In re Belz

• Decision Date: 15 July 2008
• Docket Number: No. SC 88985.,SC 88985.
• Citation: 258 S.W.3d 38
• Parties: In re Mark BELZ, Respondent.
• Court: Missouri Supreme Court

258 S.W.3d 38

In re Mark BELZ, Respondent.

No. SC 88985.

Supreme Court of Missouri, En Banc.

July 15, 2008.

Sam S. Phillips, Alan D. Pratzel, Office of Chief Disciplinary Counsel, Jefferson City, MO, for INF.

R.C. Wuestling, M. Adina Johnson, Eric O. Wolfgram, Wuestling & James, L.C., St. Louis, MO, Ann K. Covington, Bryan Cave, L.L.P., Jefferson City, MO, for Respondent.

LAURA DENVIR STITH, Chief Justice.

Both Mr. Belz and the Office of Chief Disciplinary Counsel (OCDC) agree that Mr. Belz committed professional misconduct when he borrowed his client's trust account funds without permission over a four-year period. The parties also agree that Mr. Belz kept a clear record of the amounts he had borrowed, then voluntarily repaid the sums to the accounts and self-reported his misconduct to the OCDC. The disciplinary hearing panel found that Mr. Belz's conduct resulted from his bipolar disorder, which caused manic behavior on his part and which has now been successfully treated by a physician. OCDC contends that these mitigating factors — self-reporting, mental illness, record keeping, and voluntarily restitution — are not relevant in cases of misappropriation and that disbarment is the correct sanction. This Court disagrees.

Although disbarment is the usual result in misappropriation cases because of the egregious nature of the misconduct, consistent with this Court's approach in prior cases and the ABA's Standards for Imposing Lawyer Sanctions (1991 ed.) ("ABA Standards"), this Court holds that mitigating factors are always considered in determining the correct sanction and that even in misappropriation cases exceptional mitigating factors may warrant a sanction other than disbarment. Mr. Belz's self-reporting, his voluntary restitution, his keeping of a record of his borrowings, and his mental illness present just such exceptional mitigating factors. Mr. Belz's license is suspended with no leave to apply for reinstatement for three years.

I. FACTUAL BACKGROUND

Mark Belz has been admitted to practice in Missouri since 1976. From 1999 to early 2003, he was managing partner and sole shareholder of Belz & Jones, P.C., a Missouri law firm located in Clayton. Mr. Belz suffers from bipolar disorder, which was first diagnosed after he experienced a manic episode in 1975 for which he was treated by Dr. Eugene Holemon, a board-certified psychiatrist. Bipolar disorder is a genetically based mood disorder that causes radical emotional swings, from manic highs to depressive lows. Manic and depressive periods can cycle rapidly or can last for lengthy periods. The disorder is often treatable or controllable by medication. Dr. Holemon was able to successfully treat Mr. Belz, and his manic behavior disappeared. Beginning in 1981, Dr. Holemon believed that Mr. Belz no longer required medication, and it was discontinued.

The record shows that Mr. Belz was free of symptoms of his bipolar disorder from 1981 through 1998 and developed an excellent record as an attorney during that period. During that same period, Mr. Belz was extensively involved in his community and became an elder of the Presbyterian Church of America. In the course of his practice, he created revocable living trusts for Bert and his wife Mildred.¹ Once Mildred died, Mr. Belz became trustee of Bert's trust.

In 1998, while on a vacation to Europe, Mr. Belz began to drink. Shortly thereafter, he again began experiencing manic episodes, characterized by grandiose feelings, mood swings, and conduct that is typical of the manic phase of bipolar disorder. This manic period lasted, according to Dr. Holemon, from 1998 until it was successfully treated by a resumption of medication in 2003. During this period, Mr. Belz made unauthorized withdrawals from Bert's trust account that he used for mortgage payments and to meet firm expenses. He meticulously recorded each withdrawal and noted that he owed the money to the account. In 1999 and 2000, he paid back the borrowed sums within a few months. After March 2000, he continued to make entries showing that he had withdrawn the monies and that he owed them to the trust account, but he did not promptly repay the sums.

In December 2002, Mr. Belz became seriously ill and believed he might die. He became concerned about the borrowed monies and, for the first time, informed his son and his law partners about the funds he had withdrawn. Mr. Belz and his law partners discussed the need to report the misconduct and repay the amount of funds then outstanding. Mr. Belz acknowledged the need to report his misconduct and accepted the responsibility of self-reporting the conduct to OCDC. After repaying all funds with interest on March 14, 2003, Mr. Belz filed a report of his conduct with the OCDC on May 1, 2003. Mr. Belz also provided full disclosure of his conduct to his affected clients. Mr. Belz began seeing Dr. Holemon again for treatment in May 2003, and he resumed a course of medication to treat his bipolar disorder. Mr. Belz continues to receive treatment from Dr. Holemon to the present day.

After an evidentiary hearing, the disciplinary hearing panel found that Mr. Belz was guilty of violating Rule 4-8.4(c) by engaging in conduct involving dishonesty, deceit and misrepresentation as well as conduct that is prejudicial to the administration of justice in violation of Rule 4-8.4(d). The panel also concluded that Mr. Belz violated Rule 4-1.15(a) by failing to hold his client's property separately from his own. It concluded that various aggravating circumstances were present, including dishonest or selfish motive, multiple offenses, vulnerability of the victim and substantial experience in the practice of law.

The panel found important mitigating circumstances as well, including that Mr. Belz had in good faith given timely restitution of the funds taken. It also stated in its findings of fact that he had self-reported. With regard to bipolar disorder, the panel noted that ABA Standards allow that mental disability can be a mitigating factor when certain specified conditions are met, including that the misconduct is unlikely to recur. See ABA Standards 9.32(i). The panel found that Mr. Belz "exhibited symptoms of unusual spending, grandiosity, lack of judgment and inability to appreciate the consequences of his actions" during his manic period from 1998 to 2002, which led to his misconduct. The panel also concluded that Mr. Belz "has recovered from the manic state he suffered and his recovery has been demonstrated by a meaningful and sustained period of successful rehabilitation and treatment" but it was "not convinced that Respondent's recovery has arrested the misconduct and that recurrence is unlikely." Therefore, the panel concluded that Mr. Belz's mental disability should not be considered a mitigating factor. Absent this factor, it found, disbarment was the appropriate sanction.

II. STANDARD OF REVIEW

The findings of fact and conclusions of law of the disciplinary hearing panel are advisory. In re Cupples, 979 S.W.2d 932, 933 (Mo. banc 1998). "This Court [in a disciplinary proceeding] reviews the evidence de novo, independently determining all issues pertaining to credibility of witnesses and the weight of the evidence, and draws its own conclusions of law." In re Snyder, 35 S.W.3d 380 (Mo. banc 2000); see also In re Oberhellmann, 873 S.W.2d 851, 852-53 (Mo. banc 1994).

III. DISCUSSION

The OCDC, the disciplinary hearing panel and Mr. Belz all agree that his misappropriation of client funds is misconduct that violates Rules 4-8.4(c) and (d) and Rule 4-1.15(a) and that he should be subject to discipline. They disagree as to what discipline is appropriate.

A. General Factors Governing Discipline

OCDC argues that the only possible discipline for a misappropriation of client funds is disbarment. Mr. Belz accepts that disbarment is the appropriate baseline standard for cases involving misappropriation of funds, but he argues that in this case numerous mitigating factors are present that counsel for a less severe punishment, including his bipolar disorder and his subsequent meaningful recovery, his self-reporting of his violations, his record-keeping with regard to the monies misappropriated, his restitution prior to reporting or any investigation, his remorse, the lack of actual harm to his clients who have remained his clients even after learning of his conduct, his present medical treatment and his recognition that he will need to continue to take medication. He contends that a stayed suspension with probation would be appropriate under these facts.

Both OCDC and Mr. Belz rely on the ABA Standards to support their positions, which is appropriate under this Court's precedents. See, e.g., In re Crews, 159 S.W.3d 355, 360-61 (Mo. banc 2005) (reciting ABA Standards and noting that the Court considers the ABA Standards "when determining what level of discipline to impose"); In re Griffey, 873 S.W.2d 600, 603 (Mo. banc 1994) (noting adherence to ABA Standards in disbarment case).

It is to the ABA Standards that this Court now turns. ABA Standard 3.0 states that courts should consider four primary factors when imposing sanctions after a finding that a lawyer has committed professional misconduct:

(a) the duty violated;

(b) the lawyer's mental state;

(c) the potential or actual injury caused by the lawyer's misconduct; and

(d) the existence of aggravating or mitigating factors.

These four factors in Standard 3.0 provide the basic framework for all disciplinary matters, while the remaining standards provide guidance as to appropriate sanctions for specific types of misconduct.

Standard 4.1 offers guidance when lawyers fail to preserve their client's property, as Mr. Belz has done here. It provides that "[a]bsent aggravating or mitigating circumstances, upon application of the factors set out in Standard 3.0 ... disbarment is generally appropriate when a lawyer knowingly converts client property and causes injury...