In re Disciplinary Action Against Montez

• Decision Date: 22 February 2012
• Docket Number: No. A11–0125.,A11–0125.
• Citation: 812 N.W.2d 58
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Angela Montgomery MONTEZ (n/k/a Angela Montgomery), a Minnesota Attorney, Registration No. 322192.
• Court: Minnesota Supreme Court

812 N.W.2d 58

In re Petition for DISCIPLINARY ACTION AGAINST Angela Montgomery MONTEZ (n/k/a Angela Montgomery), a Minnesota Attorney, Registration No. 322192.

No. A11–0125.

Supreme Court of Minnesota.

Feb. 22, 2012.

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Syllabus by the Court

1. A client is not required to take legal action to recover a binding fee arbitration award before filing a disciplinary complaint with the Office of Lawyers Professional Responsibility for an attorney's violation of Rule 8.4(i), Minn. R. Prof. Conduct.

2. When neither party has ordered a transcript of the proceedings before the referee, the supreme court will not review the referee's findings of fact and conclusions that professional misconduct has been committed.

3. When neither party has ordered a transcript of the proceedings before the referee, the supreme court will not review the referee's lack of findings of fact and conclusions as to aggravating or mitigating factors.

4. Respondent's pattern of misrepresentation, failure to maintain a trust account, and failure to comply with a binding fee arbitration award warrants indefinite suspension from the practice of law for a minimum of 2 years.

Martin A. Cole, Director, Cassie Hanson, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, MN, for petitioner.

Angela Montgomery, Omaha, NE, pro se.

OPINION
PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility filed a petition for discipline against respondent Angela Montgomery Montez, now known as Angela Montgomery,¹ alleging numerous violations of the Minnesota Rules of Professional Conduct. The petition alleged that Montgomery's failure to place an advance fee payment in trust; failure to remit unearned client fees; false statements to the client, to successor counsel, to a fee arbitration panel, and to the Director; and failure to comply with a binding fee arbitration award violated Minn. R. Prof. Conduct 1.15(a) ² and (c)(4),³4.1,⁴ and 8.4(c),⁵ (d),⁶ and (i). ⁷ The petition also alleged that Montgomery's failure to cooperate with the Director's investigation violated

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Rule 25,⁸ Rules on Lawyers Professional Responsibility (RLPR), and Minn. R. Prof. Conduct 8.1(a) ⁹ and (b).¹⁰ After an evidentiary hearing, the referee we appointed found that Montgomery had committed the professional misconduct alleged in the petition. The referee recommended that Montgomery be suspended from the practice of law and ineligible to petition for reinstatement for a minimum of 2 years. We conclude that the referee properly interpreted the Rules of Professional Conduct and that Montgomery's misconduct, as found by the referee, warrants indefinite suspension from the practice of law with no right to petition for reinstatement for a minimum of 2 years.

Respondent Angela Montgomery was admitted to practice law in Minnesota on October 25, 2002. Montgomery describes herself primarily as a public interest attorney, and since her admission, she has represented private clients on only two occasions. The representation of one of her private clients gives rise to the current disciplinary charges.

In 2009, Montgomery was retained by Better Future Adoption Services (BFAS), a non-profit organization, to represent the organization in a defamation suit brought by a former BFAS employee. Pursuant to a written retainer agreement dated June 15, 2009, BFAS was to pay Montgomery a “total fixed fee of $5000 payable in a 20% upfront retainer and equal monthly payments of $1,000 for a period of 4 months.” Montgomery was to provide BFAS with an accounting of her time and expenses and, in the event that Montgomery provided work beyond the $5,000 value, the agreement specified that BFAS would compensate her at the rate of $75 per hour.

Despite the terms of the retainer agreement, the then-chair of the BFAS board of directors issued a check payable to Montgomery in the amount of $5,000 with the annotation “Atty Fees (4 months).” Montgomery did not place the $5,000 in a trust account and testified before the referee that she has never maintained a trust account satisfying the requirements of Minn. R. Prof. Conduct 1.15.

A few weeks after the retainer agreement was signed, the individual who had issued the check to Montgomery left the BFAS board of directors. In reviewing financial transactions in which that individual had been involved, BFAS discovered that Montgomery had been issued a check for the full $5,000, instead of the $1,000 initial payment set forth in the June 15, 2009, fee agreement. At a meeting scheduled by BFAS's executive director to discuss return of the unearned portion of the retainer, the executive director told Montgomery that the payment of the full $5,000 was fraudulent. Montgomery disagreed and denied any wrongdoing. Following the meeting, BFAS decided to terminate Montgomery's representation and retained a new attorney to represent it.

The day after the meeting between BFAS and Montgomery, BFAS's new attorney

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sent Montgomery a letter terminating her representation, asking that Montgomery send him the client file, and requesting an opportunity to discuss with Montgomery the issue of the unearned portion of the retainer. Montgomery sent BFAS's new attorney the file and stated she believed she was entitled to retain the entire BFAS retainer. BFAS's new attorney responded and requested that Montgomery place the disputed portion of the retainer into a trust account and suggested that the issue of Montgomery's fees be submitted to the Hennepin County Bar Association's fee arbitration panel. Montgomery told BFAS's new attorney she was “in agreement with depositing $2000 in trust pending a binding fee arbitration decision.” But Montgomery did not deposit any portion of the BFAS retainer into a trust account.

The parties thereafter submitted the fee dispute to binding arbitration through the Hennepin County Bar Association's fee arbitration process. Montgomery maintained throughout the arbitration proceedings that she had deposited $2,000 in a trust account. Montgomery also contended that she was entitled to the full $5,000 upon her retainer as BFAS's counsel. To support this contention, Montgomery offered as an exhibit a different version of the June 15, 2009, fee agreement, one in which some payment terms had been crossed out and others added as follows:

A total fixed fee of $5,000, payable in a 20% upfront retainer and equal monthly payments of $1,000 for a period of 4 months+ after 4 mos monthly payments of $1,200.

Neither BFAS's executive director nor its new attorney had ever seen this version of the agreement and the referee later found that Montgomery had altered it in order to mislead the arbitration panel. In December 2009, the arbitration panel concluded that Montgomery was entitled to compensation for 14 hours of legal work at $125 per hour (a total of $1,750), and awarded BFAS a refund of the balance of the retainer.

On December 7, 2009, BFAS's new attorney requested payment of the fee arbitration award. Almost a month later, Montgomery responded by e-mail:

I advised you during our last telephone conversation that I would send the award amount to BFAS. Accordingly, I will arrange for a check to be transferred to BFAS from the [mutual fund] account. I will then need to arrange a payment next month for the remainder of the award. Please refrain from further correspondence on this matter.

But Montgomery never made any payments toward the arbitration award. On December 23, 2009, BFAS's new attorney submitted a complaint against Montgomery to the Office of Lawyers Professional Responsibility.

During the disciplinary proceedings, Montgomery made a number of representations to the Director that the referee found to be false and inconsistent with the documentary evidence in the case. Montgomery told the Director that she did not maintain a pooled client trust account, apparently because she did not regularly handle client funds, but claimed to maintain a mutual fund account for business expenses that satisfied the requirements for a trust account. Montgomery claimed to have placed all or some of the BFAS retainer into that mutual fund account. Montgomery redacted statements for the account that concealed from the Director the fact that it was an individual retirement account. Montgomery also concealed from the Director the fact that the account statements she produced were not complete. The referee rejected as not credible Montgomery's testimony that she

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had not altered the mutual fund statements and found that Montgomery had altered the statements in order to mislead the Director and conceal Montgomery's failure to place client funds in an appropriate trust account.

Montgomery also made repeated false representations to the Director regarding her handling of the BFAS retainer. In one letter to the Director in April 2010, Montgomery represented that she had deposited $2,000 of the retainer in her mutual fund account. In a second letter to the Director later in April, Montgomery represented that she had deposited $2,000 of the retainer in her mutual fund account and was “adding funds” to the account as she was able in order to cover the entire fee arbitration award. In June, Montgomery told the Director she had deposited the entire $5,000 retainer in her mutual fund account, of which $2,000 was earmarked for payment of the arbitration award. The referee found all of these representations to be false, and that none of the BFAS retainer was ever deposited in Montgomery's mutual fund account. ¹¹

Montgomery also made false and conflicting statements with respect to her ability to pay the arbitration award. During the Director's investigation of the disciplinary complaint, Montgomery claimed she was unable to pay the arbitration award “because she was in the midst of a divorce and prohibited from depleting any of her assets.” This assertion was false for two reasons. First, there was no...