In re Charges of Unprofessional Conduct in Panel Case No. 44387
In re Charges of Unprofessional Conduct in Panel Case No. 44387
Opinion of the Court
In this discipline case, an attorney challenges the findings made by a panel of the Lawyers Professional Responsibility Board and the discipline imposed. We conclude that the panel's findings are supported by the evidence and are not clearly erroneous, and that the appropriate discipline is a private admonition.
FACTS
In 2010, W.Y. purchased 14.63 acres of land from J.Y. W.Y.'s mortgage company refused to give him a mortgage unless the property was split into two pieces: Parcel A, which contained the homestead residence, and Parcel B, which contained several buildings used for farm operations. At the closing J.Y. refused to give W.Y. a warranty deed for Parcel B.
In April 2011, appellant attorney (Attorney) was retained to represent W.Y. in an action to obtain title to Parcel B. The dispute between W.Y. and J.Y. was resolved via mediation in August 2012. Afterward, J.Y. signed a warranty deed conveying Parcel B to W.Y., which was notarized by the mediator. The mediator mailed the deed and the abstract of title to Attorney several weeks later.
Attorney subsequently presented W.Y. with a bill for attorney fees and costs in the amount of $327,940.88. By early 2013, W.Y. had paid only approximately $2,800, missing several scheduled payments. On February 8, 2013, W.Y. wrote to Attorney and requested that he return the Parcel B deed and abstract. W.Y. gave Attorney one week to do so.
On February 11, 2013, Attorney sent a letter to W.Y. ending his representation in the Parcel B matter due to nonpayment of fees. On February 12, Attorney sent another letter to W.Y. stating that, pursuant to
On April 23, 2013, pursuant to the attorney-lien statute,
Attorney did not return the deed and abstract. By order upon stipulation, Attorney deposited the deed and abstract with the district court as security for a stay of enforcement of the judgment. Attorney then appealed.
The court of appeals, in an unpublished decision, affirmed in part and reversed in part. Specifically, the court affirmed the district court's determination that Attorney could not assert a lien on the deed and abstract. Thereafter, the district court ordered that the deposited documents be immediately released to W.Y. They were. W.Y. promptly recorded them with the county.
In June 2016, counsel who represented W.Y. in his efforts to take possession of the deed and abstract filed a complaint with the Office of Lawyers Professional Responsibility asserting that Attorney had violated the Minnesota Rules of Professional Conduct by failing to promptly return the documents. After an investigation, the Director determined that Attorney had violated Minn. R. Prof. Conduct 1.15(a)(1) as interpreted by Appendix 1; 1.15(c)(3)-(4); 1.15(h); 1.16(d); and 1.16(g), and issued a private admonition on September 1, 2017. See Rule 8(d)(2), Rules on Lawyers Professional Responsibility (RLPR). The Director issued an amended admonition on August 16, 2018.
Attorney appealed the amended admonition to a panel of the Lawyers Professional Responsibility Board. See Rule 8(d)(2)(iii), RLPR. The panel held an evidentiary hearing and heard testimony from Attorney and the complainant. See Rule 8(d)(4)(ii), RLPR. Reviewing the matter de novo, the panel unanimously affirmed the admonition. See Rules 8(d)(2)(iii), 9(j)(2), RLPR. Attorney appealed the admonition to us. See Rule 9(m), RLPR.
ANALYSIS
In lawyer discipline matters, we uphold a panel's findings "when those findings have evidentiary support in the record and are not clearly erroneous." In re Panel File No. 41310 ,
I.
Attorneys are required to "promptly ... deliver to the client ... properties in the possession of the lawyer which the client ... is entitled to receive." Minn. R. Prof. Conduct 1.15(c)(4). After termination of representation, attorneys must "take steps to the extent reasonably practicable to *314protect a client's interests, such as ... surrendering papers and property to which the client is entitled ...." Minn. R. Prof. Conduct 1.16(d). Attorneys are prohibited from "condition[ing] the return of client papers and property on payment of the lawyer's fee ...." Minn. R. Prof. Conduct 1.16(g).
After mediation between W.Y. and J.Y. in August 2012, J.Y. executed the warranty deed and gave it to the mediator. The mediator then mailed the deed and the abstract of title to Attorney, who did not convey the documents to his client.
Attorney argues that, although he did not convey the deed and abstract, he did not violate Rules 1.15(c)(4) and 1.16(d) because W.Y. was not entitled to the documents.
A.
At common law, two types of attorney's liens existed: the retaining lien and the charging lien. Village of New Brighton v. Jamison ,
More than a century ago, the Legislature preempted the common law and enacted an attorney-lien statute. See Minn. Rev. Laws § 2288 (1905); Jamison ,
The current version of the attorney-lien statute allows for two types of charging liens: (1) a cause-of-action lien and (2) a property-interest lien.
*315B.
Attorney also argues that the amended admonition violates his due-process rights because, he insists, the retaining lien exists in Minnesota, and the panel's affirmation of the admonition effectively changed the law. This argument lacks merit. We explicitly acknowledged the abolition of the retaining lien in Jamison , yet Attorney cites that case in support of his argument that the retaining lien exists.
On a constitutional claim such as this one, statutes and our rules are presumed to be constitutional and to demonstrate otherwise is a very heavy burden. See Heidbreder v. Carton ,
II.
We turn now to the other basis for discipline brought by the Director: trust-account violations. The Director's petition detailed two instances of trust-account accounting errors. First, Attorney paid a $525 filing fee in the W.Y. matter from the W.Y. client subsidiary ledger of his trust account when the ledger carried only a $500 balance. This payment created a $25 negative balance in the W.Y. subsidiary ledger, although not in the aggregate trust-account balance. Second, Attorney mistakenly credited a $750 deposit from client K.S. and a withdrawal payment of that $750 invoice to W.Y.'s subsidiary ledger. The Director's petition also noted that, from April 2011 to May 2013, Attorney carried a balance of between $340.65 and $790.65 of his own funds within the trust account.
Attorney admitted to the trust-account violations during the hearing. Nevertheless, Attorney argues that these are minor clerical errors and mistakes that do not rise to the level of rule violations.
Attorney's arguments are without merit. No language, explicit or implicit, in Rule 1.15(a)(1), (c)(3), or (h), as interpreted by Appendix 1, requires intent to violate the rule. To the contrary, we have specifically concluded that "misuse of the [trust] account, whether negligent or intentional, violates the rule." In re Varriano ,
III.
Finally, we turn to the appropriate discipline for Attorney's violation of the Rules. Under Rule 8(d)(2), RLPR, "if the Director concludes that a lawyer's conduct was unprofessional but of an isolated and non-serious nature, the Director may issue an admonition." The panel unanimously affirmed the Director's private admonition. "We give great weight to the recommendations of the Panel," but we have the final responsibility for determining the appropriate discipline. In re Panel File No. 39302 ,
In determining the appropriate discipline, "[w]e are guided by the principle that the purpose of attorney discipline 'is not to punish the attorney, but rather to protect the public, to protect the judicial system, and to deter future misconduct by the disciplined attorney as well as by other attorneys.' " In re Panel File No. 41755 ,
The nature of the misconduct here is "non-serious." Rule 8(d)(2), RLPR. Although Attorney impermissibly retained the documents for nearly 2 years, he did seek to vindicate his mistaken view of the law and deposited the documents with the district court for safekeeping. The misconduct is also "isolated" because it was a one-time violation, and Attorney has no record of discipline. See, e.g. , Panel File No. 41310 ,
This case involved limited harm to the public. Attorney's client was deprived of the abstract and deed, but this deprivation did not divest the client of actual ownership of the property. As for the public at large, there does not appear to be any significant harm. Even so, the absence of harm to others "does not reduce a violation of a rule, however technical, into no violation and thus no discipline at all." In re MDK ,
Finally, there was some harm to the profession, but, by a narrow margin, the harm was not great enough to warrant public discipline. In the briefs he submitted and during his testimony before the panel, Attorney came very close to inappropriately accusing the Director and the courts of malicious intent. Unsubstantiated claims of bias, particularly from a member of the bar, serve only to bring the profession into disrepute. Although this behavior is cause for concern, it was not so immoderate as to warrant public discipline.
Thus, we hold that a private admonition was the appropriate discipline in this case.
*317CONCLUSION
For the foregoing reasons, we affirm the panel's findings and the discipline imposed.
Private admonition affirmed.
In addition to facing discipline for violation of these rules, attorneys who "refuse to deliver money or papers to a person ... for whom the attorney has received them in the course of professional employment" may be "punished for contempt."
Attorney focuses his argument on Rules 1.15(c)(4) and 1.16(d). He makes passing reference to 1.16(g) only to read in the requirement that "it is implicit that the client must be 'entitled' to the 'papers and property.' " Attorney also makes a cursory statement that "if Rule 1.16(g) is mandatory independent of the property rights of the attorney in the 'papers and property' in issue, then [it] would be unconstitutional as being a Taking without Just Compensation." This statement is not supported by any persuasive constitutional analysis.
Even if there was a conflict between Rules 1.15(c)(4), 1.16(d), and 1.16(g) on the one hand, and
One could argue that a remnant of the retaining lien remains in
Attorney does not make reference to the commingling issue or to Rule 1.15(a)(1), except to note that the Director found that his law firm had reduced the amount of personal funds in the trust account to an appropriate nominal amount by May 2013.
Reference
- Full Case Name
- IN RE CHARGES OF UNPROFESSIONAL CONDUCT IN PANEL CASE NO. 44387
- Status
- Published