State ex rel. Counsel for Dis. v. Schmidt , 303 Neb. 755 ( 2019 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
09/18/2019 01:11 AM CDT
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STATE EX REL. COUNSEL FOR DIS. v. SCHMIDT
Cite as 303 Neb. 755State of Nebraska ex rel. Counsel for Discipline
of the Nebraska Supreme Court, relator, v.
K athleen M. Schmidt, respondent.
___ N.W.2d ___
Filed July 19, 2019. No. S-19-226.
Original action. Judgment of suspension.
Heavican, C.J., Miller‑Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Per Curiam.
INTRODUCTION
This case is before the court on the conditional admis-
sion filed by Kathleen M. Schmidt, respondent, on May 24,
2018. The court accepts respondent’s conditional admission
and enters an order of suspension for a period of 1 year, with 2
years of monitored probation following reinstatement.
FACTS
Respondent was admitted to the practice of law in the State
of Nebraska on September 18, 1987. At all relevant times, she
was engaged in the practice of law in Omaha, Nebraska.
On March 4, 2019, the Counsel for Discipline of the Nebraska
Supreme Court filed formal charges against respondent. The
formal charges consisted of six counts against respondent. On
May 22, the Counsel for Discipline dismissed, without preju-
dice, count VI of the formal charges. Pursuant to Neb. Ct. R.
§ 3‑302, respondent is under the jurisdiction of the Committee
on Inquiry of the Second Judicial District.
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STATE EX REL. COUNSEL FOR DIS. v. SCHMIDT
Cite as 303 Neb. 755The matters alleged in the formal charges were reviewed by
the Committee on Inquiry pursuant to Neb. Ct. R. § 3‑309(H)
(rev. 2011). The committee determined that there are reason-
able grounds for discipline of respondent and that a public
interest would be served by filing formal charges.
Count I.
Count I of the formal charges states that while represent-
ing S.L. in a dissolution of marriage case, respondent failed to
follow the discovery rules, which caused the district court to
continue a hearing.
The formal charges allege that by her actions, respondent
violated her oath of office as an attorney licensed to prac-
tice law in the State of Nebraska as provided by Neb. Rev.
Stat. § 7‑104 (Reissue 2012) and Neb. Ct. R. of Prof. Cond.
§§ 3‑503.4(c) (fairness to opposing party), 3‑504.4(a) (respect
for rights of third persons), and 3‑508.4(a) and (d) (rev. 2016)
(misconduct).
Count II.
Count II of the formal charges states that while repre-
senting L.P., the plaintiff in a dissolution of marriage case,
respondent prepared a parenting plan which she submit-
ted to the Douglas County District Court Conciliation and
Mediation Services. Respondent did not submit the proposed
parenting plan to opposing counsel for her review; rather, she
attached the last page of the stipulated order as the last page
of the parenting plan, thereby making it appear that the docu-
ment had been prepared by opposing counsel and approved
by the parties and their counsel.
The formal charges allege that by her actions, respondent
violated her oath of office as an attorney licensed to prac-
tice law in the State of Nebraska as provided by § 7‑104
and Neb. Ct. R. of Prof. Cond. § 3‑503.3(a)(1) (rev. 2016)
(candor toward tribunal) and § 3‑508.4(a), (c), and (d)
(misconduct).
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STATE EX REL. COUNSEL FOR DIS. v. SCHMIDT
Cite as 303 Neb. 755Count III.
Count III of the formal charges states that while represent-
ing A.K. in a family law matter, respondent misappropriated
client funds. On May 11 and 30, 2017, A.K. gave respondent’s
law firm checks for $1,000 and $650 as advance fee payments,
which were deposited into respondent’s business account rather
than into respondent’s client trust account. In June and July,
respondent’s law firm issued a billing statement to A.K. show-
ing fees and expenses. When A.K.’s case was completed and
A.K. was owed a refund of $315 from the initial advance fee
payment, respondent issued a refund out of her trust account
in that amount. The formal charges allege that respondent
used funds belonging to other clients to pay A.K.’s refund.
Respondent later deposited $315 of her funds into her trust
account to cover the improper withdrawal of funds.
The formal charges allege that by her actions, respondent
violated her oath of office as an attorney licensed to practice
law in the State of Nebraska as provided by § 7‑104 and Neb.
Ct. R. of Prof. Cond. § 3‑501.15 (safekeeping property) and
§ 3‑508.4(a) (misconduct).
Count IV.
Count IV of the formal charges states that respondent
received an advance fee payment of $2,500 from her client,
D.R., and deposited this fee payment into respondent’s hus-
band’s business account rather than her client trust account.
After respondent’s law firm issued billing statements to D.R.,
respondent transferred money from her trust account to her
business account and, in doing so, misappropriated D.R.’s
funds and used funds belonging to other clients to pay D.R.’s
bill. Respondent’s husband later reimbursed respondent’s client
trust account to return D.R.’s misappropriated payment.
The formal charges allege that by her actions, respondent vio-
lated her oath of office as an attorney licensed to practice law in
the State of Nebraska as provided by § 7‑104 and §§ 3‑501.15
(safekeeping property) and 3‑508.4(a) (misconduct).
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STATE EX REL. COUNSEL FOR DIS. v. SCHMIDT
Cite as 303 Neb. 755Count V.
Count V of the formal charges states that while respondent
served as a conservator to R.B., she was responsible for mak-
ing monthly rental payments to pay for R.B.’s self‑storage unit.
Respondent failed to make timely rental payments four times,
and each time, R.B. was charged a late fee of $15, which
respondent paid from R.B.’s funds. After an ethics grievance
was filed against respondent regarding her untimely payment
of R.B.’s rent for the storage unit, respondent reimbursed
R.B.’s conservatorship account the sum of $60.
The formal charges allege that by her actions, respondent
violated her oath of office as an attorney licensed to practice
law in the State of Nebraska as provided by § 7‑104 and Neb.
Ct. R. of Prof. Cond. § 3‑501.3 (diligence) and § 3‑508.4(a)
(misconduct).
On May 24, 2019, respondent filed a conditional admission
pursuant to Neb. Ct. R. § 3‑313(B) of the disciplinary rules, in
which she conditionally admitted that she violated her oath of
office as an attorney and certain professional conduct rules. In
the conditional admission, respondent states she did not know-
ingly or intentionally violate the rules of professional conduct,
but acknowledges and admits that her conduct violated certain
rules of professional conduct. Respondent knowingly does
not challenge or contest the truth of the matters conditionally
asserted and waived all proceedings against her in exchange
for agreed‑upon discipline.
By way of mitigation, respondent stated that in December
2017, she was diagnosed with an illness which required sur-
gery and extended treatment ending in August 2018. During
that time, respondent received mental health treatment, includ-
ing therapy and medication to help her with the emotional
and cognitive aspects of her diagnosis and treatment. During
the relevant time period, she failed to properly monitor tasks
she delegated to new employees, including the operation of
her office account, trust account, and a conservatorship. She
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Cite as 303 Neb. 755expresses a willingness to cooperate with the Council for
Discipline, claims to accept full responsibility for her mis-
takes, and has taken necessary steps to ensure the same mis-
takes will not recur. Respondent states that none of her clients
suffered legal detriment or financial loss as a result of the acts
alleged in the formal charges.
Respondent agreed to a 1‑year suspension of her license to
practice law in Nebraska, to begin in 30 days. Upon reinstate-
ment of her license, respondent shall serve a term of monitored
probation for a period of 2 years. The terms of the probation
shall be as follows:
(1) During the first 6 months of the probation, respondent
will meet with and provide the monitor a weekly list of cases
for which she is entirely responsible, including:
(a) the date the attorney‑client relationship began;
(b) the general type of case;
(c) the date of the last contact with the client;
(d) the last type and date of work completed on the case;
(e) the next type of work and date that work should be com-
pleted on the case;
(f) any applicable statute of limitations and its dates; and
(g) the financial terms of the attorney‑client relationship.
(2) After the first 6 months through the end of probation,
respondent shall meet with the monitor on a monthly basis and
provide the monitor with a list containing the same information
set forth above.
(3) Respondent shall reconcile her trust account within 10
days of the receipt of the monthly statement and provide the
monitor with a copy within 5 days.
(4) Respondent shall submit a quarterly compliance report
with the Counsel for Discipline, demonstrating that she is
adhering to the terms of probation. The quarterly report will
include a certification by the monitor that the monitor has
reviewed the report and that respondent continues to abide by
the terms of the probation.
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STATE EX REL. COUNSEL FOR DIS. v. SCHMIDT
Cite as 303 Neb. 755The proposed conditional admission included a declaration
by the Counsel for Discipline, stating that respondent’s pro-
posed discipline is appropriate and consistent with sanctions
imposed in other disciplinary cases with similar acts of mis-
conduct and will protect the public.
ANALYSIS
Section 3‑313, which is a component of our rules governing
procedures regarding attorney discipline, provides in perti-
nent part:
(B) At any time after the Clerk has entered a Formal
Charge against a Respondent on the docket of the Court,
the Respondent may file with the Clerk a conditional
admission of the Formal Charge in exchange for a stated
form of consent judgment of discipline as to all or
part of the Formal Charge pending against him or her
as determined to be appropriate by the Counsel for
Discipline or any member appointed to prosecute on
behalf of the Counsel for Discipline; such conditional
admission is subject to approval by the Court. The con-
ditional admission shall include a written statement that
the Respondent knowingly admits or knowingly does
not challenge or contest the truth of the matter or mat-
ters conditionally admitted and waives all proceedings
against him or her in connection therewith. If a tendered
conditional admission is not finally approved as above
provided, it may not be used as evidence against the
Respondent in any way.
Pursuant to § 3‑313, and given the conditional admission,
we find that respondent knowingly does not challenge or con-
test the matters conditionally admitted. We further determine
that by her conduct, respondent violated certain rules of con-
duct and her oath of office as an attorney licensed to practice
law in the State of Nebraska. Respondent has waived all addi-
tional proceedings against her in connection herewith. Upon
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STATE EX REL. COUNSEL FOR DIS. v. SCHMIDT
Cite as 303 Neb. 755due consideration, the court approves the conditional admis-
sion and enters the orders as indicated below.
CONCLUSION
Respondent is suspended for a period of 1 year. Should
respondent apply for reinstatement, if accepted, her reinstate-
ment shall be conditioned upon respondent’s being on proba-
tion for a period of 2 years, including monitoring, following
reinstatement, subject to the terms agreed to by respondent in
the conditional admission and outlined above. Acceptance of
an application for reinstatement is conditioned on the appli-
cation’s being accompanied by a proposed monitored proba-
tion plan, the terms of which are consistent with this opinion.
Respondent shall comply with Neb. Ct. R. § 3‑316 (rev. 2014),
and upon failure to do so, she shall be subject to punishment
for contempt of this court. Respondent is also directed to pay
costs and expenses in accordance with Neb. Rev. Stat. §§ 7‑114
and 7‑115 (Reissue 2012) and Neb. Ct. R. §§ 3‑310(P) (rev.
2014) and 3‑323(B) of the disciplinary rules within 60 days
after the order imposing costs and expenses, if any, is entered
by the court.
Judgment of suspension.