In re Disciplinary Action Against Howe

• Decision Date: 30 January 2001
• Docket Number: No. 20000211.,20000211.
• Citation: 621 N.W.2d 361,2001 ND 7
• Parties: In the Matter of the Application for DISCIPLINARY ACTION AGAINST Bruce R. HOWE, a Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner, v. Bruce R. Howe, Respondent.
• Court: North Dakota Supreme Court

621 N.W.2d 361

2001 ND 7

In the Matter of the Application for DISCIPLINARY ACTION AGAINST Bruce R. HOWE, a Member of the Bar of the State of North Dakota.

Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner, v. Bruce R. Howe, Respondent.

No. 20000211.

Supreme Court of North Dakota.

January 30, 2001.

Paul W. Jacobson, Disciplinary Counsel, Bismarck, ND, for petitioner.

Gary H. Lee, Olson Burns Lee, Minot, ND, for respondent.

PER CURIAM.

[¶ 1] Disciplinary counsel filed a petition for discipline against Bruce R. Howe. Howe contested the allegations of misconduct and was granted a hearing before a hearing panel. Howe did not tender a conditional admission under N.D.R. Lawyer Discipl. 4.2 until after the hearing panel issued its report and recommendation that Howe's license to practice law be suspended for 30 days and disciplinary counsel had filed an objection. Disciplinary counsel has objected to the hearing panel's recommendation that Howe's license to practice law be suspended for 30 days. Asserting this Court has "authority to extend an opportunity to accept discipline by consent as envisioned by Rule 4.2, N.D.R. Lawyer Discipl., even after an objection to the panel recommendation is filed," Howe has tendered "a conditional admission in exchange for the stated form of discipline, 30 days suspension." Howe withdraws the conditional admission if we reject it, and, alternatively, has raised a number of objections to the hearing panel's report. We reject the tendered conditional admission, and we suspend Howe from the practice of law for six months.

I

[¶ 2] Howe became licensed to practice law in North Dakota in 1958. In 1992, Howe began estate planning for George Schreiber and his sister, Loretta Schreiber. In 1992, Howe prepared and George executed a will and a trust agreement. The will essentially transferred all estate assets to the trust. The trust agreement provided that prior charitable pledges were to be honored quickly, provided additional charitable gifts, and provided that upon George's death, his nieces, Dolores Adams, Caroline Renner, and Rose Renner, were each to receive $200,000. George named Loretta the primary beneficiary on a number of annuities. George's nieces were contingent beneficiaries on the following annuities:

a. $79,742.17 Pioneer Mutual Life-Policy # 662510

b. $437,277.53 North American Security Life-Policy # XXXXXXXXX

c. $522,960.23 COVA (formerly Xerox Life)-Policy # 74709-1

The trust was not funded before George Schreiber died on October 8, 1995. After George's death, Howe attempted "to fund the trust via post-mortem estate planning," which ultimately led to the institution of disciplinary proceedings against him in 1999.

[¶ 3] After a hearing on April 5 and 6, 2000, the hearing panel found:

15. In order to fund, post mortem, the George Schreiber trust, Howe drafted, and had Loretta execute, a series of "disclaimer and renunciations" for all annuities, "possibly" assuming that Loretta was the sole beneficiary, with no contingent beneficiaries....

....

18.... As testified by Howe's own expert witness, Garry Pearson, Howe had an obligation to inform the nieces of all policies of which they were contingent beneficiaries. Howe directly violated that obligation, and his conduct from March 20, 1996 forward, leads the Hearing Panel to conclude, by clear and convincing evidence, that Howe made statements and representations to third persons (the nieces), of fact and law, that he knew to be false. Not only by what was said, but also what Howe failed to say. Furthermore, the Hearing Panel finds by clear and convincing evidence, that Howe's continued course of conduct constitutes conduct involving dishonesty, fraud, deceit, or misrepresentation.

19.... In a draft dated April 16, 1996, Pioneer Mutual mistakenly paid policy # 662510 to George's estate. Howe never advised Pioneer Mutual of their error. He never advised the nieces of his actions or their beneficiary status to Pioneer policy # 662510, in spite of his legal responsibility and obligation to do so.

....

21. On June 24, 1996, Howe met with Caroline and Rose Renner. The purpose of the meeting was to have Caroline and Rose sign disclaimers to the COVA annuity. All three nieces testified at the hearing. The Hearing Panel finds their testimony to be consistent and credible.... Howe did not advise the nieces of their contingent beneficiary status under the Pioneer policy. As an incentive to have the nieces sign the disclaimers, Howe told the nieces that if they did not disclaim, the proceeds they received from the COVA annuity would be deducted from their specific bequest under the trust. They testified that Howe told them they would get more if they disclaimed than they would if they didn't.... The nieces testified that Howe told them that each would be responsible for $9,700.00 in estate administration fees. Howe did not deny making this statement. He claims it was a mistake. Each of the statements by Howe was false. The hearing panel concludes that at the time Howe made the statements, he knew that the statements were false. The Hearing Panel finds by clear and convincing evidence, that Howe engaged in conduct involving dishonesty, fraud, deceit and misrepresentation.

....

23. Eventually, claims were made against George's estate on behalf of the nieces. Those claims were settled. The nieces received their fair share, and did not sustain any loss as a result of Howe's conduct. It would appear that the only losers of the failure to timely fund the trust were the charitable organizations.

24. As stated earlier, the Hearing panel finds, from clear and convincing evidence, that Howe violated Rule 8.4(d), N.D.R. Prof. Conduct by violating N.D.C.C. § 27-14-02(7), which provides that it is ground for discipline for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. The Hearing Panel also finds that Howe violated Rule 4.1 N.D.R. Prof. Conduct, which provides that in the course of representing a client a lawyer shall not make a statement to a third person of fact or law that a lawyer knows to be false. Howe's statements to the nieces were false. Howe knew those statements to be false. The statements were made to induce the nieces to disclaim and accomplish what Howe most likely should have done years earlier: timely fund the trust.

....

29. In considering a recommendation of the Hearing Panel for Howe's violations of the Rules of Professional Conduct, we find no evidence that Howe has a prior history or record of violations of the Rules of Professional Conduct. This appears to be his first violation. Howe is, otherwise, a well-respected member of the bar. Nevertheless, his prohibited actions were serious, calculated, and could have resulted in significant loss to the contingent beneficiaries. Howe's conduct is of the type that reflects dishonor on the legal profession and the public's expectation of honesty and candor. The Hearing Body therefore recommends that the license of Bruce R. Howe be suspended for a period of thirty (30) days. The Hearing Body further recommends that Howe be ordered to pay disciplinary counsel's costs, disbursements, and attorney's fees.

II

[¶ 4] We recently addressed review of disciplinary proceedings in In re Disciplinary Action Against Robb, 2000 ND 146, ¶ 8, 615 N.W.2d 125:

We review disciplinary proceedings against attorneys de novo on the record. Disciplinary Board v. Boughey, 1999 ND 205, ¶ 8, 602 N.W.2d 268. Disciplinary Counsel must prove each violation by clear and convincing evidence. Disciplinary Action Against Dvorak, 2000 ND 98, ¶ 8, 611 N.W.2d 147. Although we give due weight to the findings, conclusions, and recommendations of the Disciplinary Board, we are not merely a rubber stamp, and we decide each proceeding upon its own facts. Boughey, at ¶ 8.

"When the hearing panel has heard the witnesses and observed their demeanor, we accord special deference to its findings on matters of conflicting evidence." Disciplinary Bd. v. McDonald, 2000 ND 87, ¶ 13, 609 N.W.2d 418. "We consider each disciplinary case upon its own facts to decide what discipline is warranted." In re Disciplinary Action Against Dvorak, 2000 ND 98, ¶ 8, 611 N.W.2d 147, cert. denied, ___ U.S. ___, 121 S.Ct. 483, ___ L.Ed.2d ___.

III

[¶ 5] Disciplinary counsel objected to the hearing panel's recommendation of a 30-day suspension. Howe tendered a conditional admission in exchange for the recommended 30-day suspension, and, alternatively, raised a number of objections to the hearing panel's report.

A

[¶ 6] Howe contends expert testimony should have been required to establish a violation of the Code of Professional Conduct. We agree with the hearing panel's resolution of this contention:

In this case the standard of care is set forth in the rules themselves. There is no issue as to what the standard of care is. There is no dispute as to the interpretation of the standard of care, nor is the standard that of what a reasonably competent attorney might do under the same or similar circumstances.

[¶ 7] Under N.D.R. Lawyer Discipl. 3.5(B), the North Dakota Rules of Evidence apply in disciplinary proceedings "insofar as appropriate." Rule 702, N.D.R.E, provides an expert witness may testify if "specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue." Here, Howe was alleged to have knowingly made false statements and engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation. Expert testimony would not have assisted the hearing panel in determining if Howe made statements he knew to be false or if he engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation. We conclude expert testimony was unnecessary in this case.

B

[¶ 8] Howe contends the hearing panel's finding he had all annuity information before George Schreiber's death is not supported by clear and...