In re Petition for Disciplinary Action Against Thomas G. Harrigan

• Decision Date: 08 January 2014
• Docket Number: No. A13–0542.,A13–0542.
• Citation: 841 N.W.2d 624
• Court: Minnesota Supreme Court
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Thomas G. HARRIGAN, a Minnesota Attorney, Registration No. 132378.

841 N.W.2d 624

In re Petition for DISCIPLINARY ACTION AGAINST Thomas G. HARRIGAN, a Minnesota Attorney, Registration No. 132378.

No. A13–0542.

Supreme Court of Minnesota.

Jan. 8, 2014.

Syllabus by the Court

Where respondent misappropriated client funds amounting to over $130,000, made misrepresentations to a client about those funds, and failed to cooperate with a disciplinary investigation, the appropriate discipline is disbarment.

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

Thomas G. Harrigan, Savage, MN, pro se.

OPINION

PER CURIAM.

On March 12, 2013, the Director of the Office of Lawyers Professional Responsibility (OLPR) filed a petition for disciplinary action against Thomas G. Harrigan. The petition alleged that Harrigan's misappropriation of funds from and misrepresentations to his former client L.S. constituted professional misconduct. The petition also alleged that Harrigan's misrepresentations to the Director and failure to cooperate during the disciplinary investigation were acts of professional misconduct. On April 8, 2013, the Director filed a supplementary petition for disciplinary action against Harrigan. The supplementary petition added three new counts of professional misconduct, including additional misappropriation from L.S., misappropriation from former client N.W., and additional failure to cooperate during the disciplinary investigation. Although Harrigan filed an answer to the original petition, Harrigan's answer was stricken due to his multiple failures to respond to discovery. The allegations in the petitions were then deemed admitted. On June 25, 2013, a referee conducted a hearing on these petitions, which Harrigan did not attend, and issued findings of fact, conclusions of law, and a recommendation for discipline. The referee recommended, and the Director agrees, that Harrigan be disbarred.

I.

Harrigan was admitted to the practice of law in Minnesota on October 30, 1981. He has not been the subject of any prior discipline. The misconduct at issue arose from Harrigan's representation of two separate clients, L.S. and N.W., and Harrigan's subsequent failure to cooperate with the OLPR.

A. L.S. Matter

Harrigan represented L.S. in her capacity as personal representative of the estate of Rita Kotrba. At the time she retained Harrigan, L.S., a former secretary with a high school education, was approximately 75 years old. As the personal representative, L.S. received a check for $125,857.35 from CNA Financial Corporation in December 2009 for the proceeds from Kotrba's Individual Retirement Account (IRA). L.S. gave this check to Harrigan, who then deposited the funds in his trust account. In addition to serving as personal representative of the estate, L.S. had been designated as the beneficiary of the IRA proceeds, and thus the funds were held in trust for her. In March 2010, L.S. requested a check to pay for income taxes on the CNA funds, and Harrigan paid L.S. $25,000 from the IRA proceeds. This was the only money L.S. ever received from the IRA proceeds, as Harrigan, without L.S.'s knowledge or consent, paid the remaining $100,857.35 entirely to himself over the next two years. Harrigan, who was not entitled to the funds, never provided L.S. with an accounting of the funds.

In approximately April 2011, Harrigan received a redemption check from Vanguard, an investment firm, payable to “THOMAS G. HARRIGAN ADM EST RITA KOTRBA,” in the amount of $6,938.29 for the proceeds of one of Kotrba's accounts. Harrigan, who did not inform L.S. that he received these funds, subsequently deposited them into his trust account. By December 2011, Harrigan had paid all of the Vanguard funds to himself without the knowledge or consent of L.S. Again, Harrigan was not entitled to the funds and never provided L.S. with an accounting.

Beginning in late 2011, Harrigan falsely told L.S. that a claim had been made against her regarding the distribution of Kotrba's assets, and that he could not make any distributions to her from the CNA funds because the account was frozen. Harrigan also falsely told L.S. that he was attempting to arrange to arbitrate the claim and that the claimants were represented by a lawyer from another state. Around August 2012, L.S. retained new counsel. Her new counsel repeatedly attempted to contact Harrigan by phone and mail, requesting documentation of the purported claim that led to freezing of the account and the delayed distribution of the CNA funds. Harrigan initially provided a few documents from his representation of L.S., but did not supply documents relating to the claim, and did not release the CNA funds. Except for his initial and entirely inadequate response, Harrigan never responded to substitute counsel's repeated requests for documentation.

Based on these events, the referee found that Harrigan had misappropriated over $106,000 of L.S.'s funds. L.S. testified before the referee that this theft had caused her substantial stress, and that the money taken would have been helpful to her and her husband. Harrigan, who did not appear at the referee hearing or submit a brief in this proceeding, has not acknowledged misappropriating the funds and has not made restitution.

B. N.W. Matter

Harrigan represented N.W. in a personal injury matter related to a 2008 automobile crash. At the time N.W. retained Harrigan, she was a 20–year–old student and had not been involved in any legal matters. Harrigan received $72,000 from Wisconsin Mutual as a settlement for N.W.'s personal injury claim. Harrigan deposited these funds into his trust account. N.W. and Harrigan had agreed that his fee would be one-third of the settlement, and on April 30, 2010, Harrigan disbursed $24,000 of the settlement funds to himself in payment of this fee. Harrigan told N.W. that he would hold the remaining funds in his trust account while he negotiated with medical providers.

On June 4, 2010, Harrigan disbursed $24,000 of the settlement funds to N.W., but he told her that the negotiations with medical providers were taking longer than expected and that N.W.'s insurer was attempting to recover some of the funds. On September 27, 2010, Harrigan paid $439.20 to an anesthesiologist on N.W.'s behalf, leaving $23,560.80 in the trust account. Thereafter, Harrigan proceeded to pay the remaining balance directly to himself without N.W.'s knowledge or consent. Harrigan was not entitled to these funds. N.W. attempted to contact Harrigan about the balance of her settlement, but he did not respond to her requests for information. Based on these events, the referee found that Harrigan deprived N.W. of nearly $24,000. N.W. testified that these events have caused her to lose trust in others.

C. Misrepresentations to and Failure to Cooperate with the OLPR

On October 1, 2012, the Director of the OLPR mailed Harrigan a notice of investigation into L.S.'s complaint and requested that Harrigan appear at the Director's office on October 12 with documentation including L.S.'s file and statements for the trust account. Harrigan did not appear for the meeting, so a second notice was sent, requesting Harrigan's appearance on October 18. Harrigan attended this meeting and provided a response to the complaint, in which he stated that the funds at issue were not misappropriated but, rather, were for payment of attorneys' fees. The referee found that this was a false statement. Harrigan's document production to the Director was limited and incomplete; he did not provide the entire client file, nor did he supply bank statements or records related to the distribution of the CNA funds, such as the trust account check register, the client retainer agreement, or trust account books. Between November 2012 and March 2013, the OLPR issued five requests for information regarding deposits in the trust account and N.W.'s added complaint, but Harrigan did not respond to any of these requests. Because Harrigan failed to cooperate with discovery, the allegations against him were deemed admitted.

The referee noted, “[Harrigan] has offered no defense in this matter other than unsupported general assertions in his answers. He has by his conduct effectively abandoned any opposition to the allegations of the petitions and declined to participate in this proceeding.” The referee found that Harrigan had violated Minn. R. Prof. Conduct 1.4(a)(3) and (4),¹1.15(a), 1.15(c)(3) and (4),²4.1,³ and 8.4(c) and (d)⁴ in his representation of L.S., and Minn. R. Prof. Conduct 1.4(a)(3) and (4), 1.15(a), 1.15(c)(3) and 8.4(c) and (d) in his representation of N.W. The referee also concluded that Harrigan violated Minn. R. Prof. Conduct 8.1(a) and (b) and Rule 25 of the Rules on Lawyers Professional Responsibility (RLPR) by his conduct during the disciplinary investigation.⁵

The referee concluded that Harrigan caused serious and substantial harm to his clients by his misconduct, and that his misconduct was aggravated by several factors, including his substantial experience in the practice of law, his selfish motive, his lack of recognition or acknowledgment of his wrongdoing, his lack of remorse, his indifference to making restitution, the vulnerable nature of his victims, and his failure to cooperate with the disciplinary proceedings. The referee then recommended that Harrigan be disbarred. The referee also recommended that Harrigan be immediately suspended pending resolution of this proceeding, and we suspended Harrigan on August 6, 2013.

II.

Because neither party ordered a transcript of the proceedings, the referee's findings and conclusions are conclusive under Rule 14(e), RLPR. In re Fru, 829 N.W.2d 379, 387 (Minn.2013). The referee recommended that Harrigan be disbarred, and the Director agrees. Although we give “great weight” to the referee's recommendation, we retain the ultimate responsibility for determining the appropriate sanction. In re Rebeau, ...