The Florida Bar v. Susan K. W. Erlenbach
138 So. 3d 369
Fla.2014Background
- Respondent Susan K.W. Erlenbach stipulated to violations of Florida Bar rules 3-4.3 (acts unlawful or contrary to honesty and justice) and 4-8.4(c) (dishonesty, fraud, deceit, misrepresentation) based on long‑running tax noncompliance.
- She failed to timely file joint personal tax returns for multiple years (1997–2006, and owed later years), and entered into repayment agreements with the IRS, paying over $500,000 toward liabilities.
- From 2006–2008 she withheld federal employment taxes from her firm’s employees but intermittently failed to remit those withholdings; she and the IRS agreed to a payment plan and had paid over half of that debt at the referee hearing.
- Referee found no evidence of evasion or selfish motive; misconduct attributed to poor financial management and significant personal hardships (family medical issues, depression, local economic decline). Respondent admitted misconduct and cooperated.
- Aggravating factors: three prior disciplinary matters, pattern of repeated tax noncompliance, and long legal career. Mitigating factors: admissions, remorse, substantial character testimony, pro bono work, repayment efforts, and procedures to prevent recurrence.
- Referee recommended an 89‑day suspension + 2 years probation; the Florida Supreme Court approved guilt and costs but, reviewing recent precedent, imposed a harsher sanction: a 1‑year suspension + 2‑year probation with quarterly tax‑payment reporting conditions.
Issues
| Issue | Plaintiff's Argument (The Florida Bar) | Defendant's Argument (Erlenbach) | Held |
|---|---|---|---|
| Whether Erlenbach’s tax misconduct violated Bar rules | Failure to file and remit taxes violates rules 3‑4.3 and 4‑8.4(c) and warrants discipline | Admitted violations but argued lack of criminal intent, significant mitigation, repayment, and rehabilitative approach | Court: misconduct violated rules; findings of guilt approved |
| Appropriate sanction for prolonged tax noncompliance and failure to remit withholdings | Recent case law supports substantial suspensions (up to multi‑year) for similar tax misconduct | Recommended lesser, rehabilitative sanction (89 days + probation) given mitigation and lack of criminal conviction | Court: 1‑year suspension + 2‑year probation (referee’s 89‑day recommendation disapproved) |
| Relevance of prior discipline and pattern | Prior disciplinary history and repeated tax failures are aggravating and support harsher sanction | Prior mitigation and cooperation should counsel deference to referee’s recommended sanction | Court: prior discipline and pattern aggravate; supports increased sanction |
| Deference to referee’s recommended discipline | Bar supported referee but Court must ensure sanction aligns with modern precedent | Erlenbach urged deference to referee’s unique fact‑finding and agreed sanction to avoid undue hardship | Court: will generally defer, but rejected referee’s sanction as not reasonably supported by recent caselaw and Florida Standards |
Key Cases Cited
- Fla. Bar v. Behm, 41 So.3d 136 (Fla. 2010) (survey of recent tax‑noncompliance discipline and imposition of substantial sanctions)
- Fla. Bar v. Del Pino, 955 So.2d 556 (Fla. 2007) (three‑year suspension for false extension filing and felony convictions; significant mitigation could have lessened sanction)
- Fla. Bar v. Cimbler, 994 So.2d 306 (Fla. 2008) (table decision) (Court disapproved lesser referee sanction and imposed multi‑year suspension for failure to timely file taxes)
- Fla. Bar v. Smith, 650 So.2d 980 (Fla. 1995) (three‑year suspension for tax evasion and related misconduct)
- Fla. Bar v. Pearce, 631 So.2d 1092 (Fla. 1994) (forty‑five day suspension for two‑year failure to file personal tax returns; attorneys have special obligation to obey law)
- Fla. Bar v. Weed, 559 So.2d 1094 (Fla. 1990) (three‑year suspension where failure to file tax returns constituted illegal conduct involving moral turpitude)
- Fla. Bar v. Lord, 433 So.2d 983 (Fla. 1983) (repeated failures to file returns over extended period reflect flagrant disregard for laws lawyers swear to uphold)
- Fla. Bar v. Rotstein, 835 So.2d 241 (Fla. 2002) (Court began imposing more severe sanctions in tax and other misconduct matters)