in the Court of Appeals 5 September 2017.
by defendant from orders entered 1 July 2015, 8 and 24
February 2016, 8, 9, and 18 March 2016, and 14 July 2016, by
the Honorable Beverly T. Beal, Hearing Panel Chair of the
North Carolina State Bar No. 15 DHC 15, Disciplinary Hearing
Counsel David R. Johnson and Counsel Katherine Jean for
plaintiff-appellee, The North Carolina State Bar.
Christopher W. Livingston, defendant-appellant pro se.
the Disciplinary Hearing Commission's conclusions that
Christopher W. Livingston violated the Rules of Professional
Conduct are supported by the findings of fact which are in
turn supported by the evidence, and where Livingston's
conduct caused significant harm or potentially significant
harm to the public, the profession, or the administration of
justice, we affirm the order disciplining Livingston and
imposing a five year suspension of a law license with an
opportunity to petition for a stay after two years.
March 2008, defendant Christopher W. Livingston, an attorney,
entered into an agreement with a business known as Credit
Collections Defense Network ("CCDN") to serve as an
"Associate Attorney." In that position, Livingston
agreed to accept referrals of debt-laden consumers from CCDN,
which is not a law firm, whereby CCDN would collect fees from
customers and convey a portion to Livingston for his legal
services to those customers. Per the agreement, Livingston
was responsible for "legal advice, litigation, filing of
pleadings, discovery responses (if necessary), and . . .
cover[ing] court appearances (if necessary)" for
20 April 2008, Livingston concluded that CCDN was engaged in
the unauthorized practice of law by preparing court documents
for CCDN's customers to file pro se. Livingston
so advised CCDN through its representative, Colleen Lock, but
did not terminate his relationship with CCDN. As such, CCDN
continued to represent to North Carolina residents that CCDN
was affiliated with licensed North Carolina lawyers, namely
September 2008, Livingston filed three lawsuits against CCDN
(respectively, "Lawsuits 1, 2, and 3") in Bladen
County District Court on behalf of three CCDN
customers-William Harrison, Sheryl Lucas, and Cathy
Hunt-alleging fraud, unfair and deceptive trade practices,
gross and willful legal malpractice, and violations of both
the North Carolina and federal Racketeer Influenced and
Corrupt Organizations Acts ("RICO"). Livingston
named a number of individuals and out-of-state business
entities, including Robert Lock, Philip Manger, and R.K. Lock
& Associates d/b/a "CCDN, " but did not name
the legal entity "CCDN, LLC" as a defendant. After
making appearances to challenge personal jurisdiction over
the named defendants, counsel for CCDN informed Livingston
that CCDN was a limited liability company organized in
Nevada. Livingston confirmed that fact but did not amend the
complaints he had filed.
January 2009, while Lawsuits 1, 2, and 3 were still pending,
Livingston filed another lawsuit ("Lawsuit 4") in
Bladen County Superior Court against many of the same
individual named defendants. Lawsuit 4 also named CCDN, LLC
as a defendant. Livingston framed Lawsuit 4 as a class action
and named an individual plaintiff, Sharon Southwood, as the
class representative. In a motion to certify the class,
Livingston stated that he would not provide notice to class
members as required by law. No class was ever certified.
2009, the trial court dismissed Lawsuits 1, 2, and 3 for
failure to name a necessary party-CCDN, LLC-and for lack of
personal jurisdiction over the remaining defendants. The
trial court concluded that none of the individual defendants
had sufficient minimum contacts for personal jurisdiction
before a North Carolina court. See Lucas v. R.K. Lock
& Assocs., Nos. COA10-874, COA10-875, COA10-891,
2011 WL 721289, at **5-6 ( N.C. Ct. App. Mar. 1, 2011)
(unpublished), rev. denied, 365 N.C. 347');">365 N.C. 347
November 2009, Livingston commenced a RICO class action
against CCDN and other named defendants in U.S. District
Court for the Eastern District of North Carolina
("Lawsuit 5"). On or about 17 November 2009,
Livingston contacted a South Carolina attorney, Andrew
Arnold, who was representing CCDN in South Carolina
litigation. Livingston left Arnold a voicemail message
stating that he represented a "national class" in
his suit, that Arnold had participated in a money laundering
scheme by accepting legal fees from CCDN, and demanded that
Arnold forfeit to Livingston all fees he had received from
CCDN. Livingston also threatened to join Arnold in Lawsuit 5.
later, Livingston filed an amended complaint in Lawsuit 5,
adding Arnold, Arnold's firm, the North Carolina lawyer
who represented CCDN in Lawsuits 1-4 (Lee Bettis),
Bettis's firm, and individual members of Bettis's
firm who had not participated in representing CCDN.
Livingston accused the lawyers and their firms of having
knowledge of their clients' fraudulent conduct and
participating in the fraud by accepting legal fees and
representing CCDN clients. The federal court later dismissed
the aforementioned lawyers and their firms from Lawsuit 5 as
Livingston had no basis in law or fact to sue them. See
Taylor v. Bettis, 976 F.Supp.2d 721, 733-34, 736-39,
741-42, 745-47, 752-54 (E.D. N.C. 2013) (denying
defendants' motion to dismiss but finding for defendants
on their motion for judgment on the pleadings and dismissing
Lawsuit 5 was still pending, on 7 January 2011, Livingston
filed Lawsuit 6 in Columbus County Superior Court against the
North Carolina attorneys on substantially the same underlying
facts as alleged in Lawsuit 5. By email, Livingston informed
Philip Collins, opposing counsel for the North Carolina
attorneys in Lawsuit 6, that he planned to file suits against
them each month for the remainder of the year. On 22 February
2011, the Columbus County Superior Court dismissed Lawsuit 6,
which dismissal was affirmed by this Court. Cullen v.
Emanuel & Dunn, PLLC, No. COA11-921, 2012 WL
3573696, at *3, *11 ( N.C. Ct. App. Aug. 21, 2012)
April 2015, the North Carolina State Bar filed a complaint
with the Disciplinary Hearing Commission (the
"DHC") against Livingston alleging attorney
misconduct in violation of the North Carolina Rules of
Professional Conduct ("RPC"). Livingston filed his
answer on 4 May 2015.
hearing was held before the DHC from 17 to 20 May 2016. On 14
July 2016, the DHC entered its Order of Discipline suspending
Livingston's law license for five years with the
possibility of a stay after two years. On 5 August 2016,
Livingston filed notice of appeal from the Order of
Discipline and other orders entered against
appeal, Livingston argues the DHC (I) violated his due
process and equal protection rights; (II) erroneously found
RPC violations; and (III) ordered excessive discipline.
first argues the DHC violated his due process and equal
protection rights, arguing that he received "no
meaningful evidentiary hearing." Specifically,
Livingston argues the DHC took an insufficient amount of time
to consider the evidence presented, the State Bar engaged in
prosecutorial misconduct, and the findings of fact in the
DHC's order are vague. We disagree.
standard of review for alleged violations of constitutional
rights is de novo." State v. Graham,
200 N.C.App. 204, 214, 683 S.E.2d 437, 444 (2009) (citation
omitted). However, "a constitutional question which is
not raised and passed upon in the trial court will not
ordinarily be considered on appeal." State v.
Hunter, 305 N.C. 106, 112, 286 S.E.2d 535, 539 (1982)
extent Livingston makes a constitutional challenge for the
first time on appeal, he contends he received "no
meaningful evidentiary hearing, violating his Fourteenth
Amendment due process and equal protection and N.C. Const.
Art. I § 19 Law-of-the-Land rights[.]" We briefly
address this argument.
on our thorough review of the record in this case, we are
satisfied that "the DHC conducted a fair and unbiased
process that fully comported with the principles of due
process." See N.C. State Bar v. Sutton, ___
N.C.App. ___, ___, 791 S.E.2d 881, 891 (2016), appeal
dismissed, ___ N.C. ___, 797 S.E.2d 296 (2017). Due
process was satisfied where Livingston was given notice of
the allegations against him, he filed an answer to the
DHC's complaint, served discovery on the DHC, took
depositions, attended the trial, examined witnesses, and made
arguments before the DHC, availing himself of a full and fair
opportunity to participate. See N.C. State Bar v.
Braswell, 67 N.C.App. 456, 458, 313 S.E.2d 272, 274
(1984) ("The filing of a formal complaint satisfies [a]
defendant's right to be informed of and respond to the
charges against him."). Contrary to Livingston's
argument, due process does not require the DHC to deliberate
for any prescribed length of time. Livingston also alleges
the State Bar engaged in prosecutorial misconduct by failing
to correct false testimony given by Bettis. But Livingston is
unable to show that Bettis's testimony was false, and is
therefore unable to sustain a claim of prosecutorial
misconduct based on "failure to correct false
testimony." Finally, as set forth in Section II,
infra, the findings of fact in the Order of
Discipline are not vague. Indeed, the DHC "ruled on
numerous motions filed by [Livingston] and issued orders
containing detailed findings of fact and conclusions of law.
Therefore, the record belies [Livingston's] assertion
that he was denied due process in connection with his
disciplinary proceeding." Sutton, ___ N.C.App.
at ___, 791 S.E.2d at 891. Accordingly, Livingston's
argument that the DHC violated his due process and equal
protection rights, as well as his N.C. Constitutional rights,
next argues the DHC erroneously found that he violated the
Rules of Professional Conduct because the findings of fact
are not supported by the evidence. We disagree.
from orders of the DHC "are conducted under the
'whole record test, ' which requires the reviewing
court to determine if the DHC's findings of fact are
supported by substantial evidence in view of the whole
record, and whether such findings of fact support its
conclusions of law[.]" N.C. State Bar v.
Talford, 356 N.C. 626, 632, 576 S.E.2d 305, 309 (2003)
(internal citations omitted).
Such supporting evidence is substantial if a reasonable
person might accept it as adequate backing for a conclusion.
The whole-record test also mandates that the reviewing court
must take into account any contradictory evidence or evidence
from which conflicting inferences may be drawn. Moreover, in
order to satisfy the evidentiary requirements of the
whole-record test in an attorney disciplinary action, the
evidence used by the DHC to support its findings and
conclusions must rise to the standard of "clear[,
cogent, ] and convincing."
Id. at 632, 576 S.E.2d at 309-10 (alteration in
original) (internal citations omitted) (quoting In re
Suspension of Palmer, 296 N.C. 638, 648, 252 S.E.2d 784,
790 (1979)). "Ultimately, the reviewing court must apply
all the aforementioned factors in order to determine whether
the decision in the lower body, e.g., the DHC, 'has a
rational basis in the evidence." Id. at 632-33,
576 S.E.2d at 310 (citation omitted) (quoting In
re Rogers, 297 N.C. 48, 65, 253 S.E.2d 912, 922
[U]nder the whole record test, . . . the following steps are
necessary as a means to decide if a lower body's decision
has a "rational basis in the evidence": (1) Is
there adequate evidence to support the order's expressed
finding(s) of fact? (2) Do the order's expressed
finding(s) of fact adequately support the order's
subsequent conclusion(s) of law? and (3) Do the expressed
findings and/or conclusions adequately support the lower
body's ultimate decision? . . . [I]n cases such as . . .
those involving an "adjudicatory phase" (Did the
defendant commit the offense or misconduct?), and a
"dispositional phase" (What is the appropriate
sanction for committing the offense or misconduct?), the
whole-record test must be applied separately to each of the
Id. at 634, 576 S.E.2d at 311.
Conclusions 2(a) and 2(b)
challenges Conclusions 2(a) and 2(b) as unsupported by the
findings of fact, specifically Findings of Fact Nos. 4-12, as
he contends those findings are not supported by competent
evidence. Conclusions 2(a) and 2(b) state as follows:
(a) By entering into a contractual agreement with CCDN which
contemplated the sharing of legal fees with a nonlawyer in
violation of Rule 5.4(a), Livingston attempted to violate the
Rules of Professional Conduct in violation of Rule 8.4(a);
(b) By affiliating with CCDN and providing legal services to
customers of CCDN, which was engaged in the unauthorized
practice of law in North Carolina, Livingston assisted
another in the unauthorized practice of law in violation of
of Fact Nos. 4-12 are as follows:
4. In March 2008, Livingston entered into a contractual
agreement with Credit Collections Defense Network, LLC
("CCDN"), whereby CCDN would refer debtors seeking
debt-relief assistance to Livingston for legal representation
(this contract hereinafter referred to as "the Associate
5. CCDN was not a law firm, and was not authorized to engage
in the practice of law in North Carolina.
6. The Associate Attorney Agreement provided that CCDN would
collect fees from customers and then remit a portion of those
fees to Livingston for legal services Livingston rendered to
7. The Associate Attorney Agreement provided that CCDN would
"prepare drafts of all [court] filings for review and
approval" by Livingston.
8. The Associate Attorney Agreement prohibited Livingston
from "directly or indirectly attempting in any manner to
persuade any client of CCDN to cease to do business with or
to reduce the amount of business which any such client has
customarily done or actively contemplates doing with
9. On or about 20 April 2008, Livingston determined that CCDN
and/or its marketing partners had prepared legal documents
for CCDN customers to file pro se or to be used to otherwise
guide pro se litigation and thus had engaged in the
unauthorized practice of law.
10. On or about 20 April 2008, Livingston advised a CCDN
representative, Colleen Lock, that, in preparing pleadings to
be filed pro se, CCDN was engaged in the unauthorized
practice of law.
11. Despite becoming aware, at least as early as April 2008,
that CCDN was engaged in the unauthorized practice of law,
Livingston accepted additional clients from CCDN rather than
immediately terminate his contractual relationship with CCDN.
12. Livingston aided CCDN's unauthorized practice of law
in North Carolina by maintaining his affiliation with CCDN.
This allowed CCDN to continue to represent to North Carolina
residents that it was affiliated with licensed lawyers in the
Conclusion 2(a)-Sharing of Legal Fees
contends that because he at most agreed to share fees, and
binding precedent holds that "agreement" falls
short of "attempt, " Findings of Fact 4-12 are
"legally erroneous, " and the DHC's conclusions
that he violated Rule 5.4(a) (sharing legal fees with a
nonlawyer) and attempted to violate Rule 8.4(a)
(violating/attempting to violate the RPC or knowingly assist
another to do so) should be vacated.
5.4(a) states that "[a] lawyer or law firm shall not
share legal fees with a nonlawyer . . . ." N.C. Rev. R.
Prof. Conduct, Rule 5.4(a) (2015). Although the Rules of
Professional Conduct are not criminal statutes,
Livingston's conduct in agreeing to share fees with CCDN
met each of the required elements for criminal attempt:
"(1) the intent to commit the substantive offense, and
(2) an overt act done for that purpose which goes beyond mere
preparation, but (3) falls short of the completed
offense." State v. Coble, 351 N.C. 448, 449,
527 S.E.2d 45, 46 (2000) (citation omitted) (quoting
State v. Miller, 344 N.C. 658, 667, 477 S.E.2d 915,
921 (1996)). Here, the findings of fact show that Livingston
(1) intended to improperly share fees with CCDN, a nonlawyer
entity, and entered into a contract for that purpose; (2)
performed his services under the contract; and (3) expected
to be paid, but was not. These findings, which support
Conclusion 2(a), are also supported by the evidence.
Livingston has offered no evidence that contradicts the
findings other than his declaration that it was not his
intent to share fees with a nonlawyer. Second,
Livingston testified he entered into the agreement, the
agreement itself was entered into evidence at trial, and one
of Livingston's own witnesses testified the only reason
fee sharing never happened was because CCDN failed to make
the payments. Accordingly, the findings of fact are supported
by the evidence, which in turn support the DHC's
conclusion that Livingston entered into an agreement which
contemplated the sharing of legal fees with a nonlawyer
entity in violation of Rule 5.4(a).
Conclusion 2(b)-Assisting Another in the Unauthorized
Practice of Law
version of Rule 5.5(d) in effect at the time of
Livingston's conduct provided that "[a] lawyer shall
not assist another person in the unauthorized practice of
law." N.C. R. Prof. Cond., Rule 5.5(d)
(2016). The unauthorized practice of law in North
Carolina is defined by statute, see N.C. Gen. Stat.
§ 84-2.1 (2015), which prohibits the practice of law by
It shall be unlawful for any corporation to practice law . .
. or hold itself out to the public or advertise as being
entitled to practice law; and no corporation shall organize
corporations, or draw agreements, or other legal documents,
or draw wills, or practice law, or give legal advice, or hold
itself out in any manner as being entitled to do any of the
foregoing acts, by or through any person orally or by
advertisement, letter or circular.
N.C. Gen. Stat. § 84-5(a) (2015). Under North Carolina
law, a business corporation may not provide legal services or
the services of lawyers even if those services are performed
by licensed North Carolina attorneys. See Gardner v. The
N.C. State Bar, 316 N.C. 285, 294, 341 S.E.2d 517, 523
Livingston concedes that CCDN was engaged in the unauthorized
practice of law. Livingston claims to have learned that CCDN
was so engaged in April 2008, after CCDN customers referred
to him told him what CCDN was doing. Livingston also concedes
that he did not end his relationship with CCDN for another
six weeks. Thus, even if Livingston did not become aware that
CCDN was engaged in the unauthorized practice of law before
April 2008, by his own concession, his failure to immediately
terminate his relationship with CCDN when he did become aware
of its unauthorized practice of law enabled CCDN to continue
to promote having a North Carolina attorney (Livingston)
available for its customers. Livingston's challenges to
Conclusion 2(b) and the supporting findings of fact are
unavailing and are overruled.
challenges the DHC's Conclusion 2(c) as unsupported by
the findings of fact, specifically Findings of Fact Nos.
13-29, as he contends those findings are not supported by
competent evidence. Conclusion 2(c) states that "[b]y
filing civil actions against defendants in a court that he
knew lacked the ability to obtain jurisdiction over the
defendants and by failing to join necessary defendants in
those actions, Livingston engaged in conduct prejudicial to
the administration of justice in violation of Rule
8.4(d)[.]" Findings of Fact Nos. 13-29 are as follows:
13. Later in 2008, after undertaking representation of
several clients that CCDN referred to Livingston, Livingston
concluded that CCDN practices were frivolous and fraudulent
and began representing CCDN customers against CCDN.
14. In September 2008, Livingston filed three complaints
against CCDN on behalf of clients CCDN had referred to
15. Livingston filed these three complaints in Bladen County
District Court (hereinafter collectively referred to as
"the Bladen County actions").
16. The Bladen County actions were captioned as follows: (i)
Hunt v. R.K. Lock & Associates, an Illinois general
partnership d/b/a Credit Collections Defense Network or CCDN;
Robert K. Lock Esp.; Colleen Lock; Philip M. Manger Esq.;
Tracy Webster; and Lawgistix, LLC, a Florida limited
liability company, Defendants, Bladen County District Court
file no. 08 CVD 883; (ii) Lucas v. R.K. Lock &
Associates, an Illinois general partnership d/b/a Credit
Collections Defense Network or CCDN; Robert K. Lock Esq.;
Colleen Lock; Philip M. Manger Esq.; and Mark A. Cella,
Bladen County District Court file no. 08 CVD 884, (iii)
Harrison v. Aegis Corporation, a Missouri corporation; Debt
Jurisprudence, Inc., a Missouri corporation; R.K. Lock &
Associates, an Illinois general partnership d/b/a Credit
Collections Defense Network or CCDN; Robert K. Lock Esq.;
Colleen Lock; Philip M. Manger Esq.; David Kramer; Marcia M.
Murphy; and Tracy Webster, Defendants, Bladen County District
Court file no. 08 CVD 885.
17. Livingston alleged on behalf of his clients in the Bladen
County action that the defendants' actions constituted
unfair and deceptive trade practices, fraud, breach of
contract, gross and willful legal malpractice, violations of
the "North Carolina Racketeer and Corrupt Organizations
Act", violations of the "Credit Repair
Organizations Act", and violations of the Racketeer
Influenced and Corrupt Organizations Act."
18. Livingston further alleged that "CCDN sometimes
refers to itself as 'CCDN LLC' but no limited
liability company by that name can be found meaning that CCDN
is a general partnership."
19. None of the other defendants Livingston named in the
Bladen County actions had personal minimum contacts with the
State of North Carolina.
20. Those defendants only had contact with North Carolina by
and through their employment by or ...