In Re Petition for Disciplinary Action Against Loewenthal

468 N.W.2d 335 (1991)

In re the Petition for DISCIPLINARY ACTION AGAINST Claude M. LOEWENTHAL, an Attorney at Law of the State of Minnesota.

No. C8-91-386.

Supreme Court of Minnesota.

April 18, 1991.

The Office of Lawyers Professional Responsibility, through its Director, has filed with this court a petition alleging that respondent, Claude M. Loewenthal, misappropriated client funds, failed to keep proper trust account records, improperly used a non-interest bearing trust account from 1987 through 1991, and failed to pay Social Security payroll taxes for several employees from 1986 through 1989. In conjunction with these proceedings, the Director has filed a petition pursuant to Rule 16, Rules on Lawyers Professional Responsibility, seeking an order temporarily suspending respondent from the practice of law pending the final determination of the disciplinary proceedings.

Although respondent generally admits the allegations in the petition for disciplinary action against him, respondent argues that certain circumstances mitigate against temporary suspension. We agree. We understand that respondent began correcting the deficit in his trust account by his own initiative well before the Director initiated this disciplinary investigation. By January 1991, respondent had substantially reduced the deficit and had eliminated the deficit entirely by early February 1991. Furthermore, because of respondent's fee agreement with a client for whom respondent was performing large scale collections work, respondent had legitimate claims for fees which somewhat offset the amount of trust fund shortages shown in his and the Director's computations. There currently are no shortages in respondent's trust account.

With regard to respondent's failure to pay Social Security payroll taxes for his employees, respondent, by his own initiative, also paid a substantial portion of his outstanding tax liabilities before the Director initiated this disciplinary investigation. Respondent now is working with the Internal Revenue Service to arrange for the payment of the remaining taxes, interest and penalties assessed against him. In addition, respondent is current in filing his personal federal and state income tax returns and his state employee withholding tax returns, and is current in paying the taxes due thereon.

Respondent's efforts to make amends for his past misconduct even before the initiation of these disciplinary proceedings against him, his complete restitution of all trust account deficiencies, and his full and continued cooperation with the Director's Office mitigate against a finding of "risk of injury to the public" under Rule 16, Rules on Lawyers Professional Responsibility, *336 and thus, against temporary suspension. Accordingly, the court NOW ORDERS:

1. That the Director's petition requesting temporary suspension of respondent, Claude M. Loewenthal, hereby is denied without prejudice.

2. That the Director may renew his motion in the future if the Director believes circumstances warrant such a renewal.

3. That the Director shall take steps to expedite the referee hearing in this matter.