Opinion ID: 2122819
Heading Depth: 3
Heading Rank: 1

Heading: Nature and Harm of Misconduct

Text: Rebeau either failed to file or filed late employer withholding tax returns for thirteen quarters between 1999 and the first quarter of 2008. Rebeau also failed to file employer withholding tax returns for five quarters in 2008 and 2009, and Rebeau owes money to the IRS for employer withholding taxes. We have warned that the failure to file tax returns is serious professional misconduct warranting suspension or disbarment. In re Gurstel, 540 N.W.2d 838, 842 (Minn.1995) (citing In re Bunker, 294 Minn. 47, 199 N.W.2d 628 (1972)). We have also warned that the failure to timely file and pay employer withholding taxes is serious misconduct warranting suspension or disbarment. In re Moulton, 721 N.W.2d 900, 905 (Minn.2006). The failure to file and pay employer withholding taxes is particularly serious because it is tantamount to taking employees' money for the attorney's own use, breaches the trust established between employer and employee, and calls on governmental resources to enforce compliance with the law by those who are sworn to uphold it. Gurstel, 540 N.W.2d at 842 (imposing a 60-day suspension followed by formal reinstatement proceedings and two years probation for an attorney's failure to timely file and pay his state and federal employer withholding tax returns for one year). Additionally, Rebeau misused his trust account from 2006 to 2009. Specifically, Rebeau used the trust account to shelter funds from the IRS, commingled personal and client funds, misappropriated client funds, and failed to maintain the required books and records. A particular problem is that by commingling personal and client funds in his client trust account, Rebeau left client funds exposed to garnishment or seizure by the IRS. See In re Overboe, 745 N.W.2d 852, 867-68 (Minn.2008). The misuse of a trust account is serious and will almost invariably result in a lengthy suspension or disbarment, Overboe, 745 N.W.2d at 868 (citing In re Kinnunen, 502 N.W.2d 773, 775 (Minn.1993)), and the misappropriation of client funds is particularly serious misconduct, usually warranting disbarment absent clear and convincing evidence of substantial mitigating factors, In re Rhodes, 740 N.W.2d 574, 579 (Minn. 2007) (citation omitted) (internal quotation marks omitted). Further, Rebeau did not respond to the Director's six follow-up letters regarding the vehicle forfeiture matter and the Florida licensure matter. The failure to reasonably respond to a Director's notice of investigation constitutes noncooperation, In re Westby, 639 N.W.2d 358, 369 (Minn.2002), and is a separate act of misconduct distinct from the underlying violations that warrants public discipline including suspension, see In re Engel, 538 N.W.2d 906, 907 (Minn.1995) (holding failure to cooperate warrants indefinite suspension). When noncooperation exists in connection with other misconduct, the noncooperation increases the severity of the disciplinary sanction as an aggravating factor. Nelson, 733 N.W.2d at 464. Finally, Rebeau failed to clearly communicate to several clients how he would handle fee retainers and failed to bill one client in accordance with the retainer agreement. He also made a false statement to an insurance company in order to obtain insurance proceeds. We consider these types of misconduct when determining the cumulative effect of an attorney's violations to support suspension and even disbarment. See, e.g., Grigsby, 764 N.W.2d at 63 (considering as part of the cumulative misconduct warranting suspension the failure to use written retainer agreements in cases in which the client's advance fee payments were to be nonrefundable [even though it does] not [itself] warrant suspension); In re Brehmer, 642 N.W.2d 431, 433 (Minn.2002) (imposing disbarment for various acts of misconduct including failure to provide an accounting of services and bills); In re Wentzell, 656 N.W.2d 402, 408-09 (Minn.2003) (imposing a six-month suspension for misconduct including, in part, making false and misleading statements); In re Jambor, 694 N.W.2d 72, 72 (Minn.2005) (lengthening a suspension based on making a false statement to a tribunal). Based on the nature of Rebeau's misconduct alone, we conclude that his requested discipline of probation is not sufficient to protect the public or the judicial system or to deter future misconduct. Therefore, the question remaining is what length of suspension is appropriate.