VOL. 123 | NO. 198 | Thursday, October 9, 2008
Appeals Court Rules In Favor Of Forest Hill Attorney
By Bill Dries
The Tennessee Court of Appeals has let the attorney for Forest Hill Cemeteries and Funeral Home owner Clayton Smart off the hook for asserting his client’s Fifth Amendment right against self-incrimination.
But the court left in place a contempt of court citation against Smart by Chancellor Arnold Goldin in the civil proceedings against Smart.
The appeals court ruled Wednesday on an appeal of the contempt citation against Smart and his attorney, Scott Kramer.
“We find that the trial court abused its discretion by sanctioning attorney Kramer and we vacated the trial court’s order to that effect,” reads the ruling written by Appeals Court Judge Alan E. Highers.
Smart is facing criminal charges and civil proceedings for allegedly diverting $20 million from Forest Hill trust funds for personal use. The pending criminal charges against him are conspiracy, theft and money laundering. He’s also the defendant in two civil suits – one filed by state authorities and the other by the court-appointed receiver of Forest Hill.
Goldin ordered Smart jailed for violating a February 2007 court order instructing him to list money in the Forest Hill trust funds when he assumed ownership and to disclose where the money went. Goldin also held Kramer in contempt for waiving and then asserting Smart’s Fifth Amendment right.
At a hearing in June 2007, Kramer said his client hadn’t seen the earlier order seeking the information and would comply. Goldin gave Smart two weeks to comply. But two weeks later, Kramer said Smart was asserting his privilege against self-incrimination.
Max Shelton, the court-appointed receiver, immediately argued that Kramer had waived Smart’s fifth amendment rights at the June hearing.
“If the civil action is stayed until such time as the criminal matter can be resolved, then we will be dealing with a different set of circumstances,” Kramer replied, according to a transcript of the hearing. “And as to the waiver issues, I’m not certain that we could waive Fifth Amendment privilege.”
When Goldin pressed Kramer on what was said at the earlier hearing, Kramer said he did not waive his client’s Fifth Amendment rights.
“Your honor, I have nothing to say other than that we are not going to comply with that order due to my client’s Fifth Amendment privilege. I don’t think any explanation is required,” he told Goldin, according to the transcript.
Goldin then sanctioned Kramer for “misrepresentations intended to mislead the court.” The sanction was $5,113 in attorneys’ fees for the other side. Kramer immediately appealed. The appeals court ruling said judges should use such sanctions “sparingly.”
This week’s ruling concludes Smart didn’t take the fifth “in a timely manner.” But it also said Kramer wasn’t trying to mislead the court.
“Although we certainly understand the chancellor’s frustration with Mr. Smart’s repeated attempts to delay the progression of this case,” Highers wrote in Wednesday’s ruling, “from our review of the record we do not find any evidence that attorney Kramer was acting in bad faith by advising Mr. Smart to assert his Fifth Amendment privilege. Although his advice may have been substantively incorrect, it appears that it was well intentioned.”
The appeals court decision cites a 1975 U.S. Supreme Court ruling. The nation’s highest court ruled in that case that there is a “crucial distinction” between a “recalcitrant” witness and an attorney who advises that client “in good faith” to take the fifth.
“If his lawyer may be punished for advice so given, there is a genuine risk that a witness exposed to possible self-incrimination will not be advised of his right,” the Supreme Court ruling held.