428 P.3d 1104
Utah2018Background
- Brian W. Steffensen, a long‑time Utah practitioner, repeatedly failed to remit employee withholding taxes across multiple law firms (1995–2013), accumulated significant tax liabilities, and entered a diversion agreement in 2010 after criminal charges for failure to render tax returns and related offenses.
- The Office of Professional Conduct (OPC) charged Steffensen with violations of Utah Rule of Professional Conduct 8.4(b) (criminal acts reflecting adversely on fitness) and 8.4(c) (dishonesty, fraud, deceit, misrepresentation).
- The district court found by a preponderance of the evidence that Steffensen knowingly and intentionally failed to render required tax returns, provided W‑2s misrepresenting withholdings, failed to remit employee tax monies, and made materially misleading financial statements to the Tax Commission and a bank.
- The district court imposed disbarment under Rules Governing the Utah State Bar (particularly Rule 14‑605), treating the misconduct as warranting the harshest sanction.
- The Utah Supreme Court affirmed the factual findings of misconduct under Rules 8.4(b) and 8.4(c) (except it reversed the finding that the Tax Commission hardship application contained a proven misrepresentation) but held disbarment was not an appropriate sanction under the applicable 14‑605 subsections and remanded for a new sanctions determination.
Issues
| Issue | Plaintiff's Argument (OPC) | Defendant's Argument (Steffensen) | Held |
|---|---|---|---|
| Admissibility of evidence (personal/corporate tax returns, banking, estate planning, and special‑agent testimony) | Evidence was relevant to mental state, pattern, and misconduct; admissible for bench proceedings | Evidence was irrelevant, unfairly prejudicial, or improper expert testimony | Court: objections were inadequately preserved or went to weight; evidence admissible; no reversible error in admissions |
| Mens rea for criminal tax offense underlying 8.4(b) ("knowingly and intentionally" failed to render returns) | Circumstantial evidence, repeated failures, admissions, and diversion agreement support finding of knowing and intentional conduct | Failures were due to staff incompetence, delegation, and personal stress — not his knowing and intentional conduct | Court: affirmed district court finding that Steffensen acted knowingly and intentionally; 8.4(b) violation stands |
| Rule 8.4(c) misrepresentations (W‑2s, failure to remit, bank vs. Tax Commission statements) | Multiple dishonest acts and misrepresentations proved; all three findings suport 8.4(c) violation | Discrepancy in loan vs. hardship forms (restricted stock) was explained by Steffensen and not rebutted — OPC failed to prove misrepresentation | Court: sustained 8.4(c) findings as to failure to remit and false W‑2s; reversed the finding regarding the hardship application misrepresentation |
| Appropriateness of disbarment under Rules Governing the Utah State Bar 14‑605(a)(1)/(a)(2) | Misconduct (criminal failure to render returns and dishonesty) warrants presumptive disbarment | 14‑605(a)(1) does not list 8.4(b)/(c); 14‑605(a)(2) requires listed elements (e.g., fraud, misappropriation) as necessary elements of the crime — not present here; disbarment therefore inappropriate | Court: disbarment reversed. Interpreting 14‑605, violations of 8.4(b)/(c) must be assessed under other subsections; remanded to district court for a new, more specific sanctions determination |
Key Cases Cited
- In re Discipline of Lundgren, 355 P.3d 984 (Utah 2015) (appellate standard for independent review of discipline)
- In re Discipline of Babilis, 951 P.2d 207 (Utah 1997) (deference to fact findings but independent review of sanction)
- In re Discipline of Crawley, 164 P.3d 1232 (Utah 2007) (discipline standard and scope of review)
- In re Discipline of Bates, 391 P.3d 1039 (Utah 2017) (disbarment as the harshest sanction requiring careful review)
- In re Discipline of Grimes, 297 P.3d 564 (Utah 2012) (court’s independent responsibility to assess discipline)
- State v. Booker, 709 P.2d 342 (Utah 1985) (sufficiency of circumstantial evidence to support findings)
- State v. Park, 404 P.2d 677 (Utah 1965) (bench trial evidence appraisal)