Lawyers in 2 states sanctioned over association with national bankruptcy law firm – ABA Journal

Posted: February 15, 2022 at 6:10 am

Ethics

By Debra Cassens Weiss

February 14, 2022, 1:59 pm CST

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Updated: Lawyers in Iowa and Virginia have been sanctioned for their association with a national bankruptcy law firm accused of using high-pressure tactics to sign up clients.

Dubuque, Iowa, lawyer Christopher Soppe was reprimanded by the Iowa Supreme Court in a November 2021 order for his work with the bankruptcy firm. The reprimand included a July 2021 reprimand letter sent to Soppe by the Iowa Supreme Court Attorney Disciplinary Board.

The reprimand letter warned bankruptcy lawyers about their ethical responsibilities when working with the Chicago-based firm, which does business as UpRight Law and Law Solutions. The Iowa Capital Dispatch published a story on the reprimand last week.

In Virginia, lawyer John Carter Morgan Jr. of Warrenton, Virginia, was suspended from law practice for one year in connection for his work for an UpRight Law client. The Fauquier Times covered the January 2022 suspension order by a three-judge panel in Fauquier County Circuit Court in a story last week.

UpRight Law uses nonlawyers to screen callers, determine what type of bankruptcy suits them, send out fee agreements and accept retainer fees, according to the Iowa Supreme Court Attorney Disciplinary Board. New clients are then assigned to partner attorneys in states where the clients reside.

The Iowa reprimand alleged that UpRight Law was slow to process refunds. The Virginia case that led to Morgans reprimand involved a Car Custody Program that used the sale of clients encumbered cars to pay legal fees.

UpRight Law said in a statement it is under new ownership, and it has made significant improvements to all of its client systems.

The statement said the Iowa matter was based on a series of unsubstantiated allegations, and the Virginia case relates to events that happened more than six years ago.

UpRight Law also denied using high-pressure sale tactics. The reference to such tactics was made in a 2018 bankruptcy court decision, and the description came 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 Attorney Disciplinary Board first learned of UpRight Law when a complainant said she called the bankruptcy firm in March 2019. She was told that the law firm needed her credit card for its files, but she learned a few days later that she had been charged $500 without authorization, she alleged.

She requested a refund March 4, 2019, but was told that UpRight Law could not process it until mid-May. She didnt actually receive a refund until July 12, 2019, which was a wait of 92 days, the disciplinary board said.

The Iowa attorney general conducted an investigation and found that several Iowa residents had requested refunds from UpRight Law and did not promptly receive them. One UpRight Law client said that, when she threatened to call the Better Business Bureau, UpRight Law responded that it was not scamming anyone, and it does not specialize in giving refunds. We file bankruptcies.

The investigation found that only one Iowa attorney registered an IOLTA account in connection with UpRight Law. Soppe was not that attorney. UpRight Laws client funds were handled and managed by accountants and lawyers in Chicago, and Soppe didnt have access to or oversight for that account, the July 2021 reprimand letter said.

Soppe declined comment when contacted by the Iowa Capital Dispatch.

In Virginia, Morgans suspension stemmed from a sanction 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 principals were sanctioned $250,000, and the law firm was suspended from practice in the court for five years, according to the bankruptcy court opinion, a Bloomberg Law story and a U.S. Department of Justice press release.

The bankruptcy court partly focused on an UpRight Law program in which clients could pay their legal fees by surrendering their encumbered cars to an Indiana towing company. The company claimed the right to keep the cars from the lien holder until towing, transportation and storage fees were paid. If the towing company sold the vehicle at auction, despite a security interest by the auto lender, it used the money to pay the bankruptcy fees.

Morgan had responsibility for filing a case in which his client was put into the car program, the bankruptcy court said.

Local attorneys joining multijurisdictional law firms as local or limited partners cannot be both tall and short, the bankruptcy court said. An attorney cannot claim to be a partner in the firm and file cases with the court as lead counsel, but yet claim no responsibility for what happens in the main office on the files the attorney decides to take.

The court also faulted Morgan for allowing his wife, his nonlawyer assistant, to meet with the client and review the bankruptcy petition and schedules. The filings in the case of the complaining client were replete with errors, the court said.

Morgan told the Fauquier Times that he has not been a limited partner with UpRight Law since 2016. He said he counseled hundreds of people referred from UpRight Law and filed 63 bankruptcy cases as a result.

UpRight Law said in its statement its improvements have provided greater transparency to clients, reduced refund times, allowed clients greater accessibility to firm representatives, and have overall resulted in significantly improved client experiences.

In the Iowa case, the statement said, ethics authorities didnt disclose the identities of the complaining clients and didnt supply details of their allegations. Nor were there any hearings with respect to the allegations, the statement said.

UpRight Law also said every partner attorney has oversight over client funds.

Every partner attorney has complete transparency into the process and the ability to dictate the final terms of the management of client funds, consistent with the terms of their partnership, the statement said.

With respect to the Virginia case, UpRight Law ended the car program in November 2015 and has not operated any similar program since then.

The sanction 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 people and families since 2014 obtain a fresh start through the bankruptcy process, the statement said. Many of of these people may have otherwise been left without the help they desperately needed. Over that time frame, UpRight Law has been the most prolific filer of consumer bankruptcies in the nation. Like other law firms and lawyers, UpRight Law is not infallible and has previously acknowledged that its participation in the Car Custody Program was a mistake. However, those events are now more than six years removed, occurred under different firm ownership, and UpRight Law has made countless improvements to better serve its clients. We look forward to continuing to serve those clients and working with our dedicated partners across the nation.

Updated at Feb. 14 at 4:50 p.m. to include statement by UpRight Law.

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Lawyers in 2 states sanctioned over association with national bankruptcy law firm - ABA Journal

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