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In re Petition for Disciplinary Action against Vaught

March 31, 2005


Heard, considered, and decided by the court en banc.


Under the admitted facts, the attorney misappropriated client funds, made false statements, failed to transfer client files, and failed to cooperate in an ongoing disciplinary investigation without demonstrating any mitigating circumstances.

The appropriate disciplinary action on this record is disbarrment.

Per curiam.


Samuel M. Vaught, a licensed Minnesota attorney since 1981, primarily represented various pension and trust funds. This attorney discipline case arose from a July 13, 2004, petition filed by the Director of the Office of Lawyers Professional Responsibility alleging that Vaught violated Minn. R. Prof. Conduct 1.4, 1.15(c), and 8.4(c) and (d) (misappropriation of client funds and false statements); 1.16(d) (failure to promptly return client files); 8.1(a)(3) (non-cooperation with the disciplinary proceeding); and Rule 25 of the Rules on Lawyers Professional Responsibility (RLPR) (failure to attend prehearing meeting).*fn1 The matter is now before us on the admitted allegations of the petition and the recommendation that the appropriate discipline is disbarrment. We agree with the Director's recommendation and order that Vaught be disbarred from the practice of law in Minnesota.

In his written submission and oral argument to this court, Vaught challenges the allegations of the petition. However, Vaught failed to answer the petition for disciplinary action against him and, therefore, the allegations are deemed admitted. Rule 13(b), RLPR.*fn2 After the Director filed and served a motion for summary relief, Vaught did not file an answer within the specified time, pursuant to Rule 13(a), RLPR. Vaught did not oppose the motion. This court granted the summary relief motion deeming the allegations of the petition admitted.

On January 7, 2002, in a separate disciplinary matter, Vaught was indefinitely suspended from the practice of law for a minimum period of three years. In re Vaught, 637 N.W.2d 570 (Minn. 2002). Grounds for suspension included misappropriation of client funds. Id. at 571. At the time of his suspension, Vaught had been representing a number of trust funds (the Trust Funds) for a period of several years. As a consequence of his suspension, Vaught proceeded to conclude his work for the Trust Funds. The new attorney retained by the Trust Funds discovered that between August 26, 1999, and July 16, 2001, Vaught received nearly $50,000 in settlement proceeds on behalf of the Trust Funds, which he appropriated for his own use and benefit. In a "Final Invoice" dated January 8, 2002, Vaught acknowledged receipt of $37,479.23 in settlement proceeds, but he maintained that those funds had represented fees and costs owed to him by the Trust Funds.

The new attorney for the Trust Funds brought this matter to the attention of the Director, alleging misappropriation of funds. On January 16, 2003, the Director wrote to Vaught requesting a written response to the allegations of misappropriation. Vaught failed to respond. The Director wrote twice more requesting a written response to the complaint. Vaught never responded. Consequently, on April 18, 2003, the Director issued charges against Vaught alleging misappropriation of client funds, related false statements, failure to timely return original client files, and non-cooperation with the disciplinary proceedings.

The Director also mailed notice to Vaught of a prehearing meeting scheduled for May 20, 2003. Vaught failed to answer the charges, but faxed a letter on May 20, 2003, prior to the meeting, stating that various personal and health-related issues had prevented him from cooperating in the Director's investigation. At the prehearing meeting, Vaught admitted that he had not prepared an answer to the charges, or even reviewed them. The Director continued the meeting to June 10, 2003, to give Vaught time to prepare a response, repeated the request for the information and documents already requested in three separate letters, and requested documentation of Vaught's medical condition. The Director also requested that Vaught provide an answer to the charges at least seven days before the June 10 meeting.

On May 28, 2003, the Director wrote to Vaught requesting that the time of the June 10, 2003, meeting be changed from 10 a.m. to 1 p.m. Vaught did not respond to this letter, nor did he answer the charges or provide medical documentation. On the morning of June 10, Vaught faxed a letter to the Director stating that he would not be able to attend the meeting scheduled for that day. He wrote in the letter: "[C]ontingent upon being able to agree to a factual stipulation, I would accept disbarrment as a consequence of and in resolution of the above-referenced charge. * * * [M]y behavior has been such that I do not disagree disbarrment is an appropriate penalty." In response, the Director sent Vaught a proposed petition for disciplinary action and stipulation for discipline and scheduled a June 17, 2003, meeting, either to execute the stipulation or to hold the prehearing meeting if an agreement as to the facts could not be reached.

Vaught did not appear at the June 17 meeting. The Director wrote to him on June 18, 2003, offering another opportunity to meet on June 26, 2003. Vaught failed to appear. On July 1, 2003, the Director filed a panel bypass motion pursuant to Rule 10(d), RLPR,*fn3 and a motion for approval to file a petition for disciplinary action. However, the Director withdrew the panel bypass motion on August 7, 2003, upon learning that Vaught had been hospitalized.

Vaught was discharged from the hospital on October 31, 2003. Thereafter, he failed to respond to the Director's efforts to obtain medical documentation and failed to answer the disciplinary charges or provide any other information. On June 18, 2004, the Director reinstated his motion for disciplinary proceedings and for a panel bypass. The motion was granted by this court on July 7, 2004.

The Director filed a petition for disciplinary action against Vaught on July 13, 2004. Vaught did not answer the petition. On August 31, 2004, the Director filed a motion for summary relief pursuant to Rule 13(b), RLPR. This motion was granted on ...

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