In re Carly Van Dox – 2/22/2007

January 23, 2007

Arizona Supreme Court Clarifies the Standard the Disciplinary Commission Must Apply When Reviewing a Hearing Officer’s Findings of Fact.

Ms. Van Dox, a licensed realtor, represented the sellers in a real estate transaction in a private mediation, honestly but erroneously believing that her representation of did not constitute the unauthorized practice of law (UPL). The mediation ended without resolving the dispute and the buyers subsequently filed a complaint with the Arizona State Bar. Following an evidentiary hearing, a Hearing Officer concluded that Ms. Van Dox’s actions constituted UPL, and violated ER 5.5 and Supreme Court Rule 31. The Hearing Officer recommended diversion, finding that Ms. Van Dox’s actions were negligent. The State Bar appealed to the Disciplinary Commission, which reversed several of the Hearing Officer’s findings and conclusions and imposed a sanction of censure. This appeal followed.

Justice Berch, writing for a unanimous court, found that the Commission failed to properly defer to the Hearing Officer’s factual findings. The court noted that in “disciplinary proceedings, the Commission must defer to a hearing officer’s factual findings and ‘may not reject the hearing officer’s findings of fact related to discipline unless it determines that the factual findings are clearly erroneous.’” The court further noted that the Commission may not make additional findings of fact in a disciplinary proceeding, as it had done in this case. Applying the clearly erroneous standard, the court determined that the Hearing Officer had not erred in his factual findings. Moreover, the court upheld the Hearing Officer’s legal conclusion that an honest but erroneous belief that one’s actions do not constitute UPL does not constitute a “knowing violation.” Finally, the court determined that an informal reprimand was the appropriate sanction for UPL and failure to timely respond to inquiries from the state bar.