Bd. of Prof'l Responsibility of the Supreme Court of Tenn. v. Cowan

Decision Date19 November 2012
Docket NumberNo. E2012–00377–SC–R3–BP.,E2012–00377–SC–R3–BP.
Citation388 S.W.3d 264
CourtTennessee Supreme Court


Thomas E. Cowan, Jr., Elizabethton, Tennessee, pro se.

Nancy S. Jones, Chief Disciplinary Counsel, and Krisann Hodges, Brentwood, Tennessee, for the appellee, Board of Professional Responsibility of the Supreme Court of Tennessee.


CORNELIA A. CLARK, J., delivered the opinion of the Court, in which GARY R. WADE, C.J., and JANICE M. HOLDER, WILLIAM C. KOCH, JR., and SHARON G. LEE, JJ., joined.


This appeal involves a determination of the proper final discipline for an attorney who pleaded guilty to willful tax evasion. We hold that because ABA Standard for Imposing Lawyer Sanctions 5.11(b) applies to criminal acts such as those admitted by the attorney here, the trial court's order of disbarment is affirmed.

Factual and Procedural History

Mr. Thomas Ewing Cowan is an attorney originally licensed to practice law in Tennessee in 1968. On September 25, 2009, Mr. Cowan pleaded guilty in federal district court to one count of the felony offense of willful attempt to defeat or evade the payment of taxes in violation of 26 U.S.C. § 7201 (2006). 1 The court subsequentlysentenced Mr. Cowan to a term of imprisonment of twelve months and one day, a term of supervised release of three years, and restitution in the amount of $270,169.

On March 1, 2010, this Court suspended Mr. Cowan's license to practice law and referred the matter to the Board of Professional Responsibility (“Board”) for determination of final discipline to be imposed pursuant to Tennessee Supreme Court Rule 9, section 14. On March 4, 2010, the Board filed a Petition for Final Discipline.

The matter came before a Hearing Panel on October 14, 2010. The only issue before the Panel was the extent of final discipline to be imposed as a result of the admitted criminal act. See Tenn. Sup.Ct. R. 9, § 14.4. In reaching its decision, the Panel considered the ABA Standards for Imposing Lawyer Sanctions (“Standards”), see Tenn. Sup.Ct. R. 9, § 8.4, including Standards 5.11 and 5.12:

5.11 Disbarment is generally appropriate when: (a) a lawyer engages in serious criminal conduct a necessary element of which includes intentional interference with the administration of justice, false swearing, misrepresentation, fraud, extortion, misappropriation, or theft; or the sale, distribution or importation of controlled substances; or the intentional killing of another; or an attempt or conspiracy or solicitation of another to commit any of these offenses; or (b) a lawyer engages in any other intentional conduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer's fitness to practice.

5.12 Suspension is generally appropriate when a lawyer knowingly engages in criminal conduct which does not contain the elements listed in Standard 5.11 and that seriously adversely reflects on the lawyer's fitness to practice.

A majority of the Panel decided that Mr. Cowan should not be disbarred from the practice of law based upon the following findings:

After hearing arguments from the Board and Respondent, the Panel concludes that ABA Standard 5.11(a) is not applicable, since it recommends disbarment for attorneys who engage in serious criminal conduct only if the crime contains [particular elements]. The elements of the crime of tax evasion are a tax deficiency, an evasive act, and a willful act, none of which are included in the list of elements in Standard 5.11(a), rendering that Standard inapplicable.

Further, the Panel has determined that ABA Standard 5.11(b) is also inapplicable because “any other intentional conduct” applies to conduct other than “criminal offenses,” since Standard 5.11(a) refers to criminal offenses.

Instead, the Panel found that Standard 5.12, calling for a suspension, was applicable “because it specifically refers to ‘criminal conduct’ and because the Panel finds that Respondent's conduct seriously adversely reflects on his fitness to practice law.” The Panel also found the existence of several aggravating factors—prior disciplinary history, a pattern of misconduct, multiple offenses, and substantial experience in the practice of law—and only one mitigating factor—imposition of other penalties or sanctions. On balance, the Panel concluded that the aggravating factors outweighed the lone mitigating factor and imposed a suspension of two years.

The Panel Chair dissented from the findings and judgment of the majority, opining that both subdivisions of Standard 5.11, as well as Standard 7.1, 2 applied to the case and warranted disbarment of Mr. Cowan.

The Board filed an appeal in the Chancery Court for Carter County; further proceedings were stayed until Mr. Cowan was released from federal custody. The chancellor ultimately modified the decision of the Panel and disbarred Mr. Cowan, finding that willful tax evasion “clearly involved misrepresentation, fraud or deceit, and therefore ABA Standard 5.11(a) applies.”

In reaching this conclusion, the chancellor noted that Mr. Cowan pleaded guilty, in count one of the indictment—not merely to tax evasion—“but willful tax evasion involving affirmative acts.” The chancellor considered the affirmative acts admitted by Mr. Cowan in the plea agreement, namely the “use of nominee entities,” as well as additional affirmative acts listed in count one of the indictment, including:

concealing his true income and assets by diverting checks that had the inherent appearance of income into the checking account of a family member, cashing checks that had the inherent appearance of income, depositing earned income into his law firm trust accounts, and making personal payments from his law firm trust account, and by otherwise using his attorney trust account to conceal income and nominees to conceal the ownership of assets from the United States.

From this, the chancery court determined that “Mr. Cowan engaged in affirmative acts to hide income from the government, and this is conduct of a fraudulent nature, deceitful, and involving intentional misrepresentation.”

The chancellor noted that other state supreme courts had disbarred attorneys following convictions for the same federal crime: Attorney Grievance Commission v. Gary, 295 Md. 30, 452 A.2d 1221 (1982) (affirming disbarment for felony conviction of willful tax evasion and noting that such conduct involves dishonesty, fraud, deceit, or misrepresentation); Maryland State Bar Association v. Agnew, 271 Md. 543, 318 A.2d 811, 815 (1974) (disbarring attorney for felony conviction of willful tax evasion and noting that such conduct “is infested with fraud, deceit, and dishonesty”); In re Grimes, 414 Mich. 483, 326 N.W.2d 380 (1982) (disbarring attorney for felony convictions of willful tax evasion and counseling client to lie to investigators in tax fraud case).

As to the Standards, the chancery court found that Mr. Cowan's conduct fell within Standard 5.11:

The Court finds incorrect the Panel's decision that [Standard] 5.11 is not to be applied to willful tax evasion. Willful tax evasion, especially involving affirmative acts to hide income is a crime of deceit and/or misrepresentation and/or fraud, and it clearly reflects on the lawyer's fitness to practice. The finding by the Panel that [Standard] 5.11 does not apply is unsupported by the evidence. [Standard] 5.11 does apply.However, the chancery court did not specify at this point whether Standard 5.11(a) or (b) applied, nor did the court address Standard 7.1.

Finally, the chancery court considered the aggravating and mitigating factors proffered by the parties. The chancellor found that “the aggravating circumstances are extremely strong,” citing Mr. Cowan's disciplinary record of two suspensions, three public censures, and fifteen private admonishments. The court further noted, “Mr. Cowan is presently serving a three-year suspension due to misconduct involving pervasive neglect, misrepresentation, and failure to communicate with clients and the Board.” The chancellor concluded that this disciplinary record carried “substantial negative weight.” Citing Standard 9.22, the chancellor found the existence of four additional aggravating factors: Mr. Cowan's pattern of misconduct, multiple offenses, refusal to acknowledge the wrongfulness of his conduct, and substantial experience in the practice of law.

Mr. Cowan offered as mitigating factors his service as a lawyer in the military during the Vietnam War, his representation of indigent defendants, and his leadership roles with Legal Services of Upper–East Tennessee.3 The chancellor ruled that Mr. Cowan's service to his country and his community could “in no way mitigate his substantial history of disciplinary violations,” and that considering the aggravating and mitigating factors did not change the presumptive sanction of disbarment. He therefore modified the Panel's judgment and disbarred Mr. Cowan. Mr. Cowan has appealed.

Standard of Review

As part of our inherent duty to regulate the practice of law in Tennessee, this Court bears the ultimate responsibility for sanctioning attorneys who violate ethical rules. Talley v. Bd. of Prof'l Responsibility, 358 S.W.3d 185, 190 (Tenn.2011). In furtherance of this duty, we have established a system where attorneys charged with disciplinary violations have a right to an evidentiary hearing before a hearing panel, which must determine the disciplinary penalty. See Tenn. Sup.Ct. R. 9, § 8.2. An attorney dissatisfied with a disciplinary decree from a hearing panel may prosecute an appeal to the circuit or chancery court and then directly to this Court where our review is upon the transcript of the record from the trial court, including that of the evidence before the hearing panel. Tenn. Sup.Ct. R. 9, § 1.3. We observe the same standard of review as...

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