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When a lawyer does a criminal act he or she puts the license to practice law in jeopardy. The public believes that such a criminal act is sufficient to jail the lawyer and cause the lawyer to lose his or her license. The fact is that the Supreme Courts of the various states are loathe to totally disbar a lawyer, even after a felony conviction. However, when, as in In re Disciplinary Action against Brost, 850 N.W.2d 699 (Minn., July 23, 2014), [enhanced version available to lexis.com subscribers], the lawyer’s misconduct is egregious the court will overcome its reluctance and take the lawyer out of the stream of commerce and pull the license.
On December 16, 2013, the Director of the Office of Lawyers Professional Responsibility (OLPR) filed a petition for disciplinary action against Linda A. Brost. The petition alleged that Brost engaged in professional misconduct when she committed theft by swindle and identity theft, stealing approximately $43,000 from a client. The petition also alleged that Brost failed to cooperate in the Director’s disciplinary investigation. Brost did not respond to the petition. By order filed on February 5, 2014, the Supreme Court of Minnesota deemed all allegations in the petition for disciplinary action admitted.
Respondent, Linda A. Brost, was admitted to practice law in Minnesota on October 12, 1987. Brost was indefinitely suspended on March 31, 2009, for using the expired notary stamp of a deceased notary to fraudulently notarize her own signature on a certificate of trust prepared for a client, submitting the fraudulent document to a bank, and failing to cooperate with the Director’s investigation, in violation of law. [In re Brost, 763 N.W.2d 637, 638 (Minn.2009), [enhanced version available to lexis.com subscribers]. Brost remained suspended. The Director sought disbarment for Brost's theft of $43,000, Brost's identity theft, and Brost's non-cooperation with the Director's investigation.
Theft by Swindle and Identity Theft
Brost's theft arose from her representation of A.F., which dated back to 1993 when Brost drafted a will for A.F. Two friends of A.F. were each to receive gifts of $10,000 upon A.F.'s death and A.F.'s remaining assets were to be evenly distributed to the Church of St. Francis De Sales of St. Paul and Shriners Hospital, Twin Cities Unit. A.F. died in September 2005.
When A.F. passed away, he owned two annuity policies he had purchased from Jackson National Life Insurance in 1997. His two friends were beneficiaries of one policy and his estate was the beneficiary of the other policy. Brost knowingly and intentionally devised a scheme to avoid reporting A.F.'s two annuities to A.F.'s estate during probate. Between March 31, 2011, and March 31, 2012, Brost cashed or collected monthly annuity payments from A.F.'s annuities. In early 2012, Brost, pretending to be A.F., surrendered one of the two annuities for a cash payment of $28,641.60. Brost stole a total of approximately $43,000.
Based on this conduct, Brost was charged with six felonies, including theft by swindle, identity theft, aggravated forgery, and insurance fraud. Brost pleaded guilty and was later convicted of one count of theft and one count of identity theft both felonies.
Non–Cooperation with the Director's Investigation
After Brost pleaded guilty to the theft of A.F.'s annuity payments the Director continued his efforts only to find that Brost failed to respond. Brost was personally served with the petition for disciplinary action on December 6, 2013. Brost failed to respond to the petition.
The purpose of discipline for professional misconduct is not to punish the attorney but rather to protect the public, to protect the judicial system, and to deter future misconduct by the disciplined attorney as well as by other attorneys. The four factors that guide this court's imposition of discipline are:
(1) the nature of the misconduct;(2) the cumulative weight of the disciplinary violations;(3) the harm to the public; and(4) the harm to the legal profession.
Aggravating and mitigating circumstances are also considered.
Nature of the Misconduct
An attorney's felony conviction for theft, fraud, or embezzlement has long been treated as serious professional misconduct that warrants disbarment, particularly where the criminal conduct occurs within the practice of law. However, much to the surprise of the public, felony convictions do not result in automatic disbarment.
Brost's theft of $43,000 through the collection of A.F.'s annuity payments was serious misconduct, and it occurred within the practice of law. Her misconduct directly stemmed from her relationship with her former client, A.F. The presumptive discipline for misappropriation of client funds is disbarment, unless there are substantial mitigating circumstances. Minnesota has disbarred attorneys for misappropriating far less than $40,000 of client funds. Brost has not offered any mitigating factors.
Brost also failed to cooperate with the disciplinary investigation. The noncooperation with the disciplinary process, by itself, may warrant indefinite suspension and, when it exists in connection with other misconduct, noncooperation increases the severity of the disciplinary sanction.
Cumulative Weight of the Violations
The severity and cumulative weight of multiple disciplinary rule violations may compel severe discipline even when a single act standing alone would not have warranted such discipline. Misconduct that includes multiple rule violations and persists over time is more serious than single isolated incidents or brief lapses in judgment. In this case, Brost engaged in multiple acts of misconduct that individually warrant discipline and add cumulative weight to the misconduct. Brost's theft shows serious misconduct that was repeated over time as she collected A.F.'s annuity payments over the course of an entire year.
Harm to the Public and the Legal Profession
The court must also consider the harm the attorney's misconduct caused to the public and to the legal profession when determining the proper discipline to impose. This includes consideration of the number of clients harmed and the extent of the clients' injuries. Although Brost stole from only one client, she defrauded the estate of her client and her client's rightful heirs out of $43,000. Brost's felony convictions for stealing from her client caused harm to the public's regard for the legal profession and undermined the public's confidence in the ability of attorneys to abide by the rule of law. Furthermore, the misuse of funds is a breach of trust that reflects poorly on the entire legal profession and erodes the public's confidence in lawyers.
Aggravating and Mitigating Circumstances
Felony convictions reflect serious misconduct. Attorneys who have not been disbarred for convictions for theft, fraud, or embezzlement have presented substantial mitigating factors. In addition to the absence of mitigating factors, there are aggravating factors present with regard to Brost's misconduct. For example permanently misappropriating client funds for personal use should aggravate the misconduct. Brost clearly demonstrated a selfish and dishonest motive because she had no intention of returning any of the stolen funds and meant to permanently deprive A.F.'s estate and heirs of the proceeds from the annuities.
Brost's disciplinary history is also an aggravating factor. Brost was alreadyindefinitely suspended for similar serious misconduct. The rules Brost previously violated were similar to the rules that Brost violated in this matter, and both sets of violations involve dishonest and fraudulent misconduct. Brost committed the current acts of misconduct while suspended. It is clear that Brost's suspension for similar misconduct did not serve as a deterrent to Brost. In short, Brost's misconduct was aggravated by several factors, and there was no evidence of mitigating circumstances in the record.
Based on the substantial amount of money stolen, the fact that Brost stole the identity of a client, the failure to cooperate with the disciplinary investigation, and aggravating factors including Brost's selfish and dishonest motive and Brost's disciplinary history, the Supreme Court concluded that disbarment was the appropriate discipline in this case.
Lawyers are expected to be honorable and honest, especially when dealing with clients. Lawyer Brost committed multiple felonies acting as a lawyer while suspended from the practice of law. What causes me concern over this decision is the fact that the Supreme Court appeared reluctant to disbar this admittedly criminal lawyer who had no concern for her clients, the state bar, the public or the Supreme Court. This decision should have been a single sentence: "The lawyer stole from her client, a felony, and is for that reason disbarred."
By Barry Zalma, Attorney and Consultant
Reprinted with Permission from Zalma on Insurance, (c) 2013, Barry Zalma.
Barry Zalma, Esq., CFE, is a California attorney who limits his practice to consultation regarding insurance coverage, insurance claims handling, insurance bad faith and fraud and acting as a mediator or arbitrator on insurance disputes. Mr. Zalma serves as a consultant and expert almost equally for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. He recently published the e-books, "Zalma on Rescission in California - 2013"; "Random Thoughts on Insurance" containing posts from this blog; "Zalma on Insurance;" "Murder and Insurance Don't Mix;" “Heads I Win, Tails You Lose — 2011,” “Zalma on Diminution in Value Damages,” “Arson for Profit” and “Zalma on California Claims Regulations,” and others that are available at Zalma Books.
Mr. Zalma can be contacted at Barry Zalma or email@example.com, and you can access his free "Zalma on Insurance Fraud" newsletter at Zalma’s Insurance Fraud Letter.
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