Opinion ID: 2600199
Heading Depth: 2
Heading Rank: 3

Heading: disciplinary actions for the unauthorized practice of law

Text: ¶ 24 The OPC appeals the district court's finding that the OPC has no authority to bring a district court action against an attorney for practicing while administratively suspended. The district court reasoned that our decision in In re Crandall, 784 P.2d 1193 (Utah 1989), precluded such an action and that, regardless, any action taken in a district court against an attorney for practicing law while suspended must be instituted by the Board of Bar Commissioners, as opposed to the OPC. We examine each issue, looking first to whether the OPC has the authority to file an unauthorized practice of law complaint in district court.
¶ 25 Sonnenreich argued, and the district court agreed, that the OPC had no authority to bring an unauthorized practice of law complaint. The district court presumably based its conclusion on a strict interpretation of RIM C.20 in finding that district court actions for practicing while suspended must be instituted by the Bar Commission. ¶ 26 RIM C.20 provides as follows: No person who is not duly admitted and licensed to practice law within this state nor any person whose right or license to so practice has terminated either by disbarment, suspension ... or otherwise, shall practice or assume to act or hold himself out to the public as a person qualified to practice law or to carry on the calling of an attorney within the state. Such practice... by any such ... suspended person shall not constitute a crime, but this prohibition against the practice of law by any such person shall be enforced by such civil action or proceedings, including writ, contempt or injunctive proceedings, as may be necessary and appropriate, which action or which proceedings shall be instituted by the Board. [11] Accord Utah Code Ann. § 78-51-25 (1996) (repealed). Contrary to the district court's interpretation, RIM C.20 does not refer to the OPC's authority to seek appropriate sanctions against attorneys who practice while suspended; rather, it addresses the mechanisms by which the Bar may enforce such sanctions when an attorney fails to comply with them. The OPC's authority to initiate lawyer discipline derives from the RLDD. ¶ 27 Rule 1(c) of the RLDD states that [a]ll disciplinary proceedings shall be conducted in accordance with the rules and proceedings described herein. RLDD 8(b) further provides that [a]ny attorney who shall practice law while suspended for non-payment of the license fee violates the Rules of Professional Conduct and may be disciplined for practicing while suspended for non-payment of dues.  (Emphasis added.) The responsibility for seeking such discipline, according to rule 11(a), resides in the OPC. We believe an overview of the disciplinary process will be helpful in explaining why this responsibility is delegated to the OPC. ¶ 28 The RLDD provide that disciplinary proceedings for practicing while suspended for failing to pay annual dues may be initiated against any member of the Bar by any person, OPC counsel or the [Ethics and Discipline Committee of the Utah Supreme Court] by filing an informal complaint with the Bar in writing. RLDD 10(a)(1). Once an informal complaint is filed, OPC counsel is required to conduct a preliminary investigation to ascertain whether the informal complaint is sufficiently clear as to its allegations. RLDD 10(a)(3). If the allegations are clear and the informal complaint cannot be resolved in the public interest, the complainant's interest, and the respondent attorney's interest, or if good cause otherwise exists to bring the matter before the screening panel, OPC counsel must serve a notice of informal complaint on the respondent attorney. RLDD 10(a)(4). When the respondent files his or her answer, or after twenty days in cases in which the respondent fails to respond, OPC counsel must refer the case to a screening panel for investigation, consideration and determination. RLDD 10(a)(5). A screening panel then reviews all informal complaints, including all the facts developed by the informal complaint, answer, investigation and hearing, and the recommendations of OPC counsel, and makes one of six determinations ranging from dismissal to directing that a formal complaint be filed against the respondent attorney. RLDD 10(b)(1)-(5). When a screening panel requires disciplinary action, RLDD 11(a) clearly identifies the party responsible for following the screening panel's determinations: In the event the screening panel finds probable cause to believe that there are grounds for public discipline and that a formal complaint is merited, OPC counsel shall prepare and file with the district court a formal complaint setting forth in plain and concise language the facts upon which the charge of unprofessional conduct is based and the applicable provisions of the Rules of Professional Conduct. (Emphasis added.) ¶ 29 Thus, where, as here, the screening panel found probable cause to believe a formal complaint was warranted, the OPC had the authority under the RLDD to file the complaint against Sonnenreich for practicing while suspended.
¶ 30 Notwithstanding authorization from the RLDD, Sonnenreich argues, and the district court agreed, that our decision in In re Crandall, 784 P.2d 1193 (Utah 1989), precludes the OPC from seeking to discipline attorneys who practice while administratively suspended. The OPC counters that the district court erred in its interpretation of Crandall, and we agree. ¶ 31 In Crandall, the Bar sent a letter to attorney Crandall stating that he had been dropped from the roll of qualified attorneys authorized to practice law for failing to pay his yearly licensing fee in accordance with rule XX of the Procedures of Discipline. [12] Id. at 1195. Crandall claimed the nonpayment was the result of a misunderstanding with his bookkeeper regarding the time payment was due. Id. Although Crandall contacted the Bar and offered to hand-deliver his delinquent fee, he was told that he would have to submit the delinquent fee, accompanied by a written request for acceptance, to the Bar Commission's executive committee. Id. Crandall submitted his request in May; however, review of the request was deferred twice until a full meeting of the executive committee occurred near the end of August. Id. In the time between Crandall's tender of dues and the executive committee meeting in August, Crandall was required to appear before a Bar hearing panel to address his failure to submit reports for a separate matter that predated his failure to pay fees. Id. Although Crandall argued in that hearing that he had been unable to file the monthly reports due to his indefinite suspension and the Bar's refusal to reinstate him, the Bar panel nonetheless recommended Crandall be suspended retroactively for his failure to file the reports. Id. ¶ 32 On appeal, Crandall challenged rule XX, arguing that [i]t allow[ed] the Bar, after suspending an attorney for failure to pay the annual licensing fee, to continue suspension for reasons other than the failure to pay the fee after the attorney [had] tendered his or her delinquent fee. Id. at 1195-96. We agreed with Crandall and stated, there is no logical connection between an attorney's failure to pay his or her licensing fee and claimed unfitness to practice law. Id. at 1196. The district court relied upon this language in holding that the Bar was not authorized to bring the complaint. The district court reasoned that [b]y premising Sonnenreich's violation of [r]ule 5.5, which forbids practicing while suspended, on an administrative suspension, the Bar [was] doing exactly what [this] Court forbade in Crandall.  ¶ 33 In relying on this statement, the district court overlooked our further clarification that [t]he suspension of attorneys for failure to pay the license fee is necessary and appropriate, and that what we objected to in Crandall was the Bar's ability to refuse reinstatement after the delinquent fee is paid for a reason unrelated to the initial suspension. Id. We explained that this extension of the administrative suspension, which allowed the Bar to further discipline attorneys for action taken during the suspension, was an objectionable end-run approach to the other procedures necessary for disciplining attorneysnot that the Bar was foreclosed from seeking to discipline attorneys who practiced while administratively suspended. See id. Hence, in this case, the Crandall situation never arose because Sonnenreich was immediately reinstated after submitting the annual licensing fee plus the $100 late fee. The OPC did not seek to penalize Sonnenreich by capitalizing on circumstances that were unrelated to the reason for her suspension, as in Crandall; rather, it sought disciplinary action against her for practicing while administratively suspended. ¶ 34 While there may be no direct connection between an attorney's failure to pay the Bar's annual licensing fee and an unfitness to practice law, there is no question that an attorney may be disciplined for continuing to practice law while administratively suspended. See RLDD 8(b) (Any attorney who shall practice law while suspended for nonpayment of the license fee violates the Rules of Professional Conduct and may be disciplined for practicing while suspended for non-payment of dues.). The more difficult issue is what type of notice an attorney must receive before he or she may be so disciplined.
¶ 35 In dismissing the OPC's action, the district court reasoned that Sonnenreich was entitled to actual notice of her administrative suspension, and that it [was] undisputed [that] no actual notice of the alleged suspension was received by Sonnenreich. On appeal, the OPC contends that giving notice of an administrative suspension to non-complying members at the address on record at the Bar in compliance with RLDD 8(b) is sufficient to satisfy any notice requirement. Recognizing that this issue is a matter of first impression for [this] Court, however, the OPC asks for guidance so that the Bar may amend its procedures if necessary. ¶ 36 In considering this issue, we look to our decision in In re Discipline of Schwenke, 849 P.2d 573 (Utah 1993). Schwenke involved a petition to disbar attorney Schwenke from the practice of law. Id. at 574. In that case, when Schwenke failed to appear at an order-to-show-cause hearing before the district court, we suspended him for thirty days on recommendation from the Bar. Id. at 575. The order was sent, via certified mail, to Schwenke's business address and received by his receptionist. Id. When Schwenke subsequently continued to practice during the thirty-day suspension, a special master recommended that Schwenke be disbarred. Id. In rejecting the special master's recommendation, we noted grave concern[s] about the irregularities in [the] proceedings. Id. at 576. We stated, Significant licensing procedures are in place to assure that only qualified attorneys are admitted to the practice of law in this state. We think that suspension and disbarment proceedings call for adherence to minimum requirements of procedural due process, including notice of hearing and notice that the attorney's license has been restricted or withdrawn. We therefore hold that service by certified or registered mail must be on the attorney personally and cannot be accomplished by delivery to a common-area receptionist at the address of the attorney's office.... We acknowledge that actual personal service will often be required when service by mail is ineffectual. However, in suspension or disbarment proceedings, actual notice is essential. Id. (emphasis added). ¶ 37 Utah's constitutional guarantee of due process is substantially the same as the due process guarantees contained in the Fifth and Fourteenth amendments to the United States Constitution. In re Worthen, 926 P.2d 853, 876 (Utah 1996) (citing Untermyer v. State Tax Comm'n, 102 Utah 214, 222, 129 P.2d 881, 885 (1942)). In conformity with due process, an attorney is entitled to procedural due process guarantees in disciplinary actions. See In re Ruffalo, 390 U.S. 544, 550, 88 S.Ct. 1222, 20 L.Ed.2d 117 (1968) (noting an attorney is entitled to fair notice in the face of disbarment proceedings); Worthen, 926 P.2d at 877 (Utah's appellate courts have never hesitated to consider claims alleging due process violations when professionals risk losing their professional license or means of employment through the action of a public disciplinary body. (citing Schwenke, 849 P.2d at 576 (further citations omitted))). These due process guarantees include, [a]t a minimum, `timely and adequate notice and an opportunity to be heard in a meaningful way.' Worthen, 926 P.2d at 876 (citing Nelson v. Jacobsen, 669 P.2d 1207, 1211 (Utah 1983)). Because due process is flexible and calls for the procedural protections that the given situation demands, id. (internal quotation and citation omitted), giving notice to an attorney who fails to pay his or her licensing fees at the address on record at the Bar is sufficient notice for an administrative suspension. See RLDD 8(b). However, such notice is insufficient in the context of a disciplinary action for the unauthorized practice of law based on that suspension. In disciplinary proceedings, in accordance with due process, actual notice is required. See Schwenke, 849 P.2d at 576. ¶ 38 In this case, the district court granted summary judgment to Sonnenreich after determining that Sonnenreich had no actual notice of her administrative suspension during the time in which she allegedly continued to practice law. We review the district court's grant of summary judgment for correctness. Home Builders Ass'n v. City of N. Logan, 1999 UT 63, ¶ 6, 983 P.2d 561. Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Utah R. Civ. P. 56(c). ¶ 39 Here, it is undisputed that Sonnenreich received no actual notice. Sonnenreich submitted an affidavit to the district court stating she had no actual notice of her administrative suspension until January 6, 2000. The only rebuttal the OPC provided to this statement was evidence showing that Sonnenreich had a history of tardy payment, that her credit card was never charged, and that she never received confirmation of her payment in the form of the annual licensing sticker issued by the Bar. We find this evidence insufficient to establish actual notice, particularly in light of our decision in Schwenke. See Schwenke, 849 P.2d at 576 (finding that a certified letter received by the attorney's receptionist was insufficient to constitute actual notice). ¶ 40 We acknowledge that requiring the Bar to establish that an attorney had actual notice of his or her administrative suspension during the time in which the attorney continued to practice law will increase the Bar's burden when seeking disciplinary sanctions beyond sending notice to the attorney's address on record at the Bar. However, we do not believe this requirement will necessarily or implicitly mandate that the Bar adopt personal service measures in all instances. Indeed, we believe that, in the majority of cases, notification by registered or certified mail will continue to be entirely adequate. Of course, the Bar may ensure that actual notice has been received by simply sending notice, via personal service, to any non-complying attorney. [13] See Schwenke, 849 P.2d at 576 (We acknowledge that actual personal service will often be required when service by mail is ineffectual.). Accordingly, we disagree with the OPC's assertion that this holding will require the Bar to abandon[ ] its efforts to predicate discipline for practicing law upon an administrative suspension. ¶ 41 The OPC also argues that inasmuch as the [d]istrict [c]ourt case terminated almost immediately, it has not been given the opportunity to establish whether Sonnenreich received actual notice. The OPC asserts that it should be allowed to elicit testimony from Sonnenreich with cross-examination and an opportunity for the trial court to assess her credibility. We disagree. Rule 56(e) of the Utah Rules of Civil Procedure states that where a motion for summary judgment is made and supported as provided in [rule 56(c) ], an adverse party may not rest upon the mere allegations or denials of his pleading, but his response... must set forth specific facts showing that there is a genuine issue for trial. Utah R. Civ. P. 56(e). While the moving party bears the burden of proof on its summary judgment motion, ... `in opposing a motion for summary judgment, the plaintiff still has the ultimate burden of proving all the elements of his or her cause of action.' Gerbich v. Numed Inc., 1999 UT 37, ¶ 12, 977 P.2d 1205 (quoting Jensen v. IHC Hosps., Inc., 944 P.2d 327, 339 (Utah 1997)). Once the allegations in a complaint are challenged, the nonmoving party has an obligation to come forward with sufficient proof to show that the non-moving party is entitled to proceed to trial. Id. It is not enough to rest on allegations alone, particularly when the parties have had an opportunity for discovery. Id. ¶ 42 As previously noted, the OPC presented no evidence countering Sonnenreich's affidavit in which she stated she had received no actual notice. Had the OPC wished to rebut Sonnenreich's affidavit, it should have moved for further discovery pursuant to rule 56(f) of the Utah Rules of Civil Procedure. Accordingly, summary judgment was appropriate and we affirm the district court's ruling. ¶ 43 The OPC also challenges the district court's finding that the [c]omplaint fail[ed] to provide sufficient facts to satisfy either Rule 11 of the [RLDD] or Rule 8 of the Utah Rules of Civil Procedure. Because we have found that Sonnenreich did not receive actual notice we need not address the sufficiency of the complaint.