Court Opinion

ID: 3148983
Source: CourtListenerOpinion
Date Created: 2015-10-23 15:04:06.193489+00
Date Added: 2024-06-11T11:55:25.621317
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF KANSAS

                                             No. 113,367

                             In the Matter of TROY D. RENKEMEYER,
                                           Respondent.

                          ORIGINAL PROCEEDING IN DISCIPLINE

        Original proceeding in discipline. Opinion filed October 23, 2015. One year suspension.

        Deborah L. Hughes, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett,
Disciplinary Administrator, was with her on the formal complaint for the petitioner.

        John J. Ambrosio, of Ambrosio & Ambrosio, Chtd., of Topeka, argued the cause, and Troy D.
Renkemeyer, respondent, argued the cause pro se.

        Per Curiam: This is an original proceeding in discipline filed by the office of the
Disciplinary Administrator against the respondent, Troy D. Renkemeyer, of Overland
Park, an attorney admitted to the practice of law in Kansas in 1997.

        On June 30, 2014, the office of the Disciplinary Administrator filed a formal
complaint against the respondent, alleging violations of the Kansas Rules of Professional
Conduct (KRPC). The respondent filed a motion for additional time to file answer on
July 18, 2014, which was granted by order dated July 25, 2014. He filed his answer on
August 7, 2014. On October 7, 2014, the parties entered into written stipulations.

        A hearing was held on the complaint before a panel of the Kansas Board for
Discipline of Attorneys on October 8, 2014, where the respondent was personally present
and was represented by counsel. The hearing panel determined that respondent violated

                                                    1
KRPC 8.4(c) (2014 Kan. Ct. R. Annot. 680) (engaging in conduct involving
misrepresentation) and 8.4(g) (engaging in conduct adversely reflecting on lawyer's
fitness to practice law). Upon conclusion of the hearing, the panel made the following
findings of fact and conclusions of law, together with its recommendation to this court:

                                     "Findings of Fact

             ....

             "8.     The facts which give rise to this case can be found in an unpublished
      opinion in Monarch Transport, LLC vs. FKMT, LLC, Scot Crader, and Troy Renkemeyer,
      No. 105,487 (Kan. Ct. of App., August 17, 2012), which provides as follows:

                     'Per Curiam: This appeal arises from claims surrounding the sale
             and subsequent failure of a trucking company known as Monarch
             Transport. The litigation before the district court involved three different
             cases that were consolidated for trial, many parties, and a host of claims
             and counterclaims. The main parties to this appeal are appellants FKMT,
             LLC (Old Monarch) and its principals, Troy Renkemeyer and Scot
             Crader, on the one side, and appellees Monarch Transport, LLC (New
             Monarch) and its principals, Thomas Kleinbeck and David Kleinbeck, on
             the other. SMR Holdings, LLC, a separate company owned by
             Renkemeyer, is also a party to this appeal.

                                'Factual and Procedural Background

                     'Renkemeyer and Crader are childhood friends. Renkemeyer is a
             lawyer and a certified public accountant, and Crader has a background in
             business and management. In 2004, Renkemeyer and Crader decided to
             start a trucking company, although neither had experience in the trucking
             industry. The company—Old Monarch—was incorporated under the
             name "Monarch Transport, LLC." Crader handled the day-to-day

                                                  2
operations, while Renkemeyer secured financing and handled some tax
issues.

          'In late 2006, Renkemeyer and Crader decided to sell the
company. According to Renkemeyer, he would start or acquire a
business, grow it, and then sell it for a profit. He testified that the
company had grown significantly and that he and Crader believed it was
a good time to list it for sale. But as New Monarch later alleged, the real
reason for the sale was because the trucking company was in serious
financial trouble.

          'Regardless of the reasons motivating the sale, Crader and
Renkemeyer listed the trucking company with Sunbelt Realtors, a
business broker. Brothers Thomas Kleinbeck and David Kleinbeck were
looking for business opportunities and were interested in the trucking
company's listing. In August 2007, Thomas contacted Sunbelt and asked
for financial information about the company, which Sunbelt provided.
The Kleinbecks set up a meeting with Renkemeyer to obtain further
information and discuss the possible sale of the company. According to
Thomas, Renkemeyer lied about or failed to disclose vital information
during this meeting. Renkemeyer denied lying about or withholding
information. He further testified that the Kleinbecks were not interested
in the trucking company's liabilities because any sale would be an asset
sale only and thus they would not be assuming the trucking company's
liabilities.

          'In mid-September 2007, the Kleinbecks toured the trucking
company's facilities along with their banker at UMB Bank. During the
tour, the Kleinbecks met with Crader and asked him to stay on as general
manager after the sale. The Kleinbecks believed Crader would be able to
handle many issues related to the sale, such as making sure that
insurance was available and registering with tax authorities.

                                       3
        'The Kleinbecks had a second meeting with Renkemeyer, during
which they discussed the possibility of buying the name "Monarch
Transport, LLC" from Old Monarch in order to maintain customer
relationships and business goodwill. The Kleinbecks expressed concern
that the name purchase could cause confusion and result in payments
owing to New Monarch to be paid to Old Monarch, and vice versa, but
the parties ultimately agreed to the name purchase. It is undisputed that
the parties agreed to periodically get together and "settle up" any
misdirected payments. According to David Kleinbeck, the reconciliation
could be easily accomplished because Crader, who was staying on as the
general manager for New Monarch, would have access to the accounting
systems for both Old Monarch and New Monarch.

        'On September 27, 2007, an asset purchase agreement was
executed. New Monarch agreed to purchase the assets of Old Monarch,
excluding Old Monarch's accounts receivable for loads shipped on or
before September 30, 2007, the closing date of the sale. The total
purchase price was $2.5 million, with $2.1 million to be paid at closing.
New Monarch financed this portion of the purchase price through a loan
with UMB Bank. The remaining $400,000 was financed through a
promissory note, personally guaranteed by the Kleinbecks, which was
held by SMR Holdings, LLC, a separate company owned by
Renkemeyer.

        'On September 28, 2007, the parties executed an addendum to
the asset purchase agreement, agreeing to the sale of the name "Monarch
Transport, LLC." On October 4, 2007, Old Monarch filed with the
Kansas Secretary of State, officially changing its name from "Monarch
Transport, LLC" to "FKMT, LLC." The next day, New Monarch
officially changed its name from "Osage Holdings, LLC" to "Monarch
Transport, LLC."

                                     4
        'On October 3, 2007, 1 day before the official name change, Old
Monarch set up a new deposit account (Account 347) at Peoples Bank
under the name "Monarch Transport, LLC" and using Old Monarch's
taxpayer identification number. Renkemeyer and Crader were signatories
on the account, and the contact information for the account was soon
thereafter switched to Renkemeyer's law offices (RCW law offices)
rather than the headquarters of the trucking company. Renkemeyer
testified that they "didn't really think about" the fact that Account 347
was opened under the name "Monarch Transport, LLC"—it was simply
quicker and easier to use that name because Peoples Bank already had all
the relevant paperwork and organizational documents. Furthermore,
invoices were sent to Old Monarch's customers under the name
"Monarch Transport, LLC," and Renkemeyer believed that any incoming
checks made out to "Monarch Transport, LLC" could only be deposited
into Account 347 under that name.

        'According to Renkemeyer, the reason for closing Old Monarch's
existing deposit account at Peoples Bank and opening Account 347 was
to prevent unwanted automatic withdrawals from Old Monarch's
previous vendors. Account 347 would also receive payments for Old
Monarch's remaining accounts receivable. It was set up as a lockbox
account, meaning that customers would remit their payments to a P.O.
Box, which was located in Overland Park and rented by Peoples Bank.
Employees of Peoples Bank would collect the payments from the P.O.
Box and deposit them into the account on the day they were received.
Evidently, the P.O. Box used for Account 347 was the same P.O. Box
used to receive payments into Old Monarch's old deposit account.

        'Account 347 was subject to a special arrangement between
Peoples Bank and Bank of the West. After the sale closing, Old Monarch
used the $2.1 million in immediate proceeds to pay off many of its debts,
including the equipment loans owed to Bank of the West. But Old
Monarch still owed Bank of the West approximately $1.4 million on the

                                     5
line of credit secured by Old Monarch's accounts receivable.
Renkemeyer thus authorized Peoples Bank to wire all payments made
into Account 347 directly to Bank of the West. The payments were to be
applied toward the outstanding balance of Old Monarch's line of credit.

         'On October 10, 2007, Crader filed an electronic funds transfer
(EFT) form with Delphi, Old Monarch's largest customer representing
about 25 percent of Old Monarch's business, instructing them to make
payments owing to "Monarch Transport, LLC"—the name by this time
owned by New Monarch—into Account 347. The EFT form also used
the address and telephone number, formerly belonging to Old Monarch,
that had been assumed by New Monarch. Payments from Delphi to Old
Monarch had previously been made by EFT rather than paper check, and
according to Crader this new EFT form was filed simply to ensure that
payments owing to Old Monarch were deposited into the new Account
347 rather than Old Monarch's old deposit account. When asked why he
used New Monarch's name, address, and phone number on the form,
Crader stated that he "[didn't] recall his thought process . . . , I filled it
out and I signed it."

         'According to Thomas Kleinbeck, he had instructed Crader at the
very beginning of October—before Crader filed the EFT form—to
contact Delphi and switch Delphi's payment method to paper check
rather than EFT. The purpose of the switch was to ensure that Delphi's
payments to Old Monarch and New Monarch were kept separate. Crader
denied that Kleinbeck ever instructed him to work with Delphi to switch
their payment method; rather, he assumed Kleinbeck would be
responsible for that task.

         'Also on October 10, 2007, New Monarch opened a deposit
account at UMB Bank with a similar lockbox arrangement. Since UMB
Bank had extended New Monarch a line of credit, secured by New
Monarch's accounts receivable, UMB Bank wanted payments owing to

                                        6
New Monarch to be funneled directly into UMB Bank's P.O. Box located
in Kansas City, Missouri.

        'In the weeks after the sale, Crader and other New Monarch
employees implemented a system for keeping Old Monarch and New
Monarch invoicing (both outgoing invoices as well as incoming payment
receipts) separate. Old Monarch had used accounting software, McLeod,
which was also used by New Monarch after the sale. Each company had
different ledgers within the program in order to keep invoicing separated.

        'Outgoing invoices were managed by the same employee for
both Old Monarch and New Monarch. The outgoing invoices for each
company were supposed to be easily distinguishable because Old
Monarch's invoices started with a 2, whereas New Monarch's invoices
started with 3. Although there was some discussion about using six digits
for New Monarch's invoices as opposed to the five digits used for Old
Monarch's invoices, that distinction was never implemented and New
Monarch also used five-digit invoices. In any case, brightly colored
letters were sent out along with New Monarch's invoices, informing
customers of the change in ownership and new remittance address to the
P.O. Box in Kansas City, Missouri.

        'With respect to tracking incoming payment receipts, Crader was
responsible for entering that information into the McLeod software for
part of his time at Old Monarch and for approximately the first month at
New Monarch. Crader testified that for Old Monarch, when he received
an incoming payment receipt that contained a check skirt or otherwise
indicated which invoice the customer was paying, he would apply the
payment to that particular invoice in the McLeod ledger. But if an
incoming payment receipt did not indicate which invoice the customer
was paying, Crader simply applied the payment to the customer's oldest
outstanding invoice.

                                     7
        'During the first month for New Monarch, Crader undertook the
same process for incoming payment receipts that had been paid into New
Monarch's UMB Bank account, entering those payments into the New
Monarch ledger. He also continued to handle incoming payment receipts
for Old Monarch. Crader would go over to the RCW law offices and
collect or make copies of the deposit information for Account 347
(including copies of checks and check skirts) that Peoples Bank had
forwarded to RCW. Crader would then enter that information into the
Old Monarch ledger. He denied seeing any payment receipts for 3-series
(New Monarch) invoices come through Account 347 during that month,
but he admitted that there was a lot going on during the transition and he
did not "have [his] magnifying glass on walking through the company
looking [for] a 3-series invoice." Nonetheless, the evidence at trial
showed that Crader had received an e-mail from Delphi indicating that
many 3-series invoices were scheduled to be paid.

        'Around the end of October or beginning of November 2007,
Thomas Kleinbeck asked Crader to scale back his work on Old Monarch
and instead focus on New Monarch. After that time, Crader no longer
kept track of the incoming payment receipts for deposits made into
Account 347. From that point forward, an employee at RCW (where
Account 347 deposit information was being sent) tracked incoming
payment receipts on a spreadsheet. As incoming payment receipts from
Account 347 were forwarded to RCW, an employee would subtract the
customer's payment from their outstanding balance. Renkemeyer denied
knowing that any of the incoming payment receipts were for 3-series
invoices, in part due to the confusion as to how Old Monarch and New
Monarch invoices were to be differentiated—i.e., by starting with a 2 or
3 versus using a five-digit or six-digit number. Renkemeyer admitted that
nobody at RCW actually looked at or wrote down the invoice numbers
before attributing payments on the spreadsheet because he figured those
issues would be resolved when the two companies "settled up" as agreed,
using source information such as copies of checks and check skirts.

                                     8
        'On or about November 5, 2007, New Monarch sent a letter to
Old Monarch seeking about $300,000 for costs and lost revenues due to
Old Monarch's alleged failure to disclose certain information prior to the
sale, such as employee problems, financial difficulties with several
vendors, and the disrepair or inoperability of multiple trucks. Old
Monarch sent a letter in response, denying some of the allegations but
admitting others. Within a few days, a meeting was held between
Thomas Kleinbeck (along with New Monarch's lawyer) and
Renkemeyer. The parties reached an agreement during the meeting, and
Renkemeyer prepared a written "Settlement Agreement and Mutual
General Release." Kleinbeck testified that based on the information he
and his brother had at that point, they were satisfied with the document
and signed the settlement agreement and release.

        'The situation between Old Monarch and New Monarch
deteriorated rapidly after the parties signed the settlement agreement and
release. Thomas Kleinbeck testified that around mid-November 2007, he
asked Crader if Old Monarch was receiving any of the payments meant
for New Monarch. According to Kleinbeck, Crader did not think Old
Monarch had received any misdirected payments but said he would
check with Renkemeyer. Likewise, Kleinbeck asked Renkemeyer the
same question, and Renkemeyer stated that he would have to check with
Crader. Kleinbeck testified that neither man got back to him on the issue.
It was around this time that New Monarch first learned of the existence
of Account 347.

        'By early December 2007, New Monarch had not received
several payments that it was expecting, including a large payment from
Delphi for loads that had been shipped in early October 2007, and
Thomas Kleinbeck asked Crader to contact customers about missing
payments. Crader acknowledged that Kleinbeck had asked him to follow
up on the missing payments and testified that he had met with the

                                     9
employee at New Monarch responsible for billing, but he did not
otherwise recall what he had done in response to Kleinbeck's request.
Unsatisfied with Crader's apparent lack of action, Kleinbeck began
contacting customers and learned that some customers had made
payments on New Monarch invoices, but those payments had not been
received by New Monarch. At this point, Kleinbeck believed that New
Monarch was being defrauded, likely by Crader and Renkemeyer.

        'On December 5, 2007, Renkemeyer, on behalf of RCW, sent a
letter to Old Monarch clients in an attempt to collect remaining accounts
receivable. In that letter, he stated that Old Monarch used five-digit
invoice numbers, whereas New Monarch used six-digit invoice numbers;
he did not explain that Old Monarch invoices started with a 2 and New
Monarch invoices started with a 3. As a result of that letter, Old Monarch
received more payments into Account 347, as well as some payments
made out to RCW which were then forwarded to Account 347. At least
some of those payments appeared to be for 3-series invoices.

        'At the end of December 2007, New Monarch decided to suspend
operations for about 1 week over the holidays. Thomas Kleinbeck
testified that New Monarch had not received the invoice payments it had
expected—in particular, a large payment expected from Delphi—and had
been forced to take out an additional loan from UMB Bank to fund
operating expenses. Kleinbeck admitted that many employees were
unhappy with the decision. Crader also testified that many employees
were unhappy with the decision and had either quit or been sent home.

        'In early January 2008, when New Monarch again did not receive
a large payment that it was expecting from Delphi, Thomas Kleinbeck e-
mailed Renkemeyer and stated that he had discovered about $90,000 of
Delphi payments that should have gone to New Monarch were instead
deposited in Account 347. Renkemeyer replied that Old Monarch had
only received about $10,000 into Account 347 over the last month and

                                    10
that, as he understood, the payments were for Old Monarch invoices.
Renkemeyer also e-mailed David Kleinbeck, stating that there was
obviously a big mistake about the amounts New Monarch thought had
been deposited into Account 347 because Old Monarch had not received
nearly the amount claimed. According to David, New Monarch had
started to receive information from its customers as part of Thomas
Kleinbeck's inquiry into the missing payments, including a copy of a
payment of a New Monarch invoice that was deposited into Account
347. David Kleinbeck claimed that when he confronted Crader with this
document, Crader denied knowing who owned Account 347.

        'Around mid-January 2008, New Monarch engaged counsel to
work with Old Monarch on the issue of missing or misdirected payments,
but an agreement could not be reached. In February 2008, New Monarch
fired Crader. Around that time, New Monarch stopped making payments
on the seller carryback promissory note held by SMR Holdings. By May
2008 the trucking company was shut down. According to New Monarch,
the company's failure was due to lack of operating capital caused by Old
Monarch's diversion of invoice payments. According to Old Monarch,
the failure was due to a poor business plan and mismanagement by New
Monarch, leading to the resignation of many key employees.

        'Old Monarch and New Monarch each made their own
determinations regarding the diversion of invoice payments. Old
Monarch took the position that any payment that had either come into
Account 347 or been sent to RCW but was not substantiated by any
check skirt or other source documentation indicating the specific
invoices for which the payment was intended, clearly belonged to Old
Monarch and could be applied against the customer's balance owing to
Old Monarch. Furthermore, Old Monarch took the position that any
payment it had received—even if check skirts or source documentation
indicated that all or part of the payment was intended for a 3-series
invoice—also belonged to Old Monarch if the customer had any

                                    11
outstanding balance owed to Old Monarch. Any payment over the
outstanding balance owed to Old Monarch would be considered as
belonging to New Monarch. Renkemeyer and Crader acknowledged that
Old Monarch relied only on the check skirts and source documentation
provided by Peoples Bank, and where the payment was received without
any source documentation, they did not attempt to obtain any additional
information from customers regarding the invoices they had intended to
pay. Using this methodology, Old Monarch calculated that it owed New
Monarch $127,434.90, less any amount that New Monarch owed to Old
Monarch.

        'In contrast, New Monarch took the position that it should
receive any payments that customers had indicated were intended to pay
3-series invoices, whether that intent was manifested through the check
skirts and source documentation provided by Peoples Bank or whether
the customer had provided that information in response to specific
requests made by Thomas Kleinbeck. Using this methodology, New
Monarch calculated that Old Monarch owed it $648,028.81. New
Monarch also believed that Crader had fraudulently marked these 3-
series invoices as paid in New Monarch's McLeod ledger.

        'The pretrial conference was held on December 28, 2009. A jury
trial was held on January 11-15 and 19-22, 2010. The claims at issue
included (1) New Monarch's claims against Old Monarch, Renkemeyer,
and Crader for breach of fiduciary duty in relation to the diversion of
invoice payments and (2) SMR Holdings' claims against New Monarch,
Thomas Kleinbeck, and David Kleinbeck for failure to pay on the seller
carryback promissory note. At the close of all evidence, Old Monarch,
Renkemeyer, and Crader moved for judgment as a matter of law, arguing
that all claims against them were barred by the terms of the settlement
agreement and release and that there was insufficient evidence for a
reasonable jury to find that Old Monarch, Renkemeyer, and Crader were
fiduciaries of New Monarch and each had breached their fiduciary duty

                                    12
regarding invoice payments. SMR Holdings also moved for judgment as
a matter of law, arguing that the undisputed evidence showed that the
seller carryback promissory note was in default and that New Monarch,
Thomas Kleinbeck, and David Kleinbeck owed $427,618.56 in unpaid
principal and interest. The district court denied all motions.

        'During the jury instructions conference, Old Monarch objected
to Instructions 10 and 11, which concerned whether Renkemeyer and
Crader had improperly diverted invoice payments under a theory of
breach of fiduciary duty. Old Monarch disputed the district court's
finding that, as a matter of law, Renkemeyer and Crader were fiduciaries
of New Monarch. Old Monarch also argued that the instructions
erroneously implied that New Monarch could recover under this theory
by showing mere negligence as opposed to intentional acts. Renkemeyer
and Crader objected to Instruction 16, which permitted punitive damages
if the jury found that either man had acted in a fraudulent matter in
relation to the diversion of invoice payments. Finally, Old Monarch
requested that the district court include a jury instruction which stated:
"It is the law of this state that if a debtor does not direct how a payment
should be applied when it makes payment to a creditor, the creditor may
apply the payment as it desires." The district court overruled the
objections to Instructions 10, 11, and 16 and refused to include Old
Monarch's requested instruction.

        'The claims were then submitted to the jury. The jury found Old
Monarch, Renkemeyer, and Crader liable for breach of fiduciary duty in
relation to the diversion of invoice payments and awarded damages in
the amount of $647,000 to New Monarch. The jury also found that
Renkemeyer had acted in a fraudulent matter [sic] such that punitive
damages should be awarded. Finally, the jury found that the seller
carryback promissory note should be enforced against New Monarch,
Thomas Kleinbeck, and David Kleinbeck and awarded damages in the
amount of $350,000 to SMR Holdings.

                                     13
        'On March 5, 2010, Old Monarch, Renkemeyer, and Crader filed
a motion to apply the settlement agreement and release, arguing that the
damages awarded by the jury for diversion of invoice payments should
be reduced by the amount of payments allegedly diverted on or before
the date of the settlement agreement and release. The district court
denied the motion.

        'On May 18 and August 2, 2010, the district court held hearings
on the amount of punitive damages to be awarded against Renkemeyer.
In the context of determining how Renkemeyer's actions had adversely
affected New Monarch and the Kleinbecks, New Monarch offered
evidence that the State of Kansas had filed tax warrants against New
Monarch and the Kleinbecks for unpaid taxes stemming in part from the
time the trucking company was still owned by Old Monarch.
Renkemeyer stated that he had never seen the tax warrants before but
conceded that some of the taxes were for years when Old Monarch was
in operation. Renkemeyer believed it was New Monarch's responsibility
to contact the State and explain the mixup, but he offered to submit an
affidavit to the State, if necessary, confirming when the sale took place.
The district court placed the responsibility on Renkemeyer, on behalf of
Old Monarch, to contact the State and get the issue resolved. Finally, the
district court awarded punitive damages against Renkemeyer in the
amount of $150,000.

        'The journal entry of judgment was filed on September 23, 2010.
On October 7, 2010, Old Monarch, Renkemeyer, and Crader filed a
renewed motion for judgment as a matter of law or alternatively a new
trial and a motion to alter or amend the judgment. SMR Holdings also
filed a renewed motion for judgment as a matter of law or alternatively a
motion to alter or amend the judgment. Following a hearing, the district
court denied all postjudgment motions. Old Monarch, Renkemeyer,
Crader, and SMR Holdings timely appealed.'

                                    14
          "9.     On January 29, 2010, the respondent self-reported the entry of judgment
to the disciplinary administrator.

          "10.    On appeal, August 17, 2012, the Kansas Court of Appeals affirmed the
judgment of the district court, concluding, in part:

                  'Although Renkemeyer offered explanations for each of these
           actions, there was sufficient evidence for a reasonable jury to make
           inferences and conclude that Renkemeyer had acted in a fraudulent
           manner. Jury Instruction 16 is clear, accurately states the law with
           respect to punitive damages, and could not reasonably have misled the
           jury. We conclude the district court did not err in denying Renkemeyer's
           motion for judgment as a matter of law and overruling his objection to
           Jury Instruction 16.'

          "11.    On December 3, 2013, the parties filed Satisfactions of Judgment.

          "12.    Also on December 3, 2013, Monarch Transport ('New Monarch') and
FKMT, LLC ('Old Monarch'), Mr. Crader, and the respondent filed a joint motion to
amend the entry of judgment. The parties provided the court with a 'Proposed First
Amended Journal Entry as to Claims Other Than Those Against Peoples Bank—Jury
Trial.'

          "13.    In comparing the original journal entry to the first amended journal entry,
the parties eliminated six pages which set forth the awards of damages. In its place, the
parties substituted the following:

          'The jury found in favor of New Monarch against Old Monarch, Scot
          Crader, and Troy Renkemeyer for damages of $150,000.00. No liability
          was found against Renkemeyer, Campbell & Weaver, LLP. After
          returning their Verdict A and the answers to special interrogatories the

                                              15
        jury was discharged on January 22, 2010, from further consideration of
        this case.'

        "14.     On June 30, 2014, Ms. Hughes filed a formal complaint in this attorney
disciplinary case.

        "15.     Shortly thereafter, on July 14, 2014, Judge Paul Gurney entered the first
amended journal entry.

        "16.     Thereafter, 4 days later, on July 18, 2014, the respondent filed a motion
for an extension of time to file an answer in the instant attorney disciplinary case. The
hearing panel granted the respondent's motion. On August 7, 2014, the respondent filed
an answer to the formal complaint.

        "17.     In his answer, in response to an allegation that the jury found clear and
convincing evidence that the respondent breached a fiduciary duty, the respondent
admitted the allegation but stated:

                 'For further answer, Respondent states the amended judgment
        states "the jury found in favor of New Monarch against Old Monarch,
        Scot Crader and Troy Renkemeyer for damages of $150,000." Said
        judgment does not mention a breach of fiduciary duty.'

        "18.     On August 13, 2014, Judge Gurney entered an order setting aside the
first amended journal entry. In the order, Judge Gurney stated:

                 'Now on this 13th day of August, 2014, the Court on its own,
        pursuant to K.S.A. 60-260(a), hereby sets aside the First Amended
        Journal Entry as to Claims Other Than Those Against Peoples Bank—
        Jury Trial (Doc. No. 286). The Court finds that although the parties
        submitted a Joint Motion to Amend Entry of Judgment (Doc. No. 283),
        the Motion fails to provide a basis under which an amended journal entry
        is timely and warranted. The Court therefore finds that the Journal Entry

                                             16
        (Dock No. 240) entered on September 23, 2010[,] shall remain
        controlling. Upon request for a hearing, the Court will afford the parties
        an opportunity to present argument, in support of the Joint Motion to
        Amend Entry of Judgment. Any such request shall be made within ten
        days from the date this Order is entered.'

Old Monarch, Crader, and Renkemeyer filed a request for hearing. On October 2, 2014,
the court conducted a hearing. Following the hearing, the court denied the request for an
amendment to the judgment. Six days later, the hearing panel conducted the hearing on
the formal complaint in this case.

                                     "Conclusions of Law

        "19.    Based upon the findings of fact, the hearing panel concludes as a matter
of law that the respondent violated KRPC 8.4(c) and KRPC 8.4(g), as detailed below.

                                        "KRPC 8.4(c)

        "20.    'It is professional misconduct for a lawyer to . . . engage in conduct
involving dishonesty, fraud, deceit or misrepresentation.' KRPC 8.4(c). The respondent
engaged in conduct that involved dishonesty when he breached his fiduciary duty and
acted in a fraudulent manner.' As such, the hearing panel concludes that the respondent
violated KRPC 8.4(c).

                                        "KRPC 8.4(g)

        "21.    'It is professional misconduct for a lawyer to . . . engage in any other
conduct that adversely reflects on the lawyer's fitness to practice law.' KRPC 8.4(g). The
respondent engaged in conduct that adversely reflects on his fitness to practice law when
he breached his fiduciary duty and 'acted in a fraudulent manner.' The hearing panel
concludes that the respondent violated KRPC 8.4(g).

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                                   "American Bar Association
                         Standards for Imposing Lawyer Sanctions

           "22.   In making this recommendation for discipline, the hearing panel
considered the factors outlined by the American Bar Association in its Standards for
Imposing Lawyer Sanctions (hereinafter 'Standards'). Pursuant to Standard 3, the factors
to be considered are the duty violated, the lawyer's mental state, the potential or actual
injury caused by the lawyer's misconduct, and the existence of aggravating or mitigating
factors.

           "23.   Duty Violated. The respondent violated his duty to the public to
maintain his personal integrity.

           "24.   Mental State. The respondent knowingly and intentionally violated his
duty.

           "25.   Injury. As a result of the respondent's misconduct, the respondent caused
actual injury to New Monarch.

                            "Aggravating and Mitigating Factors

           "26.   Aggravating circumstances are any considerations or factors that may
justify an increase in the degree of discipline to be imposed. In reaching its
recommendation for discipline, the hearing panel, in this case, found the following
aggravating factors present:

           "27.   Dishonest or Selfish Motive. The respondent acted in a fraudulent
manner. Accordingly, the hearing panel concludes that the respondent's misconduct was
motivated by dishonesty.

           "28.   Mitigating circumstances are any considerations or factors that may
justify a reduction in the degree of discipline to be imposed. In reaching its

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recommendation for discipline, the hearing panel, in this case, found the following
mitigating circumstances present:

        "29.    Absence of a Prior Disciplinary Record. The respondent has not
previously been disciplined.

        "30.    Timely Good Faith Effort to Make Restitution or to Rectify Consequences
of Misconduct. The respondent paid $150,000 of his personal funds to satisfy the
judgment entered in this case.

        "31.    The Present and Past Attitude of the Attorney as Shown by His or Her
Cooperation During the Hearing and His or Her Full and Free Acknowledgment of the
Transgressions. The respondent fully cooperated with the disciplinary process.
Additionally, the respondent admitted the facts that gave rise to the violations.

        "32.    Imposition of Other Penalties or Sanctions. The respondent has
experienced other sanctions for his conduct. The respondent paid the $150,000 judgment
entered against him.

        "33.    Remorse. At the hearing on this matter, the respondent expressed
genuine remorse for having engaged in the misconduct.

        "34.    In addition to the above-cited factors, the hearing panel has thoroughly
examined and considered the following Standards:

        '5.11   Disbarment is generally appropriate when:

                ....

                (b)      a lawyer engages in any other intentional
                         conduct involving dishonesty, fraud, deceit, or
                         misrepresentation that serious adversely reflects
                         on the lawyer's fitness to practice.

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        '5.12   Suspension is generally appropriate when a lawyer knowingly
                engages in criminal conduct which does not contain the elements
                listed in Standard 5.11 and that seriously adversely reflects on
                the lawyer's fitness to practice.

        '5.13   Reprimand is generally appropriate when a lawyer knowingly
                engages in any other conduct that involves dishonesty, fraud,
                deceit, or misrepresentation and that adversely reflects on the
                lawyer's fitness to practice law.'

                                    "Recommendation

        "35.    Arguing that the respondent engaged in intentional conduct, the
disciplinary administrator recommended the respondent be suspended from the practice
of law for a period of 1 year. Counsel for the respondent argued that the respondent was
slow and sloppy, not a thief, and censure to be published in the Kansas Reports was the
appropriate discipline.

        "36.    The respondent's misconduct in this case is serious—he breached his
fiduciary duty and acted in a fraudulent manner. According to ABA Standards 5.11 and
5.13, the respondent's misconduct warrants either disbarment (if the conduct was
intentional) or censure (if the conduct was done knowingly). The hearing panel concludes
that disbarment is not warranted in this case, as the mitigating circumstances are
compelling. The hearing panel concludes that a censure is not an appropriate discipline to
impose when an attorney has engaged in fraud. Suspension is the appropriate discipline to
impose in this case. Based upon the findings of fact, conclusions of law, and the
Standards listed above, the hearing panel unanimously recommends that the respondent
be suspended from the practice of law for a period of 6 months.

        "37.    Costs are assessed against the respondent in an amount to be certified by
the Office of the Disciplinary Administrator."

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                                        DISCUSSION

       In a disciplinary proceeding, this court considers the evidence, the findings of the
disciplinary panel, and the arguments of the parties and determines whether violations of
KRPC exist and, if they do, what discipline should be imposed. Attorney misconduct
must be established by clear and convincing evidence. In re Foster, 292 Kan. 940, 945,
258 P.3d 375 (2011); see Supreme Court Rule 211(f) (2014 Kan. Ct. R. Annot. 363).
Clear and convincing evidence is "'evidence that causes the factfinder to believe that "the
truth of the facts asserted is highly probable."'" In re Lober, 288 Kan. 498, 505, 204 P.3d
610 (2009) (quoting In re Dennis, 286 Kan. 708, 725, 188 P.3d 1 [2008]).

       Respondent was given adequate notice of the formal complaint, to which he filed
an answer, and adequate notice of the hearing before the panel and the hearing before this
court. The respondent did not file exceptions to the hearing panel's final hearing reports.
The hearing panel's findings of fact are thus deemed admitted. Supreme Court Rule
212(c) and (d) (2014 Kan. Ct. R. Annot. 383).

       The evidence before the hearing panel establishes by clear and convincing
evidence the charged misconduct violated KRPC 8.4(c) (2014 Kan. Ct. R. Annot. 680)
(engaging in conduct involving misrepresentation) and 8.4(g) (engaging in conduct
adversely reflecting on lawyer's fitness to practice law), and it supports the panel's
conclusions of law. We therefore adopt the panel's conclusions.

       At the hearing before this court, at which the respondent appeared, the office of
the Disciplinary Administrator repeated its recommendation that respondent be
suspended for a period of 1 year. The respondent expressed agreement with the panel's
recommendation of a 6-month suspension.

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       This court is not bound by the recommendations of the Disciplinary Administrator
or the hearing panel. In re Mintz, 298 Kan. 897, 911-12, 317 P.3d 756 (2014). The court
bases each disciplinary sanction on the specific facts and circumstances of the violations
and aggravating and mitigating circumstances presented in the case. Mintz, 298 Kan. at
912. This court has taken the position that, while prior cases may have some bearing on
the sanctions that the court elects to impose, those prior cases must give way to
consideration of the unique circumstances that each individual case presents. In re Busch,
287 Kan. 80, 86-87, 194 P.3d 12 (2008). This court concerns itself less with the sanctions
that were appropriate in other cases and more with the discipline that is appropriate under
the facts of the case before us. In re Dennis, 286 Kan. at 738.

       At the hearing before this court, respondent's counsel argued that his client was
guilty of sloppy recordkeeping after the trucking company sale and that the filing of the
amended journal entry after disciplinary proceedings were under way was the work of
lawyers representing his client in the civil litigation, rather than based on any desire or
action of his client. Given the record compiled in the lawsuit, the record of the panel
hearing, and the respondent's decision not to file exceptions to the panel's findings and
conclusions, counsel's efforts to minimize respondent's culpability for dishonesty were
unpersuasive.

       When respondent spoke for himself at the hearing before this court, he asserted
that he had not thought of himself as a fiduciary in the trucking company transaction, that
he had been a passive investor who thought of himself as a mere seller, and that he had
left the details of receivables and their correct distribution to his fellow seller. These
arguments do not fill us with confidence that, even today, respondent has a firm grasp on
the nature and wrongfulness of his ethical lapses, and we are particularly troubled
because of his substantial training and experience not only as a tax lawyer but also as a
certified public accountant.
                                              22
       For its part at the hearing before this court, the Disciplinary Administrator's office
urged us to reevaluate the applicable aggravators and mitigators and the balance to be
struck between them. For example, the Deputy Disciplinary Administrator urged us to
find the existence of an additional aggravator, a pattern of misconduct in the many
payments that were misdirected.

       Even without engaging in the reevaluation and reweighing for which the
Disciplinary Administrator's office advocated, we have no hesitance in ruling
unanimously that a 1-year suspension from the date of the filing of this opinion is the
appropriate discipline for respondent. Further, we caution him explicitly that he must
notify each of his clients, in writing, of his suspension. See Supreme Court Rule 218
(2014 Kan. Ct. R. Annot. 414).

                               CONCLUSION AND DISCIPLINE

       IT IS THEREFORE ORDERED that Troy D. Renkemeyer be and is hereby disciplined
by a 1-year suspension from the practice of law, effective on filing of this opinion, in
accordance with Supreme Court Rule 203(a)(2) (2014 Kan. Ct. R. Annot. 306).

       IT IS FURTHER ORDERED that the costs of these proceedings be assessed to the
respondent and that this opinion be published in the official Kansas Reports.

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