In re Disciplinary Action against Nelson, A06-1370.

• Citation: 733 N.W.2d 458
• Decision Date: 21 June 2007
• Docket Number: No. A06-1370.,A06-1370.
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Dewey M. NELSON, a Minnesota Attorney, Registration No. 77677.
• Court: Supreme Court of Minnesota (US)

733 N.W.2d 458

In re Petition for DISCIPLINARY ACTION AGAINST Dewey M. NELSON, a Minnesota Attorney, Registration No. 77677.

No. A06-1370.

Supreme Court of Minnesota.

June 21, 2007.

Dewey M. Nelson, Eden Prairie, MN, Attorney Pro Se.

Martin A. Cole, Director, Timothy M. Burke, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, MN, for Petitioner.

Heard, considered, and decided by the court en banc.

OPINION

PER CURIAM.

This attorney disciplinary action arose out of a petition filed by the Director of the Office of Lawyers Professional Responsibility alleging that attorney Dewey M. Nelson committed misconduct that violated Minnesota Rules of Professional Conduct for: failing to act diligently (Rule 1.3); failing to place client funds in a trust account (Rule 1.15(a) as interpreted by Board Opinion 15¹); failing to refund to the client the unearned portion of client funds (Rule 1.15(c)(4)); failing to protect the client's interest at the termination of representation (Rule 1.16(d)); failing to expedite litigation (Rule 3.2); knowingly making false statements to the client (Rule 4.1); failing to respond to the disciplinary authority (Rule 8.1(b)); engaging in dishonest conduct (Rule 8.4(c)); and engaging in conduct that is prejudicial to the administration of justice (Rule 8.4(d)). In addition, the director claimed that Nelson violated the Minnesota Rules on Lawyers Professional Responsibility (RLPR) for failing to comply with the director's investigation (Rule 25).² The referee recommended that Nelson be suspended from the practice of law and be ineligible to apply for reinstatement for a minimum of six months. We adopt the referee's recommendation in full.

Nelson was admitted to the practice of law in Minnesota in June 1966. He currently practices in Eden Prairie, Minnesota, as a solo practitioner, primarily in the areas of personal injury, criminal defense, immigration, estate planning, and family law.

Before this disciplinary action, Nelson had an extensive disciplinary history. He was: (1) admonished because he made threats of criminal prosecution to coerce payment in a civil matter (1984); (2) admonished because he failed to adequately communicate with a client (1988); (3) admonished because he failed to timely refund the unearned portion of a client's retainer (1988); (4) admonished because he charged interest on client monies without prior written agreement (1989); (5) placed on private probation for failure to diligently pursue the completion of an estate matter and failure to adequately communicate with his client (1990); (6) admonished because he failed to adequately communicate with a client and terminated his representation of a client without sufficient notice (1993); (7) admonished because he failed to diligently pursue a client matter, allowing the statute of limitations to expire (1996); (8) placed on private probation for failure to place client fees in a trust account without a retainer agreement, and for failing to act diligently (1999); (9) placed on extended private probation from 1999 because he neglected client matters, failed to communicate with a client, and failed to return a client's file (2000).

The director's current allegations against Nelson stem from Nelson's representation of two clients.

In May 2005, M.E. hired Nelson to file a motion to vacate a default judgment. Nelson and M.E. agreed on a payment of $400 for all legal work. Nelson did not file the motion to vacate the default judgment until January 2006, after Nelson had received notice from the director that a complaint had been filed against him. Nelson does not dispute that months before he actually filed the motion papers, he told M.E. that he had already filed the papers. To this Nelson said: "I guess the main purpose was for me to buy some time in order to get the paper work done and filed."

In March 2003, M.L. hired Nelson to handle an appeal of a summary judgment that had been entered against M.L. M.L. advanced Nelson a total of $4,750 to be applied toward attorney fees and filing fees. Before the notice of appeal was filed, Nelson informed M.L. that the appeal was not meritorious. Nelson and M.L. agreed that Nelson would refund M.L. $2,500 by June 15, 2005. Nelson did not refund M.L. until May 2006, "because there was not sufficient monies coming in to his law business that would allow him to make the refund and still continue to support his family." Nelson admits that payment to M.L. was not timely.

I.

Nelson ordered a transcript of the referee's hearing, thereby preserving his right to challenge the referee's factual findings. Rule 14(e), RLPR. Nevertheless, we will give great deference to a referee's findings and will not reverse those findings "unless they are clearly erroneous." In re Wentzell, 656 N.W.2d 402, 405 (Minn.2003). The standard of proof in an attorney discipline proceeding is full, clear, and convincing evidence. In re Getty, 452 N.W.2d 694, 696 (Minn.1990) citing In re Ruhland, 442 N.W.2d 783, 785 (Minn.1989).

M.E. Matter

The referee found that Nelson falsely stated to M.E. that Nelson had filed the motion to vacate the default judgment when in fact he had not, and that certain hearing dates had been scheduled or cancelled when in fact no hearing date had been scheduled because the motion had not been filed. The referee concluded that Nelson's conduct in the M.E. matter violated Rules 1.3, 3.2, 4.1, and 8.4(c) and (d).³

Nelson "acknowledges that the misrepresentations and the failure to timely complete the motion to vacate the judgment was in violation of the Minnesota Rules of Professional Conduct." Nelson essentially argues in mitigation that he attempted to correct his conduct when he apologized to M.E., offered to file the motion, received M.E.'s approval to file the motion, and obtained a satisfactory outcome. Nelson states that he understood M.E. to be satisfied with the resolution of the matter. But we note that M.E. was not completely satisfied with the outcome because, although Nelson was able to get a $1,000 discount from the judgment against him, M.E. testified that he did not have any other choice due to the delay in filing the motion to vacate the judgment.

We conclude that the referee's findings that Nelson made false statements to M.E. were not clearly erroneous.

M.L. Matter

The referee found that Nelson did not have a written retainer agreement with M.L. and failed to deposit M.L.'s funds in a client trust account. Instead, Nelson placed the funds into a personal account and spent the monies for his own benefit. The referee also found that Nelson failed to refund the unearned portion of the client's funds when requested. The referee concluded that Nelson violated Rule 1.15(a), as interpreted in Opinion No. 15, and Rules 1.15(c)(4) and 1.16(d).⁴

Nelson argues that he had an oral retainer agreement with M.L. to provide services on a "project fee basis," which was then permitted by Opinion No. 15, and implies that the funds paid as a project fee become the funds of the attorney and need not be deposited in a trust account. He argues that even if he and M.L. had made a written retainer agreement, it would not have changed his conduct. Rather, he states:

The thing that was wrong was that [he] did not have sufficient cash flow to make the refund at the time that he had agreed to make it * * *. The fact that [he] did not have sufficient income to comply with the terms of the agreement * * * should not be a basis for discipline.

In mitigation, Nelson argues that he refunded the unearned portion of the funds to M.L. in full, with interest.

The problem with Nelson's argument is that Opinion 15 only recognized a project fee, which the opinion referred to as a "non-refundable retainer agreement," where it was clearly set forth in a written retainer agreement that notified the client that the funds will not be refunded, and will not be placed in a trust account. Nelson had no such written agreement with M.L., and therefore Nelson was required to place the $4,750 payment in a trust account until earned. Nelson did not earn the entire $4,750 because he did not complete the project, but withdrew from representation. Later, Nelson agreed with M.L. that $2,500 of the payment was not earned and would be refunded.

We conclude that the referee's findings that Nelson failed to deposit M.L.'s funds in a trust account and failed to refund the unearned portion of the client's funds when requested were not clearly erroneous.

Failure to Cooperate with Director

The referee found that Nelson continually failed to timely respond to the director's requests for information. Also, the referee found that Nelson misled the director. For example, the referee found that, in a letter to the director dated March 21, 2006, Nelson said "Regarding [M.L.'s] claim, I have enclosed a copy of a money order for $500 as payment on account," but Nelson did not send the money order to M.L. until months later. The referee found that Nelson's statements were "misleading and exhibit[ed] a lack of candor." The referee concluded that Nelson's conduct violated Rules 8.1(a)(3) and 8.1(b) and Rule 25, RLPR.⁵

Nelson argues that he was cooperative with the director's investigation, and simply "requested extensions when he needed them [and those] extensions were granted." He argues that requests for extensions should not be a basis for an allegation of the failure to cooperate with the director's investigation. The record does not support this argument. The director requested considerable information and documentation that Nelson failed to timely provide. And the director specifically informed Nelson that his failure to cooperate with the director could provide a separate basis for discipline.

We conclude that the referee's findings that Nelson failed to cooperate with the director's investigation were not clearly erroneous.

II.

Although we place great weight on the...