In re Petition for Disciplinary Action against William Bernard Butler, a Minnesota Attorney, Registration No. 0227912. ...
Susan M. Humiston, Director, Cassie Hanson, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.
William B. Butler, Robbinsdale, Minnesota, pro se.
S Y L L A B U S
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The referee did not abuse her discretion by reserving the admission of e-mail correspondence that as offered lacked authentication. - The record supports the referee’s findings of fact and conclusions that respondent violated the Minnesota Rules of Professional Conduct and Rules on Lawyers Professional Responsibility due to his criminal convictions for willful tax evasion, misuse of an attorney trust account, holding himself out as authorized to practice lаw while suspended, and failure to cooperate with the Director’s investigation.
- Given the aggravating factors present, an indefinite suspension with no right to petition for reinstatement for 4 years is the appropriate discipline for respondent’s criminal convictions for willful tax evasion, misuse of an attorney trust account, holding himself as authorized to practice law while suspended, and failure to cooperate with the Director’s investigation.
Suspended.
O P I N I O N
PER CURIAM.
The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action and a supplementary petition for disciplinary action against respondent William Bernard Butler. The petitions alleged that Butler was convicted of two felonies for willfully failing to file federal income tax returns, misused a trust account, failed to timely cooperate with the Director’s investigation, and held himself out as a licensed attorney while suspended. The referee held a hearing and concluded that Butler had violated the applicable rules, and that aggravating factors warranted disbarment. Butler asserts that, despite his convictions, his failure to file tax returns did not violate the Minnesota Rules of Professional Conduct and Rules on Lawyers Professional Responsibility. He also opposes the Director’s other
FACTS
Butler was admitted to practice in Minnesota in 1992. Butler has been disciplined twice before. On August 12, 2015, we suspended Butler from the practice of law with no right to petition for reinstatement for at least 2 years.1 In re Butler, 868 N.W.2d 243, 252 (Minn. 2015). Butler’s 2015 discipline stemmed from a substantial pattern of misconduct including pursuit of frivolous litigation on behalf of 40 clients, fraudulent joinder of parties, refiling of previously dismissed cases, and failure to pay $300,000 in court-ordered sanctions. Id. at 247–50. The Director further admonished Butler on January 27, 2017, for identifying himself as “General Counsel” for a company that employеd him and providing legal advice while he was suspended from the practice of law.
This matter arises principally out of Butler’s March 20, 2019 convictions on two counts of attempting to evade or defeat a tax law by knowingly failing to file a tax return (for tax years 2012 and 2013) when required to do so, in violation of
After Butler was charged with willful tax evasion in 2018, the Director began a disciplinary investigation. On May 16, 2019, the Director sent Butler a letter informing him that his law firm’s website, which stated that “William Bernard Butler is a Minnesota Attorney,” was misleading given his suspended status at the time. Butler responded on May 30, 2019, that his website was “currently down” but if it went back up that he would change it to state that he “is a non-practicing Minnesota attorney” and include a link to his prior discipline.
The Director also sent Butler a notice of investigation on September 3, 2019, asking him to explain an August 13, 2019 overdraft on his attorney trust account with Wells Fargo. An automatic electronic payment for Butler’s personal car lease caused this overdraft. The notice requested Butler’s trust account bank statements and other information. This notice was mailed to the Minneapolis address that Butler maintained with the Minnesota Lawyer Registration Office, one that the Director had previously used to sucсessfully communicate with Butler concerning his criminal convictions. The notice was not returned as undeliverable.
After receiving no response, the Director sent Butler another letter on September 18, 2019, to the same address as well as a residential address associated with him. In this second letter, the Director cited Butler’s failure to respond to the first notice of investigation. This letter was returned as undeliverable to Butler’s Minneapolis address, but not his residential address.
Also on September 18, 2019, the Director requested an investigatory subpoena for Butler’s trust account. The subpoena was then approved and served on Wells
The subpoenaed bank records showed that Butler had used his attorney trust account to make monthly car lease payments and to pay for car insurance. Butler also used the trust account to deposit personal funds, including a $10,000 personal check, and disbursed payments to himself. This use resulted in five overdrafts, including a $725.35 shortage. Butler did nоt provide the Director with information showing that he has corrected the overdrafts. There were never any third-party funds in the account during the disputed period, nor any comingling. Butler explained to the Director that he used the trust account for personal purposes because his criminal convictions prevented him from opening a new bank account.
The Director petitioned for disciplinary action against Butler. The Director alleged that Butler’s convictions for knowingly failing to file his tax returns violated At the hearing, Butler offered Exhibit 40, which consisted mostly of e-mail communications between him and the Director that occurred after Butler did not respond to the first two notices of investigation. The Director objected primarily on authentication grounds, because the exhibit was offered with numerous redactions. Butler explained that he did not have access to a printer, and so he forwarded these e-mails to personal friends for them to print off. He claims that the redactions were of the personally identifying information of those friends. The referee reserved receiving Exhibit 40 on authentication grounds and it was ultimately not admitted into evidence. The Director called Butler to tеstify; he refused by citing religious beliefs.3 The referee stated that Butler could affirm the truth of his testimony. Butler rejected that option and said he would not testify. Butler did not call any witnesses on his behalf. The referee issued her findings of fact, conclusions of law, and recommendation. She made findings consistent with the facts described above. She concluded that Butler violated Butler challenges the referee’s failure to admit the e-mail correspondence, her findings of fact and conclusions, and her recommended discipline. We address each in turn. At the hearing, Butler sought to admit into evidence Exhibit 40, a series of e-mails between him and the Director that principally occurred after issuance of the Wells Fargo subpoena. The Director objected to admission of Exhibit 40 because the exhibit contained multiple redactions, and several pages contained settlement negotiations. Butler explained that he had no printer and had to forward the e-mails to other persons to print, and so he redacted the identifying information of those persons. The referee was concerned with the redactions and believed that the redactions could be addressed by testimony. Accordingly, the referee reserved decision on the admission of Exhibit 40. Butler, however, did not testify or attempt to authenticatе Exhibit 40. Ultimately, Exhibit 40 was not entered into evidence. Butler claims that the e-mail correspondence in Exhibit 40 rebuts the Director’s assertion, and the referee’s conclusion, that he failed to respond to the first notice of investigation and failed to cooperate with the disciplinary investigation. The Director asserts that Butler was on notice prior to the hearing that the Director would object to Exhibit 40 due to the redactions and the referee gave Butler an opportunity to authenticate the exhibit, which he did not do. A referee’s evidentiary rulings will only be reversed for an abuse of discretion. In re Moulton, 945 N.W.2d 401, 406 (Minn. 2020). Notably, the referee did not explicitly exclude Exhibit 40, but instead reserved admission of the exhibit. This action provided Butler an opportunity to later offer testimony to authenticate the e-mails. See We turn now to the referee’s findings of fact. Because Butler timely ordered a transcript, the referee’s findings of fact are not conclusive. See Butler asserts that Finding ¶ 7 is false.4 This finding details that Butler “currently maintains that he is not legally required to file his taxes and that he continues to rely on unreasonable and widely rejected legal positions as the basis for his belief.” The finding also observes that because Butler refused to testify at the disciplinary hearing, it is unclear if Butler will file his tax returns after his probation ends. Butler does not explain why this finding is false, but he contends that it cannot serve as the basis for a Butler argues that Finding ¶ 15 is inconsistent with the record, lacks foundation, or is irrelevant. This finding details the dates on which the car lease payments were processed from Butler’s trust account. These details derive from a spreadsheet admitted into evidence as Exhibit 7. Butlеr originally objected to admission of this document into evidence, but withdrew his objection at the hearing. We have reviewed the record and all of the dates in Finding ¶ 15 and Exhibit 7 directly correspond to Butler’s trust account bank records in Exhibit 26. This finding is supported by the record and is not clearly erroneous. Moulton, 945 N.W.2d at 405. Butler next challenges the referee’s conclusions that he violated the asserted rules. The referee’s conclusion that Butler violated a rule is reviewed for clear error. In re Ulanowski, 800 N.W.2d 785, 793 (Minn. 2011). And the referee’s interpretation of the rules is reviewed de novo. Id. We address each conclusion in turn. Butler disputes the referee’s conclusion that his 2019 convictions for tax evasion are conclusive evidence that he violated Rule 8.4(b) and (d). Butler maintains that his fаilure to file income taxes is an omission, not an “act” under The Director maintains that our precedent has “consistently precluded [such] arguments.” She argues that since 1972, we have held that a conviction for tax evasion is a per se violation of The Director is correct. A lawyer’s criminal conviction is “conclusive evidence that the lawyer committed the conduct for which the lawyer was convicted,” Similarly, Butler’s Selmer argument fails because we noted in Bunker that intentional violation of tax laws necessarily reflects on a lawyer’s honesty, trustworthiness, and fitness to practice law. 199 N.W.2d at 631–32 (citing the predecessor rule of Butler next challenges the referee’s conclusion that he violated The Director maintains that Butler’s consistent use of his attorney trust account for personal purposes, including multiple overdrafts, violated Butler’s summary argument that because the trust account contained no client or third-party funds, he did not violate Similarly, we have never held that the Director may be barred from petitioning for discipline merely because she may have reason to believe that more than one rule has been violated, but did not bring all allegations in an initial petition. Instead, the attorney must show that the Director’s delay resulted in actual and substantial prejudice, see In re Overboe, 867 N.W.2d 482, 486 (Minn. 2015), which Butler has not done. In contrast, the rules explicitly permit the Director to file a supplemental petition “to include additional charges based upon conduct committed before or after the petition was filed.” Butler maintains that his failure to respond to the notices of investigation cаnnot be a violation of the rules when he never received the notices. The Director responds in three ways. First, she asserts that it was Butler’s responsibility under By asserting that he never received the notices of investigation, Butler effectively challenges the referee’s conclusion that he “knowingly” failed to respond to the Director’s request. See While the referee did not explicitly find that Butler knowingly failed to cooperate, such a finding is implicit in, for example, her findings that the Director’s notices were sent to addresses that Butler had previously used with the Director and that the relevant notices had not been returned as undeliverable. Accordingly, there is evidence inferred from the circumstances to support the implicit finding that Butler received the relevant notices and thus had actual knowledge as required by The referee concluded that Butler’s labelling of himself as “a Minnesota attorney” on his website while suspended violated We have disciplined a lawyer in part for “displaying signage and utilizing law firm аnd other designations falsely implying that [the lawyer] continued to be licensed to practice law while he was suspended.” In re Stockman, 826 N.W.2d 530, 530 (Minn. 2013) (order). The signage and website at issue in Stockman labelled him as “Attorney Louis A. Stockman” and an “Attorney at Law” despite his suspended status. Butler’s labelling of himself on his law firm’s website as “a Minnesota attorney” is substantively identical to Stockman’s misconduct in labelling himself an “Attorney.” The referee’s conclusion that Butler violated After finding that Butler committed the misconduct alleged in the petition and supplementary petition, the referee agreed We retain “ultimate responsibility for determining appropriatе discipline” and discipline is imposed “to deter future misconduct, both by the attorney subject to discipline and by other attorneys.” Moulton, 945 N.W.2d at 408 (citation omitted) (internal quotation marks omitted). But we give “great weight” to the referee’s recommended discipline. In re Rebeau, 787 N.W.2d 168, 173 (Minn. 2010). To determine the appropriate discipline, we consider four factors: (1) the nature of the misconduct, (2) the cumulative weight of the violations, (3) the harm to the public, and (4) the harm to the legal profession. Id. We will also consider aggravating and mitigating factors. Id. at 173–74. Appropriate discipline, while unique to each case, should be consistent with that imposed in similar cases. Id. at 174. We first consider the nature of Butler’s misconduct. Butler’s misconduct consists of: (1) conviction of two felony counts of tax evasion; (2) misuse of an attorney trust account; (3) failure to cooperate with the Director’s disciplinary investigation; and (4) misrepresenting himself as a licensed attorney while suspended. We may consider the severity ranking assigned to a felony offense under the Minnesota Sentencing Guidelines. See In re Strunk, 945 N.W.2d 379, 385 (Minn. 2020). Butler’s felony convictions are an offense severity level 3 out of a maximum of 11. Misuse of an attorney trust account is also serious misconduct, even when the misuse does not result in harm to clients. In re Schulte, 869 N.W.2d 674, 678–79 (Minn. 2015). Notably though, Wells Fargo was harmed because the trust account was closed with a negative balance of over $700.8 Failure to cooperate is also serious misconduct. See In re Brooks, 696 N.W.2d 84, 88 (Minn. 2005) (“We have stressed that failure to cooperate with a disciplinary investigation, in and of itself, constitutes an act of misconduct that warrants indefinite suspension.“). And holding oneself out as licensed to practice while suspended is similarly serious. See In re Van Beek, 887 N.W.2d 31, 32 (Minn. 2016) (order). The nature of Butler’s misconduct thus warrants serious discipline. We next consider the cumulative weight of Butler’s misconduct. We treat a brief lapse in judgment or a single, isolated incident more leniently. Bonner, 896 N.W.2d at 108. Butler’s pattern of misconduct was neither. Instead, his misconduct spread over multiple years. He was convicted of tax evasion for tax years 2012 and 2013, and his more recent misconduct was also extensive. He misused his attorney trust account over a period of at least 5 months. And he recently held himself out as a licensed attorney while suspended and failed to cooperate with the Director’s disciplinary investigation. This factor weighs in favor of heavier discipline. We next consider the harm to the public and the legal profession. Butler’s misconduct caused some harm to the public. Butler’s misuse of his attorney trust account deprived Wells Fargo of over $700. His misuse of the trust account, however, did not harm any clients. And while Butler did initially deprive the public of tax revenue due to his knowing failure to file income taxes, he did ultimately repay these taxes and subsequently filed income taxes through 2019 consistent with the terms of his criminal probation. Butler’s criminal convictions for tax evasion caused serious harm to the legal profession. See Moulton, 945 N.W.2d at 409 (“[B]ecause Moulton’s violation of tax regulations is a failure to abide by the rule of law, his conduct harmed the legal profession.“). His misuse of his attorney trust account also harmed the legal profession, Schulte, 869 N.W.2d at 679, as did his fаilure to cooperate with the Director’s disciplinary investigation, id. at 678–79. Butler’s misconduct caused some harm to the public and great harm to the legal profession and thus warrants serious discipline. Having considered the four factors, we now look to the existence of any aggravating or mitigating factors. The referee found three aggravating factors: (1) Butler’s prior disciplinary history; (2) his lack of remorse; and (3) his noncooperation during the disciplinary hearing.9 “Prior disciplinary history is an aggravating favor, and a particularly weighty one if the prior discipline was for similar misconduct.” In re Quinn, 946 N.W.2d 583, 592 (Minn. 2020). Butler has been disciplined before and for similar conduct. Butler was previously admonished by the Director for the unauthorized practice of law while suspended and for holding himself out as the general counsel of a corporation. Here, he held himself out to the public as a licensed Minnesota attorney while suspended. His prior, similar misconduct shows that he has not demonstrated a “renewed commitment to comprehensive ethical and professional behavior after a disciplinary proceeding.” Nelson, 733 N.W.2d at 464 (citation omitted) (internal quotation marks omitted). Butler did not present evidence of mitigating factors, and the referee found none. In sum, these aggravating factors, and the lack of any mitigating factors, warrant more severe discipline. We now turn to similar cases. The Director asserts that none of our prior cases fully encompass Butler’s misconduct and aggravating factors. She suggests that the combination of serious misconduct here, current suspension for similar misconduct, prior admonition, and other significant aggravating factors compel disbarment. The Director offers In re Albrecht as an example in which we disbarred an attorney because the attorney had not heeded the message of prior discipline. 845 N.W.2d 184, 193 (Minn. 2014). In Albrecht, the attorney had been privately admonished by the Director 13 times, placed on supervised probation by this court three times, and suspended three times, including an indefinite suspension with no right to petition for reinstatement for 2 years. Id. at 187. While the most recent indefinite suspension was still in effect, the attorney had a sexual relationship with a client, practiced law while suspended, lied to the Director about a wire transfer, and misled the Director and referee about his petition for reinstatement. Id. at 187–91. While Butler’s misconduct here is in some respects more serious—Albrecht had not been convicted of any felonies—Butler’s disciplinary history is also far less substantial than Albrecht’s. The Director also offers In re Ray, in which we disbarred an attorney for the repeated unauthorized practice of law while suspended, including prior disсipline for the same. 610 N.W.2d 342, 347 (Minn. 2000). Ray, however, actually practiced law while suspended, id. at 344–45, as opposed to Butler, whose relevant misconduct was leaving up a website labelling him as a Minnesota attorney. That said, Butler is like Ray in that he is completely without remorse for his misconduct. See id. at 347 (noting that Ray did not “acknowledge that he ha[d] committed any misconduct“). Based on the differences between these two cases and Butler’s misconduct and disciplinary history here, we disagree with the Director that these cases support Butler’s disbarment. When a Minnesota attorney simply fails to file tax returns, we ordinarily suspend the attorney within a range of 30 to 180 days. See In re Green, 887 N.W.2d 33, 33 (Minn. 2016) (order); In re Smith, 852 N.W.2d 253, 253–54 (Minn. 2014) (order); In re Converse, 926 N.W.2d 913, 913 (Minn. 2019) (order); In re Butler, 915 N.W.2d 754, 754–55 (Minn. 2018) (order). We recognized in In re Singer, however, that when an attorney both fails to file tax returns (even if not criminally charged for it) and commits other serious misconduct, suspension for longer than 1 year is warranted. 541 N.W.2d 313, 316 (Minn. 1996) (collecting cases). Singer failed to file tax returns, failed to keep proper trust account records, failed to deposit advance fees into trust, failed to timely refund unearned fees, and failed to cooperate in disciplinary proceedings. Id. at 314–15. Singer also had prior disciplinary history and had been on probation for similar tax violations. Id. at 314. We indefinitely suspended him, with no right to petition for reinstatement for 2 years. Id. at 316. But in In re McGee, we suspended an attorney for only 1 year for the same criminal conviction as Butler when that attorney also failed to timely file 4 years of income tax returns, failed to appear at two court hearings, and failed to cooperate with the disciplinary investigation. 856 N.W.2d 97, 98 (Minn. 2014) (order). McGee, however, had no prior disciplinary history. Id. We suspended the attorney in In re Sax for 1 year because the аttorney was convicted for failing to file taxes, then failed to file again. 321 N.W.2d 902, 903–04 (Minn. 1982). We also suspended the attorney in In re Diesen for 3 years for a federal conviction of tax evasion when the attorney had no prior disciplinary history. 217 N.W. 356, 356–57 (Minn. 1928). In sum, while we often suspend an attorney for between 1 to 3 years for a conviction such as willful tax evasion, the aggravating factors—including Butler’s prior similar misconduct and lack of remorse—warrant more severe discipline. Accordingly, we order that: Suspended.ANALYSIS
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