Sean K. Hornbeck v. Board of Professional Responsibility Of The Supreme Court of Tennessee

02/16/2018
IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
June 1, 2017 Session
SEAN K. HORNBECK v. BOARD OF PROFESSIONAL RESPONSIBILITY
OF THE SUPREME COURT OF TENNESSEE
Direct Appeal from the
Chancery Court for Davidson County
No. 15-509-III Ben H. Cantrell, Special Judge
___________________________________
No. M2016-01793-SC-R3-BP
___________________________________
In this attorney disciplinary appeal, upon petition by the Tennessee Board of Professional
Responsibility, this Court ordered the temporary suspension of the attorney from the
practice of law based on the threat of substantial harm he posed to the public. For a time,
the attorney was placed on disability status; later he was reinstated to suspended status.
Subsequently, after an evidentiary hearing, a hearing panel found multiple acts of
professional misconduct, including knowing conversion of client funds with substantial
injury to clients, submitting false testimony and falsified documents in court proceedings,
engaging in the unauthorized practice of law, violating Supreme Court orders, and
defrauding clients. The hearing panel determined that the attorney should be disbarred.
On appeal to the chancery court, the attorney argued inter alia that the disbarment should
be made retroactive to the date of his temporary suspension. The chancery court affirmed
the decision of the hearing panel. On appeal to this Court, the attorney does not question
the disbarment but argues that it would be arbitrary and capricious not to make his
disbarment retroactive to the date of his temporary suspension, in order to advance the
date on which he may apply for reinstatement of his law license. We disagree. In
contrast to suspension, which contemplates that the lawyer will return to law practice,
disbarment is not a temporary status. Disbarment is a termination of the individual’s
license to practice law in Tennessee. Therefore, we decline to make the effective date of
the attorney’s disbarment retroactive to the date of his temporary suspension.
Accordingly, we affirm.
Tenn. Sup. Ct. R. 9, § 1.3 (2006) (currently Tenn. Sup. Ct. R. 9, § 33.1(d) (2014))
Direct Appeal; Judgment of the Chancery Court Affirmed
HOLLY KIRBY, J., delivered the opinion of the Court, in which JEFFREY S. BIVINS, C.J.,
and CORNELIA A. CLARK and SHARON G. LEE, JJ., joined. ROGER A. PAGE, J., not
participating.
William W. (Tripp) Hunt III, Nashville, Tennessee,1 for the appellant, Sean K. Hornbeck.
William C. Moody, Brentwood, Tennessee, for the appellee, Board of Professional
Responsibility of the Supreme Court of Tennessee.
OPINION
FACTUAL AND PROCEDURAL BACKGROUND
This appeal arises out of attorney disciplinary proceedings against
Appellant/Respondent Sean Hornbeck. Mr. Hornbeck graduated from law school in 1996
and became licensed to practice law in New York and the District of Columbia in 1997.
After serving as a federal law clerk, Mr. Hornbeck practiced law in the District of
Columbia and then at a large firm in Delaware. Later, he obtained his Tennessee law
license by way of reciprocity and opened his own law practice, Hornbeck Law, in
Nashville.
In 2008, a Texas businessman introduced Mr. Hornbeck to Harish Raghavan, a
businessman working in the finance industry in New York City. After the introduction,
Mr. Hornbeck proposed a financial venture to Mr. Raghavan that entailed the
advancement of very substantial funds to Mr. Hornbeck. Under Mr. Hornbeck’s
proposed plan, Mr. Raghavan would advance Mr. Hornbeck funds to be held in an
escrow account; these funds would then serve as essential equity behind a huge leverage
transaction on a trading platform that would in turn produce large profits. Mr. Hornbeck
assured Mr. Raghavan that the advanced funds would be “blocked,” meaning they would
not be used in investments or moved out of the escrow account without Mr. Raghavan’s
express permission.
Mr. Raghavan agreed to Mr. Hornbeck’s proposal. He transferred between $5
million and $5.5 million into a Wachovia Bank escrow account that was maintained by
1
The record contains both a Nashville, Tennessee, address and a Forney, Texas, address for Mr.
Hunt.
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Mr. Hornbeck in his capacity as an attorney. Although Mr. Raghavan gave Mr.
Hornbeck permission to move the escrow account to a different, suitably rated financial
institution,2 Mr. Raghavan never gave Mr. Hornbeck permission to transfer any of the
money out of the escrow account.
Mr. Hornbeck promised Mr. Raghavan payouts from the transactions within thirty
days, to be paid to Mr. Raghavan in June or July 2008. The payouts to Mr. Raghavan did
not occur as promised.
After the promised payouts failed to materialize, Mr. Raghavan began to pursue
Mr. Hornbeck for a return of the monies he had advanced. On August 12, 2008, Mr.
Hornbeck arranged for a return of $1 million to Mr. Raghavan’s bank account. However,
Mr. Hornbeck did not return the remaining balance of between $4 million and $4.5
million. Mr. Hornbeck never gave Mr. Raghavan an accounting of what happened to his
money.
In the fall of 2008, Mr. Raghavan intervened in a lawsuit filed in the chancery
court for Davidson County and named Mr. Hornbeck as a defendant. Mr. Raghavan
sought an accounting of the funds held in trust by Mr. Hornbeck. In October 2008, the
chancery court ordered Mr. Hornbeck to provide a detailed accounting of the
approximately $5.5 million Mr. Raghavan had deposited in his trust account. It also
ordered him to file unredacted copies of his bank statements at Wachovia Bank and
Credit Suisse.
In November 2008, Mr. Hornbeck filed with the chancery court a purported bank
statement showing a balance in excess of $5.5 million in his trust account at Credit
Suisse, as well as a purported email from Credit Suisse confirming a balance of over $5.5
million in the account. However, these documents were falsified to indicate that Mr.
Hornbeck’s trust account had $5.5 million when it did not. Jeff Weaver, an
administrative employee of Mr. Hornbeck’s law firm, later testified that he prepared the
false financial documents and the accompanying email Mr. Hornbeck submitted to the
chancery court.
2
Mr. Raghavan gave Mr. Hornbeck general permission to move the escrow account to another
suitable financial institution, but did not identify a specific institution. Mr. Hornbeck then moved the
escrow account to Credit Suisse.
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Accurate and unredacted records of Mr. Hornbeck’s trust account revealed that, in
June and July of 2008, Mr. Hornbeck transferred large sums of money from the trust
account to third party individuals and entities, as well as to his law firm’s operating
account. During this time, Mr. Hornbeck also made multiple over-the-counter
withdrawals from the trust account. All of these transfers and withdrawals occurred
without the knowledge of Mr. Raghavan.
On November 26, 2008, the chancery court ordered Mr. Hornbeck to transfer all of
the funds remaining in the Credit Suisse trust account to the clerk and master of the court.
Mr. Hornbeck did not comply with this order. Instead, he instructed Credit Suisse to
transfer the remaining funds in his trust account, less than $200,000, to the Regions Bank
account of his law firm employee, Jeff Weaver.
On December 15, 2008, this Court issued an order temporarily suspending Mr.
Hornbeck from the practice of law. The order was based on a petition of the Tennessee
Board of Professional Responsibility (“the “Board”), as well as the verified complaint in
intervention and certified orders from the chancery court of Davidson County. Mr.
Hornbeck then asked this Court to instead place him on disability inactive status; the
request was supported by an affidavit from Mr. Hornbeck’s physician. This request was
granted in January 2009; the Court ordered that Mr. Hornbeck’s license to practice law be
transferred to disability inactive status until further order of the Court.3 On October 21,
2011, upon an agreement that Mr. Hornbeck was no longer disabled, the Court ordered
Mr. Hornbeck’s disability inactive status dissolved. His law license resumed its status as
temporarily suspended pending the resolution of disciplinary proceedings.
On November 13, 2013, the Board filed a petition for discipline against Mr.
Hornbeck. Proceedings before a hearing panel were held on December 3, 2014. The
Board presented to the hearing panel the evidence, arising out of the financial dealings
with Mr. Raghavan described above, that led to the temporary suspension of Mr.
Hornbeck’s law license in 2008. Asked in his testimony to the hearing panel about how
the transaction with Mr. Raghavan was supposed to generate a profit or how he would be
3
In both the order of temporary suspension and the order placing Mr. Hornbeck on disability
inactive status, this Court ordered him to “comply with Supreme Court Rule 9 in all respects, and
particularly as provided in Section 18.” Section 18 requires an attorney on suspended or disability
inactive status to refrain from maintaining a presence or occupying an office where the practice of law is
conducted, and requires him or her to remove “any indicia of lawyer, counselor at law, legal assistant, law
clerk, or similar title.” Tenn. Sup. Ct. R. 9, § 18.7 (2006).
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compensated, Mr. Hornbeck claimed he had a poor memory of this time period. He
attributed his poor memory to a head injury he allegedly sustained in the summer of
2008, when he was “jumped” and hit in the head with a metal pipe. The claimed head
injury, Mr. Hornbeck said, affected his mental state and caused him to have to take
various medications. The injury roughly coincided with the time period in which Mr.
Hornbeck engaged Mr. Raghavan in the ill-fated financial venture.
In his testimony to the hearing panel, Mr. Hornbeck claimed that, when he
submitted the falsified financial documents to the chancery court in the prior proceedings,
he believed them to be true. At the time of his testimony to the chancery court, Mr.
Hornbeck said, he was experiencing multiple family crises and still suffering from the
effects of the 2008 head injury, for which he was taking numerous medications.
However, Mr. Hornbeck also said that, despite the medications, he believed that he was
truthfully answering the questions asked of him.
In the proceedings before the hearing panel, the Board presented evidence to
support multiple other complaints against Mr. Hornbeck as well. The evidence on these
other complaints is outlined below.
Complainants Joseph and Linda Dougherty retained Mr. Hornbeck in May 2007 to
represent them in a dispute over earnest money paid to Turnberry Homes on a contract to
purchase a house. Mr. Dougherty met Mr. Hornbeck for the first time over the phone and
they discussed the contract dispute. In the conversation, Mr. Hornbeck insisted that Mr.
Dougherty pay him a $5,000 retainer over the phone in order to proceed with the lawsuit.
Mr. Hornbeck did not discuss with Mr. Dougherty the basis on which he would be billed.
Mr. Dougherty paid the retainer and Mr. Hornbeck filed the lawsuit for the Doughertys in
May. Mr. Hornbeck communicated with the lawyer for Turnberry Homes a couple of
times and met with Mr. Dougherty at his office in July 2007. After the July 2007
meeting, the Doughertys received no further communications from Mr. Hornbeck,
despite their repeated attempts to reach him by telephone, e-mail, and in person. Mr.
Dougherty finally contacted another attorney to pursue the return of his $20,000 earnest
money from Turnberry Homes.
In the disciplinary proceedings on Mr. Hornbeck, the attorney for Turnberry
Homes, Todd Panther, testified that, on June 27, 2007, he sent Mr. Hornbeck a letter
regarding the Doughertys’ case, outlining proposed terms of settlement. In spite of
numerous attempts to follow up with Mr. Hornbeck, Mr. Panther got no response. On
August 21, 2007, Mr. Panther sent another letter to Mr. Hornbeck. The second letter
referenced Mr. Hornbeck’s failure to respond to Mr. Panther’s first letter. It informed
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Mr. Hornbeck that Turnberry Homes was actively marketing the disputed property in
order to mitigate its damages. The second letter also mentioned their agreement that
Turnberry Homes had an indefinite extension to answer the complaint Mr. Hornbeck had
filed, given the ongoing settlement discussions. Mr. Hornbeck did not communicate any
of these matters to the Doughertys. In the disciplinary proceedings, the Doughertys
testified that they would not have agreed to the indefinite extension mentioned in Mr.
Panther’s second letter. The second letter from Mr. Panther also went unanswered. In
2009, with assistance from the Consumer Affairs Division of the Tennessee Department
of Commerce and Insurance, the Doughertys settled their case with Turnberry Homes.
Because Mr. Hornbeck did not perform the services for which they retained him,
the Doughtertys pursued Mr. Hornbeck for a return of their $5,000 retainer. Mr.
Hornbeck sent the Doughertys a proposed settlement agreement, but he did not advise
them to get advice from another attorney before entering into a settlement agreement with
him. The draft settlement agreement was never executed and the Doughertys never got a
refund from Mr. Hornbeck.
Complainant Elizabeth Garland, a registered nurse assistant, retained Mr.
Hornbeck to represent her in a contract matter with a third party related to a house fire
she experienced. She hired Mr. Hornbeck on May 21, 2008, and paid him a $1,500
retainer. Mr. Hornbeck wrote one letter to the adverse party on her behalf, and then
apparently did no further work on Ms. Garland’s matter. After May 2008, Mr. Hornbeck
stopped communicating with Ms. Garland. She and her husband called Mr. Hornbeck
multiple times and left messages; he never returned their phone calls or sent them any e-
mails. Ms. Garland never received a refund of the retainer she paid Mr. Hornbeck and
only received her file after she filed a complaint against Mr. Hornbeck in March 2009.
In 2010, after Mr. Hornbeck’s license to practice law had been temporarily
suspended and he was placed on disability inactive status, Mr. Hornbeck worked as an
assistant for attorney Mary Clement at her law office in Sumner County. He typed
pleadings, greeted clients, answered the phone, met with prospective clients, and
performed basic legal research and marketing for Ms. Clement. On one occasion he sat
at counsel table in court with Ms. Clement and handed her exhibits as she asked for them.
Ms. Clement billed clients for Mr. Hornbeck’s time.
During the time in which Mr. Hornbeck was working at Ms. Clement’s office, Ms.
Clement represented Mr. Glover Palmer Smith on a criminal matter. While Mr. Smith’s
case was ongoing, Mr. Hornbeck called him and suggested they meet to discuss Mr.
Smith’s case and some financial matters. They met at a Mexican restaurant. After
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discussing the appeal of his criminal case, Mr. Hornbeck told Mr. Smith that Ms.
Clement needed two $5,000 checks from him. Mr. Hornbeck assured Mr. Smith that he
would receive an itemized statement later. Mr. Smith wrote two $5,000 checks as
requested and made them payable to Ms. Clement. He gave both checks to Mr.
Hornbeck. One check was endorsed by someone other than Ms. Clement and deposited
into Mr. Hornbeck’s bank account. In the disciplinary proceedings, Ms. Clement testified
that Mr. Hornbeck had no reason to meet with Mr. Smith and that she had not asked Mr.
Hornbeck to collect any money from Mr. Smith. Ms. Clement testified that Mr.
Hornbeck was not authorized to deposit checks for her.
After the hearing, the hearing panel issued its judgment on March 25, 2015. The
hearing panel found that Mr. Hornbeck violated Tennessee Supreme Court Rule 8, Rules
of Professional Conduct (2006) (“RPC”), including RPC 1.3 (Diligence)4; RPC 1.4
(Communication)5; RPC 1.8(h) (Conflict of Interest)6; RPC 1.15(a) (Safekeeping
Property and Funds)7; RPC 1.16(d) (Declining or Terminating Representation)8; RPC 3.2
4
Tennessee Supreme Court Rule 8, RPC 1.3 states that “[a] lawyer shall act with reasonable
diligence and promptness in representing a client.”
5
Tennessee Supreme Court Rule 8, RPC 1.4 states:
(a) A lawyer shall keep a client reasonably informed about the status of a matter and
comply with reasonable requests for information within a reasonable time.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client
to make informed decisions regarding the representation.
6
Tennessee Supreme Court Rule 8, RPC 1.8(h) states:
A lawyer shall not:
(1) Enter into an agreement with a prospective, current, or former client to prospectively
limit the lawyer’s liability to the client for malpractice; or
(2) Settle a claim for such liability, unless:
(i) The client is represented in the matter by independent counsel; or
(ii) The lawyer fully discloses all the terms of the agreement to the client in a manner that
can reasonably be understood by the client, advises the client to seek the advice of
independent counsel, and affords the client a reasonable opportunity to do so.
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(Expediting Litigation)9; RPC 5.5 (Unauthorized Practice of Law)10; and RPC 8.4(a), (b),
(c), (d) and (g) (Misconduct)11. The hearing panel concluded that the Board had proven
7
Tennessee Supreme Court Rule 8, RPC 1.15(a) states:
A lawyer shall hold property and funds of clients or third persons that are in a lawyer’s
possession in connection with a representation separate from the lawyer’s own property
and funds. A lawyer in possession of clients’ or third persons’ property and funds
incidental to representation shall hold said property and funds separate from the lawyer’s
own property and funds.
8
Tennessee Supreme Court Rule 8, RPC 1.16(d) provides that, upon termination of the
representation of a client, a lawyer shall protect the client’s interests, including promptly surrendering
papers and property to which the client is entitled and promptly refunding any advance payment of fees
that have not been earned or expenses that have not been incurred by the lawyer.
9
Tennessee Supreme Court Rule 8, RPC 3.2 states: “A lawyer shall make reasonable efforts to
expedite litigation.”
10
Tennessee Supreme Court Rule 8, RPC 5.5 states:
A lawyer shall not:
(a) Practice law in a jurisdiction where doing so violates the regulation of the legal
profession in that jurisdiction; or
(b) Assist a person in the performance of activity that constitutes the unauthorized
practice of law.
11
Tennessee Supreme Court Rule 8, RPC 8.4 states:
It is professional misconduct for a lawyer to:
(a) Violate or attempt to violate the Rules of Professional Conduct, knowingly assist or
induce another to do so, or do so through the acts of another;
(b) Commit a criminal act that reflects adversely on the lawyer’s honesty,
trustworthiness, or fitness as a lawyer in other respects;
(c) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation;
(d) Engage in conduct that is prejudicial to the administration of justice;
....
-8-
these violations by a preponderance of the evidence and that Mr. Hornbeck’s acts of
dishonesty seriously and adversely reflected on his fitness to practice law.
As required by Tennessee Supreme Court Rule 9, section 8.4 (2006),12 the hearing
panel then considered the American Bar Association Standards for Imposing Lawyer
Sanctions (“ABA Standards”) applicable to this case:
4.11 FAILURE TO PRESERVE THE CLIENT’S PROPERTY
Disbarment is generally appropriate when a lawyer knowingly converts
client property and causes injury or potential injury to a client.
4.32 FAILURE TO AVOID CONFLICTS OF INTEREST
Suspension is generally appropriate when a lawyer knows of a conflict of
interest and does not fully disclose to a client the possible effect of that
conflict, and causes injury or potential injury to a client.
4.42 LACK OF DILIGENCE
Suspension is generally appropriate when:
(a) a lawyer knowingly fails to perform services for a client and causes
injury or potential injury to a client, or
(b) a lawyer engages in a pattern of neglect [and] causes injury or potential
injury to a client.
5.11 FAILURE TO MAINTAIN PERSONAL INTEGRITY
Disbarment is generally appropriate when:
(g) Knowingly fail to comply with a final court order entered in a proceeding in which
the lawyer is a party, unless the lawyer is unable to comply with the order or is seeking in
good faith to determine the validity, scope, meaning, or application of the law upon
which the order is based.
12
The hearing panel in Mr. Hornbeck’s case applied the 2006 version of Tennessee Supreme
Court Rule 9 because the matter was initiated before January 1, 2014, when comprehensive changes to
Rule 9 became effective. See Garland v. Bd. of Prof’l Responsibility, No. E2016-01106-SC-R3-BP, 2017
WL 3440558, at *4 (Tenn. Aug. 10, 2017) (noting that the pre-2014 version of Rule 9 applies to cases
that were initiated before the effective date of the new rule). The parties have not disputed that this is the
applicable version of the Rule. Accordingly, citations in this opinion to Rule 9 are to the 2006 version of
the Rule unless otherwise noted.
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(a) a lawyer engages in serious criminal conduct a necessary element of
which includes intentional interference with the administration of justice,
false swearing, misrepresentation, fraud, extortion, misappropriation, or
theft; or the sale, distribution or importation of controlled substances; or the
intentional killing of another; or an attempt or conspiracy or solicitation of
another to commit any of these offenses; or
(b) a lawyer engages in any other intentional conduct involving dishonesty,
fraud, deceit, or misrepresentation that seriously adversely reflects on the
lawyer’s fitness to practice.
6.21 ABUSE OF THE LEGAL PROCESS
Disbarment is generally appropriate when a lawyer knowingly violates a
court order or rule with the intent to obtain a benefit for the lawyer or
another, and causes serious injury or potentially serious injury to a party or
causes serious or potentially serious interference with a legal proceeding.
7.1 VIOLATION OF OTHER DUTIES OWED AS A
PROFESSIONAL
Disbarment is generally appropriate when a lawyer knowingly engages in
conduct that is a violation of a duty owed as a professional with the intent
to obtain a benefit for the lawyer or another, and causes serious or
potentially serious injury to a client, the public, or the legal system.
In addition, in accordance with ABA Standard 9.22, the hearing panel found the
presence of aggravating circumstances, including dishonest or selfish motive; a pattern
of misconduct; multiple offenses; refusal to acknowledge wrongful nature of conduct;
substantial experience in the practice of law; indifference to making restitution; and
illegal conduct. Under all of these circumstances, the hearing panel deemed disbarment
to be the appropriate discipline for Mr. Hornbeck, in accordance with Rule 9, section 4.1.
Pursuant to Rule 9, section 1.3, Mr. Hornbeck filed an appeal in the chancery court
for Davidson County. In accordance with section 1.5 of Rule 9, this Court appointed
Judge Ben Cantrell (hereinafter “trial court”) to preside over the case.
On appeal, the trial court concluded that the facts as found by the hearing panel
were supported by the evidence and that the facts support the hearing panel’s decision to
disbar Mr. Hornbeck, in accordance with the applicable ABA Standards. Mr. Hornbeck
argued that the hearing panel should have considered the fact that his mental state was
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affected by the 2008 head injury that left him with memory problems and on medication.
The trial court rejected this argument; it said that there was no evidence in the record that
the alleged injury rendered Mr. Hornbeck unable to reason or distinguish between proper
and improper conduct. The trial court also observed that, despite having allegedly
suffered the head injury, Mr. Hornbeck retained the ability to shrewdly orchestrate the
financial venture with Mr. Raghavan and obtain the $5,000 from Mr. Smith that Mr.
Hornbeck converted to his own use.
Mr. Hornbeck also argued to the trial court that his disbarment should be made
retroactive to the date he was first suspended from practicing law, December 15, 2008.
The trial court found that Mr. Hornbeck had waived this issue by failing to raise it before
the hearing panel.
Pursuant to Rule 9, section 1.3, Mr. Hornbeck now appeals directly to this Court.
He argues that the decision of the hearing panel was vague since it did not provide the
effective date of his disbarment, that he did not waive the issue of retroactive application
of his disbarment, and that the hearing panel’s failure to make the disbarment retroactive
to the date of his temporary suspension is arbitrary and capricious. Our decision
concerning the effective date of Mr. Hornbeck’s disbarment impacts the date on which he
is eligible to apply for reinstatement of his law license. See Tenn. Sup. Ct. R. 9, § 19.2
(stating that an attorney who has been disbarred “may not apply for reinstatement until
the expiration of at least five years from the effective date of the disbarment”).
STANDARD OF REVIEW
The Supreme Court of Tennessee “is the source of authority of the Board of
Professional Responsibility and all of its functions.” Rayburn v. Bd. of Prof’l
Responsibility, 300 S.W.3d 654, 660 (Tenn. 2009)(citing Hughes v. Bd. of Prof’l
Responsibility, 259 S.W.3d 631, 640 (Tenn. 2008)); see also Brown v. Bd. of Prof’l
Responsibility, 29 S.W.3d 445, 449 (Tenn. 2000). “As a part of our duty to regulate the
practice of law, we bear ultimate responsibility for enforcing the rules governing our
profession.” Mabry v. Bd. of Prof’l Responsibilty, 458 S.W.3d 900, 903 (Tenn. 2014)
(citing Doe v. Bd. of Prof’l Responsibility, 104 S.W.3d 465, 469-70 (Tenn. 2003)). “We
examine judgments in disciplinary matters in light of our inherent power and essential
and fundamental right to administer the Court’s rules pertaining to the licensing of
attorneys.” Rayburn, 300 S.W.3d at 660.
“When reviewing a hearing panel’s judgment, a trial court must consider the
transcript of the evidence before the hearing panel and its findings and judgment.”
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Mabry, 458 S.W.3d at 903 (citing Tenn. Sup. Ct. R. 9, § 1.3). “On questions of fact, the
trial court does not substitute its judgment for that of the hearing panel as to the weight of
the evidence.” Id. (citing Bd. of Prof’l Responsibility v. Allison, 284 S.W.3d 316, 323
(Tenn. 2009)). Under Rule 9, section 1.3, the trial “court may reverse or modify” a
decision of the hearing panel only “if the rights of the petitioner have been prejudiced
because the panel’s findings, inferences, conclusions, or decisions are”:
(1) in violation of constitutional or statutory provisions; (2) in excess of the
panel’s jurisdiction; (3) made upon unlawful procedure; (4) arbitrary or
capricious or characterized by abuse of discretion or clearly unwarranted
exercise of discretion; or (5) unsupported by evidence which is both
substantial and material in light of the entire record.
Tenn. Sup. Ct. R. 9, § 1.3.
If the attorney appeals the discipline first to the chancery court and then to the
Supreme Court, “[o]ur standard of review on appeal is the same as that of the trial court.”
Mabry, 458 S.W.3d at 903 (citing Skouteris v. Bd. of Prof’l Responsibility, 430 S.W.3d
359, 362 (Tenn. 2014)).13 Thus, “we will reverse a hearing panel only when the panel’s
‘findings, inferences, conclusions, or decisions’ fall within any of the five circumstances
enumerated in the rule.” Rayburn, 300 S.W.3d at 660 (quoting Bd. of Prof’l
Responsibility v. Love, 256 S.W.3d 644, 653 (Tenn. 2008); Tenn. Sup. Ct. R. 9, § 1.3).
When the first three grounds for reversal are absent, we should uphold the hearing panel
“unless the decision was either arbitrary or capricious, characterized by abuse” of
discretion or clearly unwarranted exercise of discretion, “or lacking in support by
substantial and material evidence.” Id. (quoting Hughes, 259 S.W.3d at 641) (internal
13
Tennessee Supreme Court Rule 9, sections 15.4(b) through (e) (2014), (formerly Rule 9,
section 8.4 (2006)), outlines the procedure for situations in which neither party has appealed to the
Supreme Court the judgment of the hearing panel or the chancery court, or where the attorney and the
Board have reached a settlement. In such cases, there is a different standard of review for this Court:
Given our inherent authority to enforce the disciplinary rules for the legal profession, the
mandate that we review the recommended punishment with a “view to attaining
uniformity of punishment,” and our ability to modify the judgment of the hearing panel
as we deem appropriate, we conclude that our standard of review as to the recommended
punishment is de novo.
In re Walwyn, 531 S.W.3d 131, 137 (Tenn. 2017) (quoting Tenn. Sup. Ct. R. 9, § 15.4(b) (2014), and
citing Tenn. Sup. Ct. R. 9, § 15.4(c) (2014); Hughes, 259 S.W.3d at 640).
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quotations omitted). Interpretation of a rule of the Tennessee Supreme Court is a
question of law, which we review de novo. Lockett v. Bd. of Prof’l Responsibility, 380
S.W.3d 19, 25 (Tenn. 2012).
ANALYSIS
As we have noted, Mr. Hornbeck’s appeal centers on the effective date of his
disbarment, with an eye toward advancing the date on which he is eligible to apply for
reinstatement. The Board argues that the issue of retroactivity is waived because Mr.
Hornbeck did not raise it with the hearing panel. The Board cites the general rule in
Tennessee that issues not raised in the trial court will not be entertained on appeal. See,
e.g., Welch v. Bd. of Prof’l Responsibility, 193 S.W.3d 457, 465 (Tenn. 2006).
We disagree. In the proceedings before the hearing panel, Mr. Hornbeck
strenuously if fruitlessly sought to avoid disbarment altogether, arguing inter alia that his
mental state in 2008 was adversely affected by multiple family crises, the metal pipe
injury to his head, and the medications he took because of the injury.14 Mr. Hornbeck
was not required to propose in advance of the hearing panel’s judgment that any
disbarment, if imposed, should be made retroactive to the date of his temporary
suspension. Mr. Hornbeck argued for retroactivity in the appeal to the trial court of the
hearing panel’s judgment of disbarment. Under these circumstances, the question of
retroactivity of the disbarment was not waived.
On appeal to this Court, Mr. Hornbeck argues that the judgment of the hearing
panel was vague and ambiguous because it did not explicitly state the effective date of his
disbarment. This argument is without merit. Prior to the 2014 revisions to Tennessee
Supreme Court Rule 9, the effective date of a disbarment order was stated in Rule 9,
section 18.5 (2006): “Orders imposing disbarment, suspension, or transfers to disability
inactive status are effective on a date ten days after the date of the order, except where the
Court finds that immediate disbarment, suspension, or interim suspension is necessary to
protect the public.”15 Thus, the Supreme Court’s order imposing formal discipline is
14
In deciding the severity of the discipline to impose, the factors the hearing panel should
consider include “the lawyer’s mental state.” ABA Standard 3.0(b).
15
This rule changed in 2014 and now provides that “[o]rders imposing disbarment . . . are
effective upon entry.” Tenn. Sup. Ct. R. 9, § 28.1 (2014).
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effective ten days after the date on which it is entered. It was unnecessary for the hearing
panel to expressly state the effective date of disbarment in its judgment since the effective
date is set forth in the rule.
We move on to address Mr. Hornbeck’s main argument, that the time he was
temporarily suspended from practicing law should be credited to his time as a disbarred
attorney. Were we to agree with Mr. Hornbeck, the requisite five years of disbarment
before he becomes eligible to apply for reinstatement would run from October 21, 2011,
the date he resumed his temporarily suspended status after his disability inactive status
was dissolved.16 See Tenn. Sup. Ct. R. 9, § 19.2.
“[T]his Court takes seriously its obligation to supervise and regulate the practice
of law.” Sneed v. Bd. of Prof’l Responsibility, 301 S.W.3d 603, 618 (Tenn. 2010). “‘The
license to practice law in this State is a continuing proclamation by the Court that the
holder is fit to be entrusted with professional and judicial matters, and to aid in the
administration of justice as an attorney and as an officer of the Court.’” Bd. of Profʼl
Responsibility v. Cowan, 388 S.W.3d 264, 272 (Tenn. 2012) (quoting Tenn. Sup. Ct. R.
9, § 3.1). As Mr. Hornbeck’s case shows, “[a]ttorneys are trusted by the community with
the care of their lives, liberty and property with no other security than personal honor and
integrity.” Schoolfield v. Tenn. Bar Ass’n, 353 S.W.2d 401, 404 (Tenn. 1961).
“[A] license to practice law in this state is not a right, but a privilege.” Sneed, 301
S.W.3d at 618 (citing Milligan v. Bd. of Prof’l Responsibility, 301 S.W.3d 619, 630
(Tenn. 2009)). “It is the duty of every recipient of that privilege to act at all times, both
professionally and personally, in conformity with the standards imposed upon members
of the bar as conditions for the privilege to practice law.” Tenn. Sup. Ct. R. 9, § 3.1.
“Where this duty is not met, we must act to protect the public.” Cowan, 388 S.W.3d at
272 (citing Sneed, 301 S.W.3d at 618).17 While the attorney disciplinary process is
16
Over the course of these proceedings, Mr. Hornbeck has changed the date that he claims should
be the effective date of his disbarment. Before the trial court, Mr. Hornbeck argued that his disbarment
should be retroactive to the date of his initial suspension, December 15, 2008. Before this Court, he has
argued that his disbarment should be retroactive to the date he resumed his temporarily suspended status
upon the dissolution of his disability inactive status, October 21, 2011. This inconsistency makes no
difference to our decision. From either date Mr. Hornbeck has proposed, the five-year period before he
can apply for reinstatement has passed, and Mr. Hornbeck would be free to apply for reinstatement now,
in 2018.
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punitive in some respects, its purpose is to safeguard the administration of justice, protect
the public from the misconduct or unfitness of members of the legal profession, and
preserve the confidence of the public in the integrity and trustworthiness of lawyers in
general. See ABA Standard 1.1.
Serious misconduct by a lawyer warrants either suspension or disbarment. These
two remedies are wholly distinct. An attorney whose license to practice law is suspended
is in a temporary state; to suspend means “[t]o temporarily keep (a person) from
performing a function, occupying an office, holding a job, or exercising a right or
privilege < the attorney’s law license was suspended for violating the Model Rules of
Professional Conduct >.” Black’s Law Dictionary 1675 (10th ed. 2014). Thus, an
attorney under suspension remains a member of the bar. Suspension specifically
contemplates that, once the conditions imposed under the suspension are met, the
attorney will be permitted to return to law practice.
In contrast, disbarment is not a temporary status. To disbar means “[t]o expel (a
lawyer) from the legal profession or bar; to officially revoke the privilege to practice
law.” Black’s Law Dictionary 561 (10th ed. 2014). Revoke, in turn, means “[t]o annul
or make void by taking back or recalling; to cancel, rescind, repeal, or reverse.” Black’s
Law Dictionary 1515 (10th ed. 2014). Thus, disbarment “terminates the individual’s
status as an attorney.” Tenn. Sup. Ct. R. 9, § 12.1 (2014).
This difference between suspension and disbarment is reflected in the Tennessee
Supreme Court’s Rules regarding the two forms of discipline. The current version of
17
In connection with the disappearance of approximately $4.5 million of the total $5.5 million
Mr. Raghavan entrusted to Mr. Hornbeck, Mr. Hornbeck’s counsel argued before the hearing panel that
Mr. Hornbeck’s client was Mr. Raghavan’s organization, not Mr. Raghavan himself, so Mr. Hornbeck’s
actions technically did not harm a client. As this Court has observed, when a lawyer
is lacking honesty, probity, integrity, and fidelity to trusts reposed in him, it matters not
whether the lack of such virtues is revealed in transactions with clients, in the conduct of
lawsuits, or any other business dealings or relations. These qualities are highly essential
on the part of those who are to exercise the privileges and responsibilities of members of
the bar. When the lack of them become[s] apparent, no matter what the character of the
deal or transaction that may furnish the evidence, it becomes the duty of the court to
purge its roster of an unreliable member.
Schoolfield, 353 S.W.2d at 404 (quoting In re Stolen, 214 N.W. 379, 383 (Wis. 1927)).
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Rule 9, as updated in 2014, expressly addresses possible retroactivity of suspension.18
Tenn. Sup. Ct. R. 9, §12.2(b) (2014). The Rules regarding disbarment contain no such
reference. Tenn. Sup. Ct. R. 9, §12.1 (2014). The omission of any reference to
retroactivity in the Rules regarding disbarment reflects the fact that disbarment does not
contemplate that the disbarred attorney will return to the practice of law. The purpose of
disbarring an attorney is to remove from the profession a person who has proven to be
unfit or unworthy of being entrusted with the duties and responsibilities accorded to those
who have gained the privilege of a law license.
To be sure, Tennessee permits a disbarred attorney to apply for reinstatement of
his or her law license.19 See Tenn. Sup. Ct. R. 9, § 19.2 (2006) (stating that a disbarred
attorney “may not apply for reinstatement until the expiration of at least five years from
the effective date of the disbarment”); Tenn. Sup. Ct. R. 9, § 30.2 (2014) (requiring the
same). The possibility of reinstatement, however, does not transform disbarment into a
temporary suspension of the license to practice law. Regardless of any hope of
reinstatement, disbarment means that the individual has been expelled from the bar in
Tennessee and his license to practice law in this State has been terminated.
Mr. Hornbeck contends that it would be arbitrary and capricious for this Court not
to credit him for the time he has been on temporary suspension. We think not. A lawyer
facing disbarment of course has the right to participate in the appeal process set forth in
the Tennessee Supreme Court Rules.20 Tenn. Sup. Ct. R. 9, § 1.3 (2006); see also Tenn.
Sup. Ct. R. 9, § 33 (2014). However, the disbarment does not go into effect until after
entry of this Court’s order, which is delayed while the appeal is ongoing.21 See Tenn.
18
For suspensions, Rule 9 as updated in 2014 states: “No suspension shall be made retroactive,
except that a suspension may be made retroactive to a date on which an attorney was temporarily
suspended pursuant to Section 12.3 or Section 22 if the attorney was not subsequently reinstated from
such temporary suspension.” Tenn. Sup. Ct. R. 9, § 12.2(b) (2014).
19
Most states permit a disbarred attorney to apply for reinstatement after a period of time, but a
few states make disbarment permanent in specific instances, with no hope of reinstatement. See generally
Brian Finkelstein, Note, Should Permanent Disbarment Be Permanent?, 20 Geo. J. Legal Ethics 587,
588–90 (2007).
20
As was the case for Mr. Hornbeck, the lawyer will typically remain suspended until the appeal
process is exhausted.
21
In extremely limited instances, the Court may choose to make a disbarment retroactive. For
example, this may occur where there are sequential disbarments, that is, where an attorney has been
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Sup. Ct. R. 9, § 18.5 (2006) (disbarment effective ten days after entry of Court’s order);
but see Tenn. Sup. Ct. R. 9, § 28.1 (2014) (providing that, for cases initiated after the
effective date of the new Rule 9, “[o]rders imposing disbarment . . . are effective upon
entry”). Thus, participation in the appeal process necessarily postpones the date on
which the disbarred attorney becomes eligible to apply for reinstatement. The delay in
eligibility for reinstatement must be factored into the lawyer’s calculus in deciding
whether to accept disbarment at the outset or file an appeal.
This Court does not lightly impose on an attorney the sanction of disbarment. In
this case, however, it is clearly warranted. “[W]e will uphold the Panel’s rulings ‘so long
as reasonable minds can disagree as to [the] propriety of the decisions made.’” Bd. of
Prof’l Responsibility v. Reguli, 489 S.W.3d 408, 418 (Tenn. 2015) (quoting Sallee v. Bd.
of Prof’l Responsibility, 469 S.W.3d 18, 42 (Tenn. 2015)). Disbarment is the only
appropriate sanction for the egregious misconduct in which Mr. Hornbeck engaged. We
affirm the hearing panel’s decision to disbar Mr. Hornbeck and decline his request to
make the effective date of his disbarment retroactive to the date of his temporary
suspension.
disbarred and then additional disciplinary proceedings are instituted for subsequent offenses that also
merit disbarment. In such instances, the later disbarment may be made retroactive to the date of the first
disbarment. Such sequential disbarments may be imposed in order to enable the victims in the subsequent
offenses to qualify for compensation from the Tennessee Lawyers’ Fund for Client Protection. See Tenn.
Sup. Ct. R. 25 (2014).
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CONCLUSION
For the reasons stated above, the judgment of the Davidson County Chancery
Court is affirmed and Mr. Hornbeck is disbarred from the practice of law in Tennessee,
which disbarment is to be effective ten days after the entry of this Court’s disbarment
order. See Tenn. Sup. Ct. R. 9, § 18.5. The costs of this appeal are taxed to Sean K.
Hornbeck and his surety, for which execution may issue if necessary.
_________________________________
HOLLY KIRBY, JUSTICE
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