Conduct Issues #1 – Law Society Tribunal

WOW, so David Stephen Strashin blames his dead mom for his misconduct behavior. Now we know why he is a lawyer. He won’t even allow his mother to rest in peace. It is all her fault because she grew “ill” and died, so this is why he acted so inappropriately. David Stephen Strashin has no shame or respect for the deceased. I am sure his mother would be proud of him and his disgusting excuse!

The Law Society Tribunal deliberately took it easy on him as they are all in this game together.

HEARING DIVISION

Date: 2018-09-26

File number: 17H-037

BETWEEN:

Law Society of Ontario

Applicant

– and –

David Stephen Strashin

 Respondent

Summary:

  • Professional Misconduct
  • Findings and Penalty
  • Failing to Supervise Non-Lawyer Staff
  • Disclosing Teranet Password
  • Failing to Report a Potential Claim to LawPRO
  • Failing to Keep Trust Account in Balance
  • Engaging in Sharp Practice and Acting in a Conflict of Interest

The Lawyer admitted, on the second day of hearing, the alleged misconduct and the parties presented a joint submission on penalty for a one-month suspension – The proposed penalty was at the low end of the range but the admission of misconduct provided certainty and there were significant mitigating factors including the absence of any regulatory issues over 40 years of practice and medical evidence that the Lawyer had been suffering from depression caused by his mother’s illness and subsequent death

In the circumstances, a one-month suspension was sufficient to achieve the goals of specific and general deterrence without compromising the public’s confidence in the legal profession – Joint submission accepted.

REASONS FOR DECISION

[1] Janis P. Criger (for the panel):– The Law Society alleged that Mr. Strashin (the “Licensee”) engaged in professional misconduct by breaching several provisions of the Rules of Professional Conduct, when he:

a. failed to supervise non-lawyer staff in his office;

b. disclosed his Teranet password to another person and allowed that person to use his Teranet USB key;

c. failed to report a potential claim to LawPRO;

d. misapplied trust funds and failed to keep his trust account in balance;

e. behaved dishonourably and engaged in sharp practice; and

f. failed to serve his client and acted in a conflict of interest.

[2] On the first day of this two-day hearing, we heard evidence including the testimony of Dr. Amarendra N. Singh, a well-qualified psychiatrist called by the Licensee to give evidence to mitigate or explain the misconduct. On the second day, the parties advised that they had resolved the matter by way of an admission of misconduct to all six allegations and a joint recommendation on penalty and costs. A redacted Request to Admit (“RTA”) was filed as evidence of the alleged misconduct. Mr. Strashin admitted the facts in the redacted RTA.

[3] We found misconduct, accepted the joint submission and signed the draft order for a one-month suspension plus costs. These are our reasons.

EVIDENCE

[4] The Licensee was called in 1974. He has practiced for 44 years and has no previous discipline history. He is a sole practitioner with a focus on cases before administrative tribunals, and some real estate transactions.

[5] The matters at issue arose between 2013 and 2016

[6] Starting in 2008, the Licensee suffered a period of major depression arising from his mother’s serious illness and subsequent death in 2013. The depression affected his mood, impaired his judgment and compromised his decision-making.

[7] The Licensee has recovered from the acute symptoms of the depression, although there are some residual effects which could have been improved with prompt treatment.

[8] The first two allegations relate to the placing of mortgages by an identity thief on a previously unencumbered property. The Licensee admitted that his Teranet key had been in the possession of his conveyancing clerk, and that the conveyancing clerk registered a fraudulent transaction on behalf of the identity thief. The Licensee admitted that he failed to supervise the conveyancing clerk who worked with him, and that he provided that conveyancing clerk with his Teranet key and password. These are breaches of Rule 6.1-1 and Rule 6.1-5 of the Rules of Professional Conduct (the “Rules”).

[9] The third allegation relates to the sale of a property where the Licensee acted for the vendor. The Lawyer admitted that he was sued by the seller for a shortfall in the proceeds of sale and that he failed to report the claim to LawPRO. He also failed to defend the action and ultimately satisfied the resultant judgment against him from personal funds. Failure to report a claim to LawPRO is a breach of Rule 6.09 of the former Rules.

[10] The fourth allegation concerns a complaint from another licensee who, upon taking over one of the Licensee’s files, discovered a discrepancy in the Licensee’s trust accounting. The Licensee admitted that his trust account was overdrawn by $5,304.57 as of September 25, 2015, contrary to By-Law 9, s. 9 and 14 made pursuant to the Law Society Act. The Licensee corrected the overdraft from personal funds.

[11] The fifth allegation concerns a complaint from a licensee against whom the Licensee brought a Small Claims Court action on behalf of a client. A dispute arose over whether the Licensee would consent to an adjournment of the mandatory settlement conference at the Small Claims Court. The Licensee did eventually consent to the adjournment, such that his opponent did not attend. Unbeknownst to the Licensee, his client attended the settlement conference, had the defence struck and then proceeded to request an assessment of damages. The Licensee then attended at the assessment and obtained judgment against the complainant, despite having consented to the adjournment of the settlement conference at which the complainant’s defence was struck.

[12] The Licensee admitted to misconduct by way of sharp practice contrary to Rules 6.01(1), 6.03(1) and 6.03(3) of the former Rules.

[13] The last allegation concerns a real estate transaction that closed in November 2013. The Licensee admitted that he acted on behalf of both mortgagor and mortgagee with respect to a real estate transaction and withheld the identity of the mortgagee from the mortgagor. The mortgagor complainant would not have consented to a mortgage from the mortgagee, as they were estranged family members. The Licensee admitted that he failed to serve a mortgagor client and acted in a conflict of interest contrary to Rules 2.01 and 2.04(3) of the former Rules.

CONDUCT FINDINGS

[14] On the basis of the admissions above, we conclude that the Licensee engaged in misconduct as alleged in the Amended Notice of Application.

JOINT SUBMISSION ON PENALTY
[15] Joint submissions are a proper and necessary part of the system. They benefit the administration of justice and all participants including the licensee, complainants, witnesses and counsel. A joint submission on penalty may only be rejected if it is truly unreasonable or unconscionable, or if its acceptance would lead reasonable and informed persons to believe that the proper function of the Law Society’s regulatory system had broken down: Law Society of Upper Canada v. Archambeault, 2017 ONLSTH 86.

[16] Although we were considering a joint submission, the factors outlined in Law Society of Upper Canada v. Aguirre, 2007 ONLSHP 46 and Law Society of Upper Canada v. Strug, 2008 ONLSHP 88 were also relevant as we considered whether the proposed penalty was reasonable and served the public interest.

[17] These principles informed our decision to accept the joint submission in this case.

PENALTY ANALYSIS

[18] At first glance, the Licensee’s misconduct appears quite serious and the jointly submitted penalty too lenient. However, Dr. Singh provided medical evidence that was not seriously challenged.

a. From about 2008 to about 2014, the Licensee was deeply affected by his mother’s serious illness and subsequent passing in 2013.

b. Those events gave rise to a major depression which affected his attention, concentration and focus in all areas of his life, including his law practice.

c. The Licensee’s depression featured a marked tendency to procrastinate and an inability to meet all the demands of his life, including his practice.

d. After his mother’s death, the Licensee began to gain insight into his condition and he felt that his condition had resolved in about 2014.

e. In Dr. Singh’s opinion, the Licensee is about 80% better. He could have been 99% better if he had realized earlier what was happening and taken treatment.

[19] We accept that the Licensee’s major depression affected his attention, concentration and focus during times when the misconduct occurred, although we cannot say that it directly caused the misconduct admitted. However, his failure to report a potential claim to LawPRO shows impaired judgment. The Licensee paid the $90,000 claim from personal funds rather than availing himself of his insurance coverage. The problems of lack of attention and foggy thinking caused by the depression contributed to his failure to monitor his trust account properly.

[20] We emphasize that there is no allegation of dishonesty with respect to the Licensee’s handling of trust monies, and no dispute that he brought the account into proper balance with his own funds immediately upon realizing there was a shortfall.

[21] The Licensee’s failure to supervise his non-lawyer staff was in relation to giving his Teranet key and password to an employee. These failures contributed to a serious problem, in that an identity thief presented herself to the Licensee as a client and managed to place one of two mortgages on a previously unencumbered property belonging to the genuine property owner. The Licensee acted for the identity thief on the second of the mortgages. The identity thief presented credible identification to the Licensee and the chartered bank granting the mortgage was also duped by the identity thief. We conclude that the identity thief was exceptionally sophisticated and that the Licensee’s misconduct with his Teranet key and password contributed to, but did not fully cause, the identity thief’s ability to place the mortgage.

[22] There is no allegation that the Licensee had any inkling that the transaction was not genuine. While the evidence on this point was not entirely clear, it also appears that the genuine property owner suffered no loss as a result of the fraudulent mortgages.

[23] We note that the matters giving rise to the sharp practice and conflict of interest particulars occurred during a time close to his mother’s death, when the uncontradicted evidence of Dr. Singh indicates he was suffering from a major depression that affected his mood, impaired his judgment and compromised his decision-making.

[24] Looking at the Aguirre factors, we note that the Licensee has been practicing for over 40 years and had no disciplinary record. He co-operated fully with the Law Society, both in the investigation and in the hearing process. He was clearly remorseful at the hearing and we consider that the medical evidence at least partly explains the misconduct. These factors all mitigate the penalty that would be reasonable for these serious matters.

[25] The Licensee is now largely recovered from his major depression. He has had no previous regulatory contact and we accept that his remorse demonstrated at the hearing is genuine. We conclude that the misconduct is unlikely to recur.

[26] In our view, the foregoing mitigating factors weigh strongly against the aggravating factor of the significant potential impact of the Licensee’s misconduct on others.

[27] Although the penalty jointly submitted is at the very low end for the misconduct admitted, we conclude in the circumstances of this case that it is reasonable. It achieves the goals of specific and general deterrence, without compromising the public’s confidence in the legal profession.

ORDER

[28] We ordered:

  1. The respondent’s class L1 licence shall be suspended for a period of 30 days commencing on November 1, 2018.
  2. While his class L1 licence is suspended, the respondent shall fully comply with the Law Society’s Guidelines for Suspended Lawyers or Who Have Given an Undertaking Not to Practise and the applicable by-laws.
  3. The respondent shall pay costs to the Law Society in the amount of $8,000.00 on or before July 12, 2019. Commencing immediately after that date, interest shall accrue on any unpaid part of these costs at a rate of 3% per year.

July 12, 2018

The Law Society alleged that David Stephen Strashin, 1976, of Toronto, committed professional misconduct.

The panel determined that the following allegations were established:

  • The respondent breached Rule 6.1-1 of the Rules of Professional Conduct by failing to assume complete professional responsibility for his practice, and by failing to directly and effectively supervise the non-lawyer staff of his law office to whom he delegated file work with respect to two real estate transactions that closed in November 2015 and January 2016.
  • From at least 2015 through July 2016, the respondent disclosed his Teranet password to another person and allowed that person to use his Teranet diskette contrary to Rule 6.1-5 of the Rules of Professional Conduct and Rule 5.01(3) of the former Rules of Professional Conduct.
  • With respect to a real estate transaction that closed in September 2013, the respondent failed to report a potential claim to his insurer contrary to Rule 6.09 of the former Rules of Professional Conduct.
  • During the approximate period of December 2014 through December 2015, the Lawyer misapplied trust funds totaling $5304.67 resulting in his failure to maintain a sufficient balance on deposit in his trust account to meet all his obligations with respect to money held in trust for clients, contrary to By-Law 9, sections 9 and 14 made pursuant to the Law Society Act.
  • During the approximate period of April 2013 through December 2013, the respondent engaged in sharp practice contrary to Rules 6.03(1) and 6.03(3) of the former Rules of Professional Conduct when the respondent failed to advise Complainant D of steps taken by the respondent’s client to obtain an order striking Complainant D’s statement of defence and the respondent scheduled an assessment hearing and assisted his client in obtaining a garnishment order without notice to Complainant D.
  • With respect to a real estate transaction that closed in November 2013, the respondent failed to serve his mortgagor client and acted in a conflict of interest contrary to Rules 2.01 and 2.04(3) of the former Rules of Professional Conduct when he represented both the mortgagor and the mortgagee in the transaction and withheld the identity of his mortgagee client from his mortgagor client.
  • The panel orders:
  • The respondent’s class L1 licence shall be suspended for a period of 30 days commencing on November 1, 2018.
  • While his class L1 licence is suspended, the respondent shall fully comply with the Law Society’s Guidelines for Lawyers Who Are Suspended or Who Have Given an Undertaking Not to Practise and the applicable by-laws.
  • The respondent shall pay costs to the Law Society in the amount of $8,000.00 on or before July 12, 2019. Commencing immediately after that date, interest shall accrue on any unpaid part of these costs at a rate of 3% per year.