This is an attorney discipline case in which the only question before this court is the appropriate sanction. Kent J. Trembly admits to receiving a felony conviction for filing a false individual income tax return in the U.S. District Court for the District of Nebraska. The referee recommended Trembly be suspended from the practice of law for 18 months. However, after our de novo review of the record, we conclude a 3-year suspension from the practice of law is the proper sanction.
Trembly was admitted to the practice of law in the State of Nebraska on September 28, 1994. At all relevant times, he was engaged in the practice of law in Wahoo, Nebraska.
GROUNDS FOR ATTORNEY DISCIPLINE
On December 16, 2015, the U.S. District Court for the District of Nebraska accepted Trembly's plea of guilty and found him guilty of the charge of filing a false tax
On May 3, 2017, Counsel for Discipline of the Nebraska Supreme Court filed formal charges against Trembly, alleging that he violated his oath of office as an attorney, Neb. Rev. Stat. § 7-104 (Reissue 2012), and Neb. Ct. R. of Prof. Cond. § 3-508.4(a) through (c). Trembly admitted to these allegations in his answer, and we sustained Counsel for Discipline's motion for judgment on the pleadings limited to the facts. We then appointed a referee for the taking of evidence limited to the appropriate discipline.
After an evidentiary hearing, the referee reported his findings of fact and recommendations for the appropriate sanction. The referee reasoned that omitting over $1 million of income from a tax return was serious, needed to be deterred, and reflected poorly on the reputation of the bar as a whole. However, the referee noted that Trembly's actions did not harm any clients and that "Trembly has accepted responsibility for the actions that form the basis of this proceeding, has satisfied all terms of his probation and has cooperated with Counsel for [D]iscipline to resolve this matter expeditiously."
The referee also identified certain mitigating factors that reflect on Trembly's present and future fitness to practice law: Trembly's cooperation with Counsel for Discipline and acceptance of responsibility; Trembly's lack of prior disciplinary issues, with Counsel for Discipline or the professional boards in the three states where he holds a veterinarian license; and his honorable discharge from the Nebraska Air National Guard as a lieutenant colonel in 2014.
In the report, the referee acknowledged the seriousness of a felony conviction and that this court has generally found disbarment to be the appropriate sanction for attorneys who have received a felony conviction. Nevertheless, the referee stated that such discipline was not required and that "the nature of the conduct ... ought to be evaluated more thoroughly than the final classification of any criminal proceeding."
The referee found Trembly's conduct more egregious than in cases where attorneys filed no income tax returns, receiving 1-year suspensions, but less egregious than in State ex rel. Counsel for Dis. v. Mills
ASSIGNMENT OF ERROR
The only question before this court is the appropriate discipline.
STANDARD OF REVIEW
Because attorney discipline cases are original proceedings before this court, we review a referee's recommendations de novo on the record, reaching a conclusion independent of the referee's findings.
The basic issues in a disciplinary proceeding against an attorney are whether discipline should be imposed and, if so, the appropriate discipline under the circumstances.
Violation of a disciplinary rule concerning the practice of law is a ground for discipline.
Trembly admitted being convicted of a felony for filing a false individual income tax return and violating the Nebraska Rules of Professional Conduct and his oath of office as an attorney, § 7-104, in his answer to the formal charges. Thus, we granted Counsel for Discipline's motion for judgment on the pleadings as to the facts substantiating the grounds for disciplinary action. We must now determine the appropriate sanction.
Under Neb. Ct. R. § 3-304, this court may impose one or more of the following disciplinary sanctions: "(1) Disbarment by the Court; or (2) Suspension by the Court; or (3) Probation by the Court in lieu of or subsequent to suspension, on such terms as the Court may designate; or (4) Censure and reprimand by the Court; or (5) Temporary suspension by the Court[.]"
For purposes of determining the proper discipline of an attorney, we consider the attorney's actions both underlying the events of the case and throughout the proceeding, as well as any aggravating or mitigating factors.
NATURE OF OFFENSE
We have stated that "[t]here should be no question that the knowing failure to file tax returns and to pay taxes is a serious violation of the ethical obligations of an attorney."
Another important consideration regarding the nature of Trembly's offense is the sheer magnitude of Trembly's conduct. The fact that Trembly underreported over $1.1 million in income makes the misrepresentation substantially more egregious.
DETERRENCE AND REPUTATION OF BAR
Attorneys have an "`obligation to uphold the laws of the United States' and [a] felony conviction thus `violate[s] basic notions of honesty and endanger[s] public confidence in the legal profession'" at the most egregious level.
PROTECTION OF PUBLIC
Trembly's actions were in his capacity as an individual, not an attorney, and did not harm any clients.
Nevertheless, the goal of attorney discipline proceedings is not as much punishment as a determination of whether it is in the public interest to allow an attorney to keep practicing law.
ATTITUDE OF RESPONDENT
The referee stated, "Trembly has accepted responsibility for the actions that form the basis of this proceeding, has satisfied all terms of his probation and has cooperated with Counsel for [D]iscipline to resolve this matter expeditiously."
FITNESS TO CONTINUE PRACTICE OF LAW
There was no evidence presented of Trembly's being unfit to practice law based on any mental condition or any other issue in personal life. As mentioned above, a criminal act of any kind negatively reflects on an attorney's fitness to practice law. A pattern of noncompliance with our disciplinary rules and cumulative acts of attorney misconduct are distinguishable from isolated incidents, therefore justifying more serious sanctions.
Trembly's honorable discharge from the National Guard, his lack of other misconduct in the legal and veterinary professions, and his commitment to remedying his improper action each weigh in favor of his fitness. In fact, this single indiscretion, which occurred over 10 years ago, on his otherwise unblemished record of 23 years of legal practice provides a strong indication
As discussed above, the referee acknowledged that a felony conviction for the conduct at issue in disciplinary proceedings is significant, yet the referee gave little weight to Trembly's felony conviction in the recommended sanction. Neither Counsel for Discipline nor Trembly takes exception with the 18-month suspension recommended by the referee. However, Counsel for Discipline argues Trembly should be strongly sanctioned for his felony conviction.
Trembly contends that the referee was correct in determining we have not adopted a bright-line rule requiring disbarment for a felony conviction and the underlying conduct, not the felony conviction, should be our focal point for determining discipline. He argues focusing on a conviction for the underlying conduct places undue influence on "the serendipitous exercise of unfettered discretion by a prosecuting authority."
As the referee and parties acknowledge, we have not adopted a bright-line rule requiring the disbarment of attorneys who receive a felony conviction. In State ex rel. Counsel for Dis. v. Walz,
Additionally, we do not believe this court should impose a bright-line rule that a felony conviction creates a presumption in favor of disbarment, as we have for acts of misappropriating funds and commingling.
We are not persuaded by Trembly's argument that the discretionary decision of a prosecuting authority justifies disregarding the ultimate result of criminal charges. Instead, holding that the discretionary decision of an attorney charged with the duty of enforcing the law justifies disregarding the ultimate determination of a judge or jury on the charges brought would only harm the legal profession. Such discretionary decisions are based on the severity of the underlying offense and the need to deter others from committing similar acts, among other considerations; these are the same factors we consider in our own determination for sanctions. Further, the end
We also reject the notion that our reinstatement of Mills without further sanctions established a precedent that a felony conviction is meaningless to the appropriate discipline for an attorney's conduct.
As we indicated in Walz, the fact that Mills had not been convicted of a felony at the time of our disciplinary proceedings was relevant to our consideration of the appropriate discipline.
Trembly fully cooperated with Counsel for Discipline, admitted to his misconduct, took responsibility for his actions, had practiced for many years, and had no previous disciplinary history. Further, the violation he committed was a completely isolated act not part of any pattern of misconduct. These are all mitigating factors.
In his brief, Trembly argues that letters attesting to his good character and honesty were submitted to the referee as evidence. However, these letters were not mentioned in the referee's report, and Trembly has not taken exception to the findings of fact in the referee's report. When no exceptions to the referee's findings of fact in an attorney discipline case are filed, the Nebraska Supreme Court may consider the referee's findings final and conclusive.
On two prior occasions, we have issued sanctions to attorneys who received a felony conviction for the same offense as Trembly.
Further, our reinstatement proceedings on one of these cases, State ex rel. NSBA v. Scott,
The cumulative acts of misconduct and an overall pattern of violating our ethical rules, the failure to comply with the restitution order of the sentence, and the voluntary license surrender each show a stark contrast between the circumstances in State ex rel. NSBA v. Scott
We have also sanctioned attorneys in numerous cases for failing to file income tax returns, each representing a pattern of failure to do such.
The referee found Mills I to be the most analogous case to the facts here but also stated that the facts of Mills I were more egregious. In Mills I, Mills' misconduct included filing a federal estate tax return form with the IRS containing affirmative misrepresentations. Additionally, Mills showed a pattern of misconduct by improperly notarizing and altering client renunciations and deeds, lying to an IRS agent, encouraging his clients to lie to an IRS agent, and causing a loss to the estate he was handling.
We considered these violations collectively as an isolated incident in the attorney's career because they occurred in the course of one case.
Also, as noted above, Mills was convicted of a felony for his filing with the IRS after our proceedings in Mills I. We noted in Walz that the absence of this aggravating factor when we sanctioned Mills may have affected the ultimate sanction.
In light of the felony conviction Mills received and the egregious conduct substantiating the grounds for disciplinary action, we disapprove of the 2-year suspension imposed in Mills I to the extent that it was considered sufficient.
We agree that Mills I includes similar misconduct and mitigating factors to the case at hand. While the breadth of Mills' misconduct was greater than Trembly's and represented a pattern of misconduct, Trembly's misconduct was of a greater magnitude. Both attorneys had long careers with only one period of misconduct, were fully cooperative with Counsel for Discipline, and presented other mitigating factors. Based on our determination that the 2-year suspension in Mills I was insufficient and on the strongly aggravating factor of a felony conviction, we think a 2-year suspension would also be insufficient here.
Trembly's felony conviction for filing a false income tax return underreporting more than $1.1 million in income was an offense of moral turpitude that requires a sanction sufficient to maintain the public's confidence in the bar and deter such action in other attorneys. Further, the magnitude of the violation and the resulting felony conviction aggravate the misconduct. Conversely, Trembly's attitude and demonstrated fitness to continue practicing law, the fact that no clients were harmed by his actions, and the numerous mitigating factors each warrant leniency.
These factors make this case most analogous to Mills I, in which we sanctioned the attorney with a 2-year suspension. Because the sanction imposed in Mills I was insufficient for the violation and because of the aggravating factor of Trembly's felony conviction, we hold that a 3-year suspension of Trembly's license is necessary to maintain the public's confidence in the bar and deter such action in other attorneys.
Upon our de novo review of the record, we conclude the appropriate sanction for Trembly's misconduct is a 3-year suspension. Accordingly, we find the referee's recommendation of an 18-month suspension to be in error.
Trembly is hereby suspended from the practice of law for a period of 3 years, effective immediately. Trembly is directed to comply with Neb. Ct. R. § 3-316 (rev. 2014), and upon failure to do so, he shall be subject to punishment for contempt of this court. Trembly is 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 of the disciplinary rules within 60 days after an order imposing costs and expenses, if any, is entered by the court.
JUDGMENT OF SUSPENSION.
Heavican, C.J., not participating in the decision.