Opinion
A23-1201
09-04-2024
In re Petition for Disciplinary Action against John P. Horst, a Minnesota Attorney, Registration No. 0398391.
ORDER
GORDON L. MOORE, III ASSOCIATE JUSTICE
The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action and a supplementary petition for disciplinary action alleging that respondent John P. Horst committed professional misconduct warranting public discipline-namely, neglecting seven client matters, failing to communicate with seven clients, making false statements to five clients to conceal his neglect, failing to return unearned fees to three clients, providing incompetent representation to a client, failing to provide accountings of how he earned fees to four clients, failing to provide two clients with copies of their files upon termination of representation, failing to place two clients' funds in trust, and failing to cooperate in five disciplinary investigations. See Minn. R. Prof. Conduct 1.1, 1.3, 1.4(a)(3), 1.4(a)(4), 1.4(b), 1.15(a), 1.15(b), 1.15(c)(3), 1.15(c)(4), 1.15(c)(5), 1.16(d), 4.1, 8.1(b), 8.4(c); Rule 25, Rules on Lawyers Professional Responsibility (RLPR).
The parties have filed a stipulation for discipline. In it, respondent waives his procedural rights pursuant to Rule 14, RLPR, withdraws his answers, and unconditionally admits the allegations of the petition and supplementary petition. The parties recommend that the appropriate discipline is a 120-day suspension, that respondent be subject to supervised probation for two years if he resumes practicing law, and that we waive the reinstatement hearing provided for in Rule 18(a) through (d), RLPR, and allow respondent to be reinstated by affidavit under Rule 18(f), RLPR. Without such a waiver, lawyers suspended for more than 90 days are required to petition for reinstatement and have a reinstatement hearing (reinstatement hearing process) under our rules. See Rule 18(a)-(d), (f), RLPR.
Along with the stipulation, the Director has filed a memorandum explaining why she believes that the recommended discipline and request to waive the reinstatement hearing process are appropriate. The Director asserts that mitigating factors support the recommended suspension. She points to extreme personal stress and a mental health condition (severe depression) respondent experienced at the time of the misconduct, respondent's inexperience practicing law, and his genuine remorse. The reinstatement hearing process should be waived, the Director contends, because of these mitigating factors and action respondent took after his misconduct came to light, including beginning therapy and psychiatric treatment.
"We . . . give some deference to the Director's decision to enter into a stipulation for discipline." In re Riehm, 883 N.W.2d 223, 233 (Minn. 2016) (citation omitted) (internal quotation marks omitted). We retain, however, the ultimate responsibility for determining the appropriate discipline. In re Eskola, 891 N.W.2d 294, 298 (Minn. 2017). The purpose of discipline for professional misconduct is not to punish the attorney but to protect the public and the judicial system and to deter future professional misconduct. In re Plummer, 725 N.W.2d 96, 98 (Minn. 2006).
We approve the jointly recommended disposition in part and reject it in part. Given the mitigating factors identified by the Director, which we credit, a 120-day suspension is appropriate and consistent with discipline we have imposed in cases with similar misconduct when mitigating factors were present. See In re Nielsen, 864 N.W.2d 627, 628 (Minn. 2015) (order) (imposing a four-month suspension when in multiple client matters an attorney failed to act with diligence, failed to communicate with the clients, and made false statements to and engaged in other dishonest conduct with the clients; made a false statement to a tribunal in one matter; and made a false statement during a disciplinary investigation and mitigating factors were present). Contrary to the dissent's suggestion, the discipline we impose today is not inconsistent with our commitment to lawyer well-being, especially with respect to mental health. By recognizing Horst's depression as a mitigating factor, we have accounted for Horst's mental health and the important and laudable steps he has taken to address the root cause of his misconduct. See In re Weyhrich, 339 N.W.2d 274, 279 (Minn. 1983) (holding that when an "attorney raises psychological disability as a mitigating factor, [they] must prove," among other things, that they are "undergoing treatment and [are] making progress to recover from the psychological problem which caused or contributed to the misconduct, that the recovery has arrested the misconduct, and that the misconduct is not apt to recur"). Were it not for the mitigating factors present, a longer suspension would be appropriate in this case. See In re Lennington, 948 N.W.2d 685, 685-86 (Minn. 2020) (order) (suspending a lawyer for six months for professional misconduct in eight client matters, including neglect, failing to communicate, failure to clarify a fee, failure to deposit funds in trust, failing to refund or timely refund unearned fees, charging an unreasonable fee, failing to return documents to clients, and noncooperation in disciplinary investigations without referencing any mitigating factors); In re Fru, 829 N.W.2d 379, 381-87 (Minn. 2013) (suspending a lawyer for two years for a pattern of incompetence, client neglect, and noncommunication in seven matters; failing to deposit client fees in trust; failing to timely refund an unearned, advance fee to one client; false statements to several of these clients; and noncooperation in a disciplinary investigation and stating that "[t]he referee found no mitigating circumstances").
The dissent contends that Nielsen does not support our conclusion that we have accounted for Horst's depression and extraordinary stress when deciding that a 120-day suspension is appropriate. The dissent is simply mistaken. Just like in this case, the Director in Nielsen submitted a memorandum with the stipulation for discipline explaining why the recommended discipline was appropriate. In the memorandum in Nielsen, the Director stated that given the nature of the misconduct, a suspension of longer than four months would be warranted if significant mitigating factors were not present. The Director then explained Nielsen's mental health issues, the treatment he had been receiving, and his extreme stress. And our order suspending Nielsen for four months acknowledged that "the parties indicate that respondent raised several issues in mitigation to the Director." Nielsen, 864 N.W.2d at 627.
The dissent suggests that we should issue an order to show cause, directing the parties to file memoranda addressing why Horst should not be subject to more severe discipline or required to petition for reinstatement. Our practice has varied regarding orders to show cause. We have rejected the discipline recommended by the parties in a stipulation for discipline without issuing an order to show cause. See, e.g., In re Halunen, 987 N.W.2d 585, 585-86 (Minn. 2023) (order). Because the Director explains the basis for the recommended discipline in the memorandum attached to the stipulation for discipline, we do not need an order to show cause to determine the appropriate discipline here.
Our rules currently require lawyers suspended for longer than 90 days to petition for reinstatement. See Rule 18(a)-(d), (f), RLPR. Given the very serious nature of respondent's misconduct and the harm caused to many clients, waiving the reinstatement hearing process is inadequate to protect the public and the judicial system and to deter future misconduct. See In re Halunen, 987 N.W.2d 585, 586 (Minn. 2023) (order) (rejecting parties' request for waiver of the reinstatement hearing process due to mitigating factors and the lawyer's actions after his misconduct came to light because of the very serious misconduct the lawyer committed); Nielsen, 864 N.W.2d at 628 (requiring the attorney to petition for reinstatement).
Based upon all the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT:
1. Respondent John P. Horst is indefinitely suspended from the practice of law, effective 14 days from the date of this order, with no right to petition for reinstatement for 120 days.
2. Respondent may petition for reinstatement pursuant to Rule 18(a)-(d), RLPR. Reinstatement is conditioned on successful completion of the written examination required for admission to the practice of law by the State Board of Law Examiners on the subject of professional responsibility, see Rule 18(e)(2), RLPR; see also Rule 4.A. (5), Rules for Admission to the Bar (requiring evidence that an applicant has successfully
completed the Multistate Professional Responsibility Examination); and satisfaction of continuing legal education requirements, see Rule 18(e)(4), RLPR.
3. Respondent must comply with Rule 26, RLPR (requiring notice of suspension to clients, opposing counsel, and tribunals), and must pay $900 in costs pursuant to Rule 24(a), RLPR.
GAITAS, J., not having been a member of the court at the time of its consideration, took no part in the consideration or decision of this case.
DISSENT
THISSEN, Justice (dissenting).
I dissent. Respondent John P. Horst and the Director entered into a stipulation under which Horst agreed to withdraw his answers, unconditionally admit the allegations of the petition and supplementary petition, and waive his procedural rights under Rule 14, Rules on Lawyers Professional Responsibility (RLPR). Horst and the Director further agreed to recommend that Horst be suspended for 120 days, that the requirement that he petition for reinstatement be waived, and that Horst practice for two years on supervised probation if he resumes practicing law. I dissent because the court insists that Horst petition for reinstatement; a process that will add significant time-likely several months-to the length of his suspension.
Pending a change to the rules discussed below that we ordered over a year ago, under Rule 18(a)-(d), (f), RLPR, a lawyer who is suspended for more than 90 days must petition for reinstatement. But Rule 18(f), RLPR, authorizes us to waive the requirement that the lawyer petition for reinstatement and allow the lawyer to seek reinstatement by affidavit. The Director believes that requiring a petition for reinstatement is not necessary to fulfill the purpose of discipline. The Director points to the following circumstances:
During the periods of misconduct, [Horst] was experiencing a period of severe depression and extraordinary stress, which directly contributed to his failure to comply with his duties under the Rules of Professional Conduct. These factors were compounded by [Horst's] relative lack of experience and isolation from others who might have provided support and mentorship. [Horst] has been addressing the root cause of his misconduct through therapy and psychiatric treatment and will continue to do so. These factors support mitigation in this case. [Horst] has demonstrated insight into the
circumstances that caused his misconduct and has expressed remorse and accountability for the misconduct.
I would impose the discipline to which the Director and Horst agreed. It is consistent with our commitment as a court to focusing on the wellness of attorneys, especially as it relates to mental health. Call to Action for Lawyer Well-Being: The World Has Changed, Minn. Jud. Branch, https://www.mncourts.gov/lawyer-well-being.aspx (last visited July 17, 2024) [opinion attachment].
The court relies primarily on our order opinion in In re Nielsen, 864 N.W.2d 627, 627 (Minn. 2015) (order). Nothing in the Nielsen order indicates that the lawyer's conduct was caused by mental health issues. Review of the underlying stipulation (which is not readily accessible to the public) discusses the impact of the lawyer's mental health issues on his misconduct and the Director's view that those mental health struggles supported the discipline the Director recommended and which we accepted. Moreover, our order opinion in Nielsen did not explicitly conclude that any mitigating factors were present or relied upon. This is one reason that we have been reluctant to give orders that adopt a stipulated discipline recommendation significant precedential weight. In re Pearson, 888 N.W.2d 319, 323 (Minn. 2016); see In re Tigue, 960 N.W.2d 694, 716, n.9 (Minn. 2021) (Thissen, J., dissenting). And Nielsen was issued before our renewed focus on lawyer well-being. More importantly, the question of whether the lawyer in Nielsen should have been required to petition for reinstatement was not raised and we did not address it. The court's analysis conflates the question of the proper length of discipline with the question of whether a lawyer should be required to file a petition for reinstatement. Those are separate inquiries serving independent purposes. The latter inquiry turns on whether we expect future misconduct by the lawyer is likely rather than on the appropriate discipline for the past misconduct. In re McCloud, 998 N.W.2d 760, 771 (Minn. 2023). As discussed above, in this case, there is no suggestion that future misconduct by Horst may be likely. As an addendum to this discussion, I acknowledge that because we are faced with a stipulated discipline petition in this case, the parties did not raise this issue; it is something we will have to grapple with further in future cases where the issue is squarely raised.
I also observe that on August 23, 2023-over a year ago-the court issued an order stating that a lawyer suspended for six months or less should be reinstated without petition after the filing of an affidavit that attests to compliance with the suspension conditions. See Order Regarding the Report and Recommendations of the American Bar Association Standing Committee on Professional Regulation on the Minnesota Lawyer Discipline System, Nos. ADM10-8042, ADM10-8043, Order at 16, 18 -24 (Minn. Aug. 23, 2023). We specifically stated that "[a]fter fully weighing the ABA's recommendation, we adopt it: a lawyer suspended for a fixed period of 6 months or less can seek reinstatement by affidavit." Id. at 21 (emphasis added). This new rule is subject to the caveat that we may require any lawyer to petition for reinstatement if we deem it necessary to protect the public. In re McCloud, 998 N.W.2d 760, 771 (Minn. 2023).
Implementation of a conforming change to Rule 18(f) remains pending until we issue an order on the Advisory Committee's recommendations-filed in late June 2024-on all the necessary amendments to the Rules on Lawyers Professional Responsibility arising from the ABA Report. See Order Appointing Advisory Committee on the Rules on Lawyers Professional Responsibility, No. ADM10-8043 (Minn. Aug. 23, 2023). Consistent with our August 23, 2023, Order, the Advisory Committee recommended that Rule 18 be amended, effective immediately after we issue an order adopting the recommendations, such that a lawyer suspended for 180 days or less be allowed to seek reinstatement by affidavit unless we order otherwise.
I do not see any compelling reasons to reject the considered judgment of the Director that a petition for reinstatement is not necessary to protect the public and deter future misconduct. The record discloses that Horst is taking important steps to address the root cause of his misconduct and there is no evidence in the record before the court to contradict those disclosures. Further, the proposed conditions of supervised probation provide additional protection to the public.
The stipulation for discipline includes the following: "[Horst] understands that by entering into this stipulation, the Director is not making any representations as to the sanctions the Court will impose." Thus, Horst has neither a contract law basis nor a justification under the rules to demand that we remand this case for further proceedings before the Director. See In re Riehm, 883 N.W.2d 223, 231-32 (Minn. 2016) ("[I]n attorney discipline matters, an attorney may not condition [their] admissions to allegations of professional misconduct on receiving a specific disposition from our court."). In cases in which we have had questions about the factual basis for a stipulation for discipline, however, we have issued an order to show cause, requiring the parties to explain why the recommended discipline is appropriate. See, e.g., In re Usumanu, 979 N.W.2d 885, 885 (Minn. 2022) (noting that in a stipulated discipline case we issued "an order to show cause, directing the parties to file memoranda addressing why respondent should not be subject to more severe discipline"). We should at the very least follow that process here.
Because I would impose the discipline to which the Director and Horst agreed, I dissent.