Disciplinary Action Against Shoemaker, In re, C6-92-2468

• Decision Date: 30 June 1994
• Docket Number: No. C6-92-2468,C6-92-2468
• Citation: 518 N.W.2d 552
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST James O. SHOEMAKER, an Attorney at Law of the State of Minnesota.
• Court: Minnesota Supreme Court

Page 552

518 N.W.2d 552

In re Petition for DISCIPLINARY ACTION AGAINST James O. SHOEMAKER, an Attorney at Law of the State of Minnesota.

No. C6-92-2468.

Supreme Court of Minnesota.

June 30, 1994.

Marcia A. Johnson, Director, Lawyers' Professional Responsibility Bd., Martin A. Cole, Sr. Asst. Director, St. Paul, for appellant.

Michael J. Hoover, Minneapolis, for respondent.

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

OPINION

PER CURIAM.

On December 14, 1992, the Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against respondent James O. Shoemaker alleging misappropriation of client and law firm funds, falsification of trust account records, and failure to report the misappropriated funds as income on state and federal tax returns. In his answer to the Director's petition, respondent admitted these violations but claimed that depression, anxiety, and other psychological problems contributed to his misconduct. Respondent was temporarily suspended from practice on December 17, 1992.

Referee Russell A. Anderson conducted a hearing on September 9, 1993 and issued his Findings of Fact, Conclusions of Law, and Recommendation on September 28, 1993. The referee found that respondent, age 38, was admitted to the practice of law in October 1987. In March 1988 he was employed as an associate attorney in the Anderson Law Office in Le Sueur, Minnesota. His starting salary was $26,500. It had increased to $32,000 when he left the firm in July 1992. Respondent's wife taught in the public schools, earning $22,000 to $25,000 per year. Respondent represented clients in general practice, including business, family, workers' compensation, bankruptcy, employment, real estate, personal injury, and estate planning matters. He was active in professional organizations and community activities.

Between October 1989 and July 1992, respondent misappropriated $75,981.99 from the Anderson Law Office and its clients. The loss was not discovered until respondent had left the firm. The referee found that most of the misappropriations occurred when respondent negotiated client fee checks made payable to him personally, even though he was required to turn over all attorney fees and costs received from clients to the firm. In one instance, respondent received a check for $4,513.25 on behalf of a client. Although respondent was supposed to use this money to pay a debt owed by the client's former husband and the client's attorney fees and then distribute the remainder to the client, he took the check to the bank, had a cashier's check issued to the client for her share of the funds, and misappropriated the remainder. Respondent then paid the ex-husband's debt with a trust account check thereby creating an overdraft in the firm's trust account.

In another instance, respondent issued a $7,067.01 check on the firm's trust account payable to a workers' compensation client of the firm. There were, however, no funds in the trust account in which the client had an interest. Nonetheless, respondent had the client endorse the check, accompany respondent to the bank, purchase a money order, and then endorse the money order over to respondent who kept the funds. Respondent falsely advised the client that these actions were necessary to give respondent internal credit for attorney fees generated from his work. On another occasion, respondent issued a $10,400 trust account check to apply against his student loan obligations.

On November 20, 1992, respondent was charged with five counts of theft. These counts later were consolidated into one count of felony theft, Minn.Stat. § 609.52, subd. 2(1) (1992), to which respondent pled guilty. The trial court stayed imposition of sentence for 20 years on the condition that respondent spend 30 days in jail (work release), be confined by electronic home monitoring for 90 days, pay restitution at a rate of not less than $300 per month, continue psychological counseling, and avoid employment with direct access to unmonitored money. In addition, respondent was not to practice law until he completed probation or until further court order. If respondent successfully completes his probation, his offense will be converted into a misdemeanor.

Respondent has no prior discipline record. He is in compliance with the terms and conditions of probation, he has paid restitution of $12,681.99, and he has filed amended state and federal income tax returns for 1990, 1991, and 1992. Respondent currently is employed as a residential mortgage loan originator by OMEGA Mortgage & Finance Corp. where he has worked since October 1992.

The referee found that respondent's conduct violated Rule 8.4(b), (c), and (d) of the Minnesota Rules of Professional Conduct. Although the referee also found that respondent suffers from dysthymia with secondary anxiety, he concluded that respondent had not established a psychological disability by clear and convincing evidence and recommended that respondent be disbarred. Respondent timely ordered a transcript of the referee's findings and challenges the conclusion that he failed to establish psychological disability as a valid mitigating factor. Respondent also challenges the referee's recommendation of disbarment.

An attorney proffering a psychological problem as a mitigating factor must prove, by clear and convincing evidence, that: (1) the psychological problem is severe; (2) the psychological problem was the cause of the misconduct; (3) the attorney is in treatment and is making progress to recover from the psychological problem that caused or contributed to the misconduct; (4) the recovery has arrested the misconduct; and (5) the misconduct...