Disciplinary Action Against Pyles, In re, No. C4-87-395

CourtSupreme Court of Minnesota (US)
Writing for the CourtPER CURIAM
Citation421 N.W.2d 321
Docket NumberNo. C4-87-395
Decision Date01 April 1988
PartiesIn re the Petition for DISCIPLINARY ACTION AGAINST David A. PYLES, an Attorney at Law of the State of Minnesota.

Page 321

421 N.W.2d 321
In re the Petition for DISCIPLINARY ACTION AGAINST David A.
PYLES, an Attorney at Law of the State of
Minnesota.
No. C4-87-395.
Supreme Court of Minnesota.
April 1, 1988.

Page 322

Syllabus by the Court

1. Attorney charged with multiple claims of professional misconduct failed to establish by clear and convincing evidence psychological disability as a valid mitigating factor excusing in whole or in part the misconduct.

2. Under the facts of this case, the appropriate disciplinary sanction for an attorney guilty of multiple instances of misconduct is indefinite suspension from the practice of law.

William J. Wernz, Director, Lawyers Professional Responsibility, Candice M. Hojan, Sr. Asst., St. Paul, for appellant.

Theodore J. Collins, St. Paul, for respondent.

Heard, considered, and decided by the court en banc.

PER CURIAM.

The referee appointed by the court in this lawyers disciplinary action found that respondent David A. Pyles had violated rules of professional conduct applicable to lawyers: by misappropriating client funds

Page 323

on three separate occasions; by making a false representation to a client; by failing to maintain adequate financial records in his law practice and falsely certifying to this court that he had; by handling a matter when he had a conflict of interest with a client; and by failing to timely file income tax returns. The referee rejected Pyles' mitigation assertion that during the relevant times he was "suffering from severe depression and psychological problems which were the cause of the conduct." The referee recommended disbarment as the appropriate discipline. While we acknowledge that the nature and extent of the misconduct and the absence of an established mitigation defense ordinarily would warrant the recommended disbarment, due to special circumstances in this case, we conclude that the goal the referee had in mind--protection of the public--can best be substantially served by imposing the sanction of indefinite suspension.

The Director's original petition seeking disciplinary sanctions charged that respondent had misappropriated client funds, had misappropriated escrowed funds, had made misrepresentations to conceal those misappropriations, had failed to keep adequate trust account records and had made false certifications relative thereto. In a subsequent disciplinary petition, the Director alleged that respondent had undertaken representation of a client with whom he had a conflict of interest and that he had failed to file timely income tax returns. Respondent, in his answer, generally admitted the allegations of both petitions with one exception. He denied that investment advice given a client violated any disciplinary rule governing a lawyer's conflict of interest with a client. With that sole exception, respondent's defense was one claiming mitigation because, he claimed, at the time the violations occurred he was experiencing severe psychological problems which were the cause of his conduct. The referee's fact findings which generally substantiated the allegations of the petition are summarized below.

1. Misappropriation:

(a) By his will John Davis devised two-thirds of his estate to a sister with the remainder to his church. In 1986, during the course of probating the Davis estate, respondent received approximately $45,000 of funds belonging to the estate. He deposited those funds in his office trust account. Thereafter those deposited funds were not only wrongfully used to repay other clients whose trust funds had been misused, but also were misappropriated for the respondent's own personal and family use. Ultimately, sufficient funds were returned to the trust account to replace the misappropriations so that in the end the Davis estate suffered no loss.

(b) In the same year, while acting as an escrow agent in a real estate transaction involving a client, respondent deposited approximately $15,000 in his trust account. He likewise misappropriated a portion of those funds to his own personal use, and disbursed some of the funds to others without proper prior authorization. As with the Davis funds, those funds were eventually returned, but not until after these disciplinary proceedings were instituted. These misappropriations by the respondent violated Rules 1.15(a), (b)(4); 8.4(b), (c), Minnesota Rules of Professional Conduct (MRPC).

2. Misrepresentation: The attorney for a real estate vendor who was entitled to escrow funds being held by respondent requested disbursement of the funds. For more than a month thereafter, though repeatedly promising to remit, respondent failed to do so. In fact he was unable to do so because the escrowed funds had been misappropriated and the trust account closed. After three more months had passed, the contract vendor, who had not yet received the escrowed money due him, made a complaint to the Lawyers Board on Professional Responsibility. Respondent initially falsely represented to the Director's office that he had a cashier's check for the amount due the vendor, when, in fact he had no check. Only later did respondent acknowledge that the vendor's money was neither in his trust account nor represented by a certified check. The misrepresentations made to the vendor's attorney

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violated Rules 4.1 and 8.4(c), MRPC. His misrepresentation to the Director violated Rules 8.1(a)(1) and (3), MRPC as well.

3. Inadequate Trust Account Records:

(a) Since July 1, 1983, all practicing lawyers in Minnesota have been required to maintain an "Interest on Lawyers Trust Account" (IOLTA). Though respondent maintained an IOLTA, during four of the first six months of 1986 the account had negative balances, had overdraft charges, and showed at least six checks returned for insufficient funds. This account was ultimately closed in July 1986.

(b) From October 1985 through September 1986, respondent and another attorney maintained an IOLTA in a Hopkins bank. In July and August 1985 that account had overdrafts and two checks were returned for insufficient funds. No funds from this account were ever paid over to the Lawyers Trust Account Board. Money from both accounts was used by respondent to meet his other financial obligations. Shortages in IOLTA accounts and failure to remit trust funds violated Rules 1.15(a), (b)(3), (b)(4), (c), (d), (e), 8.4(b), (c), MRPC.

(c) As a practicing attorney respondent was required to maintain an accounting system that provided for a monthly reconciliation of statements with client subsidiary ledgers, and annotation of checks and deposit tickets sufficient to establish whose funds were in trust. DR 9-104(A), Minnesota Code of Professional Responsibility (MCPR), and after September 1, 1985, Rule 1.15(g), MRPC. Although...

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40 practice notes
  • In re Disciplinary Action against Rooney, No. A04-1959.
    • United States
    • Supreme Court of Minnesota (US)
    • February 16, 2006
    ...always disbarred attorneys who have misappropriated client funds. See, e.g., In re Hanvik, 609 N.W.2d 235, 242 (Minn.2000); In re Pyles, 421 N.W.2d 321, 327 (Minn.1988). "In cases where this court has not imposed disbarment for extensive misappropriation of client funds, substantial mitigat......
  • Petition for Disciplinary Action Against Olsen, In re, No. C8-90-1012
    • United States
    • Supreme Court of Minnesota (US)
    • July 31, 1992
    ...the sanction of disbarment for extensive misappropriation of client funds, there were substantial mitigating circumstances. In re Pyles, 421 N.W.2d 321, 326 (Minn.1988) (attorney's whole life indicated care and concern for those less privileged, extensive pro bono work performed had a delet......
  • In re Farley, No. A08-1178.
    • United States
    • Supreme Court of Minnesota (US)
    • August 13, 2009
    ...relationship existed between Jellinger's depression and his affirmative acts of dishonesty. Id. at 315. We observed that in In re Pyles, 421 N.W.2d 321 (Minn.1988), we affirmed the referee's rejection of a psychological disorder as a mitigating factor based on the finding that the disorder ......
  • In re Disciplinary Action Against Gherity, No. C5-87-1684.
    • United States
    • Supreme Court of Minnesota (US)
    • January 15, 2004
    ...will uphold a referee's factual findings, and the conclusions drawn from those findings, unless they are clearly erroneous. In re Pyles, 421 N.W.2d 321, 325 (Minn. A lawyer's criminal conviction is conclusive evidence that the lawyer committed the conduct for which the lawyer was convicted.......
  • Request a trial to view additional results
40 cases
  • In re Disciplinary Action against Rooney, No. A04-1959.
    • United States
    • Supreme Court of Minnesota (US)
    • February 16, 2006
    ...always disbarred attorneys who have misappropriated client funds. See, e.g., In re Hanvik, 609 N.W.2d 235, 242 (Minn.2000); In re Pyles, 421 N.W.2d 321, 327 (Minn.1988). "In cases where this court has not imposed disbarment for extensive misappropriation of client funds, substantial mitigat......
  • Petition for Disciplinary Action Against Olsen, In re, No. C8-90-1012
    • United States
    • Supreme Court of Minnesota (US)
    • July 31, 1992
    ...the sanction of disbarment for extensive misappropriation of client funds, there were substantial mitigating circumstances. In re Pyles, 421 N.W.2d 321, 326 (Minn.1988) (attorney's whole life indicated care and concern for those less privileged, extensive pro bono work performed had a delet......
  • In re Farley, No. A08-1178.
    • United States
    • Supreme Court of Minnesota (US)
    • August 13, 2009
    ...relationship existed between Jellinger's depression and his affirmative acts of dishonesty. Id. at 315. We observed that in In re Pyles, 421 N.W.2d 321 (Minn.1988), we affirmed the referee's rejection of a psychological disorder as a mitigating factor based on the finding that the disorder ......
  • In re Disciplinary Action Against Gherity, No. C5-87-1684.
    • United States
    • Supreme Court of Minnesota (US)
    • January 15, 2004
    ...will uphold a referee's factual findings, and the conclusions drawn from those findings, unless they are clearly erroneous. In re Pyles, 421 N.W.2d 321, 325 (Minn. A lawyer's criminal conviction is conclusive evidence that the lawyer committed the conduct for which the lawyer was convicted.......
  • Request a trial to view additional results

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