IN SUPREME COURT
Took no part,
In re Petition for Disciplinary Action against
Willard L. Wentzel, Jr., a
Registration No. 13160X.
Filed: April 6, 2006
Office of Appellate Courts
S Y L L A B U S
Attorney’s misappropriation of client funds is misconduct warranting disbarment.
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 Willard L. Wentzel, Jr., alleging that Wentzel misappropriated his clients’ funds. In his answer, Wentzel admitted the shortages in his client trust account and offered mitigating circumstances. After a hearing, the referee concluded that Wentzel 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 Wentzel be disbarred with the disbarment stayed upon conditions to be determined by this court, including that Wentzel: (1) be indefinitely suspended from the practice of law; (2) be allowed to petition the director for reinstatement after two years; (3) make periodic reports to the director, and sign releases of information, regarding his treatment for depression; (4) pay a minimum of $900 in costs and disbursements; (5) completely cooperate with the director’s monitoring of these conditions; and (6) be immediately disbarred for failure to comply with the above conditions. The director appealed to this court, arguing that disbarment is the only appropriate discipline. We conclude that disbarment is the appropriate discipline in this case.
was admitted to practice law in
After the director’s audit of Wentzel’s trust account for the period of January 1, 2001, to June 4, 2004, the director and Wentzel entered into a stipulation dispensing with panel proceedings pursuant to Rule 10(a), Rules on Lawyers Professional Responsibility (RLPR). The director then filed the instant petition for disciplinary action against Wentzel, alleging misappropriation of client funds in violation of Minn. R. Prof. Conduct 1.15 and 8.4(c). Wentzel answered the petition, repeating his prior explanation for the shortage of funds, and gave the director “reasonable cooperation” during the investigation. Pursuant to Rule 14(a), RLPR, we referred the matter to a referee for a hearing.
The referee held a hearing on October 4 and 5, 2005. At the hearing, in addition to testifying himself, Wentzel presented the testimony of two character witnesses, and that of his psychologist. In his testimony, Wentzel admitted to misappropriating client funds, but sought to show that his depression was the cause of his misconduct. He also testified about personal problems he experienced during the time of his misconduct, including financial problems, the dissolution of his marriage, and child custody proceedings.
On October 27, 2005, the referee filed findings of fact, conclusions of law, and a recommendation for discipline. He found that Wentzel had engaged in intentional misappropriation of client funds. He further found that Wentzel had not established by clear and convincing evidence that he suffered from a severe psychological problem at the time of his misconduct. The referee found two aggravating factors: (1) that Wentzel’s misappropriation spanned a time period of over two years, involved 30 separate instances, and created an account shortage of $87,957.01 at one point; and (2) that Wentzel “does not have complete insight into the moral and ethical nature of his acts, preferring to characterize them as borrowing rather than theft, though he acknowledges wrongdoing.” In mitigation of Wentzel’s conduct, the referee found that Wentzel: (1) had not been disciplined previously; (2) had completed restitution, and ultimately no client or entity suffered a financial loss; (3) had, at the time of misconduct, suffered anxiety and emotional distress due to the dissolution of his marriage and child custody proceedings; and (4) had reasonably cooperated with the director.
The referee concluded that Wentzel’s conduct violated Minn. R. Prof. Conduct 1.15 and 8.4(c). As noted above, the referee recommended that Wentzel be disbarred with the disbarment stayed.
Before this court,
the director does not contest the referee’s findings of fact and conclusions of
law, but does contest the referee’s disciplinary recommendation, arguing that
Wentzel should be disbarred outright.
Wentzel argues the recommended discipline is appropriate and also
challenges one of the aggravating factors found by the referee. Wentzel ordered a transcript of the referee’s hearing. Therefore, under Rule 14(e), RLPR, the
referee’s findings and conclusions of law are not binding on this court. In re
Wentzell, 656 N.W.2d 402, 405 (
We first address Wentzel’s challenge to the referee’s finding. Wentzel argues that the referee’s finding that Wentzel lacks insight into his actions is not supported by the record. It is true that Wentzel admitted the misconduct and made statements in his testimony indicating that he understood the seriousness of his misconduct. However, there is also evidence that indicates that Wentzel does not fully appreciate the grave nature of his misconduct. For example, in his sessions with his psychologist, Wentzel characterized his actions as akin to “borrowing” from the trust account. At the hearing itself, when initially asked whether he was entitled to the money he had wrongfully withdrawn from the trust account, Wentzel responded, “Technically I guess not.” Wentzel also testified that he considered his actions borrowing instead of stealing. Thus, here, the referee’s finding rests in part on the referee’s assessment of Wentzel’s credibility, demeanor, and sincerity. Given the testimony and the level of deference we give referee findings, we cannot say that we are left with a definite and firm conviction that a mistake has been made. Therefore, we conclude that the finding is not clearly erroneous.
that the referee did not clearly err in finding that Wentzel lacks insight into
his actions, we turn our attention to the appropriate sanction in this
case. 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 (
The nature of the
misconduct here is the misappropriation of client funds. We generally disbar attorneys who misappropriate
client funds. See, e.g., In re Pierce,
706 N.W.2d 749, 756 (
Both Wentzel and the director
cite cases that they argue are sufficiently similar to Wentzel’s situation to
be relevant in informing this court’s decision in this case. Wentzel relies heavily on In re Jellinger, a case in which the discipline imposed was nearly
identical to that recommended by the referee in Wentzel’s case. 655
N.W.2d 312, 316-17 (
The director argues that our
decision in In re Stroble, 487 N.W.2d
The second factor we consider when determining the appropriate sanction is the cumulative weight of the violations. Oberhauser, 679 N.W.2d at 159. In this case, Wentzel misappropriated client funds in violation of Minn. R. Prof. Conduct 1.15 and 8.4(c). We have made clear that, standing alone, intentional misappropriation of client funds usually warrants disbarment. Weems, 540 N.W.2d at 308. Here, as the referee found, the severity of Wentzel’s misconduct is aggravated by the fact that it lasted over two years, involved 30 instances of misappropriation, and caused a trust account shortage of nearly $88,000. This was not a single isolated incident or a brief lapse in judgment.
The next factor we consider is the harm to the public and legal profession caused by the attorney’s misconduct. Oberhauser, 679 N.W.2d at 159. Wentzel has completed restitution and no client or entity ultimately suffered a financial loss as a result of his misappropriations. However, Wentzel’s misconduct has still caused harm because “[m]isappropriation 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.” Rooney, 709 N.W.2d at 270.
Finally, we assess mitigating and aggravating circumstances. Vaught, 693 N.W.2d at 890. There are two aggravating factors: (1) the fact that Wentzel’s misappropriation spanned a time period of over two years, involved 30 separate instances, and created an account shortage of $87,957.01 at one point; and (2) the fact that Wentzel “does not have complete insight into the moral and ethical nature of his acts, preferring to characterize them as borrowing rather than theft, though he acknowledges wrongdoing.” The mitigating factors found by the referee are: (1) Wentzel’s lack of prior disciplinary history; (2) Wentzel’s restitution, and the fact that ultimately no client or entity suffered a financial loss; (3) the anxiety and emotional distress of Wentzel’s marriage dissolution and child custody proceedings; and (4) Wentzel’s “reasonable cooperation” with the director.
With respect to the mitigating factors found by the referee, the director argues that the only mitigating factor sufficient to avoid disbarment for misappropriation is clear and convincing evidence showing that the attorney did not intentionally convert the funds. We recently rejected this argument. See Rooney, 709 N.W.2d at 270-71 (“[W]e are free to consider mitigating circumstances in cases involving intentional misappropriation of client funds and * * * in certain cases such mitigating factors may result in a sanction less severe than disbarment.”). On balance, we conclude that the mitigating factors do not outweigh the aggravating factors found by the referee.
We conclude that the appropriate discipline in this case is outright disbarment. Therefore, we order that Willard L. Wentzel, Jr., be, and hereby is, disbarred.
ANDERSON, G. Barry, J., took no part in the consideration or decision of this case.
 In addition, Wentzel implicitly
argues that this court should find two additional mitigating factors that the
referee did not list in his findings.
First, Wentzel argues that his “good character and reputation for
honesty support the [r]eferee’s sanction.”
Wentzel also implies that his plan “to associate with a law firm to
ensure that this never happens again” is a mitigating factor this court should
consider when imposing discipline. Each
of these factors has been considered by this court when imposing discipline in
See In re Bernstein, 404 N.W.2d804, 805 (