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In re Petition for Disciplinary Action against Upin

Supreme Court of Minnesota

December 13, 2017

In re Petition for Disciplinary Action against Jeffrey D. Upin, a Minnesota Attorney, Registration No. 0152924.

          ORDER

          David R. Stras Associate Justice

         The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent Jeffrey D. Upin has committed professional misconduct warranting public discipline by failing to safeguard and misappropriating client funds. See Minn. R. Prof. Conduct 1.15(a), 8.4(c).

         The parties have filed a stipulation for discipline. In it, respondent waives his procedural rights under Rule 14, Rules on Lawyers Professional Responsibility (RLPR); waives his right to answer; and unconditionally admits the allegations in the petition. The parties jointly recommend that the appropriate discipline is a 1-year suspension, effective 14 days from the date of this order, with no right to petition for reinstatement for at least 8 months.

         "We consider four factors when determining the appropriate discipline: 1) the nature of the misconduct, 2) the cumulative weight of the violations of the rules of professional conduct, 3) the harm to the public, and 4) the harm to the legal profession." In re Fair bairn, 802 N.W.2d 734, 742 (Minn. 2011) (quoting In re Albrecht, 779 N.W.2d 530, 540 (Minn. 2010)) (internal quotation marks omitted). ''We also weigh 'both the aggravating and the mitigating circumstances of the particular case' and examine 'similar cases in an effort to impose consistent discipline.' " Id. (quoting Albrecht, 779 N.W.2d at 540).

         Respondent's misconduct is extremely serious. "Misappropriation of client funds constitutes serious misconduct that generally warrants disbarment." In re Rooney, 709 N.W.2d 263, 268 (Minn. 2006). But "[w]e have not always disbarred attorneys who have misappropriated client funds." Id. "In cases where this court has not imposed disbarment for extensive misappropriation of client funds, substantial mitigating circumstances were present." In re Weems, 540 N.W.2d 305, 308 (Minn. 1995). ''However, even in such cases, severe sanctions, typically lengthy suspensions, generally have been imposed." Rooney, 709 N.W.2d at 268.

         The Director acknowledges that "misappropriation of client funds warrants disbarment absent substantial mitigating factors." She maintains, however, that four factors justify a sanction other than disbarment: (1) respondent's conduct was a single isolated incident reflecting a brief lapse of judgment; (2) no clients suffered direct financial loss; (3) respondent is truly remorseful; and (4) respondent was not motivated by personal benefit or gain. In light of these factors, the Director asserts that a 1-year suspension "is sufficient to protect the public and the judicial system while still serving as a deterrent of future misconduct."

         Not all of these factors, however, are actually mitigation. Some, such as the lack of harm to clients and the isolated nature of the misconduct, are a part of the initial analysis of the appropriate discipline. See In re Bonner, 896 N.W.2d 98, 110 (Minn. 2017) (indicating that a lack of harm to clients goes to the harm caused to the public and is not a mitigating factor); cf. In re Fru, 829 N.W.2d 379, 390 n.7 (Minn. 2013) (stating that "we generally take the fact that an attorney has committed multiple acts of misconduct into account when considering the cumulative weight of an attorney's disciplinary violations" rather than as a separate aggravating factor). Nevertheless, we agree that under the circumstances of this case, disbarment is not required.

         As to the nature of the misconduct, respondent has admitted to misappropriating $40, 000 in client funds in two transactions, 5 days apart, under circumstances that suggest he made a single decision to use client funds to allow his employer to meet its payroll obligations. Respondent, who was the chief operating officer at his law firm and was responsible for overseeing payroll, had no ownership interest in the firm. Respondent restored the misappropriated funds within approximately 1 month. Still, respondent's misconduct was serious in nature.

         As the Director has noted, in determining the cumulative weight of the violations, "we distinguish 'a brief lapse in judgment' or 'a single, isolated incident' of misappropriation from multiple instances of misappropriation occurring over a substantial amount of time or involving significant amounts of money." Fairbairn, 802 N.W.2d at 743 (quoting In re Wentzel, 711 N.W.2d 516, 521 (Minn. 2006)). Respondent's misconduct in this case, despite involving two acts of misappropriation separated by five days, was isolated.

         Moreover, the misappropriation did not harm any clients, which is an important consideration in determining the appropriate discipline. See, e.g., Rooney, 709 N.W.2d at 269-70. Nevertheless, we acknowledge that "misappropriation of client funds by its nature harms the public at large and the legal profession, because it betrays the trust the client places in an attorney." In re Tigue, 900 N.W.2d 424, 432 (Minn. 2017).

         As to the other considerations cited by the Director in support of the stipulation, remorse is a proper basis for mitigation. Fairbairn, 802 N.W.2d at 745-46; Roomy, 709 N.W.2d at 271. And we have sometimes identified a lack of selfish motive as a mitigating factor as well. See Rooney, 709 N.W.2d at 272 (citing ABA Standards for Imposing Lawyer Sanctions § 9.32 (1991) (listing the lack of a dishonest or selfish motive as a possible mitigating factor)). We note, however, that even if respondent lacked an obvious selfish motive in misappropriating the funds, respondent benefitted, at least in part and indirectly, from his misconduct: the misappropriation presumably allowed him, as well as others, to receive their normal payroll checks.

         We retain the ultimate responsibility for determining the appropriate discipline. In re Eskola, 891 N.W.2d 294, 298 (Minn. 2017). The purpose of discipline for professional misconduct is not to punish the attorney but to protect the public and the judicial system and to deter future professional misconduct. In re Plummer, 725 N.W.2d 96, 98 (Minn. 2006). Although we agree with the Director that the facts of this case do not require disbarment, we believe the recommended discipline stipulated to by the parties is inadequate to protect the public and the judicial system and to deter future misconduct. Instead, we conclude that the appropriate disposition is an 18-month suspension, followed by 2 years of probation. See, e.g., Fairbairn, 802 N.W.2d at 743-48 (imposing an 18-month suspension, followed by 3 years of probation and a permanent prohibition on being an authorized signatory on client trust account, for six acts of intentional misappropriation totaling $144, 000 and two acts of unintentional misappropriation over 13 months, when substantial mitigating factors were present).

         Based upon all the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT:

         1. Respondent Jeffrey D. Upin is suspended from the practice of law, effective 14 days from the date of the filing of this order, with no right to petition for reinstatement for ...


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