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Thursday, May 17, 2012 12:25 pm

Chipping away

Board upholds findings against lawyer

A review board for the Illinois Attorney Registration and Disciplinary Commission has rejected a Springfield bankruptcy attorney’s appeal of an ARDC hearing board recommendation that his law license be suspended due to unethical and dishonest conduct.

The decision by the review board brings the matter of John Stephen Narmont one step closer to resolution. The state Supreme Court will make the final decision in the case that began in 2009.

The commission’s staff had asked that Narmont’s license be suspended for two years, but a hearing board last year recommended a one-year suspension. Narmont subsequently appealed to the review board, which on May 10 upheld most of the hearing board’s findings but recommended a suspension of six months minus one day, half the sanction recommended by the hearing board.

In 1994, Narmont was censured by the Supreme Court after a business partner committed suicide and left behind a note and a tape recording in which the deceased blamed Narmont for financial difficulties that drove him to his grave. In a settlement with the ARDC, Narmont admitted that he had improperly prepared the partner’s will in which Narmont was a beneficiary, but an accusation of exerting undue influence on the business partner was dropped. The tape was ruled hearsay because the business partner, being dead, was not available for cross examination.

In the pending ARDC case, both the hearing and review boards concluded that Narmont violated fiduciary duties and had a conflict of interest when he represented a couple who divorced in the midst of financial difficulty. Narmont represented the husband in the divorce case while also representing the wife in a bankruptcy proceeding and a property-transfer matter. Both boards also found that Narmont made a false statement in the bankruptcy matter because he failed to list the property that was transferred in court filings.

Both ARDC boards also found that Narmont breached ethical rules and acted dishonestly by obtaining judgments against clients in excess of fees owed and without their knowledge while still representing them.

The review board also agreed with the hearing board that Narmont in 2008 made a false statement to U.S. Bankruptcy Court Judge Mary Gorman when the judge asked him why his mailing address appeared as the address for Hinshaw & Culbertson, a law firm that employed a client who had borrowed money against his retirement plan, making the firm a potential creditor in the bankruptcy proceeding. Narmont told the judge that the firm was aware of the bankruptcy, but the firm’s managing partner later said that wasn’t true.

Narmont told the hearing board that Gorman caught him off guard and that he was suffering from vertigo at the time. He also argued that the false statement to Gorman wasn’t a material issue, a notion rejected by the review board, which found that Narmont had violated a court rule prohibiting fraud, dishonesty and deceit.

“In this matter, the false statement was clearly material, and it resulted in a finding that the case had been filed in bad faith and resulted in a dismissal of the case,” the review board wrote.

In recommending a lesser punishment than recommended by the hearing board, the review board noted that Narmont had engaged in pro bono work, was active in youth programs, had made charitable donations for several causes and, according to seven local judges who testified in his favor, had a good reputation in the legal community. Those judges included Macoupin and Sangamon County Circuit  Judge Patrick Londrigan, State Appellate Judge Thomas Appleton, Morgan County Associate Judge Tim Olson, Sangamon County Associate Judge Steve Nardulli, Cass County Circuit Judge Robert Hardwick, Jr., Sangamon County Associate Judge Rudolph Braud and former Sangamon County Associate Judge John Mehlick, who retired in 2010. The review board also said that Narmont’s 1994 censure should not be given “significant weight” because the conduct, while similar, had occurred decades ago.

In an unrelated case, Sangamon County Circuit Judge John Schmidt last month ruled against Narmont in a lawsuit filed in December by Carolyn Williams, a former client who accuses Narmont of telling her in 2003 that she needed to quickly sell 41 acres of land in Auburn, then buying the property himself for below market value.

“An attorney has a fiduciary relationship with their client,” Schmidt wrote in an order rejecting Narmont’s request to dismiss the case. “The Defendant (Narmont) violated that fiduciary relationship when he represented the plaintiff in the sale of the 41 acres of farm land when he knew the sale was to his wife’s corporation of which he was the secretary and registered agent. … As the plaintiff’s fiduciary, the Defendant had a duty to tell or inform the Plaintiff his wife’s corporation would be getting the property the same day. He did not, and a reasonable inference from the well pled complaint is he concealed it.” (Emphasis in original)

Williams says that property Narmont acquired for $150,000 was actually worth more than $660,000, according to a mortgage he obtained on the land. However, Narmont in court filings says that the land was not the sole piece of property that secured the note. Narmont also says that Williams in a 2003 bankruptcy filing said under penalty of perjury that the property was worth less than $103,400.

The ARDC last year investigated Narmont’s conduct in the property transfer, but the status of the investigation isn’t clear.

Contact Bruce Rushton at brushton@illinoistimes.com.
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