In re Quinn, A18-1890

• Decision Date: 22 July 2020
• Docket Number: A18-1890
• Citation: 946 N.W.2d 583
• Parties: IN RE Petition for DISCIPLINARY ACTION AGAINST Michael J. QUINN, a Minnesota Attorney, Registration No. 0089011.
• Court: Minnesota Supreme Court

946 N.W.2d 583

IN RE Petition for DISCIPLINARY ACTION AGAINST Michael J. QUINN, a Minnesota Attorney, Registration No. 0089011.

A18-1890

Supreme Court of Minnesota.

Filed: July 22, 2020

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility (Director) filed a petition for disciplinary action against respondent Michael J. Quinn. The Director alleged that Quinn misappropriated client funds, failed to safeguard client funds, failed to promptly return client funds, failed to communicate with his clients, and failed to cooperate with the Director's investigations. We appointed a referee, who concluded that Quinn committed the alleged misconduct and recommended an indefinite suspension with no right to petition for reinstatement for 18 months.

Quinn challenges the referee's findings of fact and conclusions that he committed misconduct. The Director agrees with the referee's findings and recommendation. We conclude that the referee did not clearly err in her findings of fact or conclusions that Quinn committed misconduct. We further conclude that the appropriate discipline for Quinn's misconduct is an indefinite suspension with no right to petition for reinstatement for 18 months.

FACTS

Quinn was admitted to practice law in Minnesota in 1973. He had two past episodes of discipline before this matter. In 2000, Quinn received a public reprimand for engaging in the unauthorized practice of law while his license was suspended for failing to comply with continuing legal education requirements and failing to pay his attorney registration fees. In re Quinn , 605 N.W.2d 396, 396 (Minn. 2000) (order). In 2008, he received an admonition for failing to clearly communicate the basis or rate of his fee and expenses to a client.

The misconduct here stems from two client matters and the Director's disciplinary investigations into those matters. In November 2012, R.F. asked Quinn to represent him in a bankruptcy matter. Quinn and R.F. orally agreed to a flat fee arrangement for $2,106: $1,800 for legal fees¹ and $306 for the bankruptcy filing fee. R.F. felt pressured by a judgment for nearly $40,000 that Capital One had against him and told Quinn that he wanted to file a bankruptcy petition as soon as possible. R.F. gave Quinn a check for $2,106 at that first meeting, which Quinn deposited into his Wells Fargo business account.

Given R.F.’s urgent request, Quinn intended to prepare the bankruptcy petition over the weekend while R.F. completed his credit counseling—a necessary step to filing the bankruptcy petition—so that Quinn could file the petition the next business day. Quinn completed the 50-page petition, but R.F. never returned to Quinn's office; nor did R.F. complete his credit counseling.

On February 11, 2013, R.F. contacted Quinn to notify him that he was interested in negotiating a settlement of his debt with Capital One, rather than continuing with the bankruptcy proceedings. Quinn agreed to pursue a settlement, but the parties never discussed or memorialized a fee arrangement for this additional work.

During 2013, R.F. sent a number of emails to check on the status of the settlement. Quinn replied to some of these emails, but not all of them. In October 2013, R.F. sent an email stating, "If you do not anticipate being successful [in settling with Capital One], maybe we should just cancel our agreement and you can refund what I paid you less any fees accrued."

Then, in January 2014, R.F. sent another email suggesting that they "just pull the plug on it," and asked Quinn to refund any amounts owed and send an expense record. Quinn replied, noting that he had completed the bankruptcy petition. Quinn also said he would "pull the file" to check the records and follow up regarding the amount owed to R.F., but Quinn never did so.

In January 2016, R.F. again emailed Quinn, this time stating that it had been "two years" since Quinn stated that he would check his file and discuss a refund. R.F. offered to settle the matter in exchange for a full refund. Quinn replied that he thought that he had followed up with R.F. and offered to refund the filing fee.

By January 2017, Quinn still had not refunded the filing fee, so R.F. filed a complaint with the Office of Lawyers Professional Responsibility. In June 2018, after the investigation had been ongoing and the Director had reminded Quinn to place the filing fee in trust, Quinn refunded the filing fee to R.F. by check with "[r]eturn filing fee" on the memo line.

The referee concluded that Quinn failed to safeguard client funds, failed to follow up with R.F. as promised, misappropriated client funds, and failed to refund fees after the termination of representation. According to the referee, this conduct violated Minnesota Rules of Professional Conduct 1.4(a)(4),² 1.15(a),³ 1.15(c)(4),⁴ 1.15(c)(5),⁵ 1.16(d),⁶ and 8.4(c).⁷

In another client matter, C.L. retained Quinn to assist her in filing for bankruptcy in 2014. C.L. testified that, after the bankruptcy petition was filed, she did not hear from Quinn for 19 months. During that time, Quinn received the final report prepared by the trustee and the notice that the discharge of debtors was granted in C.L.’s bankruptcy case, but he never sent a copy of these documents to C.L. or communicated with her about her matter. A sworn copy of the service lists from the United States Bankruptcy Court for each document showed that C.L. received the documents. Quinn admits to relying on the trustee and the bankruptcy court to send the necessary materials to C.L. The referee concluded that this conduct violated Minnesota Rule of Professional Conduct 1.4(a)(3).⁸

Finally, Quinn failed to cooperate with the Director's investigations into these two matters. Between December 2017 and May 2018, the Director made four different requests for Quinn's bank statements concerning the R.F. matter. Each time, Quinn either failed to respond or replied that he was still searching for the bank statements.

In June, the Director set up a meeting to discuss the investigation. The Director asked Quinn to bring the relevant bank records or bank information so that Quinn could sign an authorization form to release the records. Quinn brought some information concerning his account, but not the statements. At the meeting, he also declined to sign an authorization to release the records.

The Director sent another letter to remind Quinn of his obligations to provide his bank statements, but Quinn again failed to reply. The Director renewed her request, but Quinn did not respond. The Director ultimately sought a subpoena to acquire the bank records necessary to continue the investigation. The bank produced the records on August 8, 2018, more than 8 months after the Director had originally requested the records from Quinn.

Quinn also failed to timely and substantively reply to an April 25, 2018 letter from the Director's office concerning the C.L. matter. Then, after Quinn met with the Director in June concerning his misconduct, he failed to timely respond to requests for follow-up information about the C.L. matter.

The referee concluded that Quinn violated Minnesota Rule of Professional Conduct 8.1(b)⁹ and Rule 25, Rules on Lawyers Professional Responsibility (RLPR).¹⁰

The referee found that four factors aggravated Quinn's misconduct: (1) his history of prior discipline; (2) his failure to exhibit remorse; (3) his substantial experience practicing law; and (4) his failure to cooperate with the public disciplinary proceedings. The referee found no mitigating factors. Based on these conclusions, the referee recommended that Quinn be indefinitely suspended with no right to petition for reinstatement for 18 months.

ANALYSIS

I.

When a party orders a transcript—as Quinn did here—"the referee's findings of fact and conclusions of law are not binding." In re Glasser , 831 N.W.2d 644, 646 (Minn. 2013). Even so, we give deference to the referee's factual findings and will only reverse them if they are clearly erroneous. Id. A referee's findings are clearly erroneous only when we are left " ‘with the definite and firm conviction that a mistake has been made.’ " Id. (quoting In re Albrecht , 779 N.W.2d 530, 535 (Minn. 2010) ).

Quinn contests some of the specific factual findings of the referee and her conclusion that he misappropriated client funds. Taken as a whole, Quinn principally asserts that he did not misappropriate R.F.’s funds for at least three reasons. First, he argues that because he anticipated filing the bankruptcy petition the next business day, he needed to deposit the filing fee funds into his business account because he pays the fee with his personal credit card. Second, he maintains that he had enough earned fees in his trust account to cover the filing fee from the time he received it until he returned it. Third, he asserts that he and R.F. discussed using the filing fee for the extra work performed in negotiating a settlement with Capital One. The Director disagrees and argues that the record fully supports the referee's findings.

A lawyer misappropriates funds when "funds are not kept in trust and are used for a purpose other than one specified by the client." In re Taplin , 837 N.W.2d 306, 311 (Minn. 2013) (citation omitted) (internal quotation marks omitted). Here, the record shows that, without a written fee agreement, Quinn took a flat fee for a bankruptcy matter, which included advanced legal fees and $306 for a filing fee, and deposited these funds into his business account. Quinn prepared but never filed a bankruptcy petition for R.F. And on many occasions between January 2013 and June 2018, the balance in Quinn's business account dropped below $306. Quinn therefore used the advanced filing fee for other purposes, which we have held amounts to misappropriation.¹¹ See In re Hulstrand , 910 N.W.2d 436, 439 (Minn. 2018) (finding that an attorney misappropriated funds when he deposited filing fees into a business account and used the "filing fees...