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Year in Review: Opinions, Rules and Statistics The past year has been significant
for the lawyer discipline and regulation system in Minnesota, and
not because a new director was appointed approximately seven months
ago. Several important lawyer disciplinary decisions were issued by
the Supreme Court this calendar year, and changes to rules affecting
lawyers occurred. It also appears that the number of complaints received
has increased for the first time in several years. As of November 15, 2006, seven attorneys have been disbarred
this year: William Pugh, Martha Schmitt, Richard Day, Peter Mayrand,
Willard Wentzel, Brian Peterson and Eric DeRycke.1 In addition, 26
lawyers have been suspended so far this year, four of whose suspensions
were stayed, and ten lawyers have been publicly reprimanded, seven
of whom also are undergoing a period of probation. The reasons for lawyers being disbarred are varied and instructive
as to the nature of lawyer misconduct and discipline proceedings.
While there is no one best route to disbarment, misuse of client money
remains the most common. For example, Pugh and Schmitt were both criminally
convicted of theft; both had been temporarily suspended from the practice
of law while those criminal proceedings were pending, and now are
disbarred. Day and Mayrand had been suspended after the Director’s
Office was unable to locate them for service of the petition for disciplinary
action.2 Both faced allegations of misappropriation and other misconduct
and, being in default and with the allegations deemed admitted, were
disbarred. Wentzel also was found to have intentionally misappropriated
client funds; his misconduct outweighed his claims of substantial
mitigation. Peterson was found to have taken advantage of an elderly
woman whose funds he controlled, with misconduct including misappropriation
and a criminal sales tax conviction. In addition, some of Peterson’s
actions occurred while he already was on disciplinary suspension.
DeRycke had trust account overdrafts, neglected client matters, failed
to cooperate in the disciplinary process and had a lengthy public
disciplinary history. Other Opinions The Court issued several other significant lawyer discipline
decisions this past year. In contrast to the Wentzel decision referred to above, the Court suspended Edward Rooney
for 18 months for intentional misappropriation based upon Rooney establishing
several mitigating circumstances, perhaps most importantly that he
made full restitution even before the director first learned of overdrafts
in Rooney’s trust account and made inquiry. Daniel Moulton was recently
suspended for 90 days for failing to timely file and pay employer
withholding taxes. There often remains confusion concerning tax misconduct.
Failure to file individual income tax returns is misconduct; failure
to pay income taxes is not.3 Both
failure to file and failure to pay are misconduct as to employer withholding
(as it is other people’s money involved). In the Moulton
opinion the Court also stated that because cooperation with disciplinary
proceedings is required under the rules,4 it should not be considered
in mitigation. Some other important decisions by the Court this year did not
result in discipline of the lawyer. Sharon Ramirez was reinstated
conditionally to the practice of law subject to passage of the bar
exam. Ramirez was disbarred in 1997 for misappropriation that also
resulted in her criminal conviction. She was the second disbarred
attorney reinstated in the past two years, a result that was exceedingly
rare before that. In addition, eight lawyers were reinstated from
suspension this past year. Finally, in what is known as In re Panel File 20783, the Court upheld a request for information
by the director. The case involves a judicial candidate’s statements
about an incumbent judge, and whether these statements were made in
reckless disregard for the truth. The Court held that the Director’s
Office could require the attorney to reveal his sources for the information.
A district court had earlier ruled otherwise.5 The Supreme Court also
set out appropriate standards for the district court to apply to such
matters in future. New Rules The Rules for Attorney Registration are not a direct part of
the lawyer discipline system. They do affect Minnesota attorneys,
however, and when not complied with may create a disciplinary investigation.
Two such rule changes this year are the new malpractice insurance
reporting requirement and new classes for inactive status.6 The malpractice reporting rule, which was mentioned in this
column last month, in essence requires that lawyers who represent
private clients must report annually whether they maintain malpractice
insurance, with what company, and whether they intend to maintain
it for the upcoming year. This will be public information available
from the attorney registration office. Among the new fee status categories
created by revisions to Rule 6, one will require increased registration
fees for inactive out-of-state attorneys who wish to maintain their
Minnesota licenses. More Statistics A possibly troubling statistic for this past year is that complaints
received by the Director’s Office have increased, perhaps fairly significantly.
For several years, the number of complaints has remained constant
at around 1,150-1,200 per year. Recently, an upsurge has occurred,
and at the current pace at least 1,250 complaints will be received
this year. While this would not be statistically significant for one
year, what is troubling is that the number of complaints received
in the most recent six months would annualize at 1,350. In fact, two
of the four busiest months for new complaints in the past ten years
occurred in August and October 2006. If this pace continues, 200 additional
complaints per year would seriously stretch the system’s current resources. Part of what accounts for this increase is that requests to
resign from the bar are running at four times the previous average
(37 thus far), mainly due to the attorney registration rule change
for out-of-state attorneys identified above. Resignations are treated
as complaint files for statistical purposes. But this accounts for
only a fraction of the increase. Win Some, Lose Some Finally, it was recently suggested (facetiously I think) that
it would be instructive to write this column about cases which the
Director’s Office “lost.” Although we may occasionally be disappointed
with the outcome of a matter decided by a Lawyers Board Panel7 or
the Supreme Court, the disciplinary system is intended to protect
the public and to achieve a fair and just result. It should not be
surprising, therefore, that occasionally the discipline imposed will
be less than we as prosecutors have asked for; that does not make
the Director’s Office the losing party.8 Likewise, since the Director’s
Office often will be advocating on behalf of the public for a higher
level of discipline, as long as the discipline imposed is within a
reasonable range, it is appropriate that sometimes Lawyers Board panels
or the Court may draw the line a bit differently than requested. One reason for such results is that, for the most part, cases
that are heard by Supreme Court referees or panels are those cases
that should be heard. The most obvious determinations rarely go to
hearing since where clear evidence of serious misconduct exists the
attorney may stipulate to probable cause or discipline, or the director
may obtain approval from the panel chair without a hearing based upon
clear documentary evidence or a criminal conviction.9 Thus, usually
the cases heard by Lawyers Board panels or Supreme Court referees
are the “close calls” that should receive a full evidentiary hearing.
Notes 2 Rule 12(c), Rules on Lawyers Professional Responsibility
(RLPR), provides that when an attorney cannot be found within the
state, he may be suspended. The attorney then has one year in which
to seek permission to answer the petition, and if he does not do so,
the director may petition for an order to show cause, which then results
in final discipline being imposed. 3 See, e.g., In re Tyler,
495 N.W.2d 184, 186 fn. 1 (Minn. 1992). 4 Rule 8.1(b), Minnesota Rules of Professional Conduct (MRPC),
and Rule 25, RLPR. 5 Rule 25, RLPR, provides that the reasonableness of requests
for information by the director may be challenged in Ramsey County.
The attorney is denominated by initials or by panel file number if
the matter is still at a confidential investigation stage. 6 Rules 2 and 6, Rules of the Supreme Court on Attorney Registration. 7 Pursuant to Rule 9, RLPR, Lawyers Board panels hear several
different types of cases: 1) hearings to determine whether there is
probable cause to believe that public discipline is warranted, in
which the panel can also issue an admonition or dismiss the matter;
2) hearings in which a respondent attorney is challenging an admonition
issued by the director; and 3) public reinstatement hearings of suspended,
disbarred or disabled lawyers. 8 This notion is reinforced by the Court’s approach to Rule
24, RLPR, which awards costs to “the prevailing party.” Respondents
have argued that, in cases where the lawyer gets suspended when the
director was seeking disbarment, for example, that the respondent
was in fact the prevailing party. The Court still considers the Director’s
Office to be the prevailing party in such matters. 9 See Rule 10(a), (c) and (d), RLPR. MARTIN COLE |
