Title: In re Gunter

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: March 27, 2008
IN THE SUPREME COURT OF THE STATE OF OREGON
In the Matter of the Application
for Reinstatement of
BRUCE A. GUNTER,
Applicant.
(SC S053579)
En Banc
Application for
reinstatement to the practice of law in Oregon.
Submitted on the
record December 12, 2007.
Bruce A. Gunter filed
the briefs for himself.
Jeffrey D. Sapiro,
Disciplinary Counsel, Lake Oswego, filed the brief for the Oregon State Bar.
PER CURIAM
Reinstatement denied.
PER CURIAM
Applicant Bruce A.
Gunter requests that this court reinstate him as an active member of the Oregon
State Bar pursuant to Rule of Procedure (BR) 8.1.  The Bar admitted applicant
to practice in 1982.  After moving to California in 1985, applicant transferred
to inactive status.  The Bar suspended him in 1995 for non-payment of Bar
dues.  Applicant submitted a Form A (nondisciplinary) resignation in 2001. 
Applicant moved back to Oregon and filed an application for reinstatement in
2005.  The Board of Governors determined that applicant had failed to
demonstrate that he presently possessed good moral character and general
fitness to practice law, and recommended denying reinstatement.  This court
referred the matter to the Disciplinary Board.  after a hearing, a trial panel
issued an order denying reinstatement.  The trial panel found that, in light of
applicant's past alcohol and drug use, and some of his personal financial
dealings, applicant had failed to demonstrate by clear and convincing evidence
that he presently possessed good moral character and the requisite knowledge and
legal ability to practice law.  We review that order pursuant to BR 10.2.  We
agree with the trial panel's ultimate recommendation and deny reinstatement.
REINSTATEMENT STANDARDS
BR 8.1 requires
that an applicant make the following showings:
"(b) Required Showing.  Each applicant
under this rule must show that the applicant has good moral character and
general fitness to practice law and that the resumption of the practice of law
in this state by the applicant will not be detrimental to the administration of
justice or the public interest.  No applicant shall resume the practice of law
in this state or active membership status unless all the requirements of this
rule are met.
"(c) Learning and Ability.  In addition
to the showing required in BR 8.1(b), each applicant under this rule who has
remained in a suspended or resigned status for more than three years or has
been enrolled voluntarily or involuntarily as an inactive member for more than
five years must show that the applicant has the requisite learning and ability
to practice law in this state."
The Bar has the
initial burden to provide evidence that the applicant should not be readmitted
to the practice of law.  BR 8.13.  Applicant stipulated prior to the trial
panel hearing that the Bar had come forth with sufficient evidence to meet that
burden.  Accordingly, under BR 8.12, applicant bore the following burden of
proof:
"An applicant for reinstatement to the
practice of law in Oregon shall have the burden of establishing by clear and
convincing evidence that the applicant has the requisite good moral character
and general fitness to practice law and that the applicant's resumption of the
practice of law in this state will not be detrimental to the administration of
justice or the public interest."
"Clear and convincing evidence means
that the truth of the facts asserted is highly probable."  In re
Johnson, 300 Or 52, 55, 707 P2d 573 (1985) (quoting Supore et al v.
Densmoor et ux, 225 Or 365, 372, 358 P2d 510 (1961)) (internal quotation
marks omitted).
With respect to
good moral character, applicant must prove that he is "in all respects * *
* a person who possesses the sense of ethical responsibility and the maturity
of character to withstand the many temptations which [he] will confront in the practice
of law."  In re Nash, 317 Or 354, 362, 855 P2d 1112 (1993)
(internal quotation marks omitted; emphasis in original).  This court's concern
is whether applicant presently is of good moral character.  In re Griffith,323
Or 99, 106, 913 P2d 695 (1996).  However, evidence of past conduct "may be
relevant to that issue if rationally connected to applicant's fitness to
practice law."  In re Fine, 303 Or 314, 317, 736 P2d 183 (1987).
This court
addresses an analogous question concerning a lawyer's past misconduct when it
considers the possible reinstatement of a lawyer following disbarment.  This
court has held that an attorney who seeks reinstatement after disbarment must
prove that he or she "has overcome and will not again be influenced by the
specific character flaw that led to disbarment."  Griffith, 323 Or
at 106.  In this case, applicant has not been disbarred; applicant voluntarily
resigned from the bar in 2001.  Nonetheless, the Bar submits that the same
standard applies when a lawyer seeks reinstatement after engaging in conduct
sufficiently serious to warrant disbarment, and that applicant's past conduct
meets that criterion.  Applicant does not appear to disagree with that
analysis.  Accordingly, we focus our inquiry on reformation.  Id.
FACTUAL BACKGROUND
We review the
record that was before the Disciplinary Board de novo, pursuant to BR
10.6.  We begin with a detailed consideration of applicant's personal history. 
Before his application to the Bar, applicant had some history of alcohol and drug
use.  He testified that, in high school, he had used alcohol and marijuana. (1)  At
the age of 18, he received a misdemeanor DUII.  He continued to use alcohol and
other drugs in college, but there was no evidence that any legal problems
resulted from his drug use, and he graduated with honors.  He then attended
Lewis and Clark Law School.  During his time there, he was arrested for
criminal trespass in a Portland bar after the bartender stopped serving alcohol
to him and he refused to leave.  None of those facts prevented his admission to
the Bar in 1982. (2)
Following his
admission to the Bar, applicant worked as an associate at a Portland law firm. 
He continued to use alcohol and marijuana, but did not do so during work. 
However, at a firm picnic, applicant had too much to drink and engaged in a
verbal confrontation with one of the partners regarding that partner's
contributions to the firm.  The firm promptly terminated applicant from his
job.
In 1985, applicant
moved to San Francisco to become a stockbroker.  He transferred his Bar
membership to inactive status shortly thereafter.  He succeeded as a
stockbroker, but he also continued drinking and began using cocaine on a
regular basis.  He checked into a residential treatment unit in 1992, but relapsed
soon afterwards.  Applicant testified that, around 1994, he began preparing and
smoking crack cocaine, and thereafter he "basically didn't stop" for
about two years.  At some point during that time, applicant's employer, Dean
Witter Reynolds Inc. (Dean Witter), terminated his employment for job
abandonment, and the Bar suspended applicant for nonpayment of bar dues.  An
investigative report by the National Association of Securities Dealers (NASD)
regarding the dismissal stated that petitioner was fired for "failure to
report to work for three consecutive days without notifying immediate
supervisor."  However, petitioner stated in his deposition and at trial
that his job performance before the termination was "excellent," and
that he suspected that the firm wanted to get rid of him without having to deal
with any kind of legal complications because they suspected that he was
"having issues with drugs." 
The criminal
behavior that concerned the Bar involved three incidents between 1994 and 1996,
when applicant was using crack cocaine.  First, the police arrested applicant
on charges of stalking and verbally menacing his ex-girlfriend.  Applicant
pleaded guilty to a misdemeanor charge of stalking.  He attended an inpatient
treatment program at the Betty Ford Center, but relapsed shortly afterwards. 
Second, applicant was arrested and charged with possession of cocaine on at
least one occasion.  Third, applicant attempted to steal a girlfriend's car and
struck a parking lot attendant with the car, after which the police arrested
him on multiple charges.  He pleaded guilty to a felony charge of driving under
the influence of intoxicants and causing bodily injury. (3) 
Applicant spent a short period in jail and then attended another inpatient
treatment program at Henry Ohlhoff House (HOH), and continued to attend
meetings of Cocaine Anonymous (CA) for a period of four years.  Applicant
claimed that, subsequently, he made a conscious decision to stop attending CA
due to his discomfort at spending time with former addicts and his desire to
spend more time with his family. 
There is no
evidence of any further drug use by applicant after he left HOH in 1997, but
applicant testified that, after his probation for the DUII ended, he began
drinking again.  When asked why, applicant responded that it "wasn't a
conscious decision" and that he had probably "had a moment of
weakness," but he also testified that his current use of alcohol was
infrequent.  The Bar presented testimony by Dr. Walton Byrd, a specialist in
addiction medicine, who stated that former addicts who remain clean and sober
for five years have only a five percent chance of relapsing into addiction. 
However, Byrd also testified that applicant was taking a risk by continuing to
drink any amount of alcohol, and that the chance of relapse for a "social
drinker" such as applicant is closer to 95 percent .  Byrd based his
testimony about applicant's risk of relapse on a review of the records of
applicant's criminal charges, a written statement of applicant's personal
history, a document regarding applicant's attendance at HOH, and applicant's deposition. 
However, Dr. Byrd did not personally examine or evaluate applicant at any
time.  Nothing in the record suggests that applicant's use of alcohol has
caused him actual problems since 1997. 
After leaving HOH,
applicant filed for bankruptcy, in which he obtained an order discharging over
$236,000 in debt, including a number of credit card bills, an arbitration award
that Dean Witter had obtained requiring the  return of a signing bonus due to
his abandonment of his job, and a judgment against him for nonpayment of rent. 
Applicant subsequently worked at a variety of jobs, including securities firms,
a high-tech start-up company, and a subrogation management firm.  Applicant and
the Bar had some disagreements regarding his employment history, and we note
the material disagreements below.
First, as proof of
his good character, applicant claims that, while working in a clerical capacity
at Global Strategies Group (Global Strategies), a brokerage firm, he acted as a
source for a federal investigation of that firm's alleged involvement with
organized crime.  Applicant testified about his involvement with the
investigation and presented the testimony of a friend and his brother-in-law that
he had told them about his involvement.  The trial panel noted that applicant
did not present any evidence from the investigators or the government to
corroborate his testimony.  The trial panel found that applicant's involvement,
as noted, did not independently establish his good moral character, but did
support his claim that he left Global Strategies due to factors that were
beyond his control.  We agree.
Second, after his
DUII, applicant was subject to statutory disqualification from the securities
industry.  In 1997, applicant persuaded Lee Epstein, Chief Executive Officer of
Money Market One Investments (Money Market One), to sponsor his efforts to
regain his securities license from NASD.  Money Market One prepared a
supervisory plan that provided that Epstein would supervise applicant "in
close physical proximity" to Epstein, and that applicant would not
interact with retail customers.  Applicant stated in his deposition that Epstein "went through a fair amount of trouble" to help him recover his NASD registration.  However, applicant did not take a position with Money Market One and, thus, did not obtain registration with NASD. He asserted that Epstein had not offered him adequate compensation for his work and that Epstein was "taking advantage" of him. In 1999, applicant accepted a job with Advanced Precision Technologies (APT), a high-tech start-up company. (4)
Third, in 2005,
applicant had a series of disputes with management at American Commercial
Claims Administrators (ACCA), a subrogation management firm that he had joined
in 2002.  Applicant presented a series of memoranda that he had sent to
management in January and March 2005, detailing possible conflicts of interest
that he believed the company should have brought to the attention of its
clients.  Applicant testified that the circulation of those memoranda led to
the firing of his immediate supervisor and to a pattern of harassment of him by
her replacement, and that he ultimately accepted a severance package in August
2005 out of fear that, if he stayed with the firm, he would "end up just
being fired or worse."
Shortly after
leaving ACCA, applicant and his wife filed for bankruptcy and moved to
Portland.  Applicant and the Bar dispute the circumstances surrounding that
move and the motives behind it.  The Bar asserts that the move, the filing for
bankruptcy, and applicant's loss of his job were "part of a coordinated
plan to obtain a new home in Portland at the expense of his past
creditors."  Applicant insists that filing for bankruptcy was "the
most sensible legal alternative" given his situation.  As the trial panel
noted, the testimony surrounding those events was "confusing and
prolonged, but it is important to try and establish the timeline of events and
then consider each side's interpretation of what the evidence supports."
Applicant and his
wife testified that, despite a combined income of over $100,000, they were
having difficulty providing for themselves and their two small children due to
high living expenses in San Francisco.  They accumulated a considerable credit
card debt and had outstanding federal and state tax liens.  Applicant and his
wife testified that their debt reflected everyday expenses, particularly child
care, and that, in 2005, they began to consider moving to another city with
less expensive housing and better public schools.  Applicant and his wife
decided to move to Portland, and traveled there at least twice prior to July
2005 to look for work. 
In late July and
early August 2005, applicant and his wife obtained approval for two home loans
of approximately $80,000 and $330,000.  The applications were prepared by a
mortgage broker named Thomas Weed.  Applicant testified that, when he signed
the applications for the loans, the sections listing liabilities were blank,
that his wife, not he, primarily had arranged the loans, and he "probably
pretty much just signed it at * * * [his wife's] request and direction." 
Weed testified that it was his normal practice to instruct borrowers to leave
those sections blank and fill them out himself based on credit reports. 
Applicant also had failed to disclose his existing federal tax liens on the
application, but Weed testified that he believed that applicant's wife had
disclosed the existence of those liens, and that he had not included them on
the application because the lender did not require information about that kind
of debt.  We credit Weed's testimony.  The sale of the house closed in August.
Meanwhile, as
mentioned earlier, applicant was involved in escalating disputes with his employer,
ACCA, that led to his acceptance of a severance package.  Applicant's wife
testified that she already had been taking medication for anxiety and
depression at that point and, when applicant's severance payment turned out to
be far lower than she had expected, she suffered a nervous breakdown and was
unable to start work in Portland.  Applicant's wife applied for disability
payments in September 2005, listing her mother's address in California as her
address.  she continued to receive payments at that address until September
2006, nearly a year after she had moved to Oregon.  When asked why she had
continued to use the California address, applicant's wife testified that she
had been following the advice of her doctor.  Likewise, applicant applied for
unemployment insurance at the end of August 2005, listing his mother's address
in California as his address.  Applicant testified that he had done that
because he did not know where he would be living, even though he and his wife
had already purchased the house in Oregon.
At the end of
September 2005, applicant and his wife filed for bankruptcy and ultimately
obtained an order discharging approximately $89,000 of credit card debt and
$6,000 of past due rent on their California apartment.  The address of
applicant's apartment was the only address that applicant provided on the
petition, but applicant and his wife did list their recently purchased Oregon
home among their real property.  Applicant and his wife testified that they had
ceased paying rent on their apartment due to a dispute with their landlord. 
Specifically, they claimed that one of the tenants was disrupting their right
of quiet enjoyment and the landlord had refused to take any action in
response.  The trial panel noted that the owed rent was for part of August and
September, after applicant and his wife had closed their purchase of the house
in Portland.  Applicant and his wife moved to Oregon shortly afterwards.  Since
then, applicant's wife has obtained employment as a real estate agent, while
applicant works as a realtor and cares for their children.
As evidence of his
good character, applicant offered the testimony of William Karger, a friend of
his from high school; Douglas Moore, his brother-in-law; and Carolyn Gunter,
his wife.  Their testimony centered primarily on the fact that applicant
generally had changed for the better since he ended his drug use, and had
become a responsible and loving husband and father.  To the same effect,
applicant offered letters from Suzette Callejo, a friend of his wife's, and
Claire Twomey, their former nanny.  Applicant also offered a letter from
Raymond Montgomery, a coworker of applicant's from ACCA, and notes made from
phone conversations between the Bar and other former coworkers at ACCA, as evidence
of his ethics on the job.
SUBSTANCE ABUSE ISSUES
With respect to his
history of drug and alcohol abuse, applicant must demonstrate "adequate
resolution of any previous substance abuse problem[.]"  Griffith,
323 Or at 107 (citing In re Rowell, 305 Or 584, 591, 754 P2d 905
(1988)).  The Bar urges that, if applicant fails to demonstrate "clear
insight" into the reasons for his prior drug abuse or the danger that he
will relapse into such behavior, then that failure raises "substantial doubts"
as to his good moral character.  In re Covington, 334 Or 376, 386, 50
P3d 233 (2002).
Applicant argues
that he has demonstrated adequate resolution of his previous substance abuse
problems because he has not used drugs or had problems with law enforcement
since completing treatment at HOH in 1997.  Applicant also insists that his
personal and professional achievements since that time demonstrate that he has
regained his good moral character.  Finally, applicant asserts that this
court's decisions in Rowell, Covington, and In re Beers,
339 Or 215, 118 P3d 784 (2005), warrant his reinstatement.  
The Bar responds
that applicant is at risk for future substance abuse due to his continued
social drinking.  The Bar cites Byrd's testimony that former addicts who
continue to drink in moderation have a 95 percent chance of relapsing into
abuse.  The Bar also states that, while applicant frequently suggested that he
understood the "issues" underlying his problems with drugs and
alcohol, he never identified what those issues were or how he had dealt with
them.
We first examine
the cases that applicant cites.  In Rowell, the applicant had smoked
marijuana since his teenage years, and sold marijuana and amphetamines as a
college student.  305 Or at 587.  Rowell had been arrested and charged with
several offenses including possession of marijuana with intent to sell and
possession of cocaine, and had violated the conditions of his probation more
than once. He also had a history of alcohol abuse.  Id. at 587-88.  He
eventually entered a rehabilitation program and stopped using cocaine, but
continued to drink socially, and continued to smoke marijuana until two years
before his application to the bar, which was four years before the court issued
its decision.  Id. at 588-89.  However, Rowell also presented evidence of
positive changes in his life, including character references from people who
had known applicant long enough to observe a significant change in his
character.  Id. at 590.  This court found that the "slow, steady
change in applicant's activities" showed a "maturation process"
that had started years before and had steadily continued:
"In applicant's case, we find that four
years without engaging in the activities that evidenced his former
unsatisfactory character are sufficient to indicate that he has changed.  His
personal, academic, professional and other achievements in the last four years
all support the conclusion that applicant now is of good moral character."
Id. at 592. 
We allowed Rowell's application for admission.  Id. at 593.
In Covington,
the applicant had begun drinking alcohol and using marijuana at the age of 13,
continued that behavior for several years, and was convicted of several
misdemeanors due to behavior arising from his drinking and drug use.  334 Or at
378.  Covington began attending Alcoholics Anonymous (AA) meetings and remained
sober for a year, but eventually relapsed; that pattern of recovery and relapse
recurred over several years.  Id. at 378-79.  Eventually, during law
school, Covington "hit bottom" and was using heroin, cocaine, and
methamphetamine.  Id. at 379.  Covington began attending meetings of the
Oregon Attorney Assistance Program (OAAP) and AA, and remained sober from that
time forward.  Id.  However, the Bar presented testimony by a
psychologist, who had evaluated Covington at the Bar's request, that Covington
had a "defensive style" and "tendency to rationalize or
externalize events," both of which increased his risk of relapse.  Id.
at 386.  This court noted that Covington lacked "clear insight" into
the reasons for his drug abuse and the danger that he could relapse, that his
most recent drug use was "the most serious of his entire history,"
and that the three years between his most recent drug use and the court's
decision were not "sufficient to overcome the concerns that [his]
psychological profile and history of past relapses have generated."  Id.
at 386-87.  We denied the application for admission.  Id. at 387.
In Beers,
the applicant had a long history of using drugs, including marijuana and
cocaine, as well as convictions for felony possession and various misdemeanors
related to his use of drugs.  339 Or at 217.  Eventually, Beers was convicted
of conspiracy to distribute cocaine and sentenced to prison.  Id. at
218.   Beers stopped using drugs and began to turn his life around while in
prison.  On release, he successfully held a variety of jobs and completed law
school.  His last use of drugs had occurred over a decade before the court's
decision.  Id. at 218-20.  At Beers's character and fitness hearing, Dr.
Blakeslee, a psychologist who had evaluated Beers at the Bar's request,
testified that Beers had the moral character and fitness to be a lawyer. 
Blakeslee was aware that Beers continued to drink alcohol in moderation, and
that Beers had had one alcohol-related legal problem during law school, when he
jaywalked in front of a police officer while intoxicated.  Nonetheless,
Blakeslee testified that Beers did not suffer any addiction that would
compromise his abilities as a lawyer, and that Beers's likelihood of a relapse
was marginal based on Beers's prolonged sobriety, stable employment, and
marriage.  Id. at 222-23.  This court ultimately allowed Beers's
application, noting that there was "no basis on this record" for questioning
Blakeslee's conclusions.  Id. at 226.
We announced in Rowell
that: 
"The length of time without evidence of
unsatisfactory character needed to permit the conclusion that the actor is now
of good moral character varies with, among other things, the person's age, the
length of time that the unsatisfactory characteristics were evident and the
nature of the unacceptable behavior." 
305 Or at 592.  Applicant in this case has
a long history of drug and alcohol abuse, arguably lasting from his teenage years
until his work as a stockbroker during the 1990s, when he was using crack
cocaine.  The nature and extent of applicant's abuse were serious.  He has been
arrested for DUII, criminal trespass, stalking, and vehicular assault.  His
alcohol and drug abuse have resulted in his termination from at least one job
and probably two.  Applicant's history of abuse is at least as serious, if not
more, as that of the applicants in Rowell, Covington, and Beers. 
However, applicant also has been free of drug abuse for over a decade, and
apparently has remained drug free during stressful situations, including his
dispute with ACCA, his bankruptcy, his wife's nervous breakdown, and his move
to Portland.  Thus, applicant has been free of drugs for over twice as long as
the applicant in Rowell, and for nearly as long as the applicant in Beers.
The Bar nonetheless
argues that applicant's occasional alcohol consumption may cause problems in
the future.  On similar facts, This court has rejected a similar argument in
both Rowell, 305 Or at 589, and Beers, 339 Or at 226.  However,
the Bar relies on the testimony of Byrd that applicant's history
"demonstrates that he suffers from the disease of addiction" and
that, because applicant suffers from that disease, his social drinking puts him
at a 95 percent chance of relapse.  Byrd testified that he based his testimony
on his review of applicant's criminal record, the records of applicant's
treatment at HOH, and applicant's deposition before the Bar; however, as
noted,  Byrd did not interview or meet with applicant at any time. 
The evidence about
whether applicant has overcome his addiction to drugs is undermined at least to
some degree by  Byrd's testimony suggesting that there is a very high
likelihood of a relapse into addiction due to applicant's continued consumption
of alcohol.  In our view, the evidence regarding applicant's moral character in
that regard is in conflict.  We cannot find that his drug and alcohol habits
presently affect his ability to practice law and constitute a danger to the
public.  We also cannot find affirmatively that applicant has overcome his drug
and alcohol habits so that he is not a danger to the public.  Applicant bears
the burden of proof on that question and must carry that burden by clear and convincing
evidence.  We find that applicant has failed to carry his burden of proof.
ISSUES REGARDING EMPLOYMENT HISTORY
AND FINANCIAL DEALINGS
Some aspects of
applicant's employment history give us greater cause for concern than his past
substance abuse.  First, there is his termination from Dean Witter.  The record shows that,
after terminating applicant's employment, Dean Witter sought an arbitration
award against applicant due to his retention of a substantial signing bonus. 
Dean Witter won an award of over $100,000 against applicant, which it later
reduced to a judgment.  Applicant discharged that obligation when he filed for
bankruptcy in 1997.  We have found in the past that an applicant's lack of
interest in making restitution to those harmed by his past misconduct weighs
against his claim for reinstatement.  In re Graham, 299 Or 511, 520-21,
703 P2d 970 (1985).  Here, when the trial panel asked applicant whether he had
attempted to make amends with Dean Witter and his other past creditors, applicant
responded that he "didn't give that a lot of thought," but
acknowledged that his behavior was selfish.
Second, there is
the matter of applicant's relationship with Money Market One.  As mentioned
above, applicant was subject to a statutory disqualification by the NASD due to
his 1996 conviction for driving under the influence of intoxicants and causing
bodily injury.  The record shows that, in May 1997, Money Market One applied to NASD to employ applicant as a registered representative selling money market investments and proposed to provide a particular supervisory plan for applicant.  Applicant never went to work for Money Market One, in part because he felt that he was being taken advantage of.  Applicant acknowledged in his deposition that Epstein of Money Market One "went through a fair amount of trouble" to help him regain his license and "was pretty pissed off about the whole thing."  Applicant insisted that he did nothing wrong.  However, in light of Epstein's reaction, this event demonstrates that applicant had a difficult relationship with that business entity.
None of the issues
raised by applicant's employment history are dispositive of his application,
but they do undermine his claim to good moral character to some extent.  The
trial panel interpreted applicant's history negatively as showing
"evidence of situational ethics."  We agree.
We have often
considered evidence of an applicant's handling of financial affairs in
assessing whether he or she is of good moral character.  See In re Taylor,
293 Or 285, 293, 647 P2d 462 (1982) (listing cases).  Applicants are
"expected to honor scrupulously all financial obligations."  In re Scallon, 327 Or 32, 39, 956 P2d 982 (1998).  In the cases of applicants
previously disbarred for misconduct who are "still in financial
trouble," we have expressed concern at the "danger that [the]
continuing pressure of financial need may again lead the [applicant] to violate
the law and his professional trust."  In re Koken, 214 Or 357, 362,
329 P2d 894 (1958).  In this case, applicant's personal financial dealings gave
the Bar cause for concern.  The trial panel was primarily troubled by the
applicant's recent applications for home loans, applications for unemployment
benefits, and bankruptcy filings.  We deal with each of those in turn.
Applicant signed
home loan applications that left the liability information blank, and relied on
the mortgage broker to fill in that section with information from the
applicant's credit report.  The Bar insists that this "hardly reflects the
level of responsibility expected of lawyers when it comes to reading and
signing important legal documents."  We disagree.  The mortgage broker testified
credibly that, consistent with his normal practice, he had instructed applicant
and his wife to leave the liability information blank.  Applicant's inattention
to the significance of the blanks was somewhat irregular and less than
commendable.  but we are not convinced that his failure to second-guess his
mortgage broker raises doubts as to his good moral character.
The Bar also argues
that the loan application failed to disclose the tax debt that applicant and
his wife were paying off at the time, that a question on the application
"clearly called for such disclosure," and that applicant signed the
loan application solely on the strength of his wife's assurance that the
mortgage broker had stated that the ultimate lender would not require that information. 
Again, the Bar argues that that behavior reflects a lack of responsibility on
applicant's part.  The trial panel apparently agreed:
"[T]he facts are that even by his testimony he signed
blank forms * * *, and too readily relied on the advice and interpretation of
others such as the mortgage broker or his wife.  The role of the attorney is to
take responsibility for the legal meaning of what he is signing."
The trial panel apparently believed that
applicant's responsibilities as an attorney required him to second-guess and
refuse to cooperate with both his wife and the mortgage broker.  At least in
these circumstances, we disagree.  The text of the loan application arguably
called for applicant to disclose existing tax debt, but it was not clear.  The
mortgage broker testified credibly that applicant's wife had disclosed the
existence of a tax lien to him, and testified that he had told applicant's wife
that the lender did not require that information.  We do not believe that
applicant acted unreasonably in relying on the mortgage broker's statements. 
Nor are we prepared to announce that, as a rule, a lawyer must insist on
including information on a loan application when a mortgage broker states that
such information is not required.  We reject the Bar's argument that
applicant's behavior with regard to the loan applications reflects badly on his
character.
The Bar also raised
the question of applicant's application for unemployment benefits.  The trial
panel noted that applicant gave his mother's address in California on his
application for unemployment benefits, despite the fact that he had already
closed his purchase of the house in Oregon.  The trial panel, however, did not
find that that action indicated some kind of fraud on applicant's part.  In our
view, the evidence on that question is not conclusive; it neither helps nor
hurts applicant's case and we do not attach great significance to it.
We are more
concerned by applicant's bankruptcies.  The fact that applicant filed for
bankruptcy, standing alone, is not a factor that we consider in determining
whether he has good moral character.  Taylor, 293 Or at 293.  However,
the bankruptcy statutes do not prevent us from examining the circumstances
surrounding the bankruptcies, "as these circumstances illustrate an
applicant's judgment in handling serious financial obligations."  Id. 
A bankruptcy does not reflect adversely on an applicant's character if it is
compelled by an "extraordinary hardship," such as "an unusual
misfortune, a catastrophe, an [overriding] financial obligation, or unavoidable
unemployment."  Id. at 294 (quoting In re Gahan, 279 NW2d
826, 831 (Minn 1979)).  On the other hand, We may find that applicant lacks
good moral character if the circumstances of the bankruptcy "show a
selfish exercise of legal rights and a disregard of moral
responsibilities."  Id.  We have held, however, that for an
applicant seeking admission to the bar, a past bankruptcy does not disqualify
the applicant per se.  Scallon, 327 Or at 39. 
Scallon is
instructive on that point.  In Scallon, several years before applying
for admission to the Oregon State Bar, the applicant had filed for bankruptcy
after several of his creditors on his student loans sued him or threatened to
sue.  Id. at 35.  By Scallon's own admission, he had defaulted on those
loans because of poor handling of his financial affairs.  Id. at 35-36. 
This court held, however, that the bankruptcy was no reason to disqualify
Scallon from admission:
"[W]hen applicant could not manage his
affairs successfully, and when his failure led to several legal actions being
filed or threatened against him, he was as entitled as any other debtor to seek
protection from his creditors in bankruptcy. * * * We decline to hold that a
bankruptcy in the history of an applicant for admission to the Bar per se is
disqualifying, even if it appears that the financial difficulties that led to
the bankruptcy were the fault of the applicant."
Id. at 39. 
After the bankruptcy, however, Scallon continued to experience financial
difficulties due to his mishandling of his money, and fell behind on his tax
payments.  That did not disqualify him, either, because he had always filed
returns and acknowledged the taxes that he owed, and for the most part, he had
paid them.  Id. at 41.  Additional evidence showed that, while this
court was holding Scallon's case under advisement, he satisfied all of his
delinquent tax obligations.  Id. at 38.  This court  held that the
record contained sufficient evidence of financial responsibility to justify
Scallon's admission:
"It * * * appears to us that applicant
understands and appreciates the reasons that led to his past financial
difficulties, is determined to avoid their repetition, and is capable of
carrying out that determination.  In that regard, applicant is willing to
accept the recommendation * * * that he be admitted conditionally."
Id. at 42. 
Accordingly, we admitted Scallon subject to several conditions.  Id.
Applicant's
situation in the 1997 bankruptcy is not identical to Scallon's.  For one thing,
Scallon's bankruptcy was precipitated purely by his poor money management;
applicant's was prompted by debt that he had accumulated largely due to his
drug addiction.  For another, the debts discharged in the bankruptcy proceedings
were different: Scallon's only significant debt was about $27,000 in student
loans, whereas applicant discharged over $200,000 of debt including consumer
debt, a judgment for unpaid rent, and the aforementioned judgment obtained
against him by Dean Witter.  However, both Scallon and applicant "could
not manage their affairs successfully," and that failure "led to
several legal actions being filed or threatened" against them. (5)  Both
applicants were entitled to seek protection from their creditors in bankruptcy.
We are more
concerned with applicant's behavior after the 1997 bankruptcy.  Scallon
accumulated tax debt after his bankruptcy due to his irresponsible financial
behavior, but he paid off all that debt.  Id. at 36-38.  Applicant, like
Scallon, accumulated federal and state tax debt between 2002 and 2005, as well
as approximately $95,000 of consumer debt.  Applicant sought to then discharge
his consumer debt through yet another bankruptcy proceeding in 2005. (6)  
There is no evidence that applicant's creditors had filed or threatened suit
against him.  The timing of the bankruptcy petition was particularly troubling:
applicant filed after taking on over $400,000 of additional debt for a new
house.  The fact that applicant sought bankruptcy protection twice in eight
years, and that he bought a house less than three months before filing the
second time, suggests that, unlike Scallon, applicant does not appreciate the
reasons for his past financial difficulties and is not particularly determined
to avoid their repetition. 
Applicant
nevertheless insists that the debt that he and his wife discharged in
bankruptcy was primarily due to "unforeseen expenses," particularly
child care, and that he and his wife purchased a house in Portland to get out
of debt and begin building up equity.  Even if we accept those claims at face
value, they do not establish that applicant was compelled to file for
bankruptcy by any extraordinary hardship.  The expenses that come with raising
a family generally do not qualify as an unusual misfortune.  They are a
necessary burden that everyone who chooses to raise a family knows that they
must bear.  The fact that applicant discharged those expenses in bankruptcy
after taking on a much larger debt for a new home suggests that applicant viewed
the bankruptcy proceeding as a convenient means of escaping the consequences of
his own inability to manage finances, rather than as a remedy of last resort for
unforeseen expenses.
Applicant also
asserts that his decision to file for bankruptcy was motivated by the fact that
he and his wife had both lost their jobs.  As stated above, a bankruptcy will
not reflect adversely on applicant's character if it is motivated by an
extraordinary hardship, such as unforeseen unemployment.  We are not convinced,
however, that this unemployment was entirely unforeseen.  The internal
memoranda that applicant submitted as exhibits indicate that he was having
difficulties with his supervisor at ACCA as early as April, and applicant's
testimony indicated that those difficulties had become severe by late July or
early August, when he and his wife obtained the loan.  Applicant's testimony
also indicates that, when he and his wife visited Portland in June and July, he
was already looking for a new job.  In other words, applicant and his wife took
on over $400,000 of debt, over and above their existing consumer and tax debt,
at a time when applicant should have known that his job was in jeopardy.  That
action suggests that applicant's sense of financial responsibility was not much
greater in 2005 than it was in 1997.
Applicant's
character references also do not help him here.  Applicant's friend, Karger,
and brother-in-law, Moore, both testified that applicant had become more
responsible as a husband and father, but cross-examination revealed that
neither witness was aware of the details of applicant's financial situation. 
Much of the character testimony that applicant presented describes him as
"responsible," but does not support applicant's specific claim that
he has become more fiscally responsible since the 1997 bankruptcy.  Even if it
did, we would be inclined to give more evidentiary weight to the bankruptcies
themselves and the circumstances surrounding them, as we discussed above.
Applicant has filed
for bankruptcy twice in a span of eight years, discharging similar consumer
debts in the process and purchasing a new house shortly before the later
filing.  The circumstances surrounding the bankruptcy raise doubts as to the
applicant's moral character.  We do not necessarily agree with the Bar's
contention  that those events indicate "a coordinated plan to obtain a new
home in Portland at the expense of his past creditors."  However, we are
left with a substantial doubt whether applicant is prepared to honor his financial
obligations in the manner expected of lawyers admitted to the Bar.
FINDINGS AND CONCLUSION
We find  that
applicant has failed to prove by clear and convincing evidence that he has good
moral character and general fitness to practice law and that the resumption of
the practice of law in this state by him will not be detrimental to the
administration of justice or the public interest.  Therefore, under BR 8.1, we
deny his application for reinstatement to the Oregon State Bar.  
Reinstatement denied.
1. Applicant's testimony on the subject of his early drug use was
inconsistent.  He insisted that he had used only alcohol and marijuana during
high school, but other comments that he made at the hearing and in his
deposition suggest that he had used other drugs, such as cocaine, during that
time as well.
2. The Bar conducted no hearing at the time of applicant's admission in
1982.  The evidence discussed in this opinion was adduced on the record of the
reinstatement proceeding.
3. Later, the court reduced that charge to a misdemeanor and dismissed
it.
4. As we discuss below, after leaving APT, applicant went on to work for other securities firms.
5. For example, by the time applicant filed for bankruptcy, Dean Witter
had already obtained its arbitration award against him and reduced that award
to a judgment.
6. Applicant testified that he is in the process of paying his tax debt.