Court Opinion

ID: 9670000
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:12:18.983307+00
Date Added: 2024-06-11T18:16:01.679829
License: Public Domain

Connolly, J.,
dissenting.
Frederiksen filed no exceptions to the referee’s findings of fact in this case. Thus, it is undisputed that because he was dissatisfied with his compensation, Frederiksen stole approximately $15,000 from his firm over a period of 3 to 4 years. Although he stated that the firm would not have learned of his actions had he not disclosed them, at least two clients had complained about discrepancies in their accounts. Furthermore, one of the firm’s partners testified that he had asked Frederiksen about a discrepancy before his disclosure. Also, at the referee hearing, Frederiksen admitted that he would not have disclosed the misappropriations had the firm not treated him so fairly upon his departure.
The majority opinion acknowledges the serious nature of Frederiksen’s conduct but holds that disbarment in this case is not required. This holding is based on the majority’s determination that no client was harmed as a result of Frederiksen’s actions and that there are mitigating circumstances that weigh in his favor. I dissent.
We have disbarred attorneys for misappropriating nonclient funds. In fact, we specifically rejected an attorney’s argument that his misappropriation of funds from a bar association was distinguishable from cases in which attorneys had been disbarred *576for converting the funds of clients to their own use, stating that “[t]his court has uniformly imposed the sanction of disbarment in cases of embezzlement or like defalcation by lawyers, and that sanction has not depended upon whether the funds taken were those of a client.” State ex rel. Nebraska State Bar Assn. v. McConnell, 210 Neb. 98, 100, 313 N.W.2d 241 (1981).
Similarly, we accepted an attorney’s voluntary surrender of his license after he misappropriated funds from a nonlegal association for which he served as treasurer. State ex rel. NSBA v. Rosno, 245 Neb. 365, 513 N.W.2d 302 (1994). We again stated that “[a]s Rosno was no doubt aware, this court has uniformly imposed the sanction of disbarment in cases of misappropriation, even when the funds did not belong to a client.” Id.
The majority distinguishes this case from McConnell and Rosno, stating that “neither of these cases concerning nonclient funds related to misappropriation of funds from the attorney’s firm.” The implication of the majority’s reasoning is that stealing from an attorney’s own firm is not as serious as the misappropriation of other types of nonclient funds. I disagree.
There is “no ethical distinction between a lawyer who for personal gain willfully defrauds a client and one who for the same untoward purpose defrauds his or her partners.” Matter of Siegel, 133 N.J. 162, 167, 627 A.2d 156, 159 (1993). Accord Attorney Griev. Comm’n v. Nothstein, 300 Md. 667, 480 A.2d 807 (1984). The majority’s holding sends the wrong message to the legal community and is contrary to our stated policy considerations of deterring others and maintaining the reputation of the bar as a whole. See State ex rel. NSBA v. Flores, 261 Neb. 256, 622 N.W.2d 632 (2001).
Clients often entrust lawyers with large sums of money, and they are entitled to have trustworthy lawyers. A lawyer who steals jeopardizes that trust, regardless of whether the theft is from a client or a firm. Frederiksen was wholly unable to account for the money he misappropriated over 3 to 4 years because he kept no records. While he may have been entitled to a share of the client payments had he remitted them to his firm, he nonetheless repeatedly breached his fiduciary duties to his firm by stealing his partners’ shares of the payments. I would hold that in the absence of compelling mitigating factors, misappropriation of *577firm funds warrants disbarment. See, e.g., Kaplan v. State Bar of California, 52 Cal. 3d 1067, 804 P.2d 720, 278 Cal. Rptr. 95 (1991); In re Maier, 664 S.W.2d 1 (Mo. 1984); Matter of Siegel, supra; Matter of Krob, 123 N.M. 652, 944 P.2d 881 (1997); In re Allen, 274 A.D.2d 182, 710 N.Y.S.2d 389 (2000); Matter of Salinger, 88 A.D.2d 133, 452 N.Y.S.2d 623 (1982); In re Murdock, 328 Or. 18, 968 P.2d 1270 (1998).
It is true that we have held disbarment was inappropriate in a case where the client had not been harmed because of the lawyer’s misappropriation of the client’s bond receipt. See State ex rel. NSBA v. Kelly, 221 Neb. 8, 374 N.W.2d 833 (1985). In Kelly, the attorney admitted to securing a forged endorsement for his client’s bond receipt and depositing the $1,500 bond proceeds in his office account rather than a trust account. He allowed the balance to drop below the $1,500 amount and refunded the money only after the client had retained another attorney.
But, since Kelly was decided, we have held on numerous occasions that “[t]he fact that no client suffered any financial loss does not excuse the misappropriation of client funds and does not provide a reason for imposing a less severe sanction.” State ex rel. NSBA v. Malcom, 252 Neb. 263, 272, 561 N.W.2d 237, 243 (1997), citing State ex rel. NSBA v. Gridley, 249 Neb. 804, 545 N.W.2d 737 (1996), State ex rel. NSBA v. Bruckner, 249 Neb. 361, 543 N.W.2d 451 (1996), and State ex rel. NSBA v. Woodard, 249 Neb. 40, 541 N.W.2d 53 (1995). For these reasons, I believe the majority has incorrectly extended the holding in Kelly to stand for the proposition that disbarment is an inappropriate sanction for stealing funds from an attorney’s own firm. Moreover, I note that at least two clients were forced to make inquiries about discrepancies in their accounts. After an investigation was initiated, other accounts with discrepancies were found. Frederiksen also agreed to pay for any additional misappropriations that the firm discovered in the future because he had not kept records and, therefore, had no way of knowing which accounts would be affected.
The majority notes that Frederiksen claims no mental disorder, no chemical dependency, no marital discord, and no economic distress. Nonetheless, the majority cites as mitigating factors Frederiksen’s remorsefulness, his participation in bar association committees and activities, his teaching at the *578Creighton University School of Law, and letters of support from Creighton’s faculty and other attorneys.
Frederiksen’s achievements and reputation as a lawyer, lecturer, and adjunct law professor are commendable, as is his concern for the betterment of his community and the bar. But they should not serve to mitigate thefts from his own law firm. “The egregiousness of respondent’s dishonesty should have been readily apparent to so distinguished a practitioner. Although good reputation, prior trustworthy professional conduct, and general good character are often considered as mitigating factors . .. their importance is diminished ‘where misappropriation is involved.’ ” (Citation omitted.) Matter of Siegel, 133 N.J. 162, 171, 627 A.2d 156, 161 (1993).
We have held that cumulative acts of attorney misconduct are distinguishable from isolated incidents, therefore justifying more serious sanctions. State ex rel. NSBA v. Freese, 259 Neb. 530, 611 N.W.2d 80 (2000). The referee did find that Frederiksen was genuinely remorseful. But given the extended and extensive nature of Frederiksen’s thefts, I would hold that the aggravating factors in this case substantially outweigh any mitigating factors in Frederiksen’s favor.
Because I believe that State ex rel. NSBA v. Rosno, 245 Neb. 365, 513 N.W.2d 302 (1994), and State ex rel. Nebraska State Bar Assn. v. McConnell, 210 Neb. 98, 313 N.W.2d 241 (1981), are controlling and that stealing from fellow lawyers is no less a flagrant violation than stealing from a client, I conclude that Frederiksen should be disbarred.
Gerrard, J., joins in this dissent.