa Capital Dispatch.
In Virginia, Morgan’s suspension stemmed from a penalty issued by the U.S. Bankruptcy Court for the Western District of Virginia in February 2018. Morgan was fined $5,000 by the court and suspended from practice before the court for 18 months. UpRight Law and its executives were fined $250,000 and the law firm suspended from practicing in court for five years, according to the bankruptcy court opiniona History of the Bloomberg Act and one US Department of Justice press release.
The bankruptcy court focused in part on an UpRight Law program in which customers could pay their legal fees by turning in their cluttered cars to an Indiana towing company. The company claimed the right to keep the lien holder’s cars until towing, hauling and storage costs were paid. If the towing company sold the vehicle at auction, despite a security from the auto lender, it used the money to pay bankruptcy costs.
Morgan had responsibility for filing a case in which his client was placed in the auto program, the bankruptcy court heard.
âLocal attorneys joining multijurisdictional law firms as local partners or limited partners cannot be both large and small,â the bankruptcy court said. “A lawyer cannot claim to be a partner in the firm and file cases in court as lead counsel, but does not claim responsibility for what happens at the main office on any filings the lawyer decides to take on. ”
The court also faulted Morgan for allowing his wife, his non-lawyer assistant, to meet with the client and review the bankruptcy petition and timelines. The documents filed in the plaintiff client’s case “were filled with errors”, the court said.
Morgan told the Fauquier Times that he has not been a “limited partner” of UpRight Law since 2016. He said he has advised hundreds of people referred by UpRight Law and filed 63 bankruptcy filings as a result.
UpRight Law said in its statement that its improvements “have provided greater transparency to clients, reduced reimbursement times, allowed clients greater accessibility to firm representatives, and overall have significantly improved the client experience.”
In the Iowa case, the statement said, ethics authorities did not disclose the identities of the complaining customers and did not provide details of their allegations. There were also no hearings regarding the allegations, according to the statement.
UpRight Law also said each partner attorney has control over client funds.
âEach partner attorney has complete transparency over the process and the ability to dictate the final terms of handling client funds, in accordance with the terms of their partnership,â the statement said.
Regarding the Virginia case, UpRight Law terminated the auto program in November 2015 and has not implemented a similar program since then.
The penalty in the Virginia case “was appealed and ultimately settled,” the statement said.
“UpRight Law is an innovative law firm that has helped approximately 100,000 individuals and families since 2014 get a fresh start through the bankruptcy process,” the statement said. âMany of these people might have been left without the help they so desperately needed. During this period, UpRight Law has been the most prolific filer of consumer bankruptcies in the country. Like other law firms and lawyers, UpRight Law is not infallible and has already acknowledged that its participation in the Car Custody program was a mistake. However, these events are now over six years old, have occurred under different firm owners, and UpRight Law has made countless improvements to better serve its clients. We look forward to continuing to serve these customers and working with our dedicated partners across the country. Â»
Updated Feb. 14, 4:50 p.m. to include UpRight Law’s statement.