State supreme court upholds attorney suspension without leave

The state’s highest court upheld the recommendation of the Office of Chief Disciplinary Counsel that an attorney be suspended indefinitely without leave to reapply for reinstatement for three years after finding him guilty of professional misconduct.

In a March 4 opinion, the court agreed with the OCDC’s recommendation over a panel recommendation that the court stay the suspension and instead apply probation for attorney Paul Eric Petruska.

Petruska has no prior disciplinary history and worked as a chief trial attorney for Zurich Insurance Company when the misconduct occurred. At the time of the panel hearing, he was working for U.B. Greensfelder after being fired by Zurich.

After offering a settlement without permission, failing to inform his client of sanctions, delaying payments in the settlement and continually lying to the plaintiffs in the case, the court found him guilty of violating five rules of professional conduct.

In 2018, Petruska began work on a case representing Zurich and its insured, an automobile dealership, according to the court. One of the dealership’s employees was involved in a car accident along with a mother and daughter who were injured. The mother and daughter sued.

As the case went on, Petruska had difficulty locating the former employee of the dealership for a deposition. After eventually finding the employee through a private detective, the employee still repeatedly failed to appear in court and the plaintiff sought sanctions as a result.

As the claims adjuster on the case asked Petruska to find an expert to counter one of the plaintiff’s experts, Petruska met separately with the plaintiffs and determined that they would be willing to accept a $120,000 settlement. He emailed back and forth with the plaintiffs explicitly stating that he had the authority to offer the settlement.

“The plaintiffs accepted the settlement terms on the condition the defendants’ paid costs, including the fees and costs awarded in the sanction order,” according to the court. “Petruska drafted a settlement agreement and release for each plaintiff, and the plaintiffs executed those agreements. Petruska admits neither the adjuster nor the claims department gave him sufficient authority to settle the lawsuit. The defendants likewise did not give him the authority to settle the lawsuit.”

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The case was settled in the circuit court and the court set a deadline for payment of Jan. 10, 2020.

“The court ordered the defendants to pay the settlement by January 24 and further ordered, if the funds were not paid by that deadline, post-judgment interest would be included in the settlement to run from the original settlement date,” according to the court. “Petruska and plaintiffs’ counsel again signed the order. In each instance, the circuit court had no reason to believe Petruska lacked authority to settle the case. Petruska did not notify Zurich or the defendants of the purported settlement during this time.”

The plaintiffs repeatedly demanded the payment but Petruska only responded with “lies and delay,” the court noted.

Petruska claimed to the disciplinary board that he took these actions to protect the employee of the car dealership because he worried “the adjuster would find a possible excuse to deny coverage because the former employee was not participating in his defense.”

When Zurich discovered what had happened after a review of Petruska’s files they paid the settlement, ordered him to stop all work on the case and eventually fired him.

The state supreme court determined Petruska violated rules 4-1.2(a), 4-1.3, 4-1.4, 4-3.3, and 4-8.4(c) of the professional code of conduct. The first three of these rules relate to client-attorney relationships, rule 4-3.3 bars an attorney from making a false statement before a tribunal and rule 4-8.4 says an attorney commits misconduct when they knowingly engage in fraud or dishonest conduct.

Because disbarment is the baseline sanction for such behavior, the court agreed the OCDC was correct in their decision to suspend Petruska without leave rather than putting him on probation considering the mitigating factor of having no prior disciplinary record and his community involvement and cooperation with the disciplinary process.

The opinion of the majority was written by Judge Robin Ransom with Judge Paul Wilson dissenting — arguing Petruska should be able to apply for reinstatement after one year.

The case is: In Re: Paul Petruska, Case no. SC100727.