In re Tigue
| Citation | 900 N.W.2d 424 |
| Decision Date | 16 August 2017 |
| Docket Number | A16-0694 |
| Parties | IN RE Petition for DISCIPLINARY ACTION AGAINST Randall D.B. TIGUE, a Minnesota Attorney, Registration No. 0110000. |
| Court | Supreme Court of Minnesota (US) |
Susan M. Humiston, Director, Megan Engelhardt, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.
Randall D.B. Tigue, Fridley, Minnesota, pro se.
The Director of the Office of Lawyers Professional Responsibility (Director) filed a petition for disciplinary action against respondent Randall D.B. Tigue. The Director alleged that Tigue negligently and intentionally misappropriated client funds. We appointed a referee, who concluded that Tigue committed the alleged misconduct and recommended an indefinite suspension of at least 2 years. Tigue disputes the referee's findings of misconduct and recommended discipline. The Director disputes the referee's recommended discipline, and requests disbarment. We conclude that the referee's findings that Tigue negligently and intentionally misappropriated client funds are not clearly erroneous. We further conclude that, based on the specific facts of this case, the appropriate discipline for Tigue's misconduct is an indefinite suspension with the right to petition for reinstatement after 2 years and a permanent prohibition on being an authorized signatory on a client trust account.
Tigue was admitted to practice law in the State of Minnesota on October 5, 1973.1 We publicly reprimanded Tigue in 2007 for allowing his trust account to become overdrawn, failing to promptly cure the overdraft, and failing to maintain the required trust-account books and records. In re Tigue , No. A07-1936, Order at 1-2 (Minn. filed Oct. 25, 2007). In 2014, we suspended Tigue for a minimum of 30 days for negligently misappropriating client funds and failing to maintain and retain the required trust account books and records. In re Tigue , 843 N.W.2d 583, 584-85 (Minn. 2014). We conditionally reinstated Tigue on April 28, 2014, and placed him on probation. In re Tigue , 845 N.W.2d 761, 762 (Minn. 2014) (order). Later that year, Tigue was admonished for failing to withdraw from representation or otherwise address a conflict of interest. We revoked Tigue's reinstatement in April 2015 for failing to file proof that he successfully passed the professional responsibility portion of the state bar examination by the deadline we established in reinstating Tigue. In re Tigue , No. A13-0519, Order at 2-3 (Minn. filed Apr. 15, 2015).
Finally, on May 11, 2015, we reinstated Tigue and placed him on probation until April 28, 2016, subject to the same conditions as were imposed in our April 2014 order. See In re Tigue , 863 N.W.2d 82, 82-83 (Minn. 2015) (order). The conditions of Tigue's probation included that he "shall abide by the Minnesota Rules of Professional Conduct"; "shall maintain law office and trust account books and records in compliance with Minn. R. Prof. Conduct 1.15 and Appendix 1"; and shall make his trust account books and records available to the Director "at such intervals as the Director deems necessary to determine compliance." Tigue , 845 N.W.2d at 762.
After his reinstatement, Tigue sent his trust-account books and records to the Director on a monthly basis. In September 2015, the Director instructed Tigue to begin quarterly reporting, and asked him to send his records for October, November, and December 2015 in January 2016. When Tigue provided these trust-account books and records, the Director noted that several shortages had occurred in client trust accounts during that time. The Director issued a notice of investigation and audited Tigue's trust account, which led to this petition for disciplinary action.
The Director alleged, and the record demonstrates, that on six occasions between October 2014 and February 2016, Tigue issued payments from his trust account that caused shortages in client trust accounts.2 The balance of Tigue's trust account was continuously short of the amount necessary to cover aggregate client balances during the periods from October 10 to November 18, 2014, and October 28, 2015 to January 19, 2016. The overall shortages ranged in amount from $43.55 to $650. Tigue made payments into his trust account to cure the shortages, and as a result, none of the clients suffered any permanent financial loss during those periods.
Tigue admitted that he caused these shortages by issuing checks without sufficient client funds in the trust account to cover them. He testified that, before issuing a check, he determined the balance of funds in a client trust account by comparing the balance for the previous month's reconciliation with the carbon copies of checks that he had issued, rather than referring to an updated version of the client subsidiary ledger. Tigue admitted that he did not reconcile his trust-account books and records for the month of November 2015 until January 2016, despite knowing that he was required to complete monthly reconciliations.
The Director further alleged that Tigue intentionally misappropriated funds from R.D. R.D. retained Tigue on October 14, 2015, to pursue a matter in federal court. R.D. signed a retainer agreement, which provided for "an advance retainer of $2,000.00, $400 of which will be an advance payment of the U.S. District Court filing fee." The agreement stated that Tigue would be entitled to "$250 per hour for attorney services" and that, when the retainer funds were exhausted, R.D. would "be billed on a monthly basis."
R.D. paid Tigue the $2,000 advance retainer in mid-October. Over the next 6 weeks, Tigue disbursed the entire $2,000 to himself. He drafted a complaint and sent it to R.D., but Tigue did not file a complaint in federal court. R.D. testified that he terminated the representation in December 2015. Tigue testified that he was entitled to retain the $400 filing fee as quantum meruit compensation for the services he rendered to R.D. before R.D. terminated the representation.
In August 2016, Tigue sent R.D. a check to refund the $400 filing fee. That check was returned for insufficient funds, costing R.D. a $12 fee. Shortly after the hearing before the referee in September 2016, Tigue successfully repaid the $400 with a money order.
After a hearing, the referee found that Tigue negligently misappropriated client funds and failed to promptly cure an overdraft in his trust account, in violation of Minn. R. Prof. Conduct 1.15(a), 3.4(c), and 8.4(d), and the probation conditions imposed in our April 28, 2014 order for reinstatement.3 The referee also found that Tigue intentionally misappropriated a $400 filing fee from R.D., in violation of Minn. R. Prof. Conduct 1.15(c)(4), 1.16(d), 8.4(c), and 8.4(d), and our April 28, 2014 order.4 Finding several aggravating factors and few mitigating factors, the referee recommended that Tigue be suspended indefinitely with the right to apply for reinstatement after 2 years.
When, as in this case, "a party orders a transcript of the disciplinary hearing, the referee's findings of fact and conclusions of law are not conclusive." In re Ulanowski , 800 N.W.2d 785, 793 (Minn. 2011). We do, however, give " ‘great deference to a referee's findings and will not reverse those findings unless they are clearly erroneous.’ " In re Albrecht , 779 N.W.2d 530, 535 (Minn. 2010) (quoting In re Wentzell , 656 N.W.2d 402, 406 (Minn. 2003) ). The referee's findings are clearly erroneous if they are "without evidentiary support in the record." In re Jones , 834 N.W.2d 671, 677 (Minn. 2013).
Tigue challenges the referee's conclusions that he negligently misappropriated client funds. He argues that allowing shortages in his trust account was not misconduct because the shortages were caused by mathematical or clerical errors. Tigue contends that he found and corrected his errors by keeping the trust-account records required by the rules of professional conduct and reconciling his accounts as required by those rules.
Misappropriation of client funds occurs when " ‘funds belonging to a client are not deposited in a trust account and are used for any purpose other than that specified by the client.’ " In re Lundeen , 811 N.W.2d 602, 608 (Minn. 2012) (quoting In re Westby , 639 N.W.2d 358, 370 (Minn. 2002) ). In this case, Tigue issued checks from his trust account on behalf of a particular client when he did not maintain sufficient amounts from that client in his trust account to cover those disbursements. As a result, funds belonging to other clients were used to cover these checks. Although these shortages were typically small and were eventually cured, they are misappropriations because funds belonging to a client were used for purposes other than those specified by the client. See id.
Tigue's argument that he did not commit misconduct because he kept all trust-account books and records in the required manner is unavailing. Tigue admitted that he did not keep his client subsidiary ledgers up to date, and the record supports the referee's finding that this practice caused Tigue to make mistakes when he calculated the available funds for particular clients. Appendix 1 to the Minnesota Rules of Professional Conduct describes the trust account books and records that attorneys must keep. See Minn. R. Prof. Conduct 1.15(h)-(i). It states: 5 Minn. R. Prof. Conduct Appx. 1.I.3 (emphasis added). Appendix 1 also specifies that "[n]o client subsidiary ledger balance should be negative at any time ." Minn. R. Prof. Conduct Appx. 1.I.4 (emphasis added). Tigue's negligence caused shortages in several client trust accounts, and because he failed to reconcile his trust-account records in December 2015, some shortages lasted for a total of three months. The referee's finding that Tigue...
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