Discipline of Ince, Matter of, 04345

• Decision Date: 10 April 1998
• Docket Number: No. 960298,No. 04345,04345,960298
• Citation: 340 Utah Adv. Rep. 53,957 P.2d 1233
• Parties: 340 Utah Adv. Rep. 53 In the Matter of the DISCIPLINE OF Paul R. INCE, Bar
• Court: Utah Supreme Court

Page 1233

957 P.2d 1233

340 Utah Adv. Rep. 53

In the Matter of the DISCIPLINE OF Paul R. INCE, Bar No. 04345.

No. 960298.

Supreme Court of Utah.

April 10, 1998.

Stephen R. Cochell, Kate A. Toomey, Salt Lake City, for Utah State Bar.

Paul R. Ince, Park City, for himself.

ZIMMERMAN, Justice.

The Utah State Bar ("the Bar") appeals from a district court order rejecting the Bar's request for the disbarment of Paul R. Ince. In its findings of fact, the district court determined that Ince had committed not less than nineteen major acts of misconduct over a fifteen-month period, including misappropriating law firm and client funds for his own use and benefit, forging documents to conceal an illegal transfer of pension funds, and failing to disclose his misconduct to a subsequent employer. Despite finding that the generally appropriate level of discipline fixed by the Standards for Imposing Lawyer Sanctions was disbarment, the court concluded that mitigating factors weighed in favor of suspension. The court then suspended Ince for fifteen months, to be followed by twenty-four months of supervised probation. The Bar appeals, arguing that Ince should be disbarred. We agree and therefore reverse.

Before turning to the standard of review and analysis, we must engage in a fairly extensive discussion of the facts leading up to the disbarment proceeding. From 1984 through March of 1994, when his conduct was discovered, Ince was employed by the law firm of Callister, Duncan & Nebeker ("CD & N"). During several years of his employment, Ince's family suffered numerous health and financial problems. In September of 1992, Ince and his wife happened upon a house for sale in Summit County. Because of a dream Ince's wife had, the Inces became fixated on purchasing that house. They listed their own home for sale the next week, but by February of 1993 it had not sold. The Inces had insufficient funds to make the down payment on the Summit County house but became convinced that purchasing it would alleviate some of the difficulties they were suffering. At that time, Ince decided to use $20,000 from his pension plan toward the down payment.

Under ERISA and other applicable statutes, employees may not use pension funds to make payment for a personal residence. See generally 29 U.S.C. §§ 1106-08. However, Ince represented to Zions Bank, the pension fund trustee, that he intended to use the money solely for investment purposes to purchase a lot adjacent to the Summit County home. This would have constituted a permissible investment under the pension plan's self-directed investment option. To convince CD & N and Zions Bank that he had in fact purchased the adjacent lot, Ince produced a forged warranty deed and two forged quitclaim deeds.

After purchasing the home, the Inces continued to suffer financial difficulties. In an attempt to meet his financial obligations, Ince engaged in a series of actions designed to facilitate the misappropriation of money from CD & N, including the following: Ince collected payments totaling $1500 from firm clients but kept the money for himself. He obtained checks from CD & N's accounting department to cover fabricated fees or expenses and converted those funds to his personal use. For instance, Ince obtained a check for approximately $2600 drawn on CD & N's trust account by telling the firm that the money was for a settlement closing and that funds from the closing would be returned to the trust account to cover the disbursement. He then forged the endorsement on the check, used the money for his mortgage payment, and failed to return the funds to the trust account.

Ince also manipulated an account denominated the "MSI Resolution Trust." Ince had established this account for the purpose of managing a client's funds for settlements with various creditors, including CD & N. Ince accepted two $5000 payments from the client--in July and December of 1993. He deposited roughly half of the July payment with CD & N as payment for services rendered and kept the remainder, and he kept all of the December payment, maintaining that it was a personal gift to him from the client.

In another incident involving the MSI account, Ince's brother, an attorney in Wyoming who was himself having financial and professional difficulties, convinced Ince to provide him with a check payable to his firm for $15,000. The check was drawn on the MSI account even though there was no connection between the client for whom the MSI account had been established and Ince's brother's firm. The check was presented for payment earlier than Ince anticipated and was dishonored due to insufficient funds. Ince's brother then persuaded Ince to write a letter to his Wyoming firm on CD & N letterhead providing a falsified explanation of why the first check had failed to clear.

In March of 1994, CD & N discovered Ince's misuse of the pension fund and the related forgeries. Ince offered to resign, and CD & N accepted this offer. After Ince's resignation, CD & N discovered additional misconduct. When confronted, Ince admitted the acts which had been discovered, but he did not volunteer information regarding his still undiscovered misdeeds. Eventually, Ince asked to speak to CD & N's management for the supposed purpose of making a full disclosure and arranging to repay all amounts he had misappropriated. Even then, however, he failed to reveal his misconduct regarding the two $5000 payments to the MSI account that were intended for payment of fees due to Ince's firm. ¹ CD & N discovered these transactions in subsequent weeks, and when confronted, Ince agreed to make restitution. Ince sold the house in Summit County and other property to raise the necessary funds. All money owed to CD & N was repaid within a few months of Ince's resignation.

In May of 1994, after his misconduct had been discovered by CD & N, Ince contacted the Bar and met with the chief disciplinary counsel, to whom he disclosed the general nature of his misconduct. CD & N filed a complaint against Ince with the Bar a few weeks later. After his resignation in March, Ince began looking for a new job. In May of 1994, Ince interviewed for and eventually obtained a position in the Child Protection Division of the Utah Attorney General's office. While Ince implied during his interview that his departure from CD & N had occurred under disagreeable circumstances, he did not fully disclose the situation or give any indication that it had come about as a result of his own misconduct. The Attorney General's office hired Ince without contacting anyone at CD & N. A year and a half later, the Attorney General's office learned of Ince's misconduct and fired him.

The Bar filed a formal complaint against Ince in June of 1995. The district court conducted a trial in April of 1996. The court found that although disbarment was the "generally appropriate" sanction for Ince's misconduct, "mitigating circumstances outweighed the misconduct." Therefore, the court ordered Ince suspended for fifteen months, to be followed by twenty-four months of probation during which time Ince would have to disclose his misconduct prior to handling any client funds and would have to perform thirty hours of community service per month.

On appeal, the Bar argues that the district court gave undue weight to mitigating evidence and that Ince should be disbarred. The Bar also requests that we adopt a rule that absent extremely compelling circumstances, an attorney who intentionally misappropriates funds, whether from his client or from his law firm, should be disbarred. Ince declined to file a brief in opposition to the Bar's appeal but did appear at oral argument.

We begin our analysis by determining the correct standard of review. In 1993, this court adopted the Utah Rules of Lawyer Discipline and Disability ("Rules of Lawyer Discipline"). The Rules of Lawyer Discipline effected a major change in the procedure followed in attorney discipline cases by transferring jurisdiction over formal Bar complaints from the Board of Bar Commissioners to the district courts. See In re Discipline of Babilis, 951 P.2d 207, 211 (Utah 1997). Under the revised procedure, the district court conducts a trial and enters an order of discipline that is a final order unless appealed. Id. at 213. In our recent opinion In re Discipline of Babilis, we set forth a general outline of the revised procedures and addressed the application of the standard of review to these revised disciplinary procedures. We briefly reiterate that standard here.

Under article VIII, section 4 of the Utah Constitution, this court plays a special role in governing the practice of law. This role includes overseeing the discipline of persons admitted to practice law. See id. at 213. Thus, while we review the trial court's findings of facts under the clearly erroneous standard, see State v. Pena, 869 P.2d 932, 935-36 (Utah 1994), we reserve the right to draw different inferences from the facts than those drawn by the trial court. See Babilis, 951 P.2d at 211. With respect to the discipline actually imposed, our constitutional responsibility requires us to make an independent determination as to its correctness. See id.

Moving to our analysis, the Standards for Imposing Lawyer Sanctions ("the Standards"), which were adopted at the same time as the Rules of Lawyer Discipline, provide six rules to guide courts in determining the proper sanction to impose on an attorney who violates the standards of ethical conduct. See id. at 211. The first three rules set forth the purpose of the Standards, a general overview of the scope of the available sanctions, and the factors to be considered in imposing sanctions. The remaining three rules govern the determination of the sanctions to be applied in a given case. Rule 4 establishes the "generally appropriate" or presumptive level of discipline that should be imposed. Rule 5 addresses cases in which a prior order of discipline has...