In re O'Brien

Decision Date03 May 2017
Docket NumberA15-2042
Citation894 N.W.2d 162
Parties IN RE Petition for DISCIPLINARY ACTION AGAINST Steven Michael O'BRIEN, a Minnesota Attorney, Registration No. 0389745.
CourtMinnesota Supreme Court

Susan M. Humiston, Director, Binh T. Tuong, Megan Engelhardt, Assistant Directors, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.

Steven Michael O'Brien, Solana Beach, California, pro se.

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility served Steven O'Brien with a petition for disciplinary action after he failed to appear on behalf of his client and exhibited other misconduct in handling the client's matter. O'Brien did not respond to the petition. On the Director's motion, we deemed the allegations in the petition admitted. Shortly thereafter, we granted the Director's motion to suspend briefing to allow for investigation of an additional complaint. After this investigation, the Director filed a supplemental petition for disciplinary action, alleging that O'Brien misappropriated over $300,000 from funds held in trust for a beneficiary. O'Brien filed an answer to the supplemental petition, and we referred the matter to a referee. The referee recommended that O'Brien be disbarred. We agree that the appropriate discipline in this case is disbarment.

FACTS

The facts of the case are not in dispute.1 In April 2012, O'Brien agreed to represent D. F. in a lawsuit against an automobile repair service. D.F. provided O'Brien with documents relevant to the lawsuit and an advance in the amount of $750. During the course of the representation, D.F. paid O'Brien $1,700 for fees and costs. In the months after he was retained, O'Brien prepared a summons and complaint, served these documents on the defendant, and filed them with the district court. O'Brien also prepared and served discovery requests on the defendant. The district court subsequently scheduled a date for a pretrial conference and established dates for pretrial disclosure of witnesses, exhibits, and other trial materials.

During O'Brien's representation of D.F., O'Brien continually failed to respond to D.F.'s telephone and e-mail messages. On September 12, 2014, O'Brien failed to appear for the scheduled pretrial conference and failed to file the pretrial disclosures ordered by the district court. On September 26, the court ordered O'Brien to pay $750 as a sanction for failing to appear at the pretrial conference. Although the district court directed that the sanction be paid within ten days, O'Brien paid it in $250 monthly installments from January through March 2015.

Trial was scheduled to start on Monday, October 6, 2014. On Friday, October 3, O'Brien notified D.F., by letter, that he would no longer represent him. Because O'Brien withdrew from the representation, D.F. appeared at the trial pro se. The district court denied D.F.'s request for additional time to obtain new counsel. The district court dismissed the lawsuit with prejudice and ordered D.F. to pay $522 for the defendant's costs and disbursements. After O'Brien withdrew from the representation, D.F. asked O'Brien to return the file to him. O'Brien failed to do so.

In December 2014, D.F. submitted a complaint to the Director against O'Brien. The Director and the investigator for the District Ethics Committee requested information and responses from O'Brien, by letters and by phone, on multiple occasions. O'Brien did not respond to these inquiries.2 On September 24, 2015, the Director filed a petition for disciplinary action against O'Brien based on the D.F. complaint. O'Brien did not file an answer to the petition. We therefore granted the Director's motion for summary relief and deemed the allegations in the petition admitted. Rule 13(b), Rules on Lawyers Professional Responsibility (RLPR) (stating that the allegations of a complaint are deemed admitted if a respondent fails to answer within the time provided to do so). Shortly thereafter, we granted the Director's motion to suspend briefing to allow her to investigate an additional complaint.

The Director's additional investigation related to allegations regarding O'Brien's failure to account for funds in a trust for which he served as trustee. Specifically, O'Brien was appointed as the sole successor trustee of the revocable trust agreement of M.J. after M.J. died in 2013. The beneficiary of the trust was the Order of St. Benedict, St. John's Abbey (the Abbey). In March 2014, O'Brien established a trust checking account at U.S. Bank; he was the only person authorized to conduct transactions on the account. On September 23, 2014, O'Brien deposited $190,090.13 into the account, representing the proceeds from the sale of M.J.'s residence. O'Brien withdrew $903 in cash when he made this initial deposit. Between September 2014 and March 2015, O'Brien issued and endorsed checks from the trust checking account to himself or his law firm. The total sum misappropriated from the bank account, including fees, was $191,368.78.

The trust also was the sole owner of a brokerage account that O'Brien, as the trustee, controlled from January 2014 to July 2015. During this period, O'Brien made 40 wire transfers from the brokerage account without providing an accounting of these transactions. The total amount transferred from the brokerage account, including fees, was $137,051.67. Taken together with the funds misappropriated from the bank account, O'Brien misappropriated $328,420.45 from the trust.

The Director asked O'Brien to respond to the complaint about his misappropriation of trust funds, but he failed to do so. The Director then filed a supplemental petition for disciplinary action against O'Brien in February 2016. O'Brien filed an answer to the supplemental petition, denying the allegations that he wrongfully misappropriated funds from the trust. We referred the matter to a referee. After repeated failed attempts to contact O'Brien and include him in the proceedings, and O'Brien's failure to respond to the discovery served on him, the referee granted the Director's motion to strike O'Brien's answer and deemed the allegations in the supplemental petition admitted. Following a hearing at which O'Brien failed to appear, the referee made findings of fact and conclusions of law, and recommended that O'Brien be disbarred.

We then granted the Director's motion for interim suspension, see Rule 16(e), RLPR (stating that a lawyer's license "shall be suspended pending final determination" when a referee recommends disbarment), and directed the parties to file briefs. O'Brien did not file a brief and did not appear for oral argument.

ANALYSIS

Because the allegations in the petition and supplemental petition for disciplinary action have been deemed admitted, the only issue before us is the appropriate discipline for O'Brien's admitted misconduct. See In re Swensen , 743 N.W.2d 243, 246-47 (Minn. 2007). We give "significant weight" to the referee's recommendation for discipline, but "we are the ‘sole arbiter of the discipline to be imposed.’ " In re Voss , 830 N.W.2d 867, 877 (Minn. 2013) (quoting In re Albrecht , 779 N.W.2d 530, 540 (Minn. 2010) ). "The purpose of attorney discipline ‘is not to punish the attorney,’ " but to protect the public and the judicial system as well as " ‘deter future misconduct.’ " In re Riehm , 883 N.W.2d 223, 233 (Minn. 2016) (quoting In re Rebeau , 787 N.W.2d 168, 173 (Minn. 2010) ). We consider four factors in determining the appropriate disciplinary sanction: "(1) the nature of the misconduct; (2) the cumulative weight of the disciplinary violations; (3) the harm to the public; and (4) the harm to the legal profession." In re Nelson , 733 N.W.2d 458, 463 (Minn. 2007) (citing In re Jagiela , 517 N.W.2d 333, 335 (Minn. 1994) ). We also consider aggravating and mitigating circumstances. Rebeau , 787 N.W.2d at 176. Finally, we consider the discipline imposed in "similar cases in an effort to impose consistent discipline." Albrecht , 779 N.W.2d at 540 (citing In re Bishop , 582 N.W.2d 261, 263 (Minn. 1998) ).

First, we consider the nature of the misconduct. Nelson , 733 N.W.2d at 463. Misappropriation of trust funds is serious misconduct, see In re Isaacs , 451 N.W.2d 209, 211 (Minn. 1990), that has resulted in the disbarment of attorneys who breached the fiduciary duty owed to a non-client beneficiary of a trust, see, e.g. , In re Moe , 851 N.W.2d 868, 872 (Minn. 2014) ("We have disbarred attorneys who misappropriated funds from non-clients to whom they owed a fiduciary duty."). "Repeated neglect of client matters" and "failure to communicate with clients" also is serious and typically results in indefinite suspension by itself. In re Grzybek , 567 N.W.2d 259, 263 (Minn. 1997). Noncooperation with attorney discipline proceedings is an additional ground for discipline that can warrant indefinite suspension. In re Engel , 538 N.W.2d 906, 907 (Minn. 1995).

Here, O'Brien's most serious violation was misappropriating over $300,000 from the M.J. trust. He committed this misconduct in his role as a trustee, thus violating the fiduciary duty he owed to the beneficiary of the trust. He also failed to adequately represent D.F., to respond to D.F.'s attempts to contact him, and to return D.F.'s files. Furthermore, O'Brien has not cooperated with the attorney discipline proceedings, except to file an answer to the supplemental petition (which was later stricken). Any one of these violations would be sufficiently serious to warrant severe discipline.

Next, we consider the cumulative weight of the violations. Nelson , 733 N.W.2d at 463. In evaluating this factor, we have considered the number of rules violated and whether the misconduct was a single, isolated incident or a brief lapse of judgment. See In re Glasser , 831 N.W.2d 644, 648 (Minn. 2013) (acknowledging that although only one rule was violated, Glasser's "misconduct was neither a single, isolated incident nor a brief lapse in judgment"); In re...

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