“Intentionally misappropriating a client’s money is at or near the top of the list of things a lawyer should never do.”
That is the opening sentence in an opinion the Utah Supreme Court handed down on July 21, 2015, affirming an order disbarring an attorney. In In the Matter of the Discipline of Alvin R. Lundgren, 2015 UT 58, the attorney settled a workers’ compensation claim on behalf of his client. He retained $2,500 of the settlement proceeds in his client trust account to pay his client’s outstanding medical bills. A year later, when the client learned that she still had outstanding medical bills and was unable to get the attorney to return her calls, she filed a complaint with the Utah State Bar.
At the hearing before the Utah Bar Ethics and Discipline Committee, the attorney admitted under oath that over the course of four years he had taken money from this client and others by taking money from his client trust account for his business and personal use.
The Office of Professional Conduct filed a formal complaint against the attorney in district court. The trial court granted summary judgment against the attorney, finding that he had violated rules 1.15(a) and (d) of the Utah Rules of Professional Conduct by misappropriating client funds. After a hearing to determine the appropriate sanction, the trial court found that the mitigating factors offered by the attorney were not “truly compelling” and thus did not justify departing from the presumptive sanction of disbarment.
On appeal, the attorney did not contest that he had violated the Utah Rules of Professional Conduct. Instead, he argued that the standard the trial court used to decide the appropriate sanction was illusory. The Utah Supreme Court rejected this argument.
In Utah, “intentional misappropriation of client funds will result in disbarment unless the lawyer can demonstrate truly compelling mitigating circumstances.” Id. at ¶ 13, quoting In re Discipline of Babilis, 951 P.2d 207, 217 (Utah 1997). Since this rule was first articulated in 1997, there has been no reported case where an attorney has met the truly compelling mitigating circumstances standard and avoided disbarment. The attorney argued that this indicated that the standard was illusory, vague and unenforceable. The Court rejected this argument, recognizing that the truly compelling mitigation standard sets a high burden for attorneys to meet, but that does not make it illusory. The Court found that the attorney failed to show truly compelling circumstances that would mitigate his misconduct and affirmed the trial court’s order of disbarment.