State ex rel. Nebraska State Bar Ass'n v. Veith

Decision Date31 May 1991
Docket NumberNo. 90-461,90-461
Citation238 Neb. 239,470 N.W.2d 549
PartiesSTATE of Nebraska ex rel.NEBRASKA STATE BARASSOCIATION, Relator, v. Douglas VEITH, Respondent.
CourtNebraska Supreme Court

Syllabus by the Court

1. Disciplinary Proceedings: Appeal and Error. A proceeding to discipline an attorney is a trial de novo on the record, in which the Supreme Court reaches a conclusion independent of the findings of the referee, provided, where credible evidence is in conflict on a material issue of fact, the Supreme Court considers and may give weight to the fact that the referee heard and observed the witnesses and accepted one version of the facts rather than another.

2. Disciplinary Proceedings: Proof: Appeal and Error. The Supreme Court, in its de novo review of the record, must find that the particular complaint has been established by clear and convincing evidence in order to sustain it against an attorney in a disciplinary proceeding.

3. Disciplinary Proceedings. Every attorney admitted to practice law in Nebraska shall take and subscribe an oath swearing to support the Nebraska and U.S. Constitutions and to faithfully discharge the duties of an attorney and counselor to the best of his or her abilities. An attorney's violation of a disciplinary rule and failure to act competently by neglecting a matter entrusted to him or her is conduct violative of an attorney's oath as a member of the bar. The oath requires lawyers to observe the established codes of professional ethics.

4. Disciplinary Proceedings: Conversion: Words and Phrases. In attorney discipline proceedings, conversion refers to an attorney's misappropriation of a client's property to the attorney's own use or some other improper use.

5. Disciplinary Proceedings: Words and Phrases. Misappropriation is any unauthorized use of clients' funds entrusted to a lawyer, including not only stealing, but also unauthorized temporary use for the lawyer's own purpose, whether or not he derives any personal gain or benefit therefrom.

6. Disciplinary Proceedings: Intent: Words and Phrases. An attorney's failure to use entrusted funds for the purpose for which they were entrusted constitutes misappropriation. Misappropriation caused by serious, inexcusable violation of a duty to oversee entrusted funds is deemed willful, even in the absence of a deliberate wrongdoing.

7. Disciplinary Proceedings: Proof. The mere fact that an attorney's trust account balance falls below the amount deposited in and purportedly held in trust supports a finding of misappropriation.

8. Disciplinary Proceedings: Conversion. An act of conversion is complete when the clients' trust account is overdrawn or when, through mismanagement or misconduct on the part of the attorney, the balance of the account is less than the clients' interest in it.

9. Disciplinary Proceedings: Fraud: Intent. An attorney's intent to defraud or lack thereof is irrelevant when drawing checks on clients' trust account to pay personal expenses.

10. Disciplinary Proceedings. An attorney has a duty to keep separate and properly account for client trust funds entrusted to the attorney and to promptly pay over and deliver such funds to the client upon request.

11. Disciplinary Proceedings. An attorney may not use client trust funds to cover business expenses.

12. Disciplinary Proceedings. To determine whether and to what extent discipline should be imposed it is necessary that the following factors be considered: (1) the nature of the offense, (2) the need for deterring others, (3) the maintenance of the reputation of the bar as a whole, (4) the protection of the public, (5) the attitude of the offender generally, and (6) his present or future fitness to continue in the practice of law.

13. Disciplinary Proceedings. Misappropriation of client funds, as one of the most serious violations of duty an attorney owes to his client, the public, and the courts, typically warrants disbarment.

14. Disciplinary Proceedings. In the hierarchy of offenses for which lawyers may be disciplined, stealing from a client must be among those at the very top of the list.

15. Disciplinary Proceedings. Misappropriation affects both the bar and the public because it is a serious offense involving moral turpitude.

16. Disciplinary Proceedings: Conversion. Receiving a client's funds and converting them to personal use by placing them in an office account without consent of the client is illegal conduct involving moral turpitude.

17. Disciplinary Proceedings. Misappropriation is more than a grievous breach of professional ethics. It violates basic notions of honesty and endangers public confidence in the legal profession.

18. Disciplinary Proceedings. The paramount purpose of the "moral turpitude" standard is not to punish practitioners but to protect the public, the courts, and the profession against unsuitable practitioners.

19. Disciplinary Proceedings. Mitigating circumstances shown in the record should be considered in determining the appropriate discipline imposed on an attorney violating the Code of Professional Responsibility.

20. Disciplinary Proceedings: Intent: Circumstantial Evidence. Intent to misappropriate client funds may be inferred from circumstantial evidence.

21. Disciplinary Proceedings. Cumulative acts of attorney misconduct are distinguishable from isolated incidents of neglect and therefore justify more serious sanctions.

22. Disciplinary Proceedings: Intent. If a misappropriation occurs through an attorney's laxity rather than wrongful intent, and if this lack of intent is reinforced by the attorney's having taken remedial action immediately upon discovery of the problem, less discipline than disbarment may be appropriate.

23. Disciplinary Proceedings. The fact that no client suffered any financial loss is no excuse for a lawyer to misappropriate clients' funds nor any reason why a lawyer should not receive a severe sanction.

24. Disciplinary Proceedings. To determine what sanction is appropriate, each case justifying discipline of an attorney must be evaluated individually in light of the particular facts and circumstances.

Alison L. Larson, Asst. Counsel for Discipline, for relator.

Jon S. Reid and Mark E. Novotny of Kennedy, Holland, DeLacy & Svoboda, for respondent.

HASTINGS, C.J., and BOSLAUGH, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

PER CURIAM.

In this attorney disciplinary proceeding, we find that since he knowingly and willfully transferred and commingled client trust funds with funds in his and his associated lawyers' law office business account, and because he misappropriated some of those funds to his own use and to other improper purposes, Douglas Veith should be disbarred.

Specifically, we find that the record reveals by clear and convincing evidence that Veith violated his oath of office as an attorney and Canon 1, DR 1-102, and Canon 9, DR 9-102, of the lawyers' Code of Professional Responsibility. We agree with the relator, the Nebraska State Bar Association (NSBA), that the 8-month suspension recommended by the referee is inappropriate under the circumstances of this case. The 2-year suspension suggested by the NSBA Counsel for Discipline is also too lenient.

A proceeding to discipline an attorney is a trial de novo on the record, in which the Supreme Court reaches a conclusion independent of the findings of the referee, provided, where credible evidence is in conflict on a material issue of fact, the Supreme Court considers and may give weight to the fact that the referee heard and observed the witnesses and accepted one version of the facts rather than another. State ex rel. NSBA v. Thor, 237 Neb. 734, 467 N.W.2d 666 (1991); State ex rel. NSBA v. Rhodes, 234 Neb. 799, 453 N.W.2d 73 (1990), cert. denied 498 U.S. 855, 111 S.Ct. 153, 112 L.Ed.2d 119. The Supreme Court, in its de novo review of the record, must find that the particular complaint has been established by clear and convincing evidence in order to sustain it against an attorney in a disciplinary proceeding. Id.

FACTUAL BACKGROUND

The undisputed facts in the record here reveal that Veith was admitted to the practice of law in the State of Nebraska in June 1982. At all times relevant, Veith was the managing attorney in a five-attorney office-sharing arrangement in Bellevue, Nebraska. As managing attorney, Veith received the monthly bank statements regarding the general law business and client trust accounts. Each of the attorneys used the trust account for his respective clients' trust funds.

In July 1988, Veith was informed by the bank that it had transferred funds from the trust account to the general law business account to cover a shortage of funds. At various other times Veith transferred or authorized the transfer of funds to the business account from the client trust account.

During the period of August 1988 through February 1989, Veith, although he was generally aware of periodic deficits in both the trust and business accounts, failed to reconcile the accounts or take other action to avoid the deficit problem. Between September 1988 and March 1989, the trust account had negative balances. At a minimum, throughout this period, it should have contained $16,900 in client trust funds. Between July 1988 and March 1989, Veith withdrew as income $70,000 from the business account. On March 3, 1989, one of the associated attorneys questioned Veith about the trust account balance. Veith acknowledged that the trust account had over a $3,000 negative balance. He secured a $10,000 personal loan from a bank and deposited that money into the trust fund that same day to cover the deficiency in the client trust fund account of the complaining associated lawyer. Subsequently, Veith borrowed $25,000 from a friend to cover deficiencies in the other associated attorneys' trust funds. On March 27, 1989, Veith secured a loan from a relative in the amount of $10,600, which he deposited in the trust account to cover...

To continue reading

Request your trial
26 cases
  • Lawyer Disciplinary Bd. v. Kupec, 23011.
    • United States
    • West Virginia Supreme Court
    • April 2, 1998
    ...(Fla.1991); Maryland Attorney Grievance Commission v. Bakas, 323 Md. 395, 593 A.2d 1087 (Md.1991); State ex rel. Nebraska State Bar Association v. Veith, 238 Neb. 239, 470 N.W.2d 549 (1991); In re Konopka, 126 N.J. 225, 596 A.2d 733 (1991); In re Addams, 579 A.2d 190 (D.C.1990); Committee o......
  • State ex rel. Counsel for Discipline of Neb. Supreme Court v. Crawford
    • United States
    • Nebraska Supreme Court
    • March 1, 2013
    ...Ct. R. § 3–303(A). 49. See State ex rel. Counsel for Dis. v. Jones, 270 Neb. 471, 704 N.W.2d 216 (2005). 50. See State ex rel. NSBA v. Veith, 238 Neb. 239, 470 N.W.2d 549 (1991). 51.State ex rel. Counsel for Dis. v. Wintroub, 267 Neb. 872, 678 N.W.2d 103 (2004); State ex rel. NSBA v. Veith,......
  • Veith, Matter of
    • United States
    • Kansas Supreme Court
    • December 14, 1992
    ...proceedings before the Supreme Court of Nebraska, which resulted in the disbarment of Mr. Veith in that state. State ex rel. NSBA v. Veith, 238 Neb. 239, 470 N.W.2d 549 (1991). A panel of the Kansas Board for Discipline of Attorneys (Board), which heard this matter, received voluminous evid......
  • State ex rel. Counsel for Discipline of the Neb. Supreme Court v. Barfield
    • United States
    • Nebraska Supreme Court
    • February 21, 2020
    ...for commingling or misappropriation when the client did not suffer a financial loss, even when there were mitigating factors.33 In State ex rel. NSBA v. Veith ,34 for example, the relator was disbarred because of several instances over the course of 8 months of having a deficient balance in......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT