Sean K. Hornbeck v. Board of Professional Responsibility Of The Supreme Court of Tennessee, 545 S.W.3d 386

Background

Sean K. Hornbeck, a Tennessee-licensed lawyer, received about $5–5.5 million from investor Harish Raghavan to hold in Hornbeck’s attorney escrow account for a proposed leveraged trading venture; Hornbeck represented the funds were “blocked” and would not be moved without Raghavan’s permission.
Hornbeck transferred and withdrew millions from the trust account without Raghavan’s knowledge, returned $1 million, and failed to account for the remaining ~$4–4.5 million; he later submitted falsified bank statements and a fabricated email in chancery-court proceedings.
Multiple clients (Doughertys, Garland, and others) alleged Hornbeck neglected matters, failed to communicate, misappropriated client funds, and engaged in unauthorized practice by collecting/endorsing checks while suspended.
The Board obtained Hornbeck’s temporary suspension (Dec. 15, 2008); he was later placed on disability inactive status, then returned to suspended status (Oct. 21, 2011), and disciplinary proceedings followed (hearing Dec. 3, 2014).
A hearing panel found numerous Rule violations (including knowing conversion of client funds, submission of falsified documents, violating court orders, unauthorized practice) and, citing ABA Standards and aggravating factors, recommended disbarment.
The chancery court affirmed the hearing panel; Hornbeck appealed to the Tennessee Supreme Court arguing primarily that his disbarment should be made retroactive to his temporary suspension so he could seek reinstatement earlier. The Supreme Court affirmed and denied retroactivity.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the hearing panel’s findings support disbarment	Hornbeck contested severity based on alleged 2008 head injury and mental impairment	Board argued evidence showed knowing dishonesty, conversion, falsification, and other misconduct warranting disbarment	Court affirmed disbarment; panel findings supported by substantial evidence and ABA Standards
Whether Hornbeck waived argument for retroactive disbarment	Hornbeck contended he did not need to request retroactivity at the panel stage and raised it on appeal	Board argued Hornbeck waived the issue by not raising it before the panel	Court held issue was not waived; Hornbeck preserved the retroactivity claim on appeal
Whether the panel’s judgment was vague for failing to state effective disbarment date	Hornbeck claimed judgment ambiguous without explicit effective date	Board pointed to Rule 9 setting effective dates	Court held no vagueness: pre-2014 Rule 9 set effective date ten days after the order, so explicit date unnecessary
Whether disbarment should be retroactive to Hornbeck’s prior temporary suspension	Hornbeck argued retroactivity is necessary to credit suspended time toward the five-year reinstatement waiting period	Board argued disbarment and suspension are distinct; retroactivity is not appropriate for disbarment	Court held disbarment is a termination (not temporary) and declined retroactivity; eligibility to apply for reinstatement runs from the effective disbarment date

Key Cases Cited

Rayburn v. Bd. of Prof'l Responsibility, 300 S.W.3d 654 (Tenn. 2009) (Supreme Court’s supervisory authority over Board)
Hughes v. Bd. of Prof'l Responsibility, 259 S.W.3d 631 (Tenn. 2008) (standard for reviewing disciplinary panels)
Mabry v. Bd. of Prof'l Responsibility, 458 S.W.3d 900 (Tenn. 2014) (trial-court review of hearing-panel record)
Doe v. Bd. of Prof'l Responsibility, 104 S.W.3d 465 (Tenn. 2003) (Court’s duty to enforce professional rules)
Allison v. Bd. of Prof'l Responsibility, 284 S.W.3d 316 (Tenn. 2009) (deference to panel on factual matters)
Reguli v. Bd. of Prof'l Responsibility, 489 S.W.3d 408 (Tenn. 2015) (upholding panel rulings when reasonable minds can differ)
Sallee v. Bd. of Prof'l Responsibility, 469 S.W.3d 18 (Tenn. 2015) (disciplinary-review principles)
Sneed v. Bd. of Prof'l Responsibility, 301 S.W.3d 603 (Tenn. 2010) (law license is privilege; Court’s supervisory role)
Cowan v. Bd. of Prof'l Responsibility, 388 S.W.3d 264 (Tenn. 2012) (duty to protect public and purge unfit attorneys)
Schoolfield v. Tenn. Bar Ass'n, 353 S.W.2d 401 (Tenn. 1961) (integrity required of attorneys)
Milligan v. Bd. of Prof'l Responsibility, 301 S.W.3d 619 (Tenn. 2009) (law license is privilege, not a right)