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In re Lundgren

Supreme Court of Kansas

May 26, 2017

In the Matter of Alvin R. Lundgren, Respondent.

         Original proceeding in discipline. Disbarment.

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

          Respondent did not appear.

          PER CURIAM.

         This is an uncontested original proceeding in discipline filed by the office of the Disciplinary Administrator against respondent, Alvin R. Lundgren, of Veyo, Utah, an attorney admitted to the practice of law in Kansas in 1990.

         On July 20, 2016, the office of the Disciplinary Administrator filed a formal complaint against respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). Respondent filed an answer on August 15, 2016. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on October 6, 2016, at which the respondent appeared pro se. The hearing panel determined that respondent violated KRPC 1.15(a) and (d) (2017 Kan. S.Ct. R. 326) (safekeeping property); 8.3(a) (2017 Kan. S.Ct. R. 378) (reporting professional misconduct); 8.4(c) (2017 Kan. S.Ct. R. 379) (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation); Kansas Supreme Court Rule 207(c) (2017 Kan. S.Ct. R. 246) (failure to report action); and Kansas Supreme Court Rule 208(c) (2017 Kan. S.Ct. R. 246) (failure to notify Clerk of the Appellate Courts of change of address).

         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 . . . .

"6. In August 1989, the Utah Supreme Court admitted the respondent to the practice of law in Utah.
"7. The Kansas Supreme Court admitted the respondent to the practice of law in the State of Kansas on September 20, 1990.
"8. The Missouri Supreme Court also admitted the respondent to the practice of law in 1990.
"9. On April 12, 1994, the California Supreme Court admitted the respondent to the practice of law. Prior to his admission to the practice of law in the State of California, the respondent engaged in misconduct.
'Count One:
'In November 1992, Respondent was hired by Checkrite to perform debt collection work. Checkrite hired Respondent to recover debts from checks written on insufficient funds and closed bank accounts that had been issued to California merchants. At the time, Respondent was working as an attorney in Utah.
'Between April 1993 and August 1993, Respondent sent letters to debtors on letterhead which stated "Lundgren & Associates, P.C. Attorneys at Law." The letterhead listed an address in Sacramento, California. At the time, Respondent was not admitted to practice law in the State of California. The letterhead did not mention the jurisdictions that Respondent was admitted as a member of the bar.
'In June 1993, Respondent sent a check to the State Bar's Committee of Bar Examiners to pay fees associated with his application for admission to the State Bar of California. The check was imprinted with Respondent's Sacramento address and indicated that the account belonged to "Lundgren & Associates, P.C., Attorneys at Law." Respondent was not admitted to the practice of law in California until April 12, 1994.
'By sending out letters and issuing checks imprinted with "Attorney at Law, " Respondent held himself out as being entitled to practice law in the State of California in violation of Business and Professions Code sections 6125(a) and 6126.
'Conclusions of Law: By the foregoing conduct, Respondent committed a willful violation of Business and Professions Code section 6068(a).
'Counts Five and Eight:
'In 1993, a civil complaint was filed against Respondent and other defendants for violations of the federal Fair Debt Collections Act and the California Unfair Business Practices Act, in a suit entitled Newman v. Checkrite, Eastern District Court of California, U.S. District Court case number CIV-S-93 1557 LKK PAN.
'On January 25, 1994, Respondent appeared at a scheduling conference acting as the attorney for defendant [D.K.] in the Newman case. Prior to February 18, 1994, Respondent negotiated with plaintiff's counsel to obtain an extension of time for [D.K.] to respond to plaintiff's discovery.
'Respondent was not admitted to practice law in the U.S. District Court for the Eastern District of California until May 18, 1994. Respondent did not seek pro hac vice status to practice in the court pending his admission to this State Bar of California. He also did not inform the court that he was not admitted to practice in the U.S. District Court for the Eastern District of California at the time that he made the appearance on behalf of [D.K.].
'By making an appearance in court on behalf of a client in negotiating an extension of time prior to being admitted to the practice of law before the federal court, Respondent engaged in the practice of law in a jurisdiction while he was not licensed to do so.
'Conclusions of Law: By the foregoing conduct, Respondent committed a willful violation of Rules 1-300(B) and 5-200(B) of the Rules of Professional Conduct.'
"10. On July 13, 1998, the California Supreme Court entered an order suspending the respondent's license to practice law in that state for a period of 18 months. After serving 1-month suspension, the respondent was placed on probation.
"11. On February 22, 2000, the Missouri Supreme Court entered an order concluding that the respondent violated Rule 4-5.5 (a) for engaging in the unauthorized practice of law in California. That court entered an order indefinitely suspending the respondent from the practice of law in Missouri. Thereafter, on May 30, 2000, the Missouri Supreme Court reinstated the respondent's license to practice law.
"12. J.B. filed a complaint against the respondent with the Utah State Bar, Office of Professional Conduct ('OPC'). Thereafter, on October 31, 2012, the OPC filed a motion for summary judgment in the second district court for Morgan County, Utah.
"13. On February 1, 2013, the second district court for Morgan County, Utah, granted the OPC's motion for summary judgment. Later, the court entered an order which included findings of fact and conclusions of law. The court concluded that the respondent violated Rule 1.15(a) (safekeeping property), Rule 1.15(d) (safekeeping property), Rule 8.1(b) (bar admission and disciplinary matters), and Rule 8.4(a) (misconduct).
"14. Thereafter, on June 5, 2013, the court held a sanctions hearing. During the sanctions hearing, the respondent stated, 'I have no prior record [of attorney discipline].'
"15. In an order memorializing its findings and conclusions, the court found that the respondent misappropriated client funds. The court ordered the respondent be disbarred from the practice of law in Utah.
"16. While the Utah disciplinary case was pending, on July 22, 2014, the respondent relinquished his license to practice law in California. In the voluntary resignation, the respondent declared the following:
'1. I am not currently suspended from the practice of law as a result of the imposition of discipline by the California Supreme Court, nor subject to (a) a period of disciplinary probation; (b) conditions attached to a public or private reproval; or (c) the terms of an agreement in lieu of discipline with the Office of the Chief Trial Counsel;
'2. To my knowledge, I am not currently the subject of any disciplinary complaint, investigation or proceeding by any professional licensing agency in California or another jurisdiction;
'3. I am not currently charged with the commission of any felony or misdemeanor and have no knowledge that I am the subject of a current criminal investigation or grand jury proceeding for the alleged commission of a felony or misdemeanor in any jurisdiction;
'4. I have not been convicted of any crime for which I have failed to notify the State Bar pursuant to Business and Professions Code section 6068(a)(5). (Emphasis added.)'
The California Supreme Court accepted the voluntary resignation on October 21, 2014. It appears that the respondent never informed the bar authorities of California that, in fact, he was the subject of a disciplinary complaint in Utah at the time he relinquished his license.
"17. The respondent appealed the second district court's decision to the Utah Supreme Court. On July 21, 2015, the Utah Supreme Court entered its opinion, which provided as follows:
'INTRODUCTION
'¶ 1 Intentionally misappropriating a client's money is at or near the top of the list of things a lawyer should never do. But that is what Alvin Lundgren did when he took [J.B.]'s money from his client trust account for his own purposes. Upon discovering the defalcation, [J.B.] reported Mr. Lundgren to the Utah State Bar Office of Professional Conduct (OPC). Following an investigation, the OPC filed a complaint in district court against Mr. Lundgren. Based on his admitted misconduct, the district court granted the OPC's motion for summary judgment and disbarred Mr. Lundgren. Mr. Lundgren timely appealed. We affirm his disbarment and state again that a Utah attorney who intentionally misappropriates client funds will be disbarred unless the attorney can show truly compelling mitigating circumstances.
'BACKGROUND
'¶ 2 Mr. Lundgren had been practicing law for twenty years when [J.B.] hired him to pursue a workers' compensation claim. In February 2009, [J.B.] settled her claim for $24, 906. Per her instructions, Mr. Lundgren retained $2, 500 of [J.B.]'s share of the settlement proceeds in his client trust account in order to pay her outstanding medical bills. However, in July of 2010, [J.B.]'s doctor, Carl Mattson, informed her that her medical bills remained outstanding. [J.B.] called Mr. Lundgren numerous times and left several messages, but Mr. Lundgren failed to respond.
'¶ 3 Ultimately, in December of 2010, [J.B.] sent Mr. Lundgren a letter asking him to account for her settlement funds. She attached a copy of Dr. Mattson's bill. Mr. Lundgren did not reply, nor did he account for the $2, 500 entrusted to him.
'¶ 4 He later claimed to have lost [J.B.]'s case file. As a result of Mr. Lundgren's failure to respond and failure to use the settlement funds as directed, [J.B.] filed a complaint with the Utah State Bar. On August 12, 2011, the OPC sent Mr. Lundgren notice of [J.B.]'s informal complaint. As part of its investigation, the OPC asked Mr. Lundgren to provide bank records of the deposits and withdrawals made to and from his client trust account from March 2009 through October 2010. The OPC did not receive this information, although Mr. Lundgren claims that he sent it.
'¶ 5 The OPC referred the case to a screening panel of the Ethics and Discipline Committee, which heard the matter on January 26, 2012. At the hearing, Mr. Lundgren admitted under oath that he had taken [J.B.]'s money from his client trust account for his own personal use. He further testified that over the course of about four years, he had taken money belonging to other clients from his client trust account to cover business and personal expenses. None of Mr. Lundgren's clients authorized him to take their money from the trust account for his benefit.
'¶ 6 At some point after receiving notice of [J.B.]'s complaint, but prior to the hearing before the screening panel, Mr. Lundgren set up monthly payments of $300 to Dr. Mattson to pay [J.B.]'s medical expenses- ostensibly because he did not have enough money to pay [J.B.]'s medical bill in full. Mr. Lundgren ultimately accounted for [J.B.]'s full settlement monies by paying Dr. Mattson's bill and reimbursing the rest of the money to her.
'¶ 7 Following the hearing, the screening panel directed the OPC to file a formal complaint in district court against Mr. Lundgren, and the OPC did. The OPC then moved for summary judgment, which the district court granted. The court concluded that Mr. Lundgren violated rules 1.15(a) and (d) of the Utah Rules of Professional Conduct by misappropriating client funds and rule 8.1(b) by "knowingly fail[ing] to respond to a lawful demand for information" made by the OPC.
'¶ 8 Thereafter, the district court conducted a sanctions hearing "to receive relevant evidence in aggravation and mitigation." SUP. CT. R. PROF'L PRAC. 14-511(f). Following the Standards for Imposing Lawyer Sanctions of the Supreme Court Rules of Professional Practice- rule 14-607-the district court considered various mitigating factors, including Mr. Lundgren's (1) "absence of a prior record of discipline, " (2) "good character and reputation, " and (3) "remorse." The court then determined that none of the evidence presented was "truly compelling, " and thus did not justify departure from the presumptive sanction of disbarment. See SUP. CT. R. PROF'L PRAC. 14-605. The court explicitly rejected Mr. Lundgren's claim that his financial hardship should be considered a mitigating factor. Before imposing sanctions, the court also considered aggravating factors, which included Mr. Lundgren's dishonesty, his pattern of misconduct, and his extensive experience in practicing law. The court imposed the sanction of disbarment for Mr. Lundgren's misconduct. He timely appealed.
'STANDARD OF REVIEW
'¶ 9 Mr. Lundgren does not challenge the grant of summary judgment with regard to his violation of rule 1.15(a) and (d). Accordingly, we are asked to review only the district court's decision to disbar Mr. Lundgren. Under the Utah Constitution, this court has the duty and the authority to
"govern the practice of law, including admission to practice law and the conduct and discipline of persons admitted to practice law." UTAH CONST. art. VIII, § 4. Generally, we do not overturn a district court's findings of fact unless they are "arbitrary, capricious, or plainly in error." In re Discipline of Babilis, 951 P.2d 207, 213 (Utah 1997). However, "in light of our constitutional mandate and the unique nature of disciplinary actions, " we review district court findings in attorney discipline matters with less deference. Id. In this area, we retain "the right to draw different inferences from the facts" in order to "make an independent determination" of the correctness of the discipline the district court imposed. In re Discipline of Crawley, 2007 UT 44, ¶ 17, 164 P.3d 1232; see also In re Discipline of Corey, 2012 UT 21, ¶ 23 n. 13, 274 P.3d 972.
'ANALYSIS
'I. DISBARMENT WAS THE APPROPRIATE SANCTION FOR MR. LUNDGREN'S MISCONDUCT
'¶ 10 The Utah Supreme Court Rules of Professional Practice govern, among other things, the ethical practice of law in the State of Utah and provide the standards for imposing sanctions on attorneys who violate the rules. See SUP. CT. R. PROF'L PRAC. 1.0 to 8.5 ("Rules of Professional Conduct"), 14-601 to 14-607 ("Standards for Imposing Lawyer Sanctions"). Chapter fourteen, article 6 provides the Utah State Bar with rules for imposing sanctions on attorneys who have "engaged in professional misconduct." Id. 14-603(a). These rules are designed to "maintain the high standard of professional conduct required of those who undertake the discharge of professional responsibilities as lawyers." Id. 14-602(b). Further, the rules allow judges "flexibility and creativity in assigning sanctions" when a lawyer has committed misconduct. Id. 14-602(d). A court should consider specific factors when imposing sanctions, including "(a) the duty violated; ...

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