IN SUPREME COURT
Took no part, Gildea, J.
In re Petition for Disciplinary Action against
Edward F. Rooney, a Minnesota Attorney,
Registration No. 9321X
Filed: February 16, 2006
Office of Appellate Courts
S Y L L A B U S
Attorney’s misconduct in misappropriating $27,700 in client funds warrants an 18- month suspension from the practice of law followed by a 3-year probationary period and a permanent prohibition from maintaining a client trust account.
Eighteen-month suspension ordered.
Heard, considered, and decided by the court en banc.
O P I N I O N
The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against respondent Edward F. Rooney, alleging that Rooney misappropriated $27,700 of his clients’ funds. Rooney answered and admitted the misappropriation, but offered several mitigating circumstances. After a hearing, the referee concluded that Rooney had violated Minn. R. Prof. Conduct 1.15 (safekeeping of client funds) and 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation). The referee recommended that Rooney be suspended from the practice of law for 8 months with a 3-year probationary period following his reinstatement, and that he be permanently prohibited from maintaining a client trust account in the future. The Director appealed, disputing the referee’s disciplinary recommendation and arguing that disbarment is warranted. We conclude that an 18- month suspension is the appropriate discipline in this case.
Rooney was admitted to the practice
of law in
Rooney’s misconduct involves a client trust account that he maintained at M & I Bank in connection with his practice of law. From July 7, 2003, through June 30, 2004, Rooney, without his clients’ knowledge or permission, withdrew from his client trust account a total of $27,700 in 17 separate withdrawals ranging in amount from $350 to $4,000. Rooney kept accurate records of these withdrawals and maintained accurate trust account records throughout the period of the misappropriations. Rooney admits that he misappropriated these funds, using them for various personal and business expenses. At the time of the withdrawals, Rooney was not entitled to the funds and knew that he was not entitled to them.
On July 30, 2004, Rooney’s client trust account became overdrawn due to his misappropriations. As a result, M & I Bank sent the Director’s Office a notice of the overdraft. The Director then contacted Rooney, requesting an explanation of the overdraft. In his response, Rooney admitted that the overdraft was the result of his misappropriation of client funds.
Through four separate deposits into his client trust account, Rooney repaid all of the funds that he had taken. He made the first two deposits, in the amounts of $4,850 and $500, during the period in which he was still misappropriating client funds. His last two deposits into the trust account, made on August 2, 2004, and August 5, 2004, repaid the balance of the $27,700 that he had misappropriated. These final two deposits occurred after M & I Bank had contacted Rooney regarding the overdraft, but before the Director sent his inquiry letter to Rooney.
The referee held a hearing on March 30, 2005. At the hearing, Rooney testified and presented four character witnesses on his behalf. Because Rooney admitted the misappropriation, his evidence at the hearing primarily went to establishing mitigating factors. Rooney testified that his law practice has long been financially unstable because he often takes clients who are unable to pay him. Rooney testified that he experienced serious financial difficulties in 2003 and that he misappropriated his clients’ money because he felt it was the only way to keep his practice afloat. Rooney also detailed numerous personal problems that he suffered during 2003, including his mother’s stroke in December 2002 and his subsequent responsibilities as her primary caretaker, his wife’s emergency surgery, and his sister-in-law’s death from brain cancer. At the hearing, Rooney expressed remorse and apologized for his misconduct.
On April 26, 2005, the referee issued findings of fact, conclusions of law, and a recommendation for discipline. The referee found that Rooney had misappropriated $27,700 in client funds over the span of a year. The referee also found that Rooney had repaid all of the funds taken and had cooperated fully with the disciplinary investigation. In addition, the referee determined that Rooney was suffering from serious personal and financial stress during the time when the misconduct occurred and that, over the course of his legal career, Rooney has made substantial contributions to the community. The referee concluded that Rooney’s conduct violated Minn. R. Prof. Conduct 1.15 and 8.4(c). The referee recommended that Rooney be suspended from the practice of law for 8 months followed by a 3-year probationary period and that he be permanently prohibited from maintaining a client trust account.
The Director appealed the referee’s disciplinary recommendation, arguing that Rooney should be disbarred. The Director timely ordered a transcript of the referee hearing, thereby preserving his right to challenge the referee’s findings of fact and conclusions of law pursuant to Rule 14(e), Rules on Lawyers Professional Responsibility (RLPR). However, the Director does not actually challenge any of the referee’s factual findings.
The Director argues that we should reject the referee’s recommendation on discipline and should instead disbar Rooney. The Director contends that the recommended sanction is insufficient to fulfill the purposes of attorney discipline. In addition, the Director argues that the referee incorrectly determined that the existence of several mitigating factors warrants a sanction less than disbarment.
In opposition, Rooney argues that we should adopt the referee’s recommended discipline, or a lesser sanction. Rooney contends that the significant mitigating factors in his case, including his lack of prior disciplinary history, his restitution and remorse, his cooperation with the Director’s investigation, his attempt to rectify the problems that led to the misconduct, and his substantial community involvement, warrant a sanction less than disbarment. Further, Rooney argues that suspension, rather than disbarment, would be consistent with this court’s previous attorney discipline cases involving misappropriation.
The only issue before us is the
appropriate discipline to impose. While
a referee’s recommendation for discipline carries great weight, we have final
responsibility for determining the appropriate discipline. In re
Edinger, 700 N.W.2d 462, 467 (
have established that “[t]he purposes of disciplinary sanctions for
professional misconduct are to protect the public, to protect the judicial
system, and to deter future misconduct by the disciplined attorney as well as
by other attorneys.” In re Oberhauser,
679 N.W.2d 153, 159 (
client funds constitutes serious misconduct that generally warrants
disbarment. In re Olson, 577 N.W.2d 218, 220-21 (
We have not always disbarred
attorneys who have misappropriated client funds. See,
e.g., In re Hanvik, 609 N.W.2d
235, 242 (
Both Rooney and the Director
cite numerous misappropriation cases they feel are analogous to Rooney’s situation
to provide us guidance as to the appropriate sanction to impose. But none of these cases is precisely on
point. As we have often noted, attorney
discipline cases are decided on a case-by-case basis, making the specific
factual circumstances of each case particularly important. See In
re Brooks, 696 N.W.2d 84, 88 (
In many of the cases cited by Rooney, however, the
misappropriation was either a single, isolated event or took place over a very
short period of time, unlike Rooney’s misappropriations. See,
e.g., In re Gubbins, 380 N.W.2d
810, 810-11 (
In addition to the nature of the misconduct, we look to the cumulative weight of the violations when determining the appropriate sanction. Oberhauser, 679 N.W.2d at 159. In this case, the misappropriation was Rooney’s only misconduct. But even standing alone, intentional misappropriation of client funds usually warrants disbarment. Weems, 540 N.W.2d at 308. Further, Rooney misappropriated funds on 17 separate occasions over the course of a year, taking money from nearly all of his clients. Thus, Rooney’s misconduct was not a single, isolated incident or a brief lapse in judgment.
This court also considers the harm caused to the public and the legal profession by the attorney’s misconduct. Oberhauser, 679 N.W.2d at 159. Here, Rooney’s clients did not suffer any harm due to his misappropriations, and he fully restored their funds. However, “[m]isappropriation of client funds, by its very nature, harms * * * the public at large, the legal profession, and the administration of justice.” Ruttger,566 N.W.2d at 331. Misappropriation of funds entrusted to an attorney as a fiduciary for his clients is a breach of trust that reflects poorly on the entire legal profession and erodes the public’s confidence in lawyers.
Finally, we assess mitigating and aggravating circumstances to determine the appropriate sanction. Vaught, 693 N.W.2d at 890. There are several mitigating factors in this case. The parties, however, dispute the impact these mitigating factors should have on the discipline to be imposed. The Director contends that the only mitigating factor that can ever allow an attorney to avoid disbarment in a misappropriation case is a showing that the misappropriation was unintentional—that is, all intentional misappropriation merits disbarment. Because Rooney admits that he intentionally misappropriated client funds, the Director argues that Rooney must be disbarred, despite the existence of other mitigating circumstances.
support his argument, the Director cites this court’s oft-repeated statement: “Disbarment is the usual
discipline for attorney misappropriation of client funds except in instances
when the attorney presents clear and convincing evidence of substantial
mitigating circumstances which show that the attorney did not intentionally
convert the funds.” LaChapelle, 491 N.W.2d at 21; see
also In re Keller, 656 N.W.2d
398, 402 (
the statement in LaChapelle, we
frequently have considered mitigating factors other than lack of intent in
misappropriation cases and at times have concluded that the presence of such
mitigating factors supports the imposition of discipline other than
disbarment. See, e.g., Hanvik, 609
N.W.2d at 241-42 (imposing indefinite suspension due to lack of prior
disciplinary history and substantial restitution); Pyles, 421 N.W.2d at 326-27 (imposing indefinite suspension due to
significant pro bono work and otherwise exemplary life); Bernstein, 404 N.W.2d at 805 (imposing indefinite suspension due to
small amount of money taken, full restitution, contrition, and general good
character); In re Heffernan, 351 N.W.2d 13, 14-15 (Minn. 1984) (imposing 3-month
suspension due to extensive pro bono work, personal turmoil at the time of the
misconduct, and full restitution). Further,
the ABA Standards for Imposing Lawyer Sanctions expressly contemplate the
consideration of mitigating factors in cases of intentional misappropriation
and suggest that mitigating factors may render disbarment an inappropriate
sanction for intentional misappropriation.
ABA Standards for Imposing Lawyer Sanctions § 4.1 (1991) (“Absent aggravating or mitigating
circumstances * * * [d]isbarment is generally appropriate when a lawyer
knowingly converts client property.” (emphasis added)). Thus, we conclude that we are free to
consider mitigating circumstances in cases involving intentional
misappropriation of client funds and that in certain cases such mitigating
factors may result in a sanction less severe than disbarment. See
In re De Rycke, 707 N.W.2d 370, 374 (
There are several mitigating factors in this case: (1) Rooney’s lack of prior disciplinary history; (2) his full restitution before the Director contacted him about the overdraft; (3) his remorse; (4) his cooperation with the Director; (5) his good character and significant contributions to the community through pro bono legal work and other volunteer activities, such as law student mentorship and participation on the boards of several nonprofit organizations; (6) the extraordinary stress in Rooney’s personal life at the time of the misconduct; and (7) that Rooney is receiving counseling for his problems.
An attorney’s lack of prior disciplinary history is a mitigating factor that can contribute to the imposition of a sanction less than disbarment. See Hanvik, 609 N.W.2d at 241. “However, in a case of extensive misappropriation of client funds, the lack of prior discipline is not enough to prevent the imposition of disbarment.” Olsen, 487 N.W.2d at 875.
Restitution has also been
considered a mitigating factor that may result in a sanction less than
disbarment. See Hanvik, 609
N.W.2d at 241; In re Sampson, 408 N.W.2d 574, 577 (
An attorney’s remorse for
his misappropriation is also a mitigating factor to be considered by the
court. See Bernstein, 404
N.W.2d at 805; Gubbins, 380 N.W.2d at 812. “Because one purpose of attorney discipline is to protect the
public, an attorney’s remorse or lack of it is an important factor.” In re
Nora, 450 N.W.2d 328, 330 (
An attorney’s pro bono legal
work, volunteer activities, and good character can also be mitigating factors
in misappropriation cases. See, e.g., Pyles, 421 N.W.2d at 326; In re Parks, 396 N.W.2d 560, 563 (
addition, extraordinary stress in an attorney’s personal life, such as the
serious illness of a loved one, is a mitigating factor that can lead to a
sanction less than disbarment in a misappropriation case. See, e.g.,
Gubbins, 380 N.W.2d at 812; Heffernan,
351 N.W.2d at 15. Turmoil in an
attorney’s personal life has been considered a mitigating factor even without
proof that the turmoil caused the misconduct.
See Heffernan, 351 N.W.2d at 15.
The fact that an attorney has acknowledged the personal problems
that led to his misconduct and has obtained counseling to deal with them can
also be a mitigating factor. See In re Olkon, 324 N.W.2d 192, 196 (
Whether the presence of mitigating circumstances will allow an attorney to avoid disbarment for misappropriation depends on the severity of the misconduct and the strength of the mitigating factors. See Hanvik, 609 N.W.2d at 241. Thus, in misappropriation cases involving substantial amounts of money, a large number of affected clients, or numerous misappropriations over a long period of time, mitigating circumstances often will not permit the attorney to avoid disbarment. See, e.g., Shoemaker, 518 N.W.2d at 555; Olsen, 487 N.W.2d at 875-76; In re Stroble, 487 N.W.2d at 871. Further, when the misconduct includes other ethical violations in addition to the misappropriation, particularly misrepresentations to conceal the misappropriation, mitigating factors usually will not militate against disbarment. See, e.g., Shoemaker, 518 N.W.2d at 555; LaChapelle, 491 N.W.2d at 21.
Here, Rooney misappropriated $27,700, taking money from all of the clients who had funds in his client trust account. His misconduct occurred over the span of 1 year and involved 17 separate instances of misappropriation. However, Rooney did not lie to the Director or to his clients or otherwise attempt to conceal his misconduct, and he fully cooperated with the disciplinary investigation. In addition, Rooney’s clients suffered no harm from his misappropriations. Further, Rooney intended only to temporarily borrow his clients’ funds, not to permanently defraud his clients. Cf. ABA Standards for Imposing Lawyer Sanctions § 9.32 (1991) (listing the lack of a dishonest or selfish motive as a possible mitigating factor).
The presence of numerous mitigating circumstances, none of which alone would suffice to avoid disbarment, persuades us that disbarment in this case is not necessary to achieve the goals of attorney discipline. Rooney’s sincere remorse, strong evidence of good character, and lack of prior disciplinary history suggest that he is unlikely to commit such misconduct again. Further, Rooney made full restitution of his clients’ funds before the Director contacted him regarding the trust-account overdraft. In addition, the extraordinary turmoil in Rooney’s personal life at the time of the misconduct, while certainly not an excuse for the misconduct, is a “circumstance to be considered in imposing discipline.” Heffernan, 351 N.W.2d at 15.
While we give great deference to the recommendation of the referee and agree with his conclusion that disbarment is not warranted here, we conclude that the 8-month suspension recommended does not adequately take into account the duration and magnitude of Rooney’s misappropriation. Balancing the severity of Rooney’s misconduct against the numerous significant mitigating factors present in his case, we hold that the appropriate sanction for Rooney’s misconduct is an 18-month suspension from the practice of law. An 18-month suspension is a severe sanction that reflects the seriousness of the misconduct in this case and conveys to attorneys and the public the message that misappropriation, even temporary misappropriation, will not be tolerated. Moreover, an 18-month suspension falls squarely within the range of appropriate discipline for misappropriation set by our precedent. Accordingly, we order that:
1. Respondent Edward F. Rooney is suspended from the practice of law for 18 months, commencing 1 week from the date of this decision;
2. Upon readmission, Rooney shall be placed on supervised probation for a period of 3 years;
3. Rooney is permanently prohibited from maintaining a client trust account in the future. Rooney’s client trust account shall be maintained by an outside accountant or a licensed attorney.
Eighteen-month suspension ordered.
GILDEA, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.
 Rooney disputes this finding,
arguing that the amount misappropriated was instead $22,350. Rooney appears to reach this number by
off-setting the amount that he withdrew from the trust account against the
amount that he paid into the trust account during the time period of the
misappropriations. Essentially, Rooney
argues that, after his payment of $4,850 into the trust account in January
2004, the next $4,850 that he withdrew from the account was merely a recouping
of his own funds, not a misappropriation of client funds. He applies the same argument to the $500 that
he paid into the account in June 2004.
This argument is flawed. First,
such an argument would suggest that a client trust account may be used by an
attorney as a personal bank account in which the attorney’s own funds may be
stored separately from his clients’ funds, a practice clearly prohibited by the
Minnesota Rules of Professional Conduct.
 Rule 14(e), RLPR, provides that if either party orders a transcript of the referee hearing, the referee’s findings of fact and conclusions of law are not conclusive, and either party may challenge them.
 Instead, the Director explained at oral argument that he challenges the referee’s implicit legal conclusion that the mitigating factors present in this case warrant a sanction less than disbarment. We interpret this argument to be essentially a reiteration of the Director’s primary contention that the referee’s recommended discipline is inappropriate.
 Of course, attorneys are
expected to express remorse for their misconduct and to cooperate with
disciplinary investigations. In fact,
failure to cooperate with a disciplinary investigation is itself misconduct
warranting discipline. In
re Flanery, 431 N.W.2d 115,