State ex rel. NSBA v. Frederiksen

Decision Date21 September 2001
Docket NumberNo. S-00-459.,S-00-459.
Citation262 Neb. 562,635 N.W.2d 427
CourtNebraska Supreme Court
PartiesSTATE of Nebraska ex rel. NEBRASKA STATE BAR ASSOCIATION, Relator, v. Mark D. FREDERIKSEN, Respondent.

John W. Steele, Assistant Counsel for Discipline, for relator.

Michael L. Smart, of Tiedeman, Lynch, Smart & Kampfe, Omaha, for respondent.




The Nebraska State Bar Association (NSBA) filed formal charges against Mark D. Frederiksen. In an amended answer, Frederiksen admitted all of the allegations contained in the formal charges. We conclude that Frederiksen should be suspended from the practice of law for 3 years.


A proceeding to discipline an attorney is a trial de novo on the record, in which the Nebraska Supreme Court reaches a conclusion independent of the findings of the referee; provided, however, that where the credible evidence is in conflict on a material issue of fact, the 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. Flores, 261 Neb. 256, 622 N.W.2d 632 (2001).

Disciplinary charges against an attorney must be established by clear and convincing evidence. Id.


Frederiksen was admitted to the practice of law in the State of Nebraska on September 12, 1983. From October 1985 until May 1998, Frederiksen practiced law with the firm of Zarley, McKee, Thomte, Voorhees & Sease, P.L.C. (Zarley, McKee). Zarley, McKee is based in Des Moines, Iowa, but Zarley, McKee maintains an office in Omaha, Nebraska, where Frederiksen worked. From 1991 until May 1998, Frederiksen was a partner at Zarley, McKee.

Over the course of his final 3 years at Zarley, McKee, Frederiksen reportedly worked long hours and spent much time away from his family. As a result, he became increasingly disenchanted with his compensation. According to the referee, "[i]n order to give himself `his due' and abate his anger toward his partners," Frederiksen retained for his own use approximately $15,000 in fees that were paid directly to him by Zarley, McKee's clients. Although the partnership agreement required that these funds be paid to the firm, Frederiksen retained the majority of the funds for his own use.

Frederiksen ultimately justified his actions by referring to them as "moonlighting," apparently because some of the work for which he retained funds was done at his home rather than at his office. According to Frederiksen, he misappropriated the funds solely out of anger. He claims no mental disorder, no chemical dependency, no marital discord, and no economic distress. The referee found that Frederiksen was "merely angry at his partners and took the money to appease his discontent."

In May 1998, Frederiksen resigned from Zarley, McKee and joined the Omaha firm of Koley, Jessen, Daubman & Rupiper, P.C. (Koley, Jessen). Frederiksen did not expect to be compensated in any way by Zarley, McKee upon his departure, since he had not "bought into" the firm. However, Zarley, McKee paid Frederiksen "a whole lot of money" after he left. Frederiksen stated that this payment triggered guilty feelings and convinced him that he must discuss his misappropriations with members of Zarley, McKee.

Frederiksen was also admitted to practice law in Iowa. On March 11, 1999, he sent a letter to the Iowa authorities who regulate attorney disciplinary matters, with a copy to Zarley, McKee. The letter stated in part:

The issue of my moonlighting has arisen as we are completing the terms of my buy-out from the Zarley law firm. While I do not believe that there has been any violation of any ethical obligations, I now disclose these past activities to you, in order to satisfy any duty of disclosure by myself or my former partners which may exist. I am discussing resolution of this matter with my former partners, and it is my anticipation, based on these discussions, that it will be resolved amicably between us. Because I am licensed to practice in both Iowa and Nebraska, I am sending this letter to the Disciplinary Committees in both states. Please advise if I can answer any questions you may have.

On June 21, 1999, the Iowa Supreme Court Board of Professional Ethics and Conduct issued the following reprimand:

Following a review of the complaint, your response thereto, the Board's investigation, and the file, it was the determination of the Board that upon your departure from a Des Moines law firm to associate with an Omaha, Nebraska law firm, you volunteered information to the Des Moines firm that while a partner in that firm you accepted payment for legal services which you rendered at home or otherwise away from the office, and failed to advise your partners of those services or payments which you retained for yourself. That you accepted payments from clients which were not turned over to your firm nor did you report those payments to the firm. That you did, however, volunteer that information to the firm upon your pending departure and that your differences with the firm have been resolved although you and the firm felt compelled to report this matter to the Iowa Supreme Court Board of Professional Ethics and Conduct.

It was the determination of the Board that you be and hereby are publicly reprimanded that your failure to report these fees received to the partnership and in depositing the same to your personal account, that you engaged in conduct involving dishonesty, fraud, deceit, and misrepresentation, contrary to DR 1-102(A)(4) of the Iowa Code of Professional Responsibility for Lawyers.

On March 12, 1999, Dennis L. Thomte, an attorney at Zarley, McKee, filed a complaint against Frederiksen with the NSBA. On September 14, John W. Steele, acting on behalf of the NSBA Counsel for Discipline, filed charges against Frederiksen with the Committee on Inquiry of the Second Disciplinary District (Committee). A hearing to determine whether there were reasonable grounds to believe that Frederiksen was guilty of misconduct which would require the filing of formal charges was requested before the Committee.

At the hearing on November 30, 1999, Frederiksen testified that Zarley, McKee probably would not have discovered his misappropriations had he not brought them to Zarley, McKee's attention. To the contrary, Thomte testified that in the year following Frederiksen's departure from Zarley, McKee, two different clients questioned their account statements because they believed they had paid Frederiksen more money than the amount for which Zarley, McKee had given them credit. Upon investigation, Thomte and his partners determined that they could not account for certain funds the clients claimed they had paid to Frederiksen for Zarley, McKee. Frederiksen was thereafter questioned by Zarley, McKee regarding these discrepancies. At that time, Frederiksen told a Zarley, McKee partner, Michael G. Voorhees, that he had been moonlighting and admitted to the misappropriations. It appears that full restitution for the misappropriated funds was made by Frederiksen.

The Committee submitted to the Disciplinary Review Board a transcript of its hearing together with a copy of its proposed formal charges. Following a review of the transcript, the chairperson of the Disciplinary Review Board concluded that reasonable grounds existed for discipline of Frederiksen.

On May 1, 2000, formal charges were filed against Frederiksen in this court, alleging that he had violated the following provisions of the Code of Professional Responsibility:

DR 1-102 Misconduct.
(A) A lawyer shall not:
(1) Violate a Disciplinary Rule.
(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.
DR 9-102 Preserving Identity of Funds and Property of a Client.
(B) A lawyer shall:
(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to the client regarding them.

On August 14, Frederiksen filed an amended answer in which he admitted all of the allegations contained in the formal charges.

A hearing was held before a referee on September 20, 2000. The transcript from the proceedings before the Committee was admitted upon stipulation. The referee recommended that Frederiksen "be suspended from the practice of law for a period of not less than 60 days nor more than 6 months" and that upon his return to the practice of law, Frederiksen should be placed on probation for a period of 2 years. Frederiksen appealed to this court.


In his brief to this court, Frederiksen assigns that the referee erred in recommending a sanction that is excessive under the circumstances of the case.


Frederiksen filed his exception to the referee's report with this court on November 13, 2000, stating that he did not take exception to the findings of fact in the report, but that he took exception to the referee's recommendation that he be suspended from the practice of law for a period of not less than 60 days nor more than 6 months.

Because neither party has filed exceptions to the referee's findings of fact, we consider them final and conclusive pursuant to Neb. Ct. R. of Discipline 10(L) (rev.2001). When no exceptions to the referee's findings of fact are filed by either party in a disciplinary proceeding, this court may, at its discretion, adopt the findings of the referee as final and conclusive. State ex rel. NSBA v. Mefferd, 258 Neb. 616, 604 N.W.2d 839 (2000). We therefore adopt the referee's findings and conclude that clear and convincing evidence establishes that Frederiksen violated Canon 1, DR 1-102(A)(1) and (4), and Canon 9, DR 9-102(B)(3).

We next proceed to determine the appropriate sanction. Under Neb. Ct. R. of Discipline 4 (rev.2001), the court may consider any of the following as...

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    ...6-month suspension in Iowa, formal charges in Nebraska based on same conduct resulted in 1-year suspension); State ex rel. NSBA v. Frederiksen, 262 Neb. 562, 635 N.W.2d 427 (2001) (following issuance of public reprimand in Iowa, formal charges in Nebraska based on same conduct resulted in 3......
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