Connaghan, In re, 61519

• Decision Date: 09 March 1981
• Docket Number: No. 61519,61519
• Citation: 613 S.W.2d 626
• Parties: In re John D. CONNAGHAN, Respondent.
• Court: Missouri Supreme Court

Page 626

613 S.W.2d 626

In re John D. CONNAGHAN, Respondent.

No. 61519.

Supreme Court of Missouri, En Banc.

March 9, 1981.

Martin J. Toft and Jay A. Summerville, St. Louis, for informants.

Edward R. Joyce, St. Louis, for respondent.

FINCH, Senior Judge.

This is a disciplinary proceeding against John D. Connaghan, respondent, brought under Rule 5 by the Bar Committee of the 22nd Judicial Circuit of Missouri.

After notice and hearing as required by Rule 5, the Circuit Bar Committee found that there was probable cause to believe that respondent Connaghan had engaged in conduct which is subject to discipline. It then filed in this court an information which charged that respondent had collected a fee of $20,000 from various automobile dealers to help them secure favorable action on legislation which was then pending in the Missouri legislature. The information alleged that respondent performed no legal services but instead transferred a substantial portion of the money to Richard J. Rabbitt, Speaker of the House of Representatives, to secure favorable treatment of the legislation. Such conduct was alleged to violate the laws of the State of Missouri and of the United States of America and to constitute violations of Missouri Supreme Court Disciplinary Rules DR 1-102(A)(1), (3), (4) and (6), DR 2-106(A), DR 2-107(A)(2), DR 7-102(A)(7) and (8), and DR 9-101(C). The information asked the court to hear evidence on the charges and to find respondent guilty of such charges. Disbarment was requested.

The court, acting under Rule 68.03, appointed Honorable E. Richard Webber as special master to hear evidence and make findings of fact and conclusions of law. He held a hearing at which informants offered several witnesses, including the respondent. When the latter declined to answer questions on the ground that his answers might incriminate him, informants offered in evidence a transcript of testimony given by respondent in the United States District Court for the Eastern District of Missouri in the case of United States of America v. Richard J. Rabbitt. Respondent offered no evidence other than character witnesses.

After the matter was briefed and argued, the special master filed a 27-page report containing findings of fact, conclusions of law and a recommendation. He found that the preponderance of the evidence disclosed that respondent had engaged in conduct which violated all of the Disciplinary Rules recited in the information except DR 9-101(C). He recommended that respondent be disbarred.

In disciplinary proceedings the findings and conclusions of a special master are advisory for the court but in the final analysis it is our duty to determine the credibility of witnesses, to review the evidence, and to make our own determination of the facts. In re Schiff, 542 S.W.2d 771 (Mo.banc 1976); In the Matter of Pine, 576 S.W.2d 538 (Mo.banc 1979). In making such determination the charges must be sustained by a preponderance of the evidence before discipline may be imposed. In the Matter of Duncan, 541 S.W.2d 564 (Mo.banc 1976).

Applying the foregoing standards, the credible evidence supports a finding of these facts.

For two or three legislative sessions prior to the January, 1973 session of the Missouri General Assembly, the Greater St. Louis Automobile Dealers Association (and others, including the state association) had sought enactment of legislation to repeal the then existing merchants' tax as it applied to automobile dealers and to substitute a different formula for taxation. The automobile dealers considered the existing merchants' tax to be very unfair and discriminatory as to them.

Such efforts had not been successful and in the January, 1973 session, a new bill, Senate Bill No. 110, was introduced for this purpose. It was passed by the Senate and sent to the House of Representatives.

In early May, when the bill was pending before a committee of the House of Representatives, the St. Louis Association received a report from the state association in Jefferson City that the bill was not moving. It was requested that Gene Worn, a legislative liaison for the St. Louis Association, be sent to Jefferson City to try and help expedite passage of the bill.

Mr. Worn went to Jefferson City and visited the offices of Richard J. Rabbitt, the Speaker of the House of Representatives. Worn subsequently reported to his superior, Edgar Hayward, that when he asked Speaker Rabbitt what could be done to expedite the bill, Mr. Rabbitt suggested that the association needed additional legal counsel and recommended respondent John D. Connaghan.

At the direction of Mr. Hayward, Worn met respondent and discussed Senate Bill No. 110 with him. Worn advised that he was there at the suggestion of Speaker Rabbitt. There was discussion about a fee and respondent advised that his fee would be $20,000. Worn then reported his conversation to Mr. Hayward.

On the next morning, which was Saturday, May 12, 1973, Hayward and Worn met with Ben Lindenbusch and Vincent McMahon, two St. Louis automobile dealers. They were told of the meetings with Speaker Rabbitt and with respondent Connaghan. Worn recommended that the fee of $20,000 be paid to Connaghan in order to move the bill and get it passed.

A decision was made to pay the fee and Connaghan was so notified. Worn immediately took Connaghan a check of Ben Lindenbusch dated May 14, 1973, payable to Connaghan for $5,000 and advised that the rest would be paid soon. On June 4, 1973, checks to Connaghan for $5,000 each from Charles Johnson and Gene Jantsen, both St. Louis automobile dealers, and from the Motor Car Dealers Association of Greater Kansas City were delivered to Connaghan. Connaghan deposited all four checks in his bank account.

After Worn made the arrangements with Connaghan, the latter had a conversation with Peter Rabbitt, brother and law partner of Richard J. Rabbitt, in which he indicated that he was receiving $20,000 from the automobile dealers, that he was reporting this as income for tax purposes, that he estimated his tax thereon would be about one third of the $20,000, that he intended to keep one third for that purpose, and that he would pay the rest to the Rabbitts.

Connaghan testified in the Rabbitt trial that on separate occasions he delivered $5,000 in cash to Richard J. Rabbitt and checks for $2,000 and $6,800 to Peter Rabbitt. The check stub for the $2,000 check bore the notation that it was a referral fee in the case of England v. Pope, a case handled by Connaghan. Actually Rabbitt had not referred that case and did no work on it. Peter Rabbitt deposited this check in the account of Rabbitt, Rabbitt and Dickerson, the law firm in which both Richard J. and Peter were partners. The check for $6,800 was marked as a personal loan but it was not treated as such by Connaghan. No note was given and there was no discussion about interest or terms of repayment. This check was deposited by Peter Rabbitt in an account designated as the Richard J. Rabbitt special account.

Connaghan also identified a slip of paper which, after listing the foregoing three payments of $5,000, $2,000 and $6,800 also listed an additional cash payment of $500. This was in Connaghan's handwriting but he did not remember making that payment and there was no other evidence about it. Thus the amount paid by Connaghan to Richard J. and Peter Rabbitt out of the $20,000 was either $13,800 or $14,300, depending on whether the $500 item is counted.

Several months later Connaghan became concerned that his taxes on the $20,000 would be greater than the amount he had retained out of the $20,000. He devised a scheme of remitting to Peter Rabbitt a part of his attorney fees on various other cases he had settled that year and then taking a deduction therefor on his tax returns. He told Peter Rabbitt that he would figure an amount on various cases and give him a check therefor, after which Rabbitt would give back a check for that identical amount, marking it as a partial repayment of a loan for $6,800. Connaghan made his computations, listing various cases, and then wrote a check to Peter Rabbitt for $4,345.87 which he delivered. Actually neither Peter nor Richard Rabbitt had referred any of the clients in those cases to Connaghan and they had performed no services in those cases. This was simply a scheme to save taxes for Connaghan.

After receiving the check for $4,345.87 from Connaghan, Peter Rabbitt wrote and delivered a check for that same sum to Connaghan, marking it as a payment on a loan although there was no loan from Connaghan to Peter Rabbitt.

Three questions are presented for determination. First, was the transcript of respondent's testimony in the trial of Richard J. Rabbitt admissible in evidence in this disciplinary proceeding? Second, does a preponderance of the evidence support a conclusion that respondent violated all or any of the disciplinary rules alleged in the information to have been violated? Finally, if respondent did violate disciplinary rules, what discipline should be imposed?

I

Was the transcript of respondent's testimony in the trial of Richard J. Rabbitt properly admitted in evidence by the special master?

As previously noted, the informants called respondent as a witness in the presentation of their evidence before the special master. After being sworn he gave his name and address but declined to answer all other questions, including questions about his dealings with Worn, receipt of the $20,000, payments to Rabbitt, etc., on the grounds that his answers might incriminate him, citing the Fifth Amendment to the United States Constitution and Art. I, § 19 of the Missouri Constitution.

Informants then offered in evidence a transcript of the testimony Connaghan had given in the trial of Richard J. Rabbitt in the United States District Court. That testimony was given under order of the United States District Court dated January 19, 1977, issued on application of the...