Discipline of Alvin Lundgren

This opinion is subject to revision before
publication in the Pacific Reporter
2015 UT 58
IN THE
SUPREME COURT OF THE STATE OF UTAH
In the Matter of the Discipline of ALVIN R. LUNDGREN
________________________________________________
UTAH STATE BAR,
Appellee,
v.
ALVIN R. LUNDGREN,
Appellant.
No. 20130739
Filed July 21, 2015
Second District, Morgan Dep’t
The Honorable Noel S. Hyde
No. 120500019
Attorneys:
Billy L. Walker, Adam C. Bevis, Salt Lake City, for appellee
Alvin R. Lundgren, Mountain Green, pro se
JUSTICE HIMONAS authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE,
JUSTICE DURHAM, and JUDGE ROTH joined.
Having recused herself, JUSTICE PARRISH does not participate
herein; COURT OF APPEALS JUDGE STEPHEN L. ROTH sat.
JUSTICE HIMONAS, opinion of the Court:
INTRODUCTION
¶ 1 Intentionally misappropriating a client’s money is at or
near the top of the list of things a lawyer should never do. But that
is what Alvin Lundgren did when he took Janet Best’s money
from his client trust account for his own purposes. Upon
discovering the defalcation, Ms. Best reported Mr. Lundgren to
the Utah State Bar Office of Professional Conduct (OPC).
Discipline of ALVIN R. LUNDGREN
Opinion of the Court
Following an investigation, the OPC filed a complaint in district
court against Mr. Lundgren. Based on his admitted misconduct,
the district court granted the OPC’s motion for summary
judgment and disbarred Mr. Lundgren. Mr. Lundgren timely
appealed. We affirm his disbarment and state again that a Utah
attorney who intentionally misappropriates client funds will be
disbarred unless the attorney can show truly compelling
mitigating circumstances.
BACKGROUND
¶ 2 Mr. Lundgren had been practicing law for twenty years
when Ms. Best hired him to pursue a workers’ compensation
claim. In February 2009, Ms. Best settled her claim for $24,906. Per
her instructions, Mr. Lundgren retained $2,500 of Ms. Best’s share
of the settlement proceeds in his client trust account in order to
pay her outstanding medical bills. However, in July of 2010,
Ms. Best’s doctor, Carl Mattson, informed her that her medical
bills remained outstanding. Ms. Best called Mr. Lundgren
numerous times and left several messages, but Mr. Lundgren
failed to respond.
¶ 3 Ultimately, in December of 2010, Ms. Best sent
Mr. Lundgren a letter asking him to account for her settlement
funds. She attached a copy of Dr. Mattson’s bill. Mr. Lundgren
did not reply, nor did he account for the $2,500 entrusted to him.
¶ 4 He later claimed to have lost Ms. Best’s case file. As a
result of Mr. Lundgren’s failure to respond and failure to use the
settlement funds as directed, Ms. Best filed a complaint with the
Utah State Bar. On August 12, 2011, the OPC sent Mr. Lundgren
notice of Ms. Best’s informal complaint. As part of its
investigation, the OPC asked Mr. Lundgren to provide bank
records of the deposits and withdrawals made to and from his
client trust account from March 2009 through October 2010. The
OPC did not receive this information, although Mr. Lundgren
claims that he sent it.
¶ 5 The OPC referred the case to a screening panel of the
Ethics and Discipline Committee, which heard the matter on
January 26, 2012. At the hearing, Mr. Lundgren admitted under
oath that he had taken Ms. Best’s money from his client trust
account for his own personal use. He further testified that over the
course of about four years, he had taken money belonging to
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other clients from his client trust account to cover business and
personal expenses. 1 None of Mr. Lundgren’s clients authorized
him to take their money from the trust account for his benefit.
¶ 6 At some point after receiving notice of Ms. Best’s
complaint, but prior to the hearing before the screening panel,
Mr. Lundgren set up monthly payments of $300 to Dr. Mattson to
pay Ms. Best’s medical expenses—ostensibly because he did not
have enough money to pay Ms. Best’s medical bill in full.
Mr. Lundgren ultimately accounted for Ms. Best’s full settlement
monies by paying Dr. Mattson’s bill and reimbursing the rest of
the money to her.
¶ 7 Following the hearing, the screening panel directed the
OPC to file a formal complaint in district court against
Mr. Lundgren, and the OPC did. The OPC then moved for
summary judgment, which the district court granted. The court
concluded that Mr. Lundgren violated rules 1.15(a) and (d) of the
Utah Rules of Professional Conduct by misappropriating client
funds and rule 8.1(b) by “knowingly fail[ing] to respond to a
lawful demand for information” made by the OPC. 2
¶ 8 Thereafter, the district court conducted a sanctions
hearing “to receive relevant evidence in aggravation and
mitigation.” SUP. CT. R. PROF’L PRAC. 14-511(f). Following the
Standards for Imposing Lawyer Sanctions of the Supreme Court
Rules of Professional Practice—rule 14-607—the district court
considered various mitigating factors, including Mr. Lundgren’s
(1) “absence of a prior record of discipline,” (2) “good character
and reputation,” and (3) “remorse.” The court then determined
that none of the evidence presented was “truly compelling,” and
1 While Mr. Lundgren admits to the additional defalcations, he
alleges that he lost the hard copy of his accounting records in a
flood and the electronic copy due to a computer crash and,
therefore, cannot fully account for his financial activity during the
period in question.
2At oral argument in this matter, the OPC withdrew its claim
under rule 8.1(b). Accordingly, we dismiss that charge of
misconduct.
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Opinion of the Court
thus did not justify departure from the presumptive sanction of
disbarment. See SUP. CT. R. PROF’L PRAC. 14-605. The court
explicitly rejected Mr. Lundgren’s claim that his financial
hardship should be considered a mitigating factor. Before
imposing sanctions, the court also considered aggravating factors,
which included Mr. Lundgren’s dishonesty, his pattern of
misconduct, and his extensive experience in practicing law. The
court imposed the sanction of disbarment for Mr. Lundgren’s
misconduct. He timely appealed.
STANDARD OF REVIEW
¶ 9 Mr. Lundgren does not challenge the grant of summary
judgment with regard to his violation of rule 1.15(a) and (d). 3
Accordingly, we are asked to review only the district court’s
decision to disbar Mr. Lundgren. Under the Utah Constitution,
this court has the duty and the authority to “govern the practice of
law, including admission to practice law and the conduct and
discipline of persons admitted to practice law.” UTAH CONST. art.
VIII, § 4. Generally, we do not overturn a district court’s findings
of fact unless they are “arbitrary, capricious, or plainly in error.”
In re Discipline of Babilis, 951 P.2d 207, 213 (Utah 1997) (internal
quotation marks omitted). However, “in light of our constitutional
mandate and the unique nature of disciplinary actions,” we
review district court findings in attorney discipline matters with
less deference. Id. (internal quotation marks omitted). In this area,
we retain “the right to draw different inferences from the facts” in
order to “make an independent determination” of the correctness
of the discipline the district court imposed. In re Discipline of
Crawley, 2007 UT 44, ¶ 17, 164 P.3d 1232 (internal quotation marks
omitted); see also In re Discipline of Corey, 2012 UT 21, ¶ 23 n.13, 274
P.3d 972.
3 Mr. Lundgren did challenge the propriety of the district
court’s grant of summary judgment on the rule 8.1(b) allegation.
Because the OPC withdrew that charge at oral argument, we do
not address it.
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ANALYSIS
I. DISBARMENT WAS THE APPROPRIATE SANCTION
FOR MR. LUNDGREN’S MISCONDUCT
¶ 10 The Utah Supreme Court Rules of Professional Practice
govern, among other things, the ethical practice of law in the State
of Utah and provide the standards for imposing sanctions on
attorneys who violate the rules. See SUP. CT. R. PROF’L PRAC. 1.0 to
8.5 (“Rules of Professional Conduct”), 14-601 to 14-607
(“Standards for Imposing Lawyer Sanctions”). Chapter fourteen,
article 6 provides the Utah State Bar with rules for imposing
sanctions on attorneys who have “engaged in professional
misconduct.” Id. 14-603(a). These rules are designed to “maintain
the high standard of professional conduct required of those who
undertake the discharge of professional responsibilities as
lawyers.” Id. 14-602(b). Further, the rules allow judges “flexibility
and creativity in assigning sanctions” when a lawyer has
committed misconduct. Id. 14-602(d). A court should consider
specific factors when imposing sanctions, including “(a) the duty
violated; (b) the lawyer’s mental state; (c) the potential or actual
injury caused by the lawyer’s misconduct; and (d) the existence of
aggravating or mitigating factors.” Id. 14-604(a)–(d).
¶ 11 Though the rules allow for flexibility in most cases, there
are presumptive sanctions for the most egregious types of
misconduct. Disbarment is the presumptive sanction when a
lawyer either “knowingly engages in professional misconduct . . .
with the intent to benefit the lawyer . . . and causes serious or
potentially serious injury to a party” or “engages in serious
criminal conduct, a necessary element of which includes . . .
misappropriation, or theft.” Id. 14-605(a)(1), (2). And though
disbarment is the harshest sanction available in the realm of
attorney misconduct—“the proverbial professional death-
sentence,” In re Discipline of Corey, 2012 UT 21, ¶ 40, 274 P.3d
972—we have long said that intentional misappropriation of client
funds is one of, if not the most “severe” kind of misconduct in the
legal profession. In re Discipline of Grimes, 2012 UT 87, ¶ 15, 297
P.3d 564. Misappropriation of client funds undermines the
relationship between attorney and client and damages the legal
profession as a whole. Indeed, this court and others have not
minced words when addressing it, describing it as “always
indefensible,” In re Discipline of Babilis, 951 P.2d 207, 217 (Utah
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1997); something “we cannot tolerate,” In re Discipline of Johnson,
2001 UT 110, ¶ 14, 48 P.3d 881; a form of “ethical dereliction,” In re
Blumenstyk, 704 A.2d 1, 4 (N.J. 1997); “the gravest form of
professional misconduct,” Att’y Grievance Comm’n v. Pattison, 441
A.2d 328, 333 (Md. 1982); and an act that “reflects poorly on the
entire legal profession and erodes the public’s confidence in
lawyers.” In re Disciplinary Action Against Rooney, 709 N.W.2d 263,
270 (Minn. 2006). As we explained in Babilis, a seminal Utah case
in this area, intentional misappropriation of client funds “strikes
at the very foundation of the trust and honesty that are
indispensable to the functioning of the attorney-client relationship
and, indeed, to the functioning of the legal profession itself.” 951
P.2d at 217.
¶ 12 Because intentional misappropriation of client funds is
so deeply concerning and intolerable to our profession, an
attorney who is guilty of it should be disbarred. The only
exception to this rule occurs if an attorney can show “truly
compelling mitigating circumstances.” In re Discipline of Ince, 957
P.2d 1233, 1237 (Utah 1998); Babilis, 951 P.2d at 217. We have
never explicitly defined the phrase “truly compelling mitigating
circumstances,” but we have said that the “mitigating factors
must be significant,” Ince, 957 P.2d at 1237–38, and should be
construed “relatively narrowly.” Grimes, 2012 UT 87, ¶ 40; see also
Corey, 2012 UT 21, ¶ 37 n.17. Again, the standard for sanctioning
such behavior is purposely strict in order to serve the public and
the profession by maintaining the trust that is so critical to the
attorney-client relationship.
A. The “Truly Compelling Mitigating Circumstances”
Standard Is Not “Illusory”
¶ 13 The modern standard for attorney sanctions in cases of
intentional misappropriation was first set out by this court in
Babilis, where we adopted the rule that “intentional
misappropriation of client funds will result in disbarment unless
the lawyer can demonstrate truly compelling mitigating
circumstances.” 951 P.2d at 217 (internal quotation marks
omitted). Mr. Lundgren argues that the truly compelling
mitigating circumstances standard is “illusory” and that we
should depart from it in favor of a “balancing” or rehabilitative
approach. However, his briefing on this point is unpersuasive and
largely inadequate. See UTAH R. APP. P. 24(a)(9) (“The argument
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shall contain the contentions and reasons of the appellant with
respect to the issues presented . . . .”); State v. Thomas, 961 P.2d
299, 305 (Utah 1998) (“[R]ule 24(a)(9) requires not just bald
citation to authority but development of that authority and
reasoned analysis based on that authority.”); see also Water &
Energy Sys. Tech., Inc. v. Keil, 2002 UT 32, ¶ 21, 48 P.3d 888 (“[T]his
court will not become simply a depository in which the appealing
party may dump the burden of argument and research.” (internal
quotation marks omitted)). He fails to provide a reasoned
argument for the reversal of our existing standard. We therefore
decline to abrogate it.
¶ 14 Mr. Lundgren’s argument begins with a list of various
“background illustrative cases”—cases that are summarized
without further exegesis. He asserts that the district court below
was “unable” to find truly compelling mitigating circumstances
“because there is no precedent in recent Utah Supreme Court case
history.” But in fact there have been a number of cases applying
the “truly compelling mitigating circumstances” standard in
recent years, though it is true that no attorney has yet met that
standard. See, e.g., In re Discipline of Ennenga, 2001 UT 111, 37 P.3d
1150; Corey, 2012 UT 21. Mr. Lundgren’s primary argument
appears to be, in essence, because no attorney who has
misappropriated client funds since 1997 has been able to escape
the presumptive sanction of disbarment by showing truly
compelling mitigation, “there may be a problem with” the
standard. We disagree.
¶ 15 The fact that no attorney in Utah to date has been able to
show that he acted under truly compelling mitigating
circumstances when he misappropriated client funds does not
indicate that there is a problem with the standard, nor does it
render the standard “illusory,” “vague,” or unenforceable. Nor do
we agree with Mr. Lundgren that the standard is “worthless and
of no material benefit.” To the contrary, we find our strict
standard for imposing sanctions in cases of intentional
misappropriation to be extremely explicit, worthy, and highly
beneficial to the legal profession and the public.
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¶ 16 In arguing that our standard is “illusory,” Mr. Lundgren
grasps at a variety of sources, none of which are on point.4
Mr. Lundgren asserts that our standard sets the bar for showing
mitigation “so impossibly high” that no attorney will ever meet it.
We disagree, but in any event we need not address the question of
a hypothetical case of truly compelling mitigation because
Mr. Lundgren has not shown that he acted under mitigating
circumstances. We agree with the OPC that the truly compelling
mitigation standard “is a high burden for attorneys to meet. That
does not mean it is an illusion.”
¶ 17 Mr. Lundgren asserts that this case presents us with “an
opportunity” to “abandon” the truly compelling mitigation
standard “and return to a more rational” test. We decline this
opportunity because we find the test perfectly rational. As we
explained when we adopted the standard,
[t]he honesty and loyalty that all lawyers owe their
clients are irrevocably shattered by an intentional
act of misappropriation, and the corrosive effect of
such acts tends to undermine the foundations of the
profession and the public confidence that is
essential to the functioning of our legal system.
Lawyers should be on notice that an intentional act
of misappropriation of a client’s funds is an act that
merits disbarment.
Babilis, 951 P.2d at 217. We uphold that standard today and
reiterate that an attorney who intentionally misappropriates client
4 These include: a death penalty case dealing with the standard
for attorney performance in the context of a claim of ineffective
assistance of counsel, Menzies v. Galetka, 2006 UT 81, 150 P.3d 480;
a case dealing with illusory promises made by a prosecutor
pursuing a plea deal; a case in contract law standing for the
proposition that illusory promises will defeat an enforceable
contract; and finally, a statutory interpretation case in which we
stated that we reject interpretations that render statutory rights
“‘meaningless or illusory,’” see Thomas v. Color Country Mgmt.,
2004 UT 12, ¶ 46, 84 P.3d 1201.
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funds will be disbarred unless he or she can show truly
compelling mitigating circumstances.
B. Mr. Lundgren Failed to Present Any Truly
Compelling Mitigating Circumstances
¶ 18 Mr. Lundgren testified under oath that he
misappropriated unearned money from his client trust account for
his business and personal use. On appeal, Mr. Lundgren appears
to argue that he showed truly compelling mitigating
circumstances in two ways: (1) his conduct was not as bad as
other disbarred attorneys and (2) he “repaid all amounts.” We
uphold the district court’s determination that Mr. Lundgren has
failed to show truly compelling circumstances that would
mitigate his misconduct. 5
¶ 19 “[T]he standard for departing from the presumptive
sanction of disbarment is a ‘truly compelling’ mitigating factor in
the circumstances of [this] case, not the comparative seriousness
of other cases.” Ennenga, 2001 UT 111, ¶ 16. Mr. Lundgren argues
that because other attorneys have misappropriated more money
than he did, he should not be disbarred. He contends the “relative
severity” of his conduct was less than that of other attorneys who
have been disbarred—because he took less money—and therefore
he should receive a lesser punishment than disbarment. These
arguments fail. Rule 14-605, which governs the imposition of
sanctions, does not suggest that the amount of money
misappropriated has any bearing on the seriousness of the
misconduct. See SUP. CT. R. PROF’L PRAC. 14-605(a)(2)–(3) (calling
for disbarment when a lawyer “engages in serious criminal
conduct . . . which includes . . . misappropriation” or “engages in
any other intentional misconduct involving . . . deceit”).
Moreover, we review each case of misconduct individually—the
relative seriousness of other cases of attorney misconduct has no
5 The district court considered the mitigating factors presented
by Mr. Lundgren, including (1) “[a]bsence of a prior record of
discipline,” (2) “[g]ood character and reputation,” and
(3) “[r]emorse.” The court did not find that any of these were truly
compelling. We agree.
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bearing on the proper resolution of this case. Ennenga, 2001 UT
111, ¶ 16.
¶ 20 Mr. Lundgren points to Utah State Bar v. Jardine, a case in
which the attorney, Mr. Jardine, charged unreasonable fees,
deposited client retainers in his operating account before they
were earned, and committed various other violations, but was
only suspended. 2012 UT 67, ¶¶ 1, 83, 289 P.3d 516. Mr. Lundgren
claims that his own misconduct “was far less severe.” We are not
persuaded by this argument. Again, as we explained in Ennenga,
we do not compare severity across cases. 2001 UT 111, ¶ 16.
Mr. Lundgren cannot justify his unlawful and unethical conduct
by noting that he could have done worse.
¶ 21 Moreover, Jardine is distinguishable because
Mr. Jardine’s misconduct, though unacceptable, did not rise to the
level of knowing and intentional misappropriation of client funds.
2012 UT 67, ¶¶ 10, 31–32. Mr. Jardine’s case involved mishandling
client funds—not stealing them (a subtle nuance perhaps, but an
important one). Id. ¶¶ 48–50. Mr. Jardine was charging his clients
large “nonrefundable” retainers, which he would deposit directly
into his operating account—and which he argued were earned
upon receipt. Id. ¶ 48. In deeming this misconduct, we explained
that although it is conceivable that an attorney—perhaps due to
the benefit conferred by the person’s “towering reputation”—
might earn a client’s retainer fee the moment she receives it,
Mr. Jardine did not. Id. ¶ 50. We thus concluded it was
misconduct under rule 1.15(a) for Mr. Jardine to deposit client
retainers directly into his operating account. Id. ¶ 53.
Mr. Lundgren, unlike Mr. Jardine, knowingly took funds that
were not only unearned, but would never be earned, and were in
fact earmarked for another purpose, namely, to pay Ms. Best’s
medical bills.
¶ 22 It is true that Mr. Lundgren ultimately restored
Ms. Best’s funds, but this factor is not mitigating where there is no
evidence to show that remorse was his motivation for restoring
the funds. Tellingly, Mr. Lundgren did not self-report his
unethical conduct or restore the funds to Ms. Best until after she
had lodged a complaint with the OPC. Thus, it seems likely that
his restoration of the funds was merely an attempt to avoid
punishment. Under rule 14-607(c)(1) of the Supreme Court Rules
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of Professional Practice, “compelled restitution” cannot be
considered a mitigating factor.
¶ 23 And Mr. Lundgren misses the ethical point entirely
when he attempts to minimize his misappropriation by asserting
that it is “philosophically debatable if the client does not know of
the removal of funds over which the client does not have control,
whether there is actual injury.” It is not philosophically debatable
whether stealing money is okay so long as the victim never finds
out. And in any event, Ms. Best did find out and was certainly
inconvenienced in a variety of ways. Not least of these is the fact
that Mr. Lundgren did not pay her medical bills as he was
instructed (he was instead forced to set up a payment plan with
the doctor much later), and Ms. Best had to endure the
disappointment and frustration of dealing with the doctor’s
collection attempts. We are glad that Mr. Lundgren was
ultimately able to pay Ms. Best back, but “he did not make
repayment until he was forced to do so by threat of suit . . . and
after [the client] had made an informal complaint.” Ennenga, 2001
UT 111, ¶ 13. “The repaying of [Ms. Best’s] money, though the
right thing to do, was not accomplished in a way that mitigates
the misappropriation.” Id.
¶ 24 Because Mr. Lundgren has failed to show truly
compelling mitigating circumstances, we need not discuss the
aggravating factors in detail. Although we do note that
Mr. Lundgren’s dishonesty, his pattern of misappropriation, his
long experience in the practice of law, his inability to accept the
consequences of his actions, and his attempts to justify his
misconduct are all aggravating factors. In sum, disbarment is the
appropriate sanction for Mr. Lundgren’s misconduct.
CONCLUSION
¶ 25 Today we reaffirm that the sanction for intentional
misappropriation of client funds is disbarment unless an attorney
can show truly compelling mitigating circumstances.
Mr. Lundgren intentionally misappropriated client funds and
failed to show any truly compelling mitigation. We therefore
affirm the district court’s order of disbarment.
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