Walton, Matter of, 9216

• Decision Date: 11 March 1977
• Docket Number: No. 9216,9216
• Parties: In the Matter of the Application for Disciplinary Action against Ray H. WALTON, a Member of the Bar of the State of North Dakota. GRIEVANCE COMMISSION, Petitioner, v. Ray H. WALTON, Respondent. Civ.
• Court: North Dakota Supreme Court

Page 762

251 N.W.2d 762

In the Matter of the Application for Disciplinary Action

against Ray H. WALTON, a Member of the Bar of the

State of North Dakota.

GRIEVANCE COMMISSION, Petitioner, v. Ray H. WALTON, Respondent.

Civ. No. 9216.

Supreme Court of North Dakota.

March 11, 1977.

Syllabus by the Court

1. Defalcation of client's funds is one of the least excusable acts for which a lawyer can be disciplined and calls for disciplinary action.

2. Even though danger of repetition of misconduct by lawyer is slight or nonexistent, acts detrimental to public and to Bar, which cause damage to the public image of the Bar, justify suspension from practice.

Gregory D. Morris and Frederick E. Saefke, Bismarck, for petitioner.

Frank J. Magill, Fargo, and William C. Kelsch, Mandan, for respondent.

VOGEL, Justice.

This is a disciplinary proceeding against an attorney.

Respondent was admitted to practice in this State in 1954, and practiced in Williston as an individual practitioner or in a partnership or as State's Attorney of Williams County until his appointment as Commerce Counsel of the North Dakota Public Service Commission on June 1, 1972. He has been a competent attorney and had a good record until he defalcated money from the estate of Birger Krogen.

While acting as both executor and administrator (a dual capacity fraught with temptation), he took from estate funds in separate bank accounts in the name of the estate approximately $8,300 in excess of the fees subsequently allowed to him by the probate court. After a delay of several years in the closing of the probate, the beneficiaries of the will filed a complaint with the Grievance Commission of the Supreme Court asserting delay in closing the estate. Upon investigation by a grievance committee of the State Bar Association, it was discovered that a defalcation had taken place. Upon being confronted with the finding, the respondent readily admitted the defalcation and refunded all of the money but $2,100. The referee found that the $2,100 shortage was due to the fact that, because of an accounting error, the respondent thought he had made restitution in full. Once the amount of the shortage was established, he refunded the balance of $2,100 also, with interest.

Since the facts are substantially undisputed, and the misconduct is admitted, the dispute between the parties relates to the disposition to be made of the case and as to matters in mitigation.

As mitigation, respondent points to his prompt restitution, his previous good record, his present employment by a public agency and not involving clients' funds, his admission of culpability, and his family situation. He also stated that he was under extreme pressures at the time the defalcation occurred, arising from a severe, almost disabling, and very painful chronic back problem, the difficulty in closing his office and arranging for transfer of his many files to other lawyers to be handled by them, his lack of a secretary at the time, and other personal problems.

The grievance committee investigated the matter and recommended disciplinary proceedings. The Grievance Commission of the Supreme Court recommended disbarment or suspension. We referred the matter to the Honorable Larry Hatch, as referee, and he held a full hearing. He had the benefit of observing the witnesses and their demeanor. As we observed in Grievance Commission v. Pohlman, 248 N.W.2d 833 (N.D.1977), the referee is in a better position to weigh the testimony of the witnesses and to determine in general the mitigating circumstances. The referee in this case first recommended that we administer a "private suspension," which we may or may not have the authority to impose, but have never imposed in the past. He later amended his report so as to recommend a "private reprimand." At the hearing before this court, the Grievance Commission recommended a suspension of...