In re Disciplinary Action Against Montez
812 N.W.2d 58
Minn.2012Background
- Montgomery, admitted 2002, faced disciplinary charges for trust account violations, false statements, and noncooperation arising from BFAS representation in 2009.
- BFAS hired Montgomery for a defamation suit; retainer agreement stated a $5,000 fixed fee with $1,000 monthly payments, and trust handling obligations.
- Montgomery received a $5,000 retainer check but did not place it in trust; BFAS later discovered the issue and terminated her representation.
- Arbitration awarded BFAS $1,750 (14 hours at $125) with a refund of the remaining retainer; Montgomery claimed $2,000 was deposited in a mutual fund account and failed to pay the award.
- Montgomery altered a version of the fee agreement presented at arbitration to mislead the panel; she consistently asserted funds were in trust and later provided false representations to the Director and to the referee.
- Montgomery failed to cooperate with the Director’s investigation, moved to Nebraska, and delayed or withheld substantive responses to discovery and requests for information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BFAS could file a disciplinary complaint to collect an arbitration award | BFAS contends a disciplinary action is proper for failure to honor a binding fee arbitration. | Montgomery argues Rule 8.4(i) lacks private enforcement via disciplinary complaint and that pursuing civil remedies should precede disciplinary action. | Disciplinary action proper; client need not pursue civil action before filing a Director complaint. |
| Whether Montgomery violated 1.15 by mismanaging the BFAS retainer | BFAS asserts Montgomery failed to place funds in trust and misrepresented handling of the retainer. | Montgomery contends misinterpretation of trust-account requirements and attempts to provide explanations for funds. | Court upholds violation of 1.15; failure to maintain a trust account constitutes serious misconduct. |
| Whether Montgomery’s false statements support discipline for dishonesty | BFAS and Director allege repeated false statements to Director, successor counsel, arbitration panel, and court. | Montgomery disputes the falsity or materiality of some statements and argues ambiguity in some assertions. | Dishonesty constitute serious misconduct warranting severe discipline. |
| Whether noncooperation with the investigation warrants discipline | BFAS asserts Montgomery consistently failed to respond and to produce documents. | Montgomery contends she cooperated to the extent possible and disputes the characterization of her conduct. | Noncooperation, when present, supports disciplinary action independent of underlying misconduct. |
| What discipline is appropriate given the cumulative misconduct | BFAS supports indefinite suspension with no reinstatement for at least 2 years due to trust violations and dishonesty. | Montgomery seeks lesser discipline, arguing no proven bad faith and requesting only payment arrangements. | Indefinite suspension with no reinstatement for at least 2 years; additional conditions and probation on reinstatement. |
Key Cases Cited
- In re Dedefo, 781 N.W.2d 1, 781 N.W.2d 1 (Minn. 2010) (accepts referee findings as conclusive when no transcript is ordered; reviews legal conclusions de novo)
- In re Rebeau, 787 N.W.2d 168, 787 N.W.2d 168 (Minn. 2010) (sanctioning attorney for misconduct; ultimate sanctioning authority rests with court)
- In re Karlsen, 778 N.W.2d 307, 778 N.W.2d 307 (Minn. 2010) (discusses scope of review when no transcript is ordered)
- In re Ryerson, 760 N.W.2d 893, 760 N.W.2d 893 (Minn. 2009) (discusses review of referee findings without transcript; aggravating/mitigating factors)
- In re Oberhauser, 679 N.W.2d 153, 679 N.W.2d 153 (Minn. 2004) (discusses cumulative weight of multiple violations in discipline decisions)