accused took total of $100,000 in improper distributions from law partners over three-year period of time
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- accused took total of $100,000 in improper distributions from law partners over three-year period of time
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The opinion
No. 15 March 28, 2013 411
15 re Renshaw
353 Or
In
2013 March 28, 2013
IN THE SUPREME COURT OF THE
STATE OF OREGON
In re Complaint as to the Conduct of
JEFFREY F. RENSHAW,
Accused.
(OSB 10-08; SC S059839)
En Banc
On review of the decision of a trial panel of the Disciplinary
Board.
Argued and submitted January 10, 2013.
Marc D. Blackman, Ransom Blackman LLP, Portland,
argued the cause and filed the brief for the accused.
Stacy J. Hankin, Assistant Disciplinary Counsel, Tigard,
argued the cause and filed the briefs for the Oregon State
Bar.
PER CURIAM
The accused is disbarred, effective 60 days from the date
of this decision.
In this lawyer discipline proceeding, the Bar alleged that the accused
violated Rule of Professional Conduct (RPC) 8.4(a)(2), which prohibits
criminal conduct that reflects adversely on a lawyer’s honesty and
trustworthiness, and RPC 8.4(a)(3), which prohibits conduct involving
honesty and misrepresentation that reflects adversely on a lawyer’s fitness
to practice law. The accused acknowledged having misappropriated
approximately $100,000 of law firm funds to pay personal expenses but
contended that that conduct did not amount to criminal conduct in
violation of RPC 8.4(a)(2). The trial panel found that the accused had
violated both rules, suspended him for one year, and imposed certain
conditions on his reinstatement. Held: On de novo review, the Court
found that the accused had violated both rules and that disbarment was
the appropriate sanction. The Court found that the accused’s conduct
constituted theft by deception in violation of ORS 164.085, the duration
and magnitude of which was sufficiently serious to warrant disbarment.
The Court further concluded that the accused’s conduct seriously
adversely reflected on his fitness to practice law.
The accused is disbarred, effective 60 days from the date of this
decision.
412 In re Renshaw
PER CURIAM
In this lawyer discipline proceeding, the Bar alleged
that the accused violated Rule of Professional Conduct (RPC)
8.4(a)(2), which prohibits criminal conduct that reflects
adversely on a lawyer’s honesty and trustworthiness, and
RPC 8.4(a)(3), which prohibits conduct involving dishonesty
and misrepresentation that reflects adversely on a lawyer’s
fitness to practice law. The trial panel found that the accused
had violated both rules, suspended him for one year, and
imposed certain conditions on his reinstatement. On review,
the Bar asks us to affirm the trial panel’s findings regarding
the rule violations but contends that we should disbar the
accused. The accused, for his part, acknowledges that he
violated RPC 8.4(a)(3), contends that he did not violate RPC
8.4(a)(2), and submits that the sanction that the trial panel
imposed was appropriate. On de novo review, we find that the
accused violated both rules and conclude that disbarment is
the appropriate sanction.
We find the following facts by clear and convincing
evidence. The accused was admitted to practice in Oregon in
1993. In 2003, the accused and two other lawyers formed a
law firm, Johnson, Renshaw & Lechman-Su, P.C. (the firm).
They organized the firm as a professional corporation under
Oregon law and as an S corporation under the Internal
Revenue Code. Each lawyer was an equal shareholder in the
firm. After the firm was formed, each shareholder assumed
different management roles. Johnson handled marketing
and accounts receivables. Lechman-Su handled “big picture
financial items.” The accused handled day-to-day operations,
including paying the firm’s bills, processing funds received
from clients, and addressing personnel matters.
During the relevant time period, the firm had a
general checking account and a line of credit through which
each shareholder was issued a firm credit card. All accounts
were to be used only for business purposes. Each month,
the expenses charged to each shareholder’s credit card were
reviewed and entered into Quickbooks, a program that the
firm used to record financial transactions. The firm’s part-
time bookkeeper reviewed and recorded Johnson’s and
Cite as 353 Or 411 (2013) 413
Lechman-Su’s credit card statements. The accused reviewed
and recorded his own statements.1
Johnson, Lechman-Su, and the accused were
compensated in two ways. Each received a regular paycheck,
and, when firm revenue allowed, each also received periodic
shareholder distributions. The accused was responsible
for determining whether there was sufficient revenue at
any given time to make a distribution. Generally, when
a distribution was made, each of the three shareholders
received the same amount.
In 2006, the accused made three shareholder
distributions to himself without making distributions to
Johnson and Lechman-Su. Those three distributions totaled
$3,250. Each time that the accused made a distribution only
to himself, he told Johnson and Lechman-Su that the firm
lacked sufficient funds to make a shareholder distribution.
When the firm’s accountant was preparing the shareholders’
2006 corporate tax returns, she discovered that disparity
and brought it to the accused’s attention because he was the
managing shareholder. The accused, however, did not bring
the disparity to the attention of Johnson and Lechman-Su.
In 2007, the accused made at least four shareholder
distributions only to himself. As before, each time that the
accused made a distribution only to himself, he told Johnson
and Lechman-Su that the firm lacked sufficient funds to
make any distribution. As a result of those distributions,
the accused received at least $4,000 more in distributions
that year than the other two shareholders. When the firm’s
accountant was preparing the firm’s 2007 corporate tax
returns, she discovered a disparity in the amounts that
the three shareholders owed the firm. According to the
accountant’s figures, as of December 31, 2007, the accused
owed the firm $28,118.56.2 Johnson owed $2,781.00, and
Lechman-Su owed $1,752.00. Because of her concern for the
1
On a few occasions, the bookkeeper offered to review and record the accused’s
statements, but the accused declined those offers.
2
That amount was a combination of the accused’s unauthorized shareholder
distributions and a series of transactions in which the accused had used firm funds
to pay personal expenses and coded them to accounts receivable.
414 In re Renshaw
firm’s status as an S corporation, the accountant notified all
three shareholders of the disparity.
The accused responded directly to the accountant,
promising to repay the debt by the end of June 2008. He
then sent an e-mail to Johnson and Lechman-Su, the subject
line of which was “mea culpa.” The e-mail stated,
“I am physically ill about this right now, so I need to cleanse
my soul to you two.
“* * * * *
“[T]his is simply an accumulation of three years and my
dealing with several things as a result of going through and
losing the lawsuit against the title company. I am already in
the midst of plans to get this cleared. It amounts to this—I
owe the firm and it will be repaid.
“God I feel horrible right now. I am so sorry.”
Shortly after receiving the accused’s e-mail, Johnson,
Lechman-Su, and the accused met to discuss the accused’s
actions. The accused denied experiencing personal problems
and attributed the debt to the financial consequences of
an unsuccessful lawsuit and also to promises that he had
made to his wife to remodel their home. At the meeting, the
accused did not tell Johnson or Lechman-Su that he had
taken any sums other than the ones that the accountant
had discovered.
The following month, while the accused was on
vacation in Hawaii, Johnson and the firm’s part-time
bookkeeper discovered records of the accused’s transactions
in which he had used the firm’s line of credit to pay personal
expenses. For example, in February 2008, the accused had
used the firm credit card to pay a personal Visa bill in the
amount of $3,541.72. Also in February, the accused had
made two transfers of $1,000 each from the firm’s account
into two nonfirm checking accounts, one of which was held
by the accused’s wife.
Johnson and the bookkeeper also discovered records
of the accused’s transactions in which he had used his firm
credit card to pay personal expenses and either had failed to
denote in QuickBooks that they were personal expenses or
Cite as 353 Or 411 (2013) 415
had coded the expenses in QuickBooks as business expenses.
Those transactions occurred in 2005, 2006, 2007, and early
2008. In 2005, for example, the accused had used his firm
credit card to pay Companion Pet Clinic in the amount of
$66.75 and Nordstrom in the amount of $965.00. In 2006,
he used his firm credit card to purchase airline tickets for
his family to go to Florida and also to pay various lodging
expenses associated with that family vacation. The airline
tickets were coded in QuickBooks as “Legal Library,” and
the remaining expenses were coded as “Travel,” “Meals,” and
“Professional Development.” In 2007, the accused used his
firm credit card to pay a contractor to perform remodeling
work on his home. He coded those expenses, which totaled
$9,454.73, as “Reference Materials” and “Subcontractors.”
When the accused returned from vacation, Johnson
and Lechman-Su asked the accused to resign, which he did.
After the accused’s resignation, Johnson and the bookkeeper
continued to review the accused’s financial records to
better understand the extent of the accused’s actions.
After uncovering a number of additional transactions in
which the accused had used firm funds to pay personal
expenses, they estimated conservatively that the accused
had misappropriated at least $150,000 of the law firm’s
funds.3 All of the instances in which the accused had coded
a personal expense as a business expense occurred before
March 2008—that is, before the meeting at which the
accused had met with Johnson and Lechman-Su and sought
to “cleanse [his] soul.” As noted, the accused did not mention
to his law partners any misappropriations at that meeting
other than the ones that the accountant previously had
discovered.
In March 2010, the Bar filed a formal complaint
against the accused, alleging that he had violated RPC
8.4(a)(2) and RPC 8.4(a)(3).4 As noted, in its first cause
3
The accused admitted at the trial panel hearing that he took approximately
$100,000 from the firm but disputed that he took more than that. We need not
decide whether the accused took $100,000, as he admitted, or $150,000, as Johnson
estimated. The difference does not affect our determination regarding either the
alleged rule violations or the sanction.
4
Under RPC 8.4(a),
“It is professional misconduct for a lawyer to:
416 In re Renshaw
of complaint, the Bar alleged that the accused’s conduct
involved dishonesty and misrepresentation in violation of
RPC 8.4(a)(3). In its second cause of complaint, the Bar
alleged that the accused had committed a criminal act in
violation of RPC 8.4(a)(2) because his conduct constituted
theft by deception. See ORS 164.085 (defining that offense).
The accused filed an answer denying the Bar’s allegations.
At a hearing before the trial panel, the accused
acknowledged that he took shareholder distributions in
excess of those authorized by Johnson and Lechman-Su,
that he used firm resources to pay personal expenses, and
that he had miscoded the expenses in the firm’s financial
records. He acknowledged that, when he miscoded his
personal expenses as business expenses, he knew that doing
so would make it more difficult for his partners to discover
his actions. He acknowledged that his actions “involve[ed]
dishonesty [and] misrepresentation” in violation of RPC
8.4(a)(3), but he contended that his actions did not constitute
criminal conduct and thus did not violate RPC 8.4(a)(2).
According to the accused, under the American Bar
Association’s Standards for Imposing Lawyer Sanctions
(1991) (amended 1992) (the ABA Standards) and this court’s
case law, his conduct warranted a sanction no greater than “18
months, with 12 months stayed during a three * * * year term
of probation on the conditions that [the accused’s] practice
and financial affairs be monitored by the State Lawyers
Assistance Committee and that [he] actively participate in
mental health counseling.” The trial panel issued an opinion
finding that the accused had violated both RPC 8.4(a)(2) and
RPC 8.4(a)(3). After considering aggravating and mitigating
factors, the panel suspended the accused for one year with
certain conditions of reinstatement.5
“* * * * *
“(2) commit a criminal act that reflects adversely on the lawyer’s honesty,
trustworthiness or fitness as a lawyer in other respects;
“(3) engage in conduct involving dishonesty, fraud, deceit or
misrepresentation that reflects adversely on the lawyer’s fitness to
practice law[.]”
5
The conditions required the accused to complete a full psychological
evaluation by a qualified mental health care provider and to comply with that
provider’s recommended treatment plan.
Cite as 353 Or 411 (2013) 417
On review, the Bar asks this court to find, as the trial
panel did, that the accused violated RPC 8.4(a)(2) and RPC
8.4(a)(3) but to disbar the accused instead of suspending
him. Before considering the appropriate sanction, we
first consider whether the Bar has established by clear
and convincing evidence that the accused committed the
alleged violations. See In re Koch, 345 Or 444, 447, 198
P3d 910 (2008). Because the accused does not dispute that
he violated RPC 8.4(a)(3), we consider only whether he
violated RPC 8.4(a)(2). That disciplinary rule provides that
“[i]t is professional misconduct for a lawyer to * * * commit a
criminal act that reflects adversely on the lawyer’s honesty,
trustworthiness or fitness as a lawyer in other respects[.]”
RPC 8.4(a)(2). As noted, the Bar alleged that the accused
committed theft by deception in violation of ORS 164.085.
That statute provides:
“A person, who obtains property of another thereby, commits
theft by deception when, with intent to defraud, the person
* * * [c]reates or confirms another’s false impression of law,
value, intention or other state of mind that the actor does
not believe to be true[.]”
ORS 164.085(1)(a). Specifically, the Bar contends that the
accused’s conduct constituted theft by deception because
he obtained funds that the firm, a professional corporation,
owned, intentionally miscoded personal expenses as business
expenses to obtain those funds, and failed to disclose his
conduct to Johnson and Lechman-Su.
The accused’s response is limited. As noted, the
accused does not dispute that he took substantial funds
from the law firm. He does not dispute that his conduct
“[c]reate[d] or confirm[ed] another’s false impression * * * or
other state of mind that the [accused] d[id] not believe to
be true.” And he does not dispute that he had the requisite
intent to defraud. The accused argues only that his conduct
did not constitute theft because he did not “obtai[n the]
property of another.” See ORS 164.085(1)(a) (stating that
requirement).
In response to the Bar’s argument that he took
property that the firm—a professional corporation—owned,
the accused argues that the firm did not observe any of the
418 In re Renshaw
formalities required of a corporation. It follows, he reasons,
that the firm forfeited its corporate status and operated as a
partnership and that he and his partners jointly owned the
firm’s funds. Relying on State v. Durant, 122 Or App 380,
857 P2d 891 (1993), the accused argues that, because he and
his partners owned the firm’s funds jointly and because no
partner’s interest in the funds was superior to another’s, he
could not and did not take the “property of another” within
the meaning of the theft statutes.
We need not decide whether the firm lost its
corporate status and should be viewed as a partnership, as
the accused argues. Even if the accused were correct that the
firm was operating as a partnership, the money that he took
belonged to the partnership, not to the partners. See ORS
67.060 (“Property acquired by a partnership is property of
the partnership and not of the partners individually.”). The
Court of Appeals decision on which the accused bases his
argument preceded the enactment of ORS 67.060 and is no
longer good law. When the accused took the firm’s funds, he
took the property of another.
The accused argues alternatively that he did not
engage in theft because he “reasonably believed that [he]
was entitled to the property[.]” See ORS 164.035 (defining
that defense to theft). The accused’s argument may rest on
two related but separate factual premises. It may rest on
the premise that some of the expenses that all the partners
charged to the firm, such as lunches at which business was
discussed, should be viewed as personal rather than business
expenses. It also may rest on the premise that one partner
on limited occasions charged personal expenses to the firm
as a business expense. For example, that partner attended
an American Bar Association conference in another city
and charged all the cost of a rental car to the firm without
distinguishing the day that he used the car for personal
reasons from the days that he used it for business purposes.
As we understand the accused’s argument, he reasons from
one or both of those factual premises that, because the other
two partners used firm funds for personal expenses, he
reasonably believed that he was entitled to do the same.
As the trial panel concluded, the distinction between
business and personal expenses may not always have been
Cite as 353 Or 411 (2013) 419
precise, and there may have been a few, relatively minor
instances in which another partner in the firm failed to
honor the distinction. However, those few instances provided
no reasonable basis for the accused to believe that he was
either entitled or authorized to take approximately $100,000
of the firm’s funds to pay for remodeling his home, family
vacations, and the like. Indeed, the fact that the accused
intentionally misrepresented his reasons for charging his
personal expenses to the firm is at odds with his claim
that he reasonably believed that he was entitled to do so.
The Bar proved by clear and convincing evidence that the
accused committed “a criminal act [theft by deception] that
reflects adversely on [his] honesty [and] trustworthiness[.]”
See RPC 8.4(a)(2).6
Having found that the accused violated RPC 8.4(a)(2)
and (3), we turn to the appropriate sanction. We first
consider the duty violated, the accused’s state of mind,
and the actual or potential injury caused by the accused’s
conduct. In re Kluge, 332 Or 251, 259, 27 P3d 102 (2001);
ABA Standard 3.0. We next decide whether any aggravating
or mitigating circumstances exist. Kluge, 332 Or at 259.
Finally, we consider the appropriate sanction in light of this
court’s case law. Id. In determining the appropriate sanction,
our purpose is to protect the public and the administration
of justice from lawyers who have not discharged properly
their duties to clients, the public, the legal system, or the
profession. See ABA Standard 1.1.
In violating RPC 8.4(a)(2) and RPC 8.4(a)(3), the
accused breached the duty that he owed the public. See id.
at 59 (listing a violation of RPC 8.4(a) as breaching that
duty).7 We also find that the accused acted intentionally both
in taking the property and misrepresenting his bases for
doing so. See ABA Standards at 7 (defining “intent” as “the
6
Our finding that the accused violated RPC 8.4(a)(2) does not, of course,
establish that the criminal act that is the predicate of that ethical violation has
been proved beyond a reasonable doubt.
7
The accused also breached the duty of loyalty that he owed the other two
shareholders in the firm. See In re Pennington, 220 Or 343, 349, 348 P2d 774
(1960). However, that duty is not one of the duties that the ABA Standards uses to
gauge the appropriate sanction. See ABA Standards at 5-6 (classifying sanctions
based on the duties that a lawyer owes to the client, the public, the legal system,
and the profession).
420 In re Renshaw
conscious objective or purpose to accomplish a particular
result”). Finally, the accused caused actual injury to his
firm and his former law partners. He intentionally took at
least $100,000 from the firm, funds in which the other two
shareholders had an interest.
The ABA Standards identify two situations in which
disbarment is the appropriate sanction for a lawyer’s breach
of a duty owed to the public. Both apply here. Disbarment
is appropriate when a lawyer engages in “serious criminal
conduct, a necessary element of which includes * * *
misrepresentation * * or theft.” ABA Standard 5.11(a). In
*
this case, the accused committed acts that constitute theft
by deception. Because misrepresentation and theft are
necessary elements of that crime, the criminal conduct in
which the accused engaged comes within the terms of ABA
Standard 5.11(a). We note, however, that not every criminal
act that includes those elements will warrant disbarment.
The criminal conduct must be “serious.” See id. In this case,
it was. This was not an isolated instance of, for example,
petty shoplifting. Rather, from 2005 to 2008, the accused
repeatedly and systematically took money from his firm by
misrepresenting either the firm’s finances or his reasons
for using the firm’s money. Moreover, the accused does not
dispute that he wrongfully took at least $100,000 from the
firm. Both the duration of the accused’s conduct and the
magnitude of his theft make the accused’s crime a serious
one.
The ABA Standards also provide that disbarment
is appropriate when a lawyer engages in “any other
intentional conduct involving dishonesty, fraud, deceit,
or misrepresentation that seriously adversely reflects on
the lawyer’s fitness to practice.” Standard 5.11(b). For
the reasons discussed above, we find that the accused
intentionally engaged in dishonesty and misrepresentation
when he told the other two shareholders that the firm
lacked sufficient funds to make shareholder distributions
and when he coded personal expenses as firm expenses.
Because the accused acknowledges that his conduct
violated RPC 8.4(a)(3), he necessarily acknowledges that
his dishonesty and misrepresentation “reflec[t] adversely
on [his] fitness to practice law.” See RPC 8.4(a)(3) (requiring
Cite as 353 Or 411 (2013) 421
that element to establish the violation). Again, the question
regarding the sanction is whether the accused’s dishonesty
and misrepresentation “seriously” adversely reflect on his
fitness to practice law. See ABA Standard 5.11(b). We find
that they do.
The accused owed a fiduciary duty to the other
shareholders in his firm. See In re Pennington, 220 Or 343,
349, 348 P2d 774 (1960). He breached that duty when he
repeatedly took funds that the firm owned and in which the
other shareholders had an interest. This court considered
a comparable issue in Pennington and concluded that a
lawyer’s practice of taking funds from his law partner over
the course of several years called into serious question
his trustworthiness in handling other people’s money,
particularly his clients’ money. The court reasoned,
“It is also urged that the accused has taken no funds of
any client. He did not disclose taking his partner’s funds
until called to account. The long practice of taking and
secreting funds not his own reflects directly on his right to
be placed in a position to handle other people’s property. If
these were the funds of a client there would be no hesitancy
in imposing the most severe sanction; particularly when we
consider the intent evidenced by the long course of conduct.
The same violation of the fiduciary duty to partnership
funds is no less abhorrent.”
Id. Following Pennington, we conclude that the duration and
effect of the accused’s intentional misrepresentations and
dishonesty are such that they seriously adversely reflect on
his fitness to practice law.
Applying the ABA Standards, we determine
preliminarily that disbarment is the appropriate sanction.
We now consider whether there are any mitigating factors
or aggravating factors that lead to a different conclusion. We
find four aggravating factors, two of which we have already
considered in determining the seriousness of the accused’s
criminal conduct under ABA Standard 5.11(a). First, as we
have already explained, the accused committed a crime. See
ABA Standard 9.22(k). Second, the record establishes that
the accused engaged in a pattern of repeated thefts from
2005 to early 2008. See ABA Standard 9.22(c). Third, the
accused was admitted to practice in Oregon in 1993 and
422 In re Renshaw
has substantial experience in the practice of law. See ABA
Standard 9.22(i). Fourth, the accused acted with a selfish
motive. See ABA Standard 9.22(b).
We also find four mitigating factors. First, the
accused has no prior disciplinary record. See ABA Standard
9.32(a). Second, he displayed a cooperative attitude toward
the disciplinary proceedings and during the trial panel
hearing. See ABA Standard 9.32(e). Third, the accused had
a good reputation as a competent family law attorney. See
ABA Standard 9.32(g). Fourth, the accused demonstrated
remorse for his actions. See ABA Standard 9.32(l).
We note that the trial panel found, as a mitigating
factor, that the accused acted without a “self motive.”
Specifically, the panel stated that the accused “offered
credible evidence that he misappropriated the Firm’s
resources out of desperation to provide for his family, not
to fund any self need or desire[.]” At oral argument, counsel
for the accused stated that, while the accused acknowledged
that his conduct was selfish, the fact that it was not a “self
motive”—that is, that the money was not “for himself”—
identifies an important distinction in “trying to gauge the
moral quality of his misconduct.” It is difficult to describe
taking at least $100,000 of someone else’s money to pay
for your family’s vacations, pet care, and home remodeling
as either selfless or morally neutral acts. Far from being
a mitigating factor, the reasons that the accused took the
firm’s funds constitute an aggravating factor. See ABA
Standard 9.22(b) (providing that acting for selfish reasons
is an aggravating factor).
The accused also urges us to consider, as a mitigating
factor, his “personal or emotional problems.” See ABA
Standard 9.32(c). On that point, however, the accused offered
no expert testimony before the trial panel to demonstrate
that he suffered from any psychological or other condition
that would explain his actions or mitigate his culpability.
He offered no evidence that, before the hearing, he had seen
a mental health professional to help him deal with any
personal or emotional problems that might have caused
his behavior. The only evidence of his personal or emotional
problems came from the accused, who testified that he
Cite as 353 Or 411 (2013) 423
does not handle conflict well and has a fear of failure. We
do not find that the personal and emotional problems that
the accused self-described are a mitigating factor. Having
considered the aggravating and the mitigating factors, we
are not persuaded that they warrant a sanction less than
disbarment. We now turn to our precedent.
Two cases are virtually identical to this one. See In
re Murdock, 328 Or 18, 968 P2d 1270 (1998); Pennington,
220 Or at 349. In each case, the lawyer took money from
his firm by intentionally withholding part or all of the fees
that the lawyer collected. Over eight years, Pennington
“secreted” approximately $50,000. 220 Or at 345. Over two
years, Murdock withheld from his firm slightly less than
$10,000. 328 Or at 21.8 In both cases, this court observed
that a lawyer who “embezzles” funds from the lawyer’s firm
is no different from a lawyer who takes his or her client’s
funds and held that “disbarment generally will follow” from
that conduct. Murdock, 328 Or at 36; Pennington, 220 Or at
349.
In Murdock, the lawyer had argued that a lesser
sanction was appropriate because his actions were the
result of a “long-term addiction to alcohol and illegal drugs.”
328 Or at 29. The court reasoned that, even if Murdock were
“affected” by a chemical dependency, that dependency did not
“cause” him to take the firm’s funds. Id. at 30. In Pennington,
the only explanation that the lawyer offered for his conduct
was that he had produced more of the firm’s income than his
partner, a fact that, in his view, permitted him to withhold
payments that belonged to the partnership. 220 Or at 345.
Pennington also offered evidence from witnesses of “high
standing” that he was an able lawyer, that those witnesses
had no reason to doubt his integrity, that they had no reason
to believe that he had ever cheated a client, and that they
believed that he “would not transgress again.” Id. at 346.
Despite that mitigating evidence, this court ruled
in both cases that the magnitude of the lawyers’ ethical
8
The lawyers in Pennington and Murdock withheld money that should have
gone to their firms. In this case, the accused wrongfully took money that the firm
already had received. Although the timing of the thefts differs, the effect is the
same. In each case, the lawyer deprived his firm of funds to which the firm and the
lawyer’s partners were entitled.
424 In re Renshaw
violations warranted disbarment. Murdock, 328 Or at 36;
Pennington, 220 Or at 349. That conclusion follows equally
here. The accused does not suffer from the sort of addictive
behavior that Murdock did and, as explained above, offered
no expert evidence to establish a psychological or emotional
condition that might explain his actions or mitigate his
culpability. Although the accused offered character evidence
on his behalf, we see no material difference between that
evidence and the character evidence that Pennington
offered. For more than 50 years, this court has held that the
sort of conduct that the accused engaged in here warrants
disbarment.9
The accused, however, relies on five cases that, in
his view, have resulted in lesser sanctions for comparable
conduct. The accused relies primarily on In re Leisure, 338
Or 508, 113 P3d 412 (2005). In that case, the Bar alleged
that Leisure had engaged in criminal conduct in violation
of former DR 1-102(A)(2) “by writing numerous checks that,
when she wrote them, her checking account could not cover.”
Id. at 510.10 The Bar did not allege nor did this court find
that Leisure had committed the crime of theft. See id. at
516-19. Rather, the Bar alleged and this court found that
Leisure had committed the crime of negotiating a bad check,
ORS 165.065, which the court distinguished from theft. Id.
In setting out the facts in Leisure, the court
described one of several matters (the Combs matter) that
had resulted in Leisure’s writing multiple bad checks. See
9
We note that the effect of disbarment has not been constant. Initially, a
disbarred lawyer could apply for reinstatement or admission after a period of
time had passed. Bar Rule (BR) 6.1(d) changed that practice. It provided that a
lawyer “disbarred as a result of a disciplinary proceeding commenced by formal
complaint after December 31, 1995, shall never be eligible” to apply for admission
or reinstatement. Because the Bar filed the formal complaint in Murdock in 1996,
BR 6.1(d) applied in that case. That did not affect, however, this court’s conclusion
that Murdock’s conduct warranted disbarment, as Pennington’s conduct had
earlier.
10
The Bar also alleged and this court found that Leisure had violated former
DR 1-102(A)(3), which prohibited conduct involving dishonesty, fraud, deceit or
misrepresentation. Leisure, 338 Or at 510. The court based its finding on Leisure’s
false statements that her bank would honor certain checks, that her bank had not
cleared a deposit for payment, and that she would cover certain dishonored checks.
Id. at 520-21.
Cite as 353 Or 411 (2013) 425
id. at 512-14.11 It may be that some of the acts that Leisure
took in the Combs matter would permit an inference that
she intended to commit the crime of theft rather than the
crime of negotiating bad checks. The Bar, however, did not
allege that Leisure had committed the crime of theft, and
this court did not find by clear and convincing evidence that
she had intended to deprive anyone permanently of their
money. In this case, by contrast, we find that the accused
intended to deprive his firm and his partners permanently
of a substantial sum of money and, in carrying out that
intent, committed acts that constitute theft. The fact that
Leisure was suspended for writing bad checks does not
suggest that a lawyer who commits theft from his or her
firm is not subject to disbarment.
The accused also relies on In re Carstens, 297 Or
155, 683 P2d 992 (1984). That case, however, provides less
support for the accused than Leisure. In that case, Carstens
and his wife jointly owned a truck, a boat, and a trailer. Id. at
157. After they had filed a petition for dissolution but during
a period of reconciliation, Carstens signed his wife’s name to
certificates of title for the boat and the trailer, transferring
them to his professional corporation for tax purposes. Id.
at 158. After the reconciliation failed, Carstens sold the
truck for more than it had been valued and signed his wife’s
name to the certificate of title for the truck. Id. Before doing
so, however, Carstens called his lawyer in the dissolution
proceeding, who advised him to go ahead with the sale. Id.
Carstens deposited the proceeds from the sale in a separate
11
The facts giving rise to the Combs matter were: A client owed Leisure and
her co-counsel a substantial sum, which the client refused to pay. A third lawyer
recovered a judgment from the client, which that lawyer then sought to collect.
Between January and August 2002, the lawyer collected some of the judgment and
disbursed approximately $9,000 to Leisure. Leisure did not disclose receipt of that
money to her co-counsel. In August 2002, the lawyer collected the remainder of the
judgment from the client and disbursed $122,807.05 to Leisure, who deposited the
money on August 30, 2002, into her business account. Also on August 30, the lawyer
who had collected the money told Leisure’s co-counsel that he had recovered it.
Co-counsel assumed that Leisure would send him his share of the money and went
on vacation. When co-counsel returned from vacation on September 9, Leisure
had not paid him his share, nor had she disclosed receipt of the money to him.
He demanded his share, and Leisure wrote him a check for it. However, at that
time, her business account was not sufficient to cover the check, and she ended
up writing her co-counsel a series of bad checks to cover her obligation, which she
ultimately paid. Id. at 513-14.
426 In re Renshaw
account and promptly advised his wife of the sale. Id. at
158-59.
On learning of the sale, Carstens’ wife initiated
criminal charges against her husband, claiming that he had
forged her name on the titles for the truck, boat, and trailer
and that, as a result, he had stolen her interest in them. Id.
at 159. In the criminal proceeding, a trial court convicted
Carstens of one count of forgery and one count of theft, both
of which counts arose from the sale of the truck; however,
the court dismissed the counts arising from the transfer of
the titles to the boat and the trailer. Id. at 160. The Bar then
brought a disciplinary proceeding against Carstens, based
on those two convictions and additionally on the ground
that forging his wife’s name on the titles for the boat and
trailer violated former DR 1-102(A)(3) and (4). Id. at 160-61.
In reviewing the Bar’s charges, this court explained
that it was bound by the criminal convictions and could not
look behind them. Id. at 163. Regarding the other claims
based on Carstens’ forging his wife’s name on the titles for
the boat and trailer, the court found that no forgery had
occurred. It reasoned that Carstens had “implied authority
to sign his wife’s name to the certificates of title to the boat
trailer and the boat.” Id. at 164-65. Regarding the sale of
the truck, the court observed that Carstens should have
“realized that any implied authority he previously had to
sign his wife’s name [to the certificate of title] must have
been revoked when the reconciliation failed” and that he had
“made a serious mistake in judgment by signing his wife’s
name to the certificate of title to the truck[,]” a mistake
that the court attributed to the acrimonious relationship
between Carstens and his wife. Id. at 166-67. However,
considering that Carstens had sought advice from his lawyer
before selling the truck, placed the proceeds of the sale in
a separate account, promptly notified his wife of the sale,
and, on learning of his wife’s objections, promptly notified
the purchaser that he would hold him harmless, the court
concluded that only a public reprimand was warranted. Id.
Carstens provides no basis for distinguishing
Pennington and Murdock, nor do the other three cases on
Cite as 353 Or 411 (2013) 427
which the accused relies.12 Having found no basis to depart
from the ABA Standards or our case law, we conclude that,
to protect the public and the administration of justice, the
accused should be disbarred.
The accused is disbarred, effective 60 days from the
date of this decision.
12
The third case on which accused relies, In re Goff, 352 Or 104, 280 P3d 984
(2012), identified the rules that the attorney had violated but said nothing about
the facts that gave rise to those violations. The fourth case, In re Toth-Fejel, 14
DB Rptr 179 (2000), involved a stipulation for discipline and has no precedential
value. See Murdock, 328 Or at 24 n 1. In the final case on which the accused relies,
In re Fitzhenry, 343 Or 86, 162 P3d 260 (2007), Fitzhenry and other members of
the corporation for which Fitzhenry worked signed a management representation
letter that misrepresented that one of several listed transactions met the criteria
necessary to show the transaction as a “bill and hold” transaction on the company’s
books. That misrepresentation permitted the company to overstate its earnings,
but Fitzhenry did not commit a theft of another’s money in the way that the
accused did here. The final three cases that the accused cites provide less support
for his position than Leisure and Carstens.