State ex rel. Counsel for Discipline of the Neb. Supreme Court v. Nimmer
| Decision Date | 31 August 2018 |
| Docket Number | No. S-17-111,S-17-111 |
| Citation | 300 Neb. 906,916 N.W.2d 732 |
| Parties | STATE of Nebraska EX REL. COUNSEL FOR DISCIPLINE OF the NEBRASKA SUPREME COURT, relator, v. John C. NIMMER, respondent. |
| Court | Nebraska Supreme Court |
William F. Austin, Special Prosecutor, of Blake & Austin Law Firm, L.L.P., for relator.
John C. Nimmer, pro se.
On February 1, 2017, the Counsel for Discipline of the Nebraska Supreme Court filed formal charges against John C. Nimmer, alleging he violated Neb. Ct. R. of Prof. Cond. §§ 3-501.15 and 3-508.4 (rev. 2016) and his oath of office as an attorney licensed to practice in Nebraska1 by commingling personal funds with client trust account funds. This court appointed a referee who held an evidentiary hearing and then filed a report finding Nimmer had violated the disciplinary rules by depositing personal funds into his client trust account and using his client trust account to pay personal expenses. The referee recommended a 1-year suspension followed by a 2-year period of probation. Nimmer filed an exception to the referee’s report, challenging both the finding that he violated the disciplinary rules and the recommended sanction.
We find by clear and convincing evidence that Nimmer commingled client funds with personal funds, in violation of §§ 3-501.15 and 3-508.4 of the Nebraska Rules of Professional Conduct and his oath of office. Furthermore, we conclude on this record that the appropriate sanction for Nimmer’s misconduct is disbarment.
Nimmer was admitted to the practice of law in the State of Nebraska in 1993, and since that time has practiced primarily in Omaha and Bellevue, Nebraska. In 2004, Nimmer opened a client trust account at an Omaha area bank. The manner in which Nimmer has used that client trust account is the central issue in this disciplinary proceeding.
In a letter dated March 11, 2016, the enforcement division of the U.S. Securities and Exchange Commission (SEC) notified the Counsel for Discipline of "possible professional misconduct" by Nimmer. The SEC had subpoenaed records from Nimmer’s client trust account in connection with an unrelated investigation and reported that its "review of Nimmer’s trust account transactions revealed that he wrote numerous checks for personal expenses, ranging from rent and child support to dog boarding and landscaping fees." On March 18, the Counsel for Discipline notified Nimmer that he was the subject of an investigation and provided him a copy of the grievance.2
On June 8, 2016, the Counsel for Discipline provided Nimmer with copies of the bank records subpoenaed by the SEC and asked him to explain several checks written on his client trust account that did not appear to be client related. Nimmer was also asked to explain a $10,000 check from his mother with the memorandum notation "loan" which had been deposited into his client trust account. Nimmer declined, at the time, to answer the questions posed by the Counsel for Discipline.
The Counsel for Discipline then subpoenaed Nimmer’s client trust account records directly from the bank. Through two subpoenas, records were obtained for the time period from January 1, 2006, through September 1, 2016. After reviewing these records, the Counsel for Discipline determined there were reasonable grounds for discipline, and thus reduced the SEC’s grievance to a complaint and forwarded it to the Committee on Inquiry of the Fourth Judicial District.3 Thereafter, the inquiry panel found reasonable grounds for discipline and determined it would be in the public’s interest to file formal charges.4
On February 1, 2017, the Counsel for Discipline filed formal charges against Nimmer. It alleged that between January 2006 and February 2016, Nimmer wrote personal checks on his client trust account to 29 different businesses, individuals, and organizations. Additionally, it alleged that on December 20, 2007, Nimmer deposited a $10,000 check from his mother issued to him with the notation "loan" into his client trust account. The formal charges alleged that by using his client trust account in this fashion, Nimmer commingled his personal funds with client funds and thereby violated his oath of office as an attorney licensed to practice in Nebraska5 and § 3-501.15, which provides in part:
The formal charges also alleged Nimmer’s actions violated § 3-508.4, which provides in relevant part that it is professional misconduct for a lawyer to "violate or attempt to violate the Rules of Professional Conduct."6
Nimmer filed a motion to dismiss the formal charges, alleging the Counsel for Discipline "is part of the Nebraska judicial branch under the direct supervision of this Court, which violates separation of powers, which violates constitutional due process, which in turn negates [the Counsel for Discipline] from having standing to have filed the Formal Charges, thereby constituting a lack of subject matter jurisdiction." This court overruled Nimmer’s motion to dismiss as meritless.7
Nimmer also moved to recuse the Counsel for Discipline, alleging he had a conflict of interest because Nimmer planned to call him as a necessary fact witness. We overruled his motion to recuse, but determined it was prudent under the circumstances to appoint a special prosecutor.
After his motion to dismiss was overruled, Nimmer filed a verified answer to the formal charges. His answer admitted some of the factual allegations in the formal charges, but generally denied that his conduct amounted to commingling in violation of the disciplinary rules. Additionally, Nimmer’s answer raised several affirmative defenses which will be addressed later in this opinion.
Nimmer also filed a second motion to dismiss, this time asking that the disciplinary proceeding be dismissed without prejudice due to alleged procedural errors predating the filing of the formal charges. This court found the motion was meritless and overruled it.
Nimmer filed "Motions to Quash Subpoenas and Exclude Evidence," seeking to prevent his client trust account records from being offered at the disciplinary hearing. He argued the records had been obtained improperly and suggested the SEC had violated federal privacy laws when it provided his trust account records to the Counsel for Discipline in connection with the grievance. Nimmer acknowledged that after receiving the grievance, the Counsel for Discipline independently subpoenaed the trust account records as part of the disciplinary investigation.8 Nimmer did not claim those subpoenas were unreasonable or oppressive,9 but argued he did not have an opportunity to object and thus asked that all records produced in response to those subpoenas be excluded.
Additionally, Nimmer asked that any client trust account records more than 5 years old be excluded even if more recent records were admitted. In support, Nimmer relied on § 3-501.15(a), which requires attorneys to maintain complete records of client property for 5 years after termination of the representation. Nimmer claimed that because he had not retained any client records predating 2011, the Counsel for Discipline should be prevented from offering any subpoenaed trust account records for that period.
The referee found no merit to Nimmer’s arguments for exclusion of the subpoenaed trust account records and overruled the motions.
On December 4, 2017, an evidentiary hearing was held on the formal charges. Nimmer represented himself and was the only witness to testify.
The special prosecutor introduced, and the referee received, Nimmer’s client trust account records from 2006 through 2016. Nimmer did not dispute the veracity of those records and instead stated,
The special prosecutor also introduced, and the referee received, a record of a prior attorney disciplinary proceeding involving Nimmer. In 2013, the Counsel for Discipline alleged Nimmer had received $12,500 from a client to deliver "qualified investors" as advertised on his website and then failed to provide such services.10 Nimmer’s actions were alleged to have violated Neb. Ct. R. Prof. Cond. § 3-507.1 and § 3-508.4(a).11 Nimmer entered a conditional admission to the 2013 charges and requested a public reprimand.12 This court accepted his conditional admission and issued a public reprimand.13
As stated, at the hearing, Nimmer did not dispute the veracity of the client trust account records or the accuracy of the notations on various checks deposited into and written on the client trust account. For instance, Nimmer admitted writing numerous checks for personal expenses from his client trust account over the course of several years, including checks for rent, checks to his church, checks to his mother, and checks for his daughter’s summer camp. He also admitted his mother had given him thousands of dollars that he...
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