IN RE DISCIPLINARY ACTION AGAINST ALBRECHT

Citation779 NW 2d 530
Decision Date18 March 2010
Docket NumberNo. A08-2082.,A08-2082.
PartiesIn re Petition for DISCIPLINARY ACTION AGAINST Alan J. ALBRECHT, a Minnesota Attorney, Registration No. 191826.
CourtSupreme Court of Minnesota (US)

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

Alan J. Albrecht, Brooklyn Center, MN, pro se.

OPINION

PER CURIAM.

On November 26, 2008, the Director filed a petition for disciplinary action against Alan J. Albrecht. The petition alleged two counts. In the first, the Director alleged that Albrecht had shown a pattern of incompetence and lack of diligence that violated Minn. R. Prof. Conduct 1.1,1 1.3,2 3.4(c),3 and 8.4(d).4 In the second count, the Director alleged that Albrecht's issuance of a non-negotiable check and his failure to communicate regarding that check violated Minn. R. Prof. Conduct 8.4(d).

After a hearing on the Director's allegations, the referee we appointed found that Albrecht had committed misconduct, and recommended that Albrecht be indefinitely suspended from the practice of law for a minimum of two years. Albrecht appealed the referee's recommendation and ordered a transcript of the referee's proceedings. See Rule 14(e), Rules on Lawyers Professional Responsibility (RLPR) (providing that the referee's findings of fact and conclusions are conclusive unless one of the parties orders a transcript of the proceedings). Albrecht contests the referee's factual findings with respect to several mitigating and aggravating factors, argues that the referee failed to consider several relevant mitigating factors, and challenges the referee's recommended discipline as "arbitrary." He argues that a three-month suspension, with a possible requirement of a reinstatement petition, would be more appropriate discipline.

Albrecht graduated from law school in 1988 and practiced as a lawyer in various capacities for several years. In 1993, he formed the law firm of Albrecht and Associates, Ltd. Since starting his own firm, Albrecht has been admonished ten times and publicly disciplined four times. The history of those proceedings up until 2003 is set forth at some length in Albrecht's most recent public discipline and will not be repeated here. See In re Albrecht (Albrecht IV), 660 N.W.2d 790, 792-93 (Minn. 2003); see also In re Albrecht (Albrecht III), 577 N.W.2d 712 (Minn.1998); In re Albrecht (Albrecht II), 573 N.W.2d 89 (Minn.1998); In re Albrecht (Albrecht I), 565 N.W.2d 704 (Minn.1997). In 2003, Albrecht was disciplined twice. In Albrecht IV, Albrecht was disciplined for misconduct in matters involving three clients. See 660 N.W.2d at 793. The misconduct included neglect of client affairs, lack of communication, and filing a frivolous lawsuit. See id. at 793-95. As part of his discipline, he was suspended for 90 days and placed on supervised probation for two years following his reinstatement. See id. at 797. He was privately disciplined again in September of the same year for failing to provide timely notice to his clients of his suspension as required by Rule 26, RLPR.

The facts giving rise to the current disciplinary petition are largely uncontested. On June 21, 2005, a client retained Albrecht to represent her in pursuing bankruptcy. The client had been self-employed for thirty years and had accumulated more than $90,000 in credit card debt. Her only retirement asset was a structured settlement that she had received in connection with her husband's death in a car accident years earlier. The client testified before the referee that she told Albrecht that it was very important to her to keep the structured settlement and that she did not want to file for bankruptcy unless that asset would be protected. She also testified that she had been approved for a home equity loan and would likely have taken out a loan on her house, rather than filing for bankruptcy, if that were the only way to protect the structured settlement. She testified that Albrecht indicated multiple times that the structured settlement "wouldn't be a problem."

Albrecht filed a bankruptcy petition in August 2005 on behalf of the client. He did not review the structured settlement agreement itself. In the petition, Albrecht listed the structured settlement as an exempt asset from the bankruptcy estate, citing the exemption for insurance policies. The bankruptcy trustee objected to this exemption and, when Albrecht would not stipulate that the structured settlement was not exempt, the trustee filed a motion with the bankruptcy court formally objecting to the claimed exemption. In November 2005, the bankruptcy court rejected Albrecht's claim that the structured settlement was exempt from the bankruptcy estate. Albrecht told the client he would bring a motion to vacate this order and would continue seeking to exempt this asset. He took no more legal action in this case until June 2006.

In the meantime, in March 2006, the client received her annual structured settlement check and asked Albrecht if she could cash the check and retain the proceeds. Albrecht told her that she could. Albrecht received letters from the trustee's counsel on March 7 and 20, requesting that he see to it that the funds were turned over to the trustee. The client also called Albrecht several times to express her concern about the settlement payments after receiving copies of these letters in the mail.

On May 1, the trustee's counsel brought a motion for the recovery of the annual structured settlement payment and also sought attorney fees of $800 for the cost of bringing the motion. On June 11, Albrecht filed a motion to vacate the court's November 2005 order denying the requested exemption for the structured settlement payment. The court denied the motion as untimely and further found that Albrecht raised no meritorious defenses to the trustee's May 1 motion. Initially, the court ordered the client to pay the $800 in attorney fees for the trustee's cost of bringing the motion, but the court subsequently issued a second order requiring Albrecht to pay the $800 instead. Although it is somewhat unclear from the record, it appears that this change was due to the intervention of a lawyer friend of the client, who stepped in to help the client after she became frustrated with the quality of Albrecht's legal representation. Albrecht subsequently paid the $800.

Albrecht made no offer to refund the client the $700 fixed fee she had paid him when she retained him to take her case. In 2008, the client filed a conciliation court claim against him. After receiving her conciliation court complaint, Albrecht sent the client a $700 check, dated June 6, 2008, and drawn on his business account. The bank refused to cash the check because of insufficient funds. The client contacted Albrecht and testified that, although he told her he would get back to her the next day, he failed to do so and she was unable to reach him again. The client was finally able to negotiate the check on June 20, 2008.

In his conclusions of law, the referee determined that Albrecht's conduct violated Minn. R. Prof. Conduct 1.1, 1.3, 3.4(c), and 8.4(d). The referee also found that there were no mitigating factors in Albrecht's case and that the harm suffered by the client and Albrecht's extensive disciplinary history were both aggravating factors. As discipline, the referee recommended a minimum two-year suspension.

I.

In disciplinary proceedings, the Director must prove the respondent's violation of the Rules of Professional Conduct by clear and convincing evidence. In re Grigsby, 764 N.W.2d 54, 60 (Minn.2009). Because Albrecht ordered a transcript of the referee's hearing, the referee's findings and conclusions of law are not binding on our court. See In re Wentzell, 656 N.W.2d 402, 405 (Minn.2003). Although not binding, we give "great deference to a referee's findings and will not reverse those findings unless they are clearly erroneous, especially in cases where the referee's findings rest on disputed testimony or in part on respondent's credibility, demeanor, or sincerity." Id. We must be "`left with the definite and firm conviction that a mistake has been made'" to conclude that a referee's findings were clearly erroneous. Id. (quoting In re Strid, 551 N.W.2d 212, 215 (Minn.1996)). Where "the referee's findings are supported by the evidence, they will be upheld." In re Erickson, 653 N.W.2d 184, 189 (Minn. 2002). Albrecht does not dispute the referee's findings of fact regarding what misconduct occurred and the referee's conclusions that this misconduct violated the Rules of Professional Conduct. Albrecht does, however, challenge the referee's findings of fact and conclusions of law with respect to aggravating and mitigating factors.

A.

Albrecht first argues that it was clearly erroneous for the referee to find that the following were not mitigating factors for his misconduct: his adjustment disorder and his treatment for the disorder, and the length of time since his last instance of misconduct causing harm to a client. Next, Albrecht argues that he produced evidence of several additional mitigating factors that were not addressed by the referee, including Albrecht's good reputation in the legal community and the favorable results he achieved in complex matters; his remorse for his misconduct; and his cooperation with the Director. Finally, Albrecht argues that, although the referee noted his involvement in community service, it was unclear whether the referee treated it as a mitigating factor and thus, to the extent the referee failed to address whether it was a mitigating circumstance, this was also clearly erroneous. See In re Grigsby, 764 N.W.2d at 60 ("We review the lack of particular factual findings by the referee for clear error."). We examine each of these claims in turn.

First, Albrecht argues that it was clearly erroneous for the referee to reject his argument that his adjustment disorder was a...

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