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In re: Paul Mann, II (6/11/93), 853 P 2d 1115
Notice: This is subject to formal
correction before publication in the
Pacific Reporter. Readers are requested
to bring typographical or other formal
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THE SUPREME COURT OF THE STATE OF ALASKA
In the Disciplinary Matter )
Involving ) Supreme Court File No. S-
) ABA File No. 1991D128
PAUL MANN, II, )
) O P I N I O N
) [No. 3966 - June 11,
Appeal from Discipline Board of the
Alaska Bar Association.
Appearances: Stephen J. Van Goor,
Alaska Bar Association, Anchorage.
William G. Royce, Anchorage, for
Before: Moore, Chief Justice,
Rabinowitz, Burke, Matthews and Compton,
MOORE, Chief Justice.
MATTHEWS, Justice, with whom Burke, Justice,
Paul Mann, II, the respondent in this proceeding,
and the Alaska Bar Association's Discipline Counsel entered
into a stipulation for discipline by consent. The Bar's
Disciplinary Board accepted the stipulation and recommended
that we adopt it. Were we to do so, Mann would have been
suspended from the practice of law for three years from
August 15, 1991 nunc pro tunc. Instead, we believe Mann
should be suspended from the practice of law for three years
commencing January 15, 1993, the date of our
order rejecting the Bar's stipulation and remanding the case
for further proceedings pursuant to Bar Rule 22(e).1 We
reach this decision because we believe the stipulation
provides inadequate discipline for the egregious offense of
misappropriating client funds.
I. BACKGROUND FACTS
Mann was admitted to the Alaska Bar in 1977. He
practiced for one year as an associate with a Sitka attorney
then established a sole practitioner office in 1978. He
maintained his Sitka practice until the events at issue in
In early September 1990, Mann misapplied $2,001
which had been obtained on a referral collection for the
benefit of a New York law firm. He used the money to pay
past due mortgage payments on his home.
On September 19, 1990, Mann drove to the Sitka
police station. He had a pistol in his car, and
contemplated suicide. Mann entered the station and reported
the misappropriation to the Sitka police. He insisted on
being arrested at that time; however, the police were
concerned with Mann's mental state. They summoned a
psychologist, who concluded that Mann was acutely suicidal.
Thereafter, Mann was hospitalized in the Sitka Community
Hospital, where he remained under medical and psychological
care for several days.
Upon his release, Mann directed his attorneys to
contact the Alaska Bar Association to report his crime and
determine the appropriate steps with respect to his
practice. On September 28, Mann and the Alaska Bar
Association executed an agreement for the supervised closing
of his practice under the trusteeship of another Sitka
Mann returned the misappropriated funds on
September 28. On October 4 and 5, Mann voluntarily placed a
notice in the Sitka Sentinel newspaper informing the local
community of the misappropriation and its probable
consequences. He informed the public of the transition
agreement and apologized for any harm he may have caused.
Mann's self-reporting resulted in a criminal
conviction for misapplication of property, a Class C felony.
Mann served 60 days in jail, and was required to comply with
other conditions during a three year probationary term. One
condition of the probation was that Mann not practice law
during the three year term.
II. APPROPRIATE SANCTION
In determining sanctions, we need not accept the
Board's recommendation, and may exercise our own independent
judgment. Alaska Bar R. 22(r); Burrell v. Disciplinary Bd.,
777 P.2d 1140, 1143 (Alaska 1989). "We determine the
appropriate sanction to impose for attorney misconduct on a
case-by-case basis." Burrell, 777 P.2d at 1143.
In In re Buckalew, 731 P.2d 48, 51-52 (Alaska
1986), we adopted the American Bar Association's Standards
for Imposing Lawyer Sanctions (ABA Standards) and
methodology as guidelines for determining sanctions for
lawyer misconduct in Alaska. The ABA Standards use a four-
pronged test to assess the appropriate sanction.
(1) What ethical duty did the lawyer
violate? (A duty to a client, the
public, the legal system, or the
(2) What was the lawyer's mental state?
(Did the lawyer act intentionally,
knowingly, or negligently?)
(3) What was the extent of the actual
or potential injury caused by the
lawyer's misconduct? (Was there a
serious or potentially serious injury?)
(4) Are there any aggravating or
Id. at 52 (quoting Standards for Imposing Lawyer Sanctions,
Laws. Man. on Prof. Conduct (ABA/BNA) at 01:805-06).
We use a three-step analysis to address these
The initial step requires that we answer
the first three "prongs" of the ABA test
set forth above. Next, we must look to
the ABA Standards to discern what
sanction is recommended for the "type"
of misconduct found in our initial
inquiry. After determining the
recommended sanction, we must ascertain
whether any aggravating or mitigating
circumstances exist which warrant
increasing or decreasing the otherwise
Id.; see also In re Schuler, 818 P.2d 138, 140 (Alaska
A. Step One: Ethical Duties Violated, Mental
State and Injury or Potential Injury
Because, like Buckalew, this case involves a
stipulation for discipline by consent pursuant to Alaska Bar
Rule 22(h), the first three prongs of the ABA test have
essentially been answered for us. See Buckalew, 731 P.2d at
52. Thus, extensive analysis is not required here.
Under the first prong, the ethical duties
violated, bar counsel argues that Mann violated two ethical
duties. The first is ABA Standard 4.1, Failure to
Preserve the Client's Property, ABA/BNA 01:815, which is a
violation of the duty Mann owed to his client. See id. at
52 & n.15. The second is ABA Standard 5.1, Failure to
Maintain Personal Integrity, ABA/BNA 01:827, which is a duty
Mann owed to the public. See id. (citing ABA Standards,
Laws. Man. on Prof. Conduct (ABA/BNA) at 01:827). These ABA
Standards correspond to the following professional canons in
the Code of Professional Responsibility: DR 9-102,
Preserving Identity of Funds and Property of a Client; and
DR 1-102, Misconduct.2 We agree that these are the duties
The second prong, the lawyer's mental state, also
is easy to discern. Mann was convicted of misapplication of
property in violation of AS 11.46.620. His conviction is
conclusive proof of all the elements of the crime for which
he was convicted. Schuler, 818 P.2d at 141. One element of
the crime of misapplication of property is the scienter
requirement that the crime be committed "knowingly."3
[A] person acts "knowingly" with respect
to conduct or to a circumstance
described by a provision of law defining
an offense when the person is aware that
the conduct is of that nature or that
the circumstance exists; when knowledge
of the existence of a particular fact is
an element of an offense, that knowledge
is established if a person is aware of a
substantial probability of its
existence, unless the person actually
believes it does not exist . . . .
AS 11.81.900(a)(2). The "knowingly" scienter requirement is
in accord with the "knowledge" mental state under the ABA
Standards.4 Buckalew, 731 P.2d at 53 n.19.
The third prong of the ABA test is the injury or
potential injury. The ABA Standards define "injury" and
"potential injury" as follows:
"Injury" is harm to a client, the
public, the legal system, or the
profession which results from the
lawyer's misconduct. The level of
injury can range from "serious" injury
to "little or no" injury; a reference to
"injury" alone indicates any level of
injury greater than "little or no"
. . . .
"Potential injury" is the harm to a
client, the public, the legal system or
the profession that is reasonably
foreseeable at the time of a lawyer's
misconduct, and which, but for some
intervening factor or event, would
probably have resulted from the lawyer's
Definitions, Laws. Man. on Prof. Conduct (ABA/BNA) at
Bar counsel argues that Mann's client suffered
injury by Mann's failure to preserve its money, and that the
public suffered injury by Mann's failure to maintain his
personal integrity. We agree. See ABA Standards
Theoretical Framework, Laws. Man. on Prof. Conduct
(ABA/BNA) at 01:806; see also Buckalew, 731 P.2d at 52-53.
B. Step Two: ABA Recommended Sanction
After answering the first three prongs of the ABA
test, we look to the ABA Standards to determine the
recommended sanction. Two applicable ABA Standards exist for
the type of misconduct in which Mann engaged. Under both,
disbarment generally is the appropriate sanction.5 ABA
Standards 4.11, 5.11(a), Laws. Man. on Prof. Conduct
(ABA/BNA) at 01:815, 01:827. Our analysis does not end
here, however. Under the ABA Standards, we also must
inquire whether any mitigating circumstances warrant a
reduced sanction. "Because disbarment is the most severe
sanction we can impose, we need not consider any aggravating
factors in order to consider whether [the] sanction should
be increased. However, the presence of aggravating factors
is relevant here because of the 'neutralizing' effect they
may have upon any mitigating factors." Buckalew, 731 P.2d
at 54 n.24.
C. Step Three: Aggravating and Mitigating
Both aggravating6 and mitigating7 factors exist.
In aggravation, the following factors are present: prior
disciplinary offenses8 and substantial experience in the
practice of law.9 The following mitigating factors exist:
personal or emotional problems;10 timely good faith effort to
make restitution or to rectify consequences of misconduct;11
full and free disclosure to disciplinary board or
cooperative attitude toward proceedings;12 interim
rehabilitation;13 imposition of other penalties or sanctions;14
remorse;15 and remoteness of prior offense.16
There is no "magic formula" to
determine which or how many mitigating
circumstances justify the reduction of
an otherwise appropriate sanction. Each
case presents different circumstances
which must be weighed against the nature
and gravity of the lawyer's misconduct.
Buckalew, 731 P.2d at 54.
"[T]he severity of [this] misconduct cannot be
overstated. '[T]here are few more egregious acts of
professional misconduct . . . than the misappropriation of
client's funds held in trust.'" Id. at 55 (quoting In re
Beckman, 400 A.2d 792, 793 (N.J. 1979)). However, we
believe the mitigating factors weigh heavily enough to
reduce Mann's sanction from disbarment to a three year
suspension from January 15, 1993, the date of our order.
The most significant mitigating factor is Mann's
voluntary disclosure. He freely came forward within a month
after misapplying his client's funds, before anyone knew of
his offense. Nothing suggests that anyone would have
discovered his offense but for his disclosure. Although we
do not condone Mann's misappropriation of funds, we commend
his voluntary disclosure and genuine regret. We encourage
others similarly situated also to freely disclose their
For the reasons stated above, we decline to impose
the sanction consented to by Mann and recommended by the
Disciplinary Board. As we are required to do under these
circumstances by Alaska Bar Rule 22(h), we remand this case
to the Alaska Bar Association for further proceedings.
Pending such further proceedings, Mann shall remain
suspended from the practice of law in accordance with Alaska
Bar Rule 26(d).17
MATTHEWS, Justice, joined by BURKE, Justice,
Because the misappropriation of a client's funds
is not only stealing but a gross breach of trust, I think
disbarment should almost always be imposed in such cases.
"[O]nly the most compelling mitigating circumstances"
justify sanctions more lenient than disbarment where a
lawyer converts client funds for his own use. Commentary,
ABA Standards for Imposing Lawyer Sanctions, 4.11.
Mann committed his offense when he was severely
depressed, a condition brought about at least in part by
financial and family problems. Unfortunately, depression is
a common malady. A review of the digests leads one to
conclude that most attorneys who take their clients' money
are depressed. See, e.g., 4 Pacific Digest 2d, Attorney &
Client, Key Number 58 (West 1990 & Supp. 1992). In my view
depression should not be regarded as a mitigating
circumstance of sufficient strength to reduce the sanction
for misappropriation from disbarment to suspension.
The most unique mitigating circumstance which is
present in this case is the fact that Mann turned himself in
a few weeks after his offense, at a time when no one knew he
had committed it. While this is certainly commendable, it
is nonetheless after the fact conduct which does not serve
to explain or excuse the offense. To me, the dominant fact
in this case is that Mann stole money belonging to his
clients. The fact that he acted responsibly afterwards does
not warrant a reduction in the usual sanction. Thus I would
order Mann disbarred.
1In pertinent part this order reads:
1. The stipulation is REJECTED,
and this matter is REMANDED to the
Alaska Bar Association for proceedings
under Bar Rule 22(e) with instructions
that a sanction of less than a
suspension from the practice of law for
three years beginning January 15, 1993,
will not be accepted.
2. An opinion will follow.
. . . .
[Burke and Matthews, Justices, concur in
the rejection of the stipulation but
dissent as to the sanction recommended;
they would disbar.]
2Specifically, Mann violated DR 1-102(A)(1), DR 1-102(A)(3),
and DR 1-102(A)(4). These canons prohibit a lawyer from
violating a disciplinary rule, engaging in illegal conduct
involving moral turpitude, and engaging in conduct involving
dishonesty, fraud, deceit or misrepresentation. DR
3AS 11.46.620(a) reads:
A person commits the crime of
misapplication of property if the person
knowingly misapplies property that has
been entrusted to that person as a
fiduciary or that is property of the
government or a financial institution.
4The ABA Standards define "knowledge" as "the conscious
awareness of the nature or attendant circumstances of the
conduct but without the conscious objective or purpose to
accomplish a particular result." Definitions, Laws. Man. on
Prof. Conduct (ABA/BNA) at 01:807.
5Disbarment is generally appropriate both "when a lawyer
knowingly converts client property and causes injury or
potential injury to a client," ABA Standard 4.11, Laws.
Man. on Prof. Conduct (ABA/BNA) at 01:815, and when "a
lawyer engages in serious criminal conduct a necessary
element of which includes . . . misappropriation, or theft .
. . ." Id. 5.11(a) at 01:827.
6Aggravating factors include:
(a) prior disciplinary offenses;
(b) dishonest or selfish motive;
(c) a pattern of misconduct;
(d) multiple offenses;
(e) bad faith obstruction of the disciplinary
proceeding by intentionally failing to comply
with rules or orders of the disciplinary
(f) submission of false evidence, false
statements, or other deceptive practices
during the disciplinary process;
(g) refusal to acknowledge wrongful
nature of conduct;
(h) vulnerability of victim;
(i) substantial experience in the
practice of law;
(j) indifference to making restitution.
In re West, 805 P.2d 351, 358 n.16 (Alaska 1991) (quoting
former ABA Standard 9.22, Laws. Man. on Prof. Conduct
(ABA/BNA) at 01:841-42). In February 1992, when amending
its standards for sanctions, see ABA Standards, Preface,
Laws. Man. on Prof. Conduct (ABA/BNA) at 01:801, the ABA
added a new aggravating circumstance: "(k) illegal conduct,
including that involving the use of controlled substances."
ABA Standard 9.22, Laws. Man. on Prof. Conduct (ABA/BNA)
at 01:838-39 (June 17, 1992).
7Mitigating factors include:
(a) absence of a prior disciplinary
(b) absence of a dishonest or selfish
(c) personal or emotional problems;
(d) timely good faith effort to make
restitution or to rectify consequences of
(e) full and free disclosure to
disciplinary board or cooperative attitude
(f) inexperience in the practice of
(g) character or reputation;
(h) physical or mental disability or
(i) delay in disciplinary proceedings;
(j) interim rehabilitation;
(k) imposition of other penalties or
(m) remoteness of prior offenses.
West, 805 P.2d at 358-59 n.18 (quoting former ABA Standard
9.32, Laws. Man. on Prof. Conduct (ABA/BNA) at 01:842). In
February 1992, when amending its standards for sanctions,
see ABA Standards, Preface, Laws. Man. on Prof. Conduct
(ABA/BNA) at 01:801, the ABA inserted a new provision,
elaborating on mental disability itself as a mitigating
(i) mental disability or chemical
dependency including alcoholism or drug
(1) there is medical evidence that the
respondent is affected by a chemical
dependency or mental disability;
(2) the chemical dependency or mental
disability caused the misconduct;
(3) the respondent's recovery from the
chemical dependency or mental disability
is demonstrated by a meaningful and
sustained period of successful
(4) the recovery arrested the misconduct
and recurrence of that misconduct is
ABA Standard 9.32, Laws. Man. on Prof. Conduct (ABA/BNA)
at 01:839-40 (June 17, 1992). Other mitigating factors have
not changed. See id.
8The disciplinary records of the Bar Association reveal that
in 1984 Mann received a written private admonition for
neglect of a client matter (DR 6-101(A)(3)) and failure to
carry out a contract of employment for that client (DR 7-
9Mann was admitted to the practice of law in Alaska in 1977.
10A psychologist determined that Mann was acutely suicidal
when he turned himself in to the Sitka police two weeks
after misappropriating his client's funds.
11Mann restored the client's funds on September 28, within a
month of the misappropriation. In addition, Mann fully
cooperated with the Sitka attorney who supervised the
closing of Mann's practice.
12Mann voluntarily turned himself in to the Sitka police and
the Alaska Bar Association before anyone discovered his
misappropriation. Without his self-disclosure, Mann's crime
easily could have gone undetected.
13Mann was required to participate in alcohol/drug
rehabilitation and psychological/psychiatric counseling
programs in conjunction with his criminal probation.
Additionally, Mann successfully closed his practice under
the supervision of another Sitka attorney.
14Mann spent 60 days in jail and was required to complete 100
hours of community service for his criminal conviction. He
was suspended from the practice of law for his three year
criminal probationary period, which began June 17, 1991.
15Mann's self-disclosure to the police is the most telling
evidence of his remorse. His notice in the Sitka Sentinel
and cooperation with authorities provide further evidence to
support this factor.
16Mann's prior offense, which was much less serious, occurred
17After publishing our January 15, 1993 order, we received
from the Bar Association both a request to reconsider and,
in the event we declined to do so, a revised stipulation
whereby Mann and the Bar agreed to our recommended sanction.
We decline to reconsider the order, but accept the revised