In Re Petition For Disciplinary Action v. Jill M. Waite, No. A08-2097.

• Decision Date: 03 June 2010
• Docket Number: No. A08-2097.
• Citation: 782 N.W.2d 820
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Jill M. WAITE, a Minnesota Attorney, Registration No. 191152.
• Court: Minnesota Supreme Court

782 N.W.2d 820

In re Petition for DISCIPLINARY ACTION AGAINST Jill M. WAITE, a Minnesota Attorney, Registration No. 191152.

No. A08-2097.

Supreme Court of Minnesota.

June 3, 2010.

Syllabus by the Court

Indefinite suspension with no right to petition for reinstatement for a minimum of five months is the appropriate discipline for a lawyer who failed to timely file her state and federal tax returns, acted incompetently and without proper diligence, failed to obey court directives, failed to properly supervise her non-lawyer assistant, and engaged in conduct prejudicial to the administration of justice.

Martin A. Cole, Director, Julie E. Bennett, Senior Assistant Director, Office of Lawyers Professional Responsibility, St. Paul, MN, for petitioner.

Jill Clark, Golden Valley, MN; and Michael C. Mahoney, Wayzata, MN, for respondent.

OPINION

PER CURIAM.

In August 2008, the Director of the Office of Lawyers Professional Responsibility served and filed a petition for disciplinary action against respondent Jill M. Waite, alleging that Waite failed to timely file federal and state income tax returns for the tax years 1993 through 2004, in violation of Minn. R. Prof. Conduct 8.4(b) and (d). Waite admitted that she failed to timely file the tax returns in question but denied that this conduct violated any rule of professional conduct. In a supplementary petition, the Director alleged that Waite failed to comply with certain orders issued by a federal district court judge. Waite denied any misconduct relating to the allegations of the supplementary petition. Pursuant to Rule 14, Rules on Lawyers Professional Responsibility (RLPR), a referee hearing was held, after which the referee filed findings of fact, conclusions of law, and recommendation for discipline with our court. The referee recommended that Waite be suspended from the practice of law with no right to petition for reinstatement for a period of five months. We adopt the referee's recommended discipline.

Waite was first admitted to the practice of law in Texas in 1977 and is also admitted in Wisconsin. She was admitted to the practice of law in Minnesota in July 1988 and practices as a sole practitioner, focusing on litigation in civil and criminal cases in state and federal court.

Although Waite had sufficient income from her law practice between 1993 and 2004 to require her to file individual federal and state income tax returns, Waite failed to file either state or federal income tax returns for those years. In 2004, after an audit, the Minnesota Department of Revenue (DOR) determined that Waite's total state tax liability for the years 1994 through 2001, including penalties and interest, was $84,797.74 and ordered Waite to pay that amount by October 15, 2004. Waite neither appealed the DOR order nor paid the required amount.

In July 2005, DOR notified Waite of its intent to file a disciplinary complaint with the Director's office. During August and September 2005, Waite filed her state income tax returns for the years 2000, 2001, 2003, and 2004 and her 2002 federal income tax return. On September 21, 2005, DOR filed a disciplinary complaint against Waite with the Director's office. In the month following the filing of the disciplinary complaint, Waite filed her state income tax returns for the years 1998, 1999, and 2002 and her federal income tax returns for the years 1998 through 2001 and for 2003 and 2004 (the 2002 return having been filed earlier). However, Waite did not file her federal income tax returns for the years 1993 through 1997 until April 2006 and did not file her state income tax returns for the years 1993 through 1997 until May 2006.¹

In August 2008, the Director of the Office of Lawyers Professional Responsibility served and filed a petition for disciplinary action against Waite. The petition alleged that Waite failed to timely file required federal and state individual income tax returns for tax years 1993 through 2004, in violation of Minn. R. Prof. Conduct 8.4(b) and (d). In her answer to the petition, Waite admitted that she had sufficient income to require her to file federal and state income tax returns for the tax years in question and that she failed to timely file the required income tax returns. Waite asserted, however, that this conduct did not violate any rule of professional conduct.

The Director subsequently filed a supplementary petition for disciplinary action alleging that Waite failed to comply with certain orders issued by a federal district court judge, resulting in the dismissal of Waite's client's claims with prejudice. Waite denied any misconduct relating to the allegations contained in the supplementary petition for disciplinary action.

A referee hearing on the petitions was conducted in March and April of 2009. In May 2009, the referee filed with our court findings of fact, conclusions of law, and a recommendation for discipline. The referee concluded that the Director proved by clear and convincing evidence that Waite's failure to timely file federal and state income tax returns for the years in question violated Minn. R. Prof. Conduct 8.4(b) and (d). The referee further concluded that Waite's conduct in the federal district court proceeding violated Minn. R. Prof. Conduct 1.1, 1.3, 3.4(c), 5.3, and 8.4(d).² Based on his findings and conclusions, the referee recommended that Waite be indefinitely suspended from the practice of law in the State of Minnesota and that she be ineligible to apply for reinstatement for a minimum of five months.

The Director bears the burden of proving professional misconduct by clear and convincing evidence. In re Varriano, 755 N.W.2d 282, 288 (Minn.2008); In re Gillard, 271 N.W.2d 785, 805 n. 3 (Minn.1978) (adopting “full, clear and convincing evidence” standard for attorney discipline matters). This standard requires a high probability that the facts are true. In re Houge, 764 N.W.2d 328, 334 (Minn.2009); see also In re Ray, 452 N.W.2d 689, 691 (Minn.1990) (noting that the clear and convincing evidence requires “more than a preponderance of the evidence, but less than proof beyond a reasonable doubt”). If either party orders a transcript of the hearing, as Waite did here, the referee's findings of fact and conclusions of law are not conclusive. Rule 14(e), RLPR; In Re Ryerson, 760 N.W.2d 893, 900 (Minn.2009). We nonetheless give great deference to the referee's findings and will not reverse those findings unless they are clearly erroneous, especially when the referee's findings rest on disputed testimony or in part on credibility, demeanor, and sincerity. In re Barta, 461 N.W.2d 382, 382 (Minn.1990). To conclude that a referee's findings are “clearly erroneous,” we must be “left with the definite and firm conviction that a mistake has been made.” In re Lyons, 780 N.W.2d 629, 635 (Minn.2010).

I.

The referee concluded that Waite's failure to timely file her state and federal income tax returns from 1993 to 2004 violated the Minnesota Rules of Professional Conduct. Waite disputes the referee's conclusion.

In 1972, we first announced that the failure to file individual income tax returns would almost certainly subject the delinquent attorney to disciplinary sanctions. In re Bunker, 294 Minn. 47, 53-55, 199 N.W.2d 628, 631-32 (1972). We explained:

The lawyer in our society occupies a unique role. He provides the average citizen with the means of regulating his own affairs so as to conform to the laws imposed upon citizens by the representative form of government. In addition, the lawyer provides leadership in formulating the laws and regulations by which we all live. At the time of his admission to practice in this state, each lawyer takes an oath to support the laws of the state and the nation. There is no law of the state or nation which so uniformly affects every citizen as the income tax regulations. Income tax regulations and collection of these taxes form an integral part of our government system since they insure the revenues necessary to carry out the operation of the government. Any violation of the income tax laws represents a threat to the ability of our governmental units to function, whether such action is done with corrupt intent or not. In the case of a lawyer, it most certainly represents a clear violation of his oath to uphold the Constitution and the laws of the United States and the State of Minnesota.

Id. at 50, 199 N.W.2d at 630. Since then we have disciplined many attorneys for failure to file tax returns, both for failure to timely file such tax returns and for failure to file them altogether. See, e.g.,

In re Selmer, 749 N.W.2d 30, 40 (Minn.2008) (failure to timely file); In re Borden, 690 N.W.2d 557, 557 (Minn.2005) (failure to file); In re Friday, 690 N.W.2d 559, 559 (Minn.2005) (failure to timely file); In re See, 669 N.W.2d 602, 602 (Minn.2003) (failure to timely file).

Waite offers several arguments why her admitted failure to file individual federal and state income tax returns for as many as 12 years should not be considered a violation of the Rules of Professional Conduct. First, Waite argues that there can be no violation of Minn. R. Prof. Conduct 8.4(d), one of the rules the referee concluded that Waite violated, without a violation of some other rule of professional conduct as well. Waite points to nothing in support of such an interpretation of Rule 8.4(d). To the contrary, we have disciplined lawyers for violating only Rule 8.4(d). See In re Backstrom, 767 N.W.2d 453, 453 (Minn.2009); In re Nichols, 766 N.W.2d 703, 703 (Minn.2009); In re Moulton, 721 N.W.2d 900, 901-02 (Minn.2006).

Waite further argues that we should limit Minn. R. Prof. Conduct 8.4(d) to conduct before courts or other tribunals because that is how other courts have limited similar rules applicable to lawyers' conduct in their jurisdictions. We have never so limited the scope of conduct sanctionable under Rule 8.4(d), as evidenced by the fact that we have previously disciplined lawyers...