Opinion ID: 1671344
Heading Depth: 1
Heading Rank: 3

Heading: K. Matter

Text: In thus adopting the referee's findings, we also conclude that the evidence supports the referee's finding that there was a conflict of interest in Varriano's representation of G.K. One client's interest in obtaining an affidavit from G.K. for use to reconsider the July 7, 2003, order conflicted with G.K.'s interest in avoiding prosecution for perjury. Given the existence of Varriano's attorney-client relationship with both G.K. and M.P., Varriano's failure to discuss the conflict of interest inherent in those representations, and his failure to obtain G.K.'s consent to his representation of her despite the conflict, clearly violated Minn. R. Prof. Conduct 1.7(b).
We turn to the appropriate sanction for Varriano's misconduct. The referee recommended indefinite suspension, with eligibility to apply for reinstatement after one year from the date of this court's decision. Varriano acknowledges that discipline is warranted, but asks us to impose a public reprimand and probation. Although we place great weight on the referee's recommendation of discipline, we retain responsibility for determining the appropriate sanction. Nelson, 733 N.W.2d at 463. In determining the sanction, we consider four factors: (1) the nature of the misconduct; (2) the cumulative weight of the disciplinary violations; (3) the harm to the public; and (4) the harm to the legal profession. Id. We look to similar cases for guidance, but we make the final determination on a case-by-case basis, after examination of the acts of misconduct and consideration of both aggravating and mitigating circumstances. Id. at 463-64. Even where no single act of misconduct standing alone warrants severe public discipline, the cumulative weight and severity of multiple disciplinary rule violations may compel such discipline. In re Geiger, 621 N.W.2d 16, 23 (Minn.2001). The referee's recommendation of indefinite suspension for at least one year is in line with discipline we have imposed in cases involving similar violations. Trust account violations alone generally lead to suspensions; indeed, we have said that `misuse of trust accounts will almost invariably result in lengthy suspension at the very least and disbarment at worst.' In re Overboe, 745 N.W.2d 852, 868 (Minn.2008) (quoting In re Kinnunen, 502 N.W.2d 773, 775 (Minn.1993)). Even `unintentional misappropriation as the result of poor accounting practices' can result in discipline. Id. `We take trust account violations seriously and will not hesitate to impose a disciplinary suspension to protect the public from attorneys who either intentionally or unintentionally fail to exercise care in handling client funds.' In re Hoedeman, 620 N.W.2d 714, 718 (Minn.2001) (quoting In re Haugen, 543 N.W.2d 372, 375 (Minn. 1996)). We imposed a three-month suspension on a lawyer who had multiple overdrafts of his trust account and used it as a personal account. In re Edinger, 700 N.W.2d 462, 464-69 (Minn.2005). The failure to maintain proper books and records warrants discipline as well. See In re Ranum, 611 N.W.2d 344, 344-45 (Minn. 2000). Varriano's trust account violations are aggravated by two factors: his misuse was intentional and persisted even after the Director explained to him that he was violating the rules, and he intentionally frustrated legitimate IRS collection efforts. The one mitigating factor is that no clients sustained known losses as a result of the trust account violations. We have imposed lengthier suspensions in cases involving conflicts of interest. When an attorney borrowed a substantial sum of money from a client without informing her of the conflict, we imposed a one-year suspension. In re Dillon, 371 N.W.2d 548, 548-52 (Minn.1985). The attorney's misconduct in Dillon included misappropriation of client funds, misrepresentation, charging an excessive fee, and using the contingent fee he expected to secure the loan he obtained. Id. Likewise, we have imposed a one-year suspension when there was a conflict of interest combined with other misconduct not involving dishonesty. In re Perl, 407 N.W.2d 678, 680-83 (1987) (attorney also paid referral fees to nonlawyer employees and solicited clients in violation of the rules). Varriano's conflict of interest is aggravated by the fact that his representation of G.K. occurred at a time when she was particularly vulnerable, see In re Kaszynski, 620 N.W.2d 708, 712 (Minn.2001), that the conflict was clear and certain, and that the foreseeable and likely consequence of his advice was G.K.'s prosecution for perjury. In addition to the serious misconduct outlined above, Varriano failed to enter into written retainer agreements when he received nonrefundable fees or agreed to a contingent fee, failed to provide settlement agreements to clients paying contingent fees, and provided financial assistance to a client in connection with pending litigation. The failure to enter into written agreements is aggravated by the fact that the failures were not isolated, but a customary business practice. Although these violations might not merit severe discipline, their cumulative weight, added to that of the more serious violations, warrants severe discipline. See, e.g., In re Oberhauser, 679 N.W.2d 153, 160 (Minn.2004). Under Rule 12(d), RLPR, a final adjudication in another jurisdiction that a Minnesota lawyer has committed misconduct shall conclusively establish the misconduct for purposes of disciplinary proceedings in Minnesota, unless this Court determines otherwise. Varriano was publicly reprimanded in North Dakota for several violations. In light of the additional misconduct discussed above, a more serious sanction is warranted. In addition, there is the aggravating factor of Varriano's being publicly reprimanded by the Eighth Circuit Court of Appeals. We conclude that the appropriate sanction for Varriano's misconduct is indefinite suspension, with eligibility to apply for reinstatement after one year from the date of this decision. Varriano committed multiple and serious violations of the rules governing attorney conduct. Although his conduct did not lead to any known financial losses for his clients, client funds were exposed to the claims of Varriano's creditors when he used his trust account to shelter his own funds from the IRS. See Overboe, 745 N.W.2d at 869. Furthermore, Varriano's actions resulted in significant nonfinancial harm to G.K. Varriano's failure to explain to G.K. the conflict of interest is the sort of behavior that decreases public trust in the profession. Accordingly, we order that:

4. Varriano shall pay the Director's office $900 in costs and an amount in disbursements to be determined in compliance with Rule 24 of the Minnesota Rules of Lawyers Professional Responsibility. So ordered.