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Local lawyer gives up law license after legal battle with debt collector

Rexburg

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Courtesy Dimond Hepworth

REXBURG — A Rexburg lawyer has opted to give up his license rather than face sanctions from the Idaho State Bar.

Ryan Ballard’s career as an attorney in Idaho came to an end on Aug. 28, when the Idaho Supreme Court accepted his resignation in place of disciplinary hearings. The court indicated Ballard violated 17 Idaho Rules of Professional Conduct between 2014 and 2016. Chief among those violations was filing a lawsuit without a client’s knowledge or authorization, and failing to tell clients about settlement offers from the opposing side.

The Idaho Rules of Professional Conduct are the requirements to practice law in Idaho. Specifically, the rules outline the duties of an attorney and how an attorney should interact with clients.

The court’s findings were released after an investigation into Ballard was prompted by a 217-page grievance filed with the Idaho State Bar by Idaho Falls attorney Bryan Smith in 2018.

Smith has a stake in both Medical Recovery Services, an Idaho Falls debt collection company, and its representing law firm, Smith, Driscoll & Associates. Both entities were at the center of the legal cases, which ultimately resulted in Ballard’s resignation.

Following its investigation, the Idaho State Bar filed a complaint against Ballard with the Idaho Supreme Court in June.

Background

Ballard started Ballard Law in Rexburg in late 2012, around the time he joined the Idaho State Bar, according to documents filed with the Idaho Secretary of State and the Idaho State Bar. He focused on defending people who were being sued by debt collectors.

In early 2014, Ballard reviewed a significant number of court cases. He then sent a form letter to between 600 to 700 debtors who had been sued in the previous year by collection companies represented by Smith, Driscoll & Associates, according to the grievance filed by Smith.

In an EastIdahoNews.com investigation earlier this year, it was determined that Smith, Driscoll & Associates files thousands of debt collection lawsuits annually across the state, primarily on behalf of Medical Recovery Services. The practice and the debt collection company have been criticized for tacking on very large attorney fees to debt collection lawsuits, which, in some cases, far exceeds the original amount owed.

RELATED: Medical debt nightmare: Why a local woman could end up paying over $5,550 for her $294 doctor’s visit

Ballard’s letter was written to appeal to those who had dealt with an MRS/Smith Driscoll & Associates lawsuit. The subject line of the letter was “Let me DEFEND you against third-party debt collector lawsuit.”

The letter explains that Ballard reviewed court records and saw that Medical Recovery Services had recently sued the individual. He then explains that he believes MRS and Smith, Driscoll & Associates were violating the federal Fair Debt Collection Practices Act and Idaho Consumer Protection Act,” according to the grievance.

Ballard then tells the recipients that they “may be entitled to compensation for the unfair practices” from MRS or Smith Driscoll & Associates and to contact him for a free consultation.

About 23 debtors, representing 15 different cases, contacted Ballard in response. He would later clarify in a deposition that during his initial contact with these individuals, he received permission to file a lawsuit against MRS and Smith, Driscoll & Associates on their behalf. It was also based on the understanding that he would not charge an hourly fee, but would be paid from any attorney’s fees that were collected upon winning the lawsuit.

According to this verbal agreement, the debtors would “would not owe (him) anything” if he lost. Ballard did not have a written contract with any of his clients.

In June 2014, Ballard filed a group of lawsuits against MRS and Smith, Driscoll & Associates on behalf of those 23 people.

The lawsuits

The lawsuits, which were later combined into one omnibus complaint, focused on four areas, which Ballard indicated MRS and Smith, Driscoll & Associates were violating.

In the combined lawsuit, Ballard said MRS/SDA violated federal law by charging improper interest or fees in debt collection lawsuits and by misrepresenting to clients that a payment plan was sufficient response to a lawsuit. Ballard also asserted MRS/SDA violated state law by not providing proper notice to clients about lawsuits being filed and by attempting to deceive clients into believing that payment to MRS was the only possible outcome of lawsuits filed against them.

The complaint requested a jury trial and at least $10,000 in damages per defendant for the alleged violations of state and federal law.

Things didn’t go as planned for Ballard, though. The lawsuit dragged along for the better part of three years, according to court documents. Hundreds of motions and actions were filed in the case as the two parties debated the merits of the lawsuit.

Smith attacked individual points of the lawsuit, and at one point filed a counter lawsuit against Ballard and his clients for malicious prosecution. He was able to get some parts of the first lawsuit dismissed because the information Ballard used was wrong. In some cases, Ballard asserted MRS was charging 18 percent interest when it was, in many cases, charging 12 percent.

Smith also began the process of deposing — or interviewing — many of the plaintiffs in the initial case. Once interviewed, it appears Smith used the information gleaned to argue parts of the lawsuit were frivolous, or “spurious and filed solely for harassment purposes.”

In some cases, after depositions, the clients voluntarily agreed to drop charges, as they no longer felt the outcome of the case, even if they were successful, was in their best interests, according to court documents. Some clients opted to drop claims rather than attend depositions.

Eventually, the entire case was dismissed, and Ballard was ordered to pay attorney fees to MRS on behalf of his clients. The malicious prosecution lawsuit filed by MRS/SDA against Ballard and his clients was settled for $250,000, according to court documents. Ballard paid the fees owed in the first case as part of that settlement.

Ballard confirmed to EastIdahoNews.com that insurance covered the entire settlement and attorney fees. None of his clients lost any money.

Findings against Ryan Ballard

One thing that became clear during Smith’s depositions was there was a communications disconnect between Ballard and his clients from the very beginning. Smith’s grievance to the state bar includes many examples where developments in the case were never communicated to the client.

The complaint filed by the Idaho State Bar against Ballard outlines many of the same examples listed in Smith’s grievance.

Court documents show as part of the investigation, Ballard testified he did not send a copy of the lawsuit to any of his clients after it had been filed. He also admitted he did not promptly inform his clients about decisions that would have required their consent.

Of the 23 people he was representing, 17 of them told the Idaho State Bar that they did not authorize Ballard to file a lawsuit on their behalf.

Ballard failed to inform his clients when MRS/SDA attempted to dismiss part of the claim and when he failed to oppose that dismissal. He failed to tell a number of his clients or receive authorization for a venue change, or to consolidate multiple lawsuits into one.

Ballard tried to settle the case without telling any of his clients or receiving their authorization. Later, when MRS/SDA tried to settle the case, Ballard opted not to tell his clients about the offer.

Ballard also didn’t tell some of his clients about their depositions, and as a result, they did not attend. He also failed to tell his clients that legally, they were on the hook for attorney’s fees and courts costs after the lawsuit was dismissed in favor of MRS/SDA.

For a detailed list of Ballard’s interactions with his clients, review the entire 161-page Idaho Supreme Court Case here.

“I took some shortcuts.”

Throughout the investigatory process, Ballard was forthcoming about his mistakes in the case. He declined an interview with EastIdahoNews.com but issued the following statement:

“In seven years of practicing law, I was able to help more than 1,000 Idahoans resolve collection lawsuits brought against them. I also represented approximately 70 people in lawsuits against debt collectors for alleged abusive collection efforts and practices.

Unfortunately, in my zeal to help as many people as I could, I took some shortcuts, including not always explaining all possible outcomes and downsides of their case, not always making sure our fee arrangements were in writing (which were almost always on a fee-shifting basis where I worked for free unless I won the case for the client and then I would get paid by the other party), and not always regularly updating clients about their case. Notably, it was not my clients that initially complained to the Idaho State Bar about my missteps.

“For many years, debt collectors in Idaho have had free rein to pursue debtors in any manner they saw fit, even if they were arguably violating collection laws. By attempting to shine a light on some of these practices, I made powerful enemies which have made it their mission to prevent me from being an impediment to their business. Those enemies have succeeded. I regret that I will no longer be able to provide a valuable service to the community as there are very few attorneys in the state (if any, now) willing to represent consumers who cannot afford to pay an hourly rate.”

The aftermath

The Idaho State Bar filed formal charges against Ballard in June, and both sides agreed that Ballard’s resignation instead of a disciplinary hearing would resolve the complaint.

As part of the resignation, Ballard cannot reapply to the Idaho State Bar for at least five years. If he does reapply, he will have to comply with all bar admission requirements and have the burden of overcoming the “rebuttable presumption of the unfitness to practice law.”

“We are now totally vindicated.”

As for Medical Recovery Services and Smith, Driscoll & Associates, they came away from the lawsuit in a significantly better position than before, given the size of the settlement.

“Ryan Ballard filed over two dozen lawsuits against my law firm, Smith, Driscoll & Associates, PLLC, and against Medical Recovery Services, LLC,” Smith said in a statement to EastIdahoNews.com.

“The court agreed that we had done nothing wrong. And what we said then continues to be true today that Smith, Driscoll & Associates and Medical Recovery Services follow the laws applicable to debt collection. The loss of a law license is an appropriate step to discourage unethical conduct, and we are always willing to work with the Idaho State Bar, like we did here, to make sure lawyers are held to account. We are also pleased that the Idaho State Bar investigated the matter thoroughly and that we are now totally vindicated from the claims that Mr. Ballard made against us.”

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