State v. Sundvold

• Decision Date: 04 April 2014
• Docket Number: No. S–13–002,S–13–002
• Citation: 287 Neb. 818,844 N.W.2d 771
• Parties: State of Nebraska ex rel. Counsel for Discipline of the Nebraska Supreme Court, relator, v. Thomas G. Sundvold, respondent.
• Court: Nebraska Supreme Court

287 Neb. 818

844 N.W.2d 771

State of Nebraska ex rel. Counsel for Discipline of the Nebraska Supreme Court, relator,

v.Thomas G. Sundvold, respondent.

No. S–13–002

Supreme Court of Nebraska.

Filed April 4, 2014

Original action. Judgment of suspension.

Kent L. Frobish, Assistant Counsel for Discipline, for relator.

Clarence E. Mock, of Johnson & Mock, for respondent.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller–Lerman, and Cassel, JJ.

Syllabus by the Court

1. Disciplinary Proceedings. A proceeding to discipline an attorney is a trial de novo on the record.

2. Disciplinary Proceedings: Appeal and Error. In an attorney discipline case, the Nebraska Supreme Court reaches its conclusion independent of the findings of the referee. However, where the credible evidence is in conflict on a material issue of fact, the Nebraska 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.

3. Disciplinary Proceedings: Proof. Violation of a disciplinary rule concerning the practice of law is a ground for discipline, and disciplinary charges against an attorney must be established by clear and convincing evidence.

4. Disciplinary Proceedings. In attorney discipline cases, the basic issues are whether discipline should be imposed and, if so, the type of discipline under the circumstances.

5. Disciplinary Proceedings. The Nebraska Supreme Court evaluates each attorney discipline case in light of its particular facts and circumstances and considers the attorney's acts both underlying the events of the case and throughout the proceeding.

6. Disciplinary Proceedings. The goal of attorney disciplinary proceedings is not as much punishment as determination of whether it is in the public interest to allow an attorney to keep practicing law.

7. Disciplinary Proceedings. To determine whether and to what extent discipline should be imposed in an attorney discipline proceeding, the Nebraska Supreme Court considers the following factors: (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) the offender's present or future fitness to continue in the practice of law.

8. Disciplinary Proceedings: Words and Phrases. In the context of attorney discipline proceedings, misappropriation is an unauthorized use of client funds entrusted to an attorney, including not only stealing, but also unauthorized temporary use for the attorney's own purpose, whether or not the attorney derives personal gain therefrom.

9. Disciplinary Proceedings. Misappropriation of client funds is one of the most serious violations of duty an attorney owes to clients, the public, and the courts.

10. Disciplinary Proceedings. Misappropriation by an attorney violates basic notions of honesty and endangers public confidence in the legal profession.

11. Disciplinary Proceedings. Absent mitigating circumstances, disbarment is the appropriate discipline in cases of misappropriation or commingling of client funds.

12. Disciplinary Proceedings. The fact a client did not suffer any financial loss does not excuse an attorney's misappropriation of client funds and does not provide a reason for imposing a less severe sanction.

13. Disciplinary Proceedings. The Nebraska Supreme Court does not view the misappropriation of funds from one's own firm as any less dishonest and deceptive than the misappropriation of client funds.

14. Disciplinary Proceedings. In determining the appropriate discipline of an attorney, the Nebraska Supreme Court considers the discipline imposed in cases presenting similar circumstances.

15. Disciplinary Proceedings. Cumulative acts of attorney misconduct are distinguishable from isolated incidents, therefore justifying more serious sanctions.

16. Disciplinary Proceedings. In evaluating attorney discipline cases, the Nebraska Supreme Court considers aggravating and mitigating circumstances.

Per Curiam.

NATURE OF CASE

The Counsel for Discipline of the Nebraska Supreme Court, relator, filed amended formal charges against Thomas G. Sundvold, respondent, alleging that he violated his oath of office as an attorney, Neb.Rev.Stat. § 7–104 (Reissue 2012), and several of the Nebraska Rules of Professional Conduct. Respondent filed an answer admitting certain factual allegations but denying other certain factual allegations and denying that he violated the rules of professional conduct. This court appointed a referee. After holding an evidentiary hearing, the referee filed a report and determined that respondent had violated Neb. Ct. R. of Prof. Cond. §§ 3–501.1 (competence); 3–501.3 (diligence); 3–501.4(a) and (b) (communications); 3–501.15(a) and (c) (safekeeping property); and 3–508.4(a), (c), and (d) (misconduct); and his oath of office as an attorney. The referee recommended that respondent be suspended for a period of 3 years, followed by 2 years' monitored probation. Respondent filed exceptions to the referee's report regarding findings of fact and conclusions of law and the recommended discipline. In his brief to this court, respondent states that he withdraws his exceptions to the referee's findings of fact and conclusions of law and takes exception only to the referee's recommended discipline. Relator agrees with the referee's recommended discipline. We determine that the proper sanction is suspension from the practice of law for a period of 3 years and, upon reinstatement, 2 years of probation, including monitoring.

STATEMENT OF FACTS

Respondent was admitted to the practice of law in Nebraska in September 2003. At all relevant times, respondent was engaged in the private practice of law in Lincoln, Nebraska, under the jurisdiction of the Committee on Inquiry of the First Disciplinary District, which determined reasonable grounds existed to discipline respondent. Accordingly, formal charges were filed against respondent on January 3, 2013, and amended formal charges were filed on February 15.

The amended formal charges contained two counts against respondent. Count I generally alleged that respondent, while employed by a law firm, failed to properly represent a client, a roofing contractor, in a civil suit brought against the client; failed to deposit advance fees from the client in the law firm's trust account; and failed to turn over attorney fees received from the client to the law firm in accordance with an oral agreement with the law firm. Count II generally alleged that respondent failed to deliver payments that he received from three additional clients to the law firm in accordance with an oral agreement with the law firm.

Respondent filed his answer on March 15, 2013, in which he admitted certain factual allegations and denied other factual allegations and denied that he violated the rules of professional conduct. Given respondent's answer, this court appointed a referee on March 25.

On June 11, 2013, an evidentiary hearing was held before the referee. On September 10, the referee filed his report. The referee found facts substantially as described below. Following our review of the record, we determine there is clear and convincing evidence in the record to support these facts.

Respondent graduated from Creighton University School of Law in May 2002. During law school, respondent served as a member of the Creighton Law Review and worked as a law clerk for an Omaha law firm. As a law clerk, respondent's duties were confined to legal research and brief writing.

Respondent's first employer after law school was an insurance company, where he worked as a cargo claims attorney starting in May 2003. Respondent essentially worked as an insurance adjuster negotiating claims. He did not participate in any litigation, nor did he draft any pleadings.

In 2006, respondent accepted employment with a carrier company as an associate general counsel handling bodily injury claims. His duties primarily involved adjusting claims for bodily injury. While employed there, respondent was not involved in any courtroom litigation or the drafting of pleadings.

In August 2010, respondent left the carrier company to engage in the private practice of law. Up to that time, respondent did not have any experience in the financial aspects of the attorney-client relationship. He had never negotiated a fee, handled client funds, or drafted a contract for the provision of legal services, nor had he ever worked with a billing system or utilized a trust account.

In late September or early October 2010, respondent joined a law firm as an associate attorney. Respondent was an employee with the law firm as an associate attorney from October 2010 through December 12, 2011.

Respondent's compensation was based upon an oral agreement with the law firm. Respondent was to receive a percentage of the gross amount of fees paid by his clients to the law firm. Under this agreement, 60 percent of the gross amount was to go to respondent and 40 percent was to go to the law firm. Respondent was obligated to deliver to the law firm all fee payments received by him from his clients, with the exception that he was to be allowed to retain fees generated from relatives and close friends for certain legal work. In exchange, the law firm supplied respondent with an office, billing services, and some limited secretarial assistance. The law firm also orally agreed to cover his expenses, including, but not limited to, bar dues, seminar fees, organization dues, and marketing expenses.

Although respondent was an associate at the law firm, he practiced independently, essentially sharing office space with no direct supervision by the law firm. Because respondent operated largely on his own under this agreement, the law firm did not provide him with formal training or oversight related to the handling of client funds or billing.

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