Disciplinary Action Against Reiter, In re, C4-91-157

• Decision Date: 07 August 1997
• Docket Number: No. C4-91-157,C4-91-157
• Citation: 567 N.W.2d 699
• Court: Minnesota Supreme Court
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Fred A. REITER, an Attorney at Law of the State of Minnesota.

Page 699

567 N.W.2d 699

In re Petition for DISCIPLINARY ACTION AGAINST Fred A.

REITER, an Attorney at Law of the State of Minnesota.

No. C4-91-157.

Supreme Court of Minnesota.

Aug. 7, 1997.

Syllabus by the Court

1. An attorney's failure to pay a court reporter fee even after the entry of a judgment and the filing of an ethics complaint against him amounted to a violation of Rule 8.4(d) of the Minnesota Rules of Professional Conduct (MRPC).

2. An attorney's issuance of checks on behalf of a client prior to the deposit of funds necessary to cover those checks constitutes mismanagement of client funds in violation of Rule 1.15(a) of the MRPC.

3. An attorney's failure to maintain trust account reconciliations on a monthly basis amounts to a violation of Rule 1.15(g) of the MRPC and Lawyers Professional Responsibility Board Opinion No. 9.

4. An attorney's false certification to this court of compliance with trust account requirements violates Rules 1.15(h) and 8.4(c) of the MRPC.

5. Appropriate attorney discipline for the misconduct listed above is a public reprimand followed by a two-year supervised probation.

John C. McNulty, Charlotte M. Reed, McNulty & Wallace, St. Paul, for appellant.

Patrick R. Burns, St. Paul, for respondent.

OPINION

PER CURIAM.

This attorney discipline case involves several charges of unprofessional conduct against an attorney who has been disciplined some nine times since his admission to practice in 1974. ¹ Given the relatively minor rule violations at issue in the current proceeding, we order that the attorney, Fred A. Reiter, be publicly reprimanded and placed on probation for two years.

The Director of the Office of Lawyer's Professional Responsibility Board (Director) petitioned this court to take disciplinary action against Reiter, alleging several violations of the Rules of Professional Conduct, based upon six separate events. The alleged violations include failure to pay a law-related debt, improper handling of trust accounts, failure to properly maintain trust account books and records, and false certification to this court that proper trust account books and records were kept.

After a disciplinary hearing, the referee recommended that Reiter be suspended from the practice of law for 30 days and that upon reinstatement, he be subject to supervised probation for two years. ² On appeal to this court, Reiter contests certain findings of fact and conclusions of law made by the referee and further argues that suspension is not warranted for the alleged violations of professional conduct. In general, this court will not reverse the findings and conclusions of the referee in a disciplinary hearing unless they are clearly erroneous. In re Gurstel, 540 N.W.2d 838, 840 (Minn.1995). Furthermore, this court generally gives great weight to the recommendation made by the referee as to discipline. However, the final responsibility for determining the appropriate discipline for attorney misconduct rests solely with this court. In re Hartke, 529 N.W.2d 678, 683 (Minn.1995). Thus, in this case, we consider the referee's factual findings to determine whether they are clearly erroneous and we examine the recommended discipline to determine if it is appropriate, in light of the nature of the misconduct, the cumulative weight of the disciplinary rule violations, the potential harm to the public, and the harm to the legal profession. See In re Haugen, 543 N.W.2d 372, 375 (Minn.1996).

Failure to Pay Court Reporter

It is uncontested that Reiter failed to pay a court reporter for work associated with two depositions Reiter took on behalf of his client Ritter, until after a judgment had been entered against him. The depositions were taken in September 1992. The court reporter sent Reiter a bill totaling $163 for the transcripts of those depositions and Reiter subsequently sent a bill to Ritter that included, among other fees, a charge for this bill from the court reporter. By December 1992, Ritter had paid that bill in full to Reiter. However, Reiter failed to pay the court reporter's fee and the court reporter sued Reiter in conciliation court to collect the fee. In March 1994, a judgment was entered but Reiter did not pay the judgment until November 1994, several months after the court reporter had filed a complaint against him with the Lawyers Professional Responsibility Board (LPRB). Reiter claimed that he did not pay the court reporter's fee earlier because of dire financial circumstances. ³

The referee concluded that Reiter's failure to pay the law-related debt until after the entry of a judgment and the filing of a complaint against him constituted a violation of Rules 8.4(c) and (d) of the Minnesota Rules of Professional Conduct (MRPC). Although Reiter does not dispute the facts underlying this conclusion, he argues that his conduct did not constitute a violation of either Rule 8.4(c) or (d).

Rule 8.4(d) provides that it is professional misconduct for a lawyer to "engage in conduct that is prejudicial to the administration of justice." Minn. R. Prof. Conduct 8.4(d). The comment to Rule 8.4 further states that lawyers are professionally answerable for offenses that constitute a "serious interference with the administration of justice." Minn. R. Prof. Conduct 8.4, cmt. This court has previously held that the failure to pay law-related debts constitutes a violation of Rule 8.4(d) and warrants discipline. In re Pokorny, 453 N.W.2d 345, 347-48 (Minn.1990) (failure to pay court-ordered fees and conciliation court judgments for law-related debts violates Rules 8.4(c) and (d) and warrants disciplinary action); In re Ruffenach, 486 N.W.2d 387, 390-91 (Minn.1992) (a lawyer's willful failure to pay law-related debts whose validity is not in dispute is professional misconduct and warrants discipline).

Reiter's repeated failure to pay court reporter fees clearly establishes an indifference to legal obligation and serious interference with the administration of justice in violation of Rule 8.4(d). Because we conclude that Reiter's conduct on this matter violated Rule 8.4(d) of the MRPC, we need not reach the issue of whether it also violated Rule 8.4(c).

Mismanagement of Client Funds

The next matter involves the allegation that Reiter issued checks on behalf of two clients before deposits were made in their trust accounts to cover the checks. As to the first client, Reiter testified that on July 6, 1992, he received a check for $720 in favor of his client Halvorson. On July 9, 1992, Reiter wrote a check for $720 to Halvorson, but, according to his testimony, on July 20, 1992, he discovered that he had forgotten to deposit the Halvorson check and he made the deposit later that day.

In another incident, Reiter issued two checks totaling $70 to pay bills on behalf of his client Amhrien in September 1994. However, at the time the checks were issued, there were no funds to cover them and the shortage remained through December 1994, at least. Thus for a period of at least three months, funds belonging to other clients were being used to pay bills incurred on behalf of Amhrien.

As to these incidents, the referee apparently concluded that Reiter's actions constituted professional misconduct in violation of Rule 1.15(a) of the MRPC. ⁴ Reiter argues that the Halvorson matter is not properly before this court as a basis of discipline because the Director knew of this matter when his prior probation was closed July 12, 1993, yet the Director chose not to discipline him at that time. The Director responds that the decision to forego disciplinary action at the close of Reiter's probation does not preclude the imposition of discipline for that misconduct in these proceedings.

From January 31, 1992 to October 30, 1992, Reiter was on probation for prior professional misconduct and his trust account was being audited by the LPRB during that period. On July 20, 1993, a representative of the LPRB sent Reiter a letter notifying him that the LPRB was closing his probation file. The letter stated that, although Reiter was now maintaining proper trust account books and records, he should not withdraw funds on behalf of a client before that client's funds were deposited in the appropriate trust account. In a memorandum attached to the letter, the Halvorson matter at issue in this appeal was specifically noted as an example of Reiter's improper withdrawal of funds. The memorandum was addressed to the Director and noted that "[t]he remaining deficiencies do not seem serious enough to revoke probation or extend it. A letter, referencing this memo and reminding him of the correct way to handle client money seems appropriate."

Rule 19(b)(1) of the Rules on Lawyers Professional Responsibility (RLPR) provides that "[c]onduct considered in previous lawyer disciplinary proceedings * * * is inadmissible if it was determined in the proceedings that discipline was not warranted, except to show a pattern of related conduct the cumulative effect of which constitutes an ethical violation." Rule 19(b)(1), RLPR. Because deficiencies discovered during a probationary audit could potentially be the basis for revoking or extending probation, the audit is considered to be a disciplinary proceeding within the meaning of Rule 19(b)(1). Inasmuch as the Halvorson matter was known to the Director prior to the completion of the prior probation and was not acted upon, we conclude that the Halvorson matter is not properly before this court as a separate basis of discipline in itself.

However, the referee could have considered it as part of a pattern of conduct amounting to an ethical violation. See Rule 19(b)(1), RLPR; In re Pearson, 383 N.W.2d 689, 691 n. 1 (Minn.1986) (violations for which sanctions were already decided can be used to demonstrate a pattern of conduct indicating the respondent's level of professional responsibility). The record in this case and in the prior Reiter disciplinary matters establishes a pattern of...