In re Butler, A20-0918

• Decision Date: 09 June 2021
• Docket Number: A20-0918
• Citation: 960 N.W.2d 540
• Parties: IN RE Petition for DISCIPLINARY ACTION AGAINST William Bernard BUTLER, a Minnesota Attorney, Registration No. 0227912.
• Court: Minnesota Supreme Court

960 N.W.2d 540

IN RE Petition for DISCIPLINARY ACTION AGAINST William Bernard BUTLER, a Minnesota Attorney, Registration No. 0227912.

A20-0918

Supreme Court of Minnesota.

Filed: June 9, 2021

Susan M. Humiston, Director, Cassie Hanson, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.

William B. Butler, Robbinsdale, Minnesota, pro se.

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action and a supplementary petition for disciplinary action against respondent William Bernard Butler. The petitions alleged that Butler was convicted of two felonies for willfully failing to file federal income tax returns, misused a trust account, failed to timely cooperate with the Director's investigation, and held himself out as a licensed attorney while suspended. The referee held a hearing and concluded that Butler had violated the applicable rules, and that aggravating factors warranted disbarment. Butler asserts that, despite his convictions, his failure to file tax returns did not violate the Minnesota Rules of Professional Conduct and Rules on Lawyers Professional Responsibility. He also opposes the Director's other charges on evidentiary grounds. After reviewing the record, we conclude that the referee did not clearly err. We further conclude that the appropriate discipline for Butler's misconduct is an indefinite suspension with no right to petition for reinstatement for 4 years.

FACTS

Butler was admitted to practice in Minnesota in 1992. Butler has been disciplined twice before. On August 12, 2015, we suspended Butler from the practice of law with no right to petition for reinstatement for at least 2 years.¹ In re Butler , 868 N.W.2d 243, 252 (Minn. 2015). Butler's 2015 discipline stemmed from a substantial pattern of misconduct including pursuit of frivolous litigation on behalf of 40 clients, fraudulent joinder of parties, refiling of previously dismissed cases, and failure to pay $300,000 in court-ordered sanctions. Id. at 247–50. The Director further admonished Butler on January 27, 2017, for identifying himself as "General Counsel" for a company that employed him and providing legal advice while he was suspended from the practice of law.

This matter arises principally out of Butler's March 20, 2019 convictions on two counts of attempting to evade or defeat a tax law by knowingly failing to file a tax return (for tax years 2012 and 2013) when required to do so, in violation of Minnesota Statutes § 289A.63, subd. 1(a) (2020). The district court stayed imposition of the sentences and placed Butler on probation for 3 years.² Butler complied with the condition of his probation that he file tax returns from 2012 through 2019.

After Butler was charged with willful tax evasion in 2018, the Director began a disciplinary investigation. On May 16, 2019, the Director sent Butler a letter informing him that his law firm's website, which stated that "William Bernard Butler is a Minnesota Attorney," was misleading given his suspended status at the time. Butler responded on May 30, 2019, that his website was "currently down" but if it went back up that he would change it to state that he "is a non-practicing Minnesota attorney" and include a link to his prior discipline.

The Director also sent Butler a notice of investigation on September 3, 2019, asking him to explain an August 13, 2019 overdraft on his attorney trust account with Wells Fargo. An automatic electronic payment for Butler's personal car lease caused this overdraft. The notice requested Butler's trust account bank statements and other information. This notice was mailed to the Minneapolis address that Butler maintained with the Minnesota Lawyer Registration Office, one that the Director had previously used to successfully communicate with Butler concerning his criminal convictions. The notice was not returned as undeliverable.

After receiving no response, the Director sent Butler another letter on September 18, 2019, to the same address as well as a residential address associated with him. In this second letter, the Director cited Butler's failure to respond to the first notice of investigation. This letter was returned as undeliverable to Butler's Minneapolis address, but not his residential address.

Also on September 18, 2019, the Director requested an investigatory subpoena for Butler's trust account. The subpoena was then approved and served on Wells Fargo. At this point, Butler still had not responded to the Director's requests. After being notified of the subpoena by Wells Fargo, Butler e-mailed the Director on October 19, 2019, explaining that there were no client funds in the trust account and that he was using it for personal purposes. Butler did not include in this e-mail the bank statements requested by the Director. Butler eventually provided the Director a screenshot of the trust account balance on November 13, 2019.

The subpoenaed bank records showed that Butler had used his attorney trust account to make monthly car lease payments and to pay for car insurance. Butler also used the trust account to deposit personal funds, including a $10,000 personal check, and disbursed payments to himself. This use resulted in five overdrafts, including a $725.35 shortage. Butler did not provide the Director with information showing that he has corrected the overdrafts. There were never any third-party funds in the account during the disputed period, nor any comingling. Butler explained to the Director that he used the trust account for personal purposes because his criminal convictions prevented him from opening a new bank account.

The Director petitioned for disciplinary action against Butler. The Director alleged that Butler's convictions for knowingly failing to file his tax returns violated Minn. R. Prof. Conduct 8.4(b) and (d) ; his misuse of the trust account violated Minn. R. Prof. Conduct 1.15(a) ; his holding of himself out as authorized to practice law while suspended violated Minn. R. Prof. Conduct 5.5(b)(2) and 7.1 ; and his failure to cooperate with the disciplinary investigation violated Minn. R. Prof. Conduct 8.1(b) and Rule 25, Rules on Lawyers Professional Responsibility (RLPR). A hearing was held before the referee.

At the hearing, Butler offered Exhibit 40, which consisted mostly of e-mail communications between him and the Director that occurred after Butler did not respond to the first two notices of investigation. The Director objected primarily on authentication grounds, because the exhibit was offered with numerous redactions. Butler explained that he did not have access to a printer, and so he forwarded these e-mails to personal friends for them to print off. He claims that the redactions were of the personally identifying information of those friends. The referee reserved receiving Exhibit 40 on authentication grounds and it was ultimately not admitted into evidence.

The Director called Butler to testify; he refused by citing religious beliefs.³ The referee stated that Butler could affirm the truth of his testimony. Butler rejected that option and said he would not testify. Butler did not call any witnesses on his behalf.

The referee issued her findings of fact, conclusions of law, and recommendation. She made findings consistent with the facts described above. She concluded that Butler violated Minn. R. Prof. Conduct 1.15(a), 5.5(b)(2), 7.1, 8.1(b), and 8.4(b) and (d) and Rule 25, RLPR. The referee also found several aggravating factors. First, Butler had a substantial prior disciplinary history. Second, Butler lacked remorse by maintaining "unreasonable and widely rejected legal positions regarding the government's right to taxation," failing to acknowledge the wrongfulness of his misuse of the trust account and the restrictions placed on him as a suspended attorney, and blaming the Director for failed communication despite him not updating his address with the Lawyer Registration Office. Third, the referee found that Butler failed to cooperate with the disciplinary hearing by refusing to testify, and did so in bad faith. The referee then found that Butler offered no evidence of mitigating factors. In light of this, the referee recommended that Butler be disbarred.

ANALYSIS

Butler challenges the referee's failure to admit the e-mail correspondence, her findings of fact and conclusions, and her recommended discipline. We address each in turn.

I.

At the hearing, Butler sought to admit into evidence Exhibit 40, a series of e-mails between him and the Director that principally occurred after issuance of the Wells Fargo subpoena. The Director objected to admission of Exhibit 40 because the exhibit contained multiple redactions, and several pages contained settlement negotiations. Butler explained that he had no printer and had to forward the e-mails to other persons to print, and so he redacted the identifying information of those persons. The referee was concerned with the redactions and believed that the redactions could be addressed by testimony. Accordingly, the referee reserved decision on the admission of Exhibit 40. Butler, however, did not testify or attempt to authenticate Exhibit 40. Ultimately, Exhibit 40 was not entered into evidence.

Butler claims that the e-mail correspondence in Exhibit 40 rebuts the Director's assertion, and the referee's conclusion, that he failed to respond to the first notice of investigation and failed to cooperate with the disciplinary investigation. The Director asserts that Butler was on notice prior to the hearing that the Director would object to Exhibit 40 due to the redactions and the referee gave Butler an opportunity to authenticate the exhibit, which he did not do.

A referee's evidentiary rulings will only be reversed for an abuse of discretion. In re Moulton , 945 N.W.2d 401, 406 (Minn. 2020). Notably, the referee did not explicitly exclude Exhibit 40, but instead reserved...