Disciplinary Action against Thedens, In re, C9-96-1260

• Decision Date: 16 January 1997
• Docket Number: No. C9-96-1260,C9-96-1260
• Court: Minnesota Supreme Court
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Gerald D. THEDENS, an Attorney at Law of the State of Minnesota.

Page 344

557 N.W.2d 344

In re Petition for DISCIPLINARY ACTION AGAINST Gerald D.

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

No. C9-96-1260.

Supreme Court of Minnesota.

Jan. 16, 1997.

Marcia A. Johnson, Timothy M. Burke, Office of Lawyers Professional Responsibility, St. Paul, for appellant.

Gerald D. Thedens, Isle, for respondent.

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility (hereinafter "Director") issued charges of unprofessional conduct against respondent, Gerald D. Thedens, on February 13, 1996. The charges identified three types of violations: neglect of a client matter in violation of Rule 1.3, Minnesota Rules of Professional Conduct (MRPC); tax-law infractions in violation of Rules 8.4(c) & 8.4(d), MRPC; and noncooperation with an investigation by the Lawyers Professional Responsibility Board in violation of Rule 8.1(a)(3), MRPC, and Rule 25, Rules on Lawyers Professional Responsibility (RLPR). A Panel hearing was scheduled for June 7, 1996 but respondent failed to attend. The Director filed a petition for disciplinary action on June 10, 1996. Respondent failed to serve an answer. On July 10, 1996, the Director filed a motion for summary relief and on July 16, 1996, this court granted the Director's motion and filed an order pursuant to Rule 13(b), RLPR, deeming admitted all allegations contained in the petition.

The Director recommended that respondent be suspended indefinitely from the practice of law with the right to apply for reinstatement after two years. Respondent proposed that he be suspended from the practice of law for 60 days, with the suspension stayed for a period of two years on the conditions that 1) no same or similar complaints are registered against respondent for two years, and 2) respondent volunteer for 100 hours of pro bono legal aid in each of the next two years. We conclude that a six-month suspension is appropriate given the facts and circumstances of this case.

This disciplinary action arises out of a notice of complaint filed by the Minnesota Department of Revenue (hereinafter "DOR") with the Director on March 19, 1993, alleging that the respondent failed to comply with the filing and payment requirements of Minn.Stat. §§ 289A.08, 289A.11 or 290.92 (1992).

The respondent, who was admitted to practice law in Minnesota on May 11, 1984, had sufficient gross income from 1984 to 1991 to require him to file federal individual income tax returns. However, respondent failed to timely file his federal income tax returns for tax years 1984, 1987, 1990 and 1991. The details of his failure to timely file federal income tax returns are as follows: In 1985, respondent was granted an extension to October 15, but did not file his 1984 return until December 9, 1985. In 1988, respondent was granted an extension to October 15, but did not file his 1987 return until December 5, 1988. In 1990, respondent was granted an extension to October 15, but did not file his 1989 return until November 11, 1990. In 1992, respondent was granted an extension to August 15, but did not file his 1991 return until September 14, 1992. As of August 23, 1993, respondent had an outstanding federal tax liability of $12,870.18 from 1987, and $1,223.95 from 1989.

Respondent also had sufficient gross income in 1984 to require him to file a Minnesota individual income tax return. Respondent received an extension to October 15, 1985, but did not file his 1984 return until October 16, 1985. The DOR assessed a civil-fraud penalty against respondent for his failure to claim a $148,483 taxable event on his 1984 return that occurred while respondent claimed he was a California resident. Respondent claimed he was taxed by the State of California on this event, but California taxing authorities reported that respondent did not file a California individual income tax return for 1984. Respondent did not appeal the civil-fraud penalty and as of November 17, 1995 had an outstanding 1984 Minnesota individual income tax liability of $22,117.06.

In 1989, the DOR assessed a penalty against respondent under Minn.Stat. § 290.53, subd. 3A for his failure to provide the DOR with requested records for the purpose of an audit. In 1990, the DOR placed a lien against respondent's real property as allowed by Minn.Stat. § 270.69 in the amount of $4,265.29, the unpaid income tax due for tax year 1989. Later in 1990, the DOR placed a second lien on respondent's real property for $43,778.38, the unpaid income tax due for tax years 1984, 1985, 1987 and 1989.

The DOR filed a complaint with the Director's office on March 19, 1993. The Director immediately began an investigation and respondent repeatedly failed to respond to the Director's request in a timely manner. The details of those failures are as follows:

The Director mailed to respondent a notice of investigation on March 30, 1993. In that notice, the Director requested that respondent return within 14 days certain information in writing and an executed tax authorization. After a subsequent letter had been sent by the Director on April 23, 1993, respondent provided a written response dated April 19, 1993. The Director also received the executed tax authorization on May 6, 1993.

In a January 18, 1994 letter, the Director requested respondent to provide information and documents by February 8, 1994. After a subsequent letter making the same requests had been sent by the Director, respondent provided the information on February 28, 1994.

In a May 11, 1994 letter, the Director requested that respondent provide information and documents by May 21, 1994. Respondent provided the information on June 1, 1994.

During a June 20, 1994 session where respondent gave a sworn statement, the Director requested that respondent provide information and documents. That request was confirmed by a June 21, 1994 letter from the Director asking that the information and documents be provided by July 15, 1994. After respondent advised the Director on July 19, 1994 that he would provide the information and documents within six or seven days, and after the Director sent another letter on September 8, 1994 requesting the same material by September 23, 1994, respondent provided the information and documents on October 10, 1994.

In a November 15, 1994 letter, the Director requested that respondent execute and return by November 25, 1994 an authorization allowing the Director to obtain information from respondent's accountant. In a December 19, 1994 letter, the Director reiterated the request from November 15, 1994 and also asked respondent to execute and return state and federal tax authorizations by December 30, 1994. Respondent provided all three authorizations on January 6, 1995.

In a September 6, 1995 letter, the Director requested respondent to re-execute and return the state and federal tax authorizations because the previous authorizations had expired. During a September 14, 1995 telephone conversation with the Director's office, respondent said he would return the authorizations by September 18, 1995. In letters dated September 25, 1995 and October 2, 1995, the Director reiterated her requests. On October 9, 1995, per respondent's request, the Director sent a second set of state and federal tax authorizations to the respondent and also requested that respondent execute and return a California tax authorization by October 19, 1995. The Director reiterated her requests on October 23, 1995. On October 27, 1995, the Director received the requested Minnesota and federal tax authorizations, but on the Minnesota tax authorization, respondent included a hand-written limitation that read: "information regarding Minnesota Tax Forms only and Dept. of Revenue wrong doing (sic)." Respondent failed to provide the California tax authorization.

In addition, the Director became aware that the respondent had neglected a client matter. On March 19, 1993, Joanne and Rita Dryburgh paid $300 to retain respondent for representation regarding an estate issue that included a transfer of real estate. According to respondent's billing records, respondent spent one-and-one-half hours on the project between March 19, 1993 and October 25, 1993, when respondent commenced work on the matter. Respondent continued to work on the matter until he withdrew in approximately April 1994.

The Director ultimately issued charges of unprofessional conduct against respondent on February 13, 1996, and the pattern of noncooperation continued. On March 27, 1996, the Director served on respondent a notice of a panel hearing pursuant to Rule 9, RLPR. Respondent failed to attend the June 7, 1996 panel hearing. On June 10, 1996, the Director filed a petition for disciplinary action against the respondent. Respondent admitted service of the petition on June 14, 1996, but did not file an answer within 20 days of service as required by Rule 13(a), RLPR. ¹ The Director filed a motion for summary relief on July 10, 1996, and this court, pursuant to Rule 13(b), RLPR, granted the order on July 16, 1996.

Because the allegations of the petition are deemed admitted, we address only the appropriate discipline in this case. In considering appropriate sanctions for attorney misconduct, we weigh the following factors: the nature of the misconduct, the cumulative weight of disciplinary violations, the harm to the public, and the harm to the legal profession. In re Lochow, 469 N.W.2d 91, 96 (Minn.1991). This court looks to similar cases to assist it in determining proper discipline for attorney misconduct. In re Sigler, 512 N.W.2d 899, 901 (Minn.1994). In considering mitigating factors in assessing discipline, the court looks for an appreciation by the attorney of the harm he has caused others and evidence that he considers himself obligated to conform to the rules. In re Franke, 345 N.W.2d 224, 229 (Minn.1984).

The Director argues that respondent's civil tax-fraud penalty, the failure to timely file...