author: GILBERTSON, Chief Justice.

text:
    2004 SD 66
    In the Matter of the RECIPROCAL DISCIPLINE OF Alice L. ROKAHR as an attorney-at-law.
    No. 23222.
    Supreme Court of South Dakota.
    Considered on April 15, 2004.
    Decided May 19, 2004.

      Robert B. Frieberg, Beresford, South Dakota, Attorney for Disciplinary Board.
    Alice L. Rokahr, Yankton, South Dakota, pro se.
   GILBERTSON, Chief Justice.

[¶ 1.] Alice L. Rokahr, an attorney-at-law licensed in South Dakota, has filed notice with this Court as required by SDCL 16-19-71 that she was subjected to professional disciplinary action' in another jurisdiction. For the reasons stated herein and because this matter was referred to, and previously determined by the South Dakota Disciplinary Board, we decline to impose reciprocal discipline. We instead conduct our own independent review of the disciplinary record.

BACKGROUND

[¶ 2.] Rokahr is a Yankton, South Dakota attorney admitted to the practice of law in both South Dakota and Nebraska. Rokahr represented Clara Heine and her son Allen Heine. Rokahr represented Allen in a number of different capacities including individually, as the controlling partner of the Heine Feedlot Company and as a trustee for three separate trusts created by his father for the benefit of Allen’s two nieces and one nephew. These three trusts would be terminated at the option of the beneficiaries at the age of twenty-one or automatically at the age of twenty-five. The trusts wére at least partially funded with various parcels of land in South Dakota and Nebraska.

[¶ 3.] Certain land deeded in trust was operated by the Heine Feedlot Company and the rental payments were deposited in trust for the beneficiaries. At various times Rokahr drafted documents concerning the real property held in trust. Particularly relevant here is an easement Rokahr drafted that provided access to property held in trust for Allen’s children. That easement provided access over and across land held in trust for Allen’s nieces and nephew, of which he was trustee on their behalf. The easement was signed by Allen and his wife Marilyn in their capacity as trustees. According to Rokahr’s testimony, the easement was dated and notarized by Rokahr on September 1,1994, but was not recorded with the Yankton County Register of Deeds until March 6, 1995. These dates .are particularly important because by March 1995 two of the trusts had terminated and Allen had no legal authority to act on those beneficiaries’ behalf in executing this easement encumbering the property. Arlene Heine, the party who initiated the complaint against Rokahr, alleged that Rokahr backdated the document she notarized so that an easement could be obtained which benefited her client, Allen.

[¶ 4.] A Nebraska disciplinary referee found that there was clear and convincing evidence to support the allegation of misconduct. The Nebraska Supreme Court affirmed in part concerning the easement issue. The evidence supporting that finding was as follows: Rokahr’s appointment calendar makes no mention of an appointment to have this document signed in September 1994. On February 22, 1995, Rok-ahr sent a letter to Allen indicating “Please find enclosed a copy of the Perpetual Easement ... on the parcel of land in Yankton County ... If this is acceptable, please let me know and we can make arrangements for its signing.” Finally, Rokahr billed Allen for the preparation and signing of an easement on March 15, 1995.

[¶5.] The evidence supporting Rok-ahr’s contention that she did not backdate the easement was her sworn testimony, Allen and Marilyn’s sworn testimony and Rokahr’s explanation in the Nebraska proceeding and before the South Dakota Disciplinary Board that:

• She did not specifically recall when the easement was signed or why it was not filed until March 6,1995.
• She suspected that she found a draft of the easement and not realizing it had already been signed, forwarded it to Allen under the previously quoted cover letter to arrange for its signing. Thereafter, when she discovered her mistake, it was recorded.
• Rokahr indicated that she had poor billing practices and she probably didn’t bill for the document until she discovered the draft she sent to Allen in February 1995.

Nebraska Disciplinary History

[¶ 6.] A Nebraska disciplinary referee found by clear and convincing evidence that Rokahr had committed three ethical violations: (1) backdating the aforementioned easement; (2) colluding with Allen in backdating and filing the easement; and, (3) engaging in delay, deceit, and deception in the delivery of certain deeds to the beneficiaries. The referee also rejected Rokahr’s testimony as not credible. The referee recommended Rokahr be suspended from the practice of law for six months. The Nebraska Supreme Court determined that clear and convincing evidence existed to support the findings of the referee that Rokahr backdated the easement and colluded with Allen in backdating and filing the easement. Counsel for Discipline of the Nebraska Supreme Court v. Rokahr, 267 Neb. 436, 675 N.W.2d 117, 128 (2004). The Nebraska Supreme Court rejected the referee’s finding that Rokahr engaged in delay, deceit, and deception in the delivery of deeds to the beneficiaries. Id. at 130. The Nebraska Supreme Court ultimately suspended Rokahr from the practice of law for one year. Id. at 131.

South Dakota Discipline

[¶ 7.] Arlene Heine submitted' a complaint against Rokahr to the South Dakota State Bar and later to this Court. The complaints were referred to the South Dakota Disciplinary Board. Thereafter, Rok-ahr submitted a self-report to the South Dakota Disciplinary Board of the pending Nebraska matter and a South Dakota investigation conducted by the Board ensued. The South Dakota Disciplinary Board consists of seven members, that being six members of the State Bar and one lay member. See SDCL 16-19-24. In addition, the Board retains its own legal counsel.

[¶ 8.] Arlene Heine, as the complainant, was informed of the pending investigation in South Dakota and invited to submit any and all information to the South Dakota Disciplinary Board. It appears from the record that information gathered by the Nebraska disciplinary prosecutor was forwarded to the South Dakota Disciplinary Board. On December 12, 2002, Rokahr and her counsel appeared before the South Dakota Disciplinary Board. Rokahr was questioned by counsel for the Disciplinary Board and by the members individually. Rokahr maintained that the easement was not backdated though she conceded that during the course of her representation she failed to recognize conflicts of interest as they developed and too readily followed the desire of her client. Following that hearing, the Disciplinary Board unanimously entered the following admonishment:

The Disciplinary Board of the State of South Dakota has considered the complaint of Arlene Heine, together with the testimony presented at the hearing and the submissions received in connection with that complaint. This letter shall constitute the Board’s findings.
The Board finds that you acceded to Allen’s directions/ instruction too readily and that you failed to exercise independent professional judgment. A reality of the practice of law is that, on occasion, a lawyer must withdraw from representation of a client when the lawyer finds herself unable to exercise independent professional judgment or when the client refuses to accept the lawyer’s advice. In addition, the Board finds that conflicts of interest did exist as between the beneficiaries of the trusts established for the grandchildren as became more apparent with the passage of time. You failed to recognize these conflicts in a timely fashion. The Board finds that these violations were unintentional and unlikely to be repeated. Therefore, the Board finds that the appropriate disposition of the complaint is an admonition to exercise independent professional judgment and to be more sensitive to conflicts arising during the course of representation.
With the above stated admonition, this matter is concluded.

The Board further informed the complainant that “the Board found no evidence that Ms. Rokahr intentionally violated any rules of Professional Conduct.” As previously mentioned, the South Dakota Disciplinary Board’s hearing occurred before the Nebraska referee’s final report or any decision by the Nebraska Supreme Court.

[¶ 9.] Thereafter, upon the conclusion of the Nebraska disciplinary proceeding, Rokahr sent notice to this Court as required by SDCL 16-19-71 advising of her discipline in Nebraska. Rokahr has requested that we deviate from imposing reciprocal discipline in South Dakota. The South Dakota Disciplinary Board has also requested that we not impose reciprocal discipline under these circumstances. Complainant maintains that the South Dakota discipline imposed was inadequate and has requested the imposition of reciprocal discipline.

ANALYSIS

ISSUE ONE

[¶ 10.] Whether reciprocal discipline should be imposed as a result of Rok-ahr’s Nebraska discipline even though an independent South Dakota disciplinary proceeding has already occurred.

[¶ 11.] SDCL 16-19-71 requires an attorney disciplined in another jurisdiction to promptly inform this Court of such action. SDCL 16-19-71. “Except as provided in SDCL 16-19-74, a final adjudication in another jurisdiction that an attorney has been guilty of misconduct shall establish conclusively the misconduct for purposes of a disciplinary proceeding in this state.” SDCL 16-19-71 (emphasis added). SDCL 16-19-74 provides:

[T]he Supreme Court shall impose the identical discipline unless the board or the attorney demonstrates, or the Court finds that upon the facts of the record upon which the discipline is predicated it clearly appears;
(1) That the procedure was so lacking in notice or opportunity to be heard as to constitute a deprivation of due process; or
(2) That there was such an infirmity of proof establishing the misconduct as to give rise to the clear conviction that the Court could not, consistent with its duty, accept as final the conclusion on that subject; or
(3) That the misconduct established warrants substantially different discipline in this state.
Where the Court determines that any of said elements exist, the Court shall enter such order as it deems appropriate.

SDCL 16-19-74. Rokahr urges that SDCL 16-19-74(2) and (3) preclude imposition of reciprocal discipline in this instance. We decline to do so.

[¶ 12.] The reciprocal discipline rules have no provision for an instance such as this where two separate and distinct investigations occurred in each respective state. See SDCL ch 16-19. Moreover, those rules provide no guidance concerning the appropriate remedy when the two jurisdictions reach separate conclusions concerning the facts supporting the discipline. See id. Therefore, this case does not fall squarely within the framework of the reciprocal discipline provisions, or exceptions thereto, because the very “misconduct established” in' the foreign jurisdiction was not found to have occurred in this jurisdiction. i

[¶ 13.] In both disciplinary proceedings the most serious allegation of misconduct against Rokahr concerned the preparation, backdating, notarization and filing of an easement that benefited her client Allen, as opposed to the trust beneficiaries. The Nebraska referee and the Nebraska Supreme Court determined that clear and convincing evidence of such misconduct was established in their proceeding. However, the South Dakota Disciplinary Board found the other way, Rokahr did not engage in the backdating of the easement for the benefit of her client. In a report to this Court, the Disciplinary Board indicated its reasoning:

The Board noted in its deliberations that it is not unusual for lawyers to inadvertently leave signed documents in the client’s file causing delay in the recordation (something that the Board sees perhaps too often). Secondly, it is not unusual for lawyers to delay billing for cpncluded work, particularly with agricultural .clients who many times pay their bills once a year on the selling of grain or calves. Missing from the Nebraska determination is the motive for back-dating the easement. Rokahr’s Ghent’s children had a statutory easement existing in their favor and the ’ easement was unnecessary. In fact, ' Rokahr’s testimony was that she attempted to dissuade her client from pre-páring and recording the easement as it would simply result in discord among the family. Client insisted and Rokahr prepared the easement.

Therefore, it appears that the primary explanation for this difference in discipline is the result of a credibility determination based on the observation of Rokahr as she testified on this topic. Given the competing factual and credibility determinations between jurisdictions, and the absence of South Dakota rules or case law concerning this type of proceeding, we turn to case law from other jurisdictions for guidance.

[¶ 14.] In addressing a similar situation, the District of Columbia Court of Appeals has determined that the imposition of reciprocal discipline is not automatic when there are competing investigations and sanctions in separate jurisdictions. In re Perrin, 663 A.2d 517, 522-23 (D.CApp. 1995). In reaching that determination, the court recognized:

On its face, [the reciprocal discipline rule] requires the court to impose reciprocal discipline in every case in which a member of our Bar is disciplined elsewhere unless the attorney proves that at least one of the exceptions applies. Literal application, however, leads to absurd results. According to the strict terms of the Rule, we would be obliged to apply reciprocal discipline no matter how far our own proceedings had progressed, or even if they had been completed and if this court had already imposed a different sanction of its own, unless there was a major and substantial difference between the foreign state’s practice and our own.

Id. Moreover, in determining whether reciprocal discipline should be imposed, consideration should be given to “the resources expended in this jurisdiction.” Id. at 522. Furthermore,

Each jurisdiction has its own statutes and rules. If the District’s proceedings, based on its own standards and a careful evaluation of the attorney’s conduct in light of those standards, conclude with the selection of one sanction, then it would surely be irrational to impose, instead, a different sanction which was selected on the basis of a different factual record under another jurisdiction’s laws and rules.

Id. at 523. See also In re Cerroni, 683 A.2d 150, 151 (D.C.App.1996) (A court is not required to follow the doctrine of reciprocal discipline when independent proceedings have already been conducted in its own jurisdiction). Though it was not discussed in the Nebraska opinion, we note that this rationale would support Nebraska’s decision to proceed in this matter despite the South Dakota admonition. Likewise, the Iowa Supreme Court has determined that a South Dakota disciplinary determination was not entitled to deference when the event had a significant nexus to that state and South Dakota did not consider the same disciplinary rules at issue in the Iowa proceeding. Committee on Professional Ethics and Conduct of the Iowa State Bar Association v. Qualley, 487 N.W.2d 327, 330 (Iowa 1992).

[¶ 15.] There is also the question of whether an attorney disciplinary decision of a separate jurisdiction must be given full faith and credit in this jurisdiction. Indeed, Rokahr raised this same argument as a defense to the Nebraska Disciplinary proceeding, contending that because the South Dakota Disciplinary Board had already investigated the complaint based upon the same set of facts, no further discipline should be imposed. The Nebraska Supreme Court rejected this argument and concluded that full faith and credit is not offended by the sanctioning of an attorney already disciplined in the state where the ethical violation occurred. Rokahr, 675 N.W.2d at 123-25 (citing State ex rel. NSBA v. Gallner, 263 Neb. 135, 638 N.W.2d 819 (2002); State ex rel. NSBA v. Frederiksen, 262 Neb. 562, 635 N.W.2d 427 (2001); Kentucky Bar Ass’n v. Signer, 533 S.W.2d 534 (Ky.1976)). We agree with the analysis of the Nebraska Supreme Court and for the same reason conclude that while its disciplinary decision concerning Rokahr is worthy of careful review and consideration by this Court, it does not require an identical sanction in South Dakota. Id.

[¶ 16.] Consequently, because an independent disciplinary proceeding occurred in South Dakota, this matter was significantly connected to South Dakota (the easement pertained to South Dakota property) and considering the divergent findings and resulting discipline imposed in each jurisdiction, reciprocal discipline is not mandated or warranted in this instance. The more severe sanction of a one-year suspension imposed in Nebraska was the result of a factual finding that is in direct conflict with the finding of the South Dakota Disciplinary Board. This Court gives careful consideration to the findings of the Disciplinary Board. because they have had the advantage of encountering the witnesses first hand. In Be Discipline of Light, 2000 SD 100, ¶ 9, 615 N.W.2d 164, 167. The South Dakota Disciplinary Board found no intentional rule violations after reviewing the evidence and hearing the testimony of Rokahr. Rather, the Disciplinary Board found unintentional rule violations concerning Rokahr’s failure to identify conflicts of interest and failure to exercise independent professional judgr ment. It also determined that Rokahr was unlikely to commit these violations again and that her conduct warranted an admonishment.

[¶ 17.] In summary, it is clear that the facts of this case give us jurisdiction over this complaint. The complaint relates to events that occurred in South Dakota, concerns an attorney licensed in South Dakota and the parties involved in this complaint resided in South Dakota. Moreover, un7 der art V, § 12 of the South Dakota Constitution, this Court is solely charged “with the responsibility for determining what is appropriate discipline in an attorney misconduct case.” Discipline of Dorothy, 2000 SD 23, ¶ 39, 605 N.W.2d 495, 505 (citing Matter of Discipline of Hopewell, 507 N.W.2d 911, 917 (S.D.1993)). We have an obligation to construe SDCL 16-19-74 in a manner which is in accordance with our constitution. Therefore, we hold that SDCL 16-19-74 does not require the automatic imposition of the discipline imposed in Nebraska under these facts.

ISSUE TWO

[¶ 18.] The appropriate discipline to be imposed upon Rokahr.

[¶ 19.] This is not an instance where this Court is required to choose between the discipline imposed in Nebraska' or the sanction of the South Dakota Disciplinary Board. The final determination of the appropriate discipline of a member of the State Bar of South Dakota rests firmly and exclusively with this Court. In re Discipline of Wehde, 517 N.W.2d 132, 133 (S.D.1994).

[¶ 20.] The purpose of the disciplinary process is to protect the public and not to punish the lawyer. Petition of Pier, 1997 SD 23, ¶ 8, 561 N.W.2d 297, 299. An additional purpose is to deter similar conduct by other attorneys. Matter of Discipline of Tidball, 503 N.W.2d 850, 856 (S.D.1993). “The appropriate discipline in a particular case is determined by considering the seriousness of the misconduct and the likelihood that it or similar misconduct will be repeated.” In re Discipline of Eicher, 2003 SD 40, ¶ 47, 661 N.W.2d 354, 369 (citing Light 2000 SD 100, ¶ 12, 615 N.W.2d at 168).

[¶ 21.] We have repeatedly held that the “ ‘right to practice law’ is not in any proper sense of the word a ‘right’ at all, but rather a matter of license and high privilege.” Application of Widdison, 539 N.W.2d 671, 675 (S.D.1995) (quoting In re Egan, 52 S.D. 394, 398, 218 N.W. 1, 2-3 (1928)). Nevertheless, the attorney who is the subject of a disciplinary complaint is entitled to fundamental due process protections throughout the proceedings. See Appeal of Schramm, 414 N.W.2d 31, 34 (S.D.1987). “The formality and procedural requisites of a hearing to address the issue of professional negligence and misconduct depends on the nature of the subsequent proceedings and the importance of the interests involved.” Id. (citing Cleveland Bd. of Ed. v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985); Boddie v. Connecticut, 401 U.S. 371, 91 S.Ct. 780, 28 L.Ed.2d 113 (1971)).

It has been repeatedly held in this state that the revocation of a license of a professional [person] carries with it dire consequences. It not only involves necessarily disgrace and humiliation, but it means the end of [her] professional career. In a proceeding so serious, due process of law requires a definite charge, adequate notice and a full, fair and impartial hearing.

Schramm, 414 N.W.2d at 35 (citing Smith v. Dept. of Registration, 412 Ill. 332, 106 N.E.2d 722, 728 (1952)). These principles guide us in our careful consideration of the appropriate discipline for a member of the bar of this state.

[¶ 22.] Herein, there is no indication Rokahr has had any previous complaints against her which were found to have been meritorious. This is a factor that weighs in her favor. In re Discipline of Dorothy, 2000 SD 23, ¶39, 605 N.W.2d 493, 505. As it relates to this specific complaint, we give the factual determinations of the South Dakota Disciplinary Board serious consideration and conclude those findings not to be clearly erroneous. These findings absolved Rokahr of the most serious charges concerning backdating the easement and then lying about it under oath. See Matter of Voorhees, 294 N.W.2d 646 (S.D.1980)(disbarment for conviction of making and using false documents). The findings by the Board relating to minor violations of rules by Rokahr concerned negligent acts rather than intentional ones. This is a mitigating factor in assessing the appropriate discipline. Dorothy, 2000 SD 23, ¶ 39, 605 N.W.2d at 505 (citing In re Claggett, 1996 SD 21, ¶ 15, 544 N.W.2d 878, 881). The Board also found there was little likelihood that Rok-ahr would repeat her past mistakes and we agree. We have repeatedly held that the failure to acknowledge and admit misconduct which has been established as fact points towards a more severe sanction. Dorothy, 2000 SD 23, ¶ 41, 605 N.W.2d at 505 (citing Matter of Discipline of Lacey, 283 N.W.2d 250, 253 (S.D.1979)). Rokahr acknowledged her failure to identify conflicts as they developed and the fact she too readily acceded to the directions of her client as found by the Disciplinary Board. She has informed this Court that “I certainly stand ready to fully comply in all respects with the South Dakota rules.”

[¶ 23.] We have recently examined in detail the relationship of professional attorney competence to professional discipline. In re Discipline of Laprath, 2003 SD 114, 670 N.W.2d 41. Therein, we held:

The level of professional competence that one must posses to be granted the privilege to practice law in this state has its basis in the recognition of the goal-to assume ... control of the important affairs of others and to guide and safeguard them when, without such assistance, they would be helpless ... we recognize that human frailty being what it is, mistakes may happen where the competent attorney simply commits an act of malpractice. While this individual act may subject the attorney to respond in monetary damages, it is not the basis for removal from the bar.

Id. ¶ 78. As a result, we concluded that removal from the roll of attorneys was an appropriate action for protection of the public where an attorney fails to possess the “fundamental level of competence which an attorney must possess.” Id. ¶ 79.

[If 24.] The South Dakota Disciplinary Board found that Rokahr possesses the requisite level of competence required of an attorney. While we do not condone an attorney’s failure to promptly file documents such as the easement at issue here, this failure was determined to be an inadvertent and isolated incident which will probably not be repeated. Moreover, no member of the public was harmed by this conduct of procrastination.

[¶ 25.] We accept the findings and recommendations reached in the South Dakota proceeding and decline to impose reciprocal discipline in this instance. An order consistent with this opinion shall be entered accordingly.

[¶ 26.] SABERS, KONENKAMP, ZINTER, and MEIERHENRY, Justices, concur.

      . Allen and his brother were initially named trustees for each other's children. Family animosity between the two made this arrangement contentious.

      . Prior to the issuance of the referee’s report or the later review by the Nebraska Supreme Court the South Dakota Disciplinary Board issued an admonishment to Rokahr.

      . The Board continues that "it was this decision that prompted the Board to issue the two admonitions. The first was the failure to exercise independent professional judgment (see Rule 2.1). The easement was not needed and Rokahr recognized that fact but allowed her client to override her judgment. Secondly, she was admonished because in preparing the easement, it was in conflict with the rights of the children of the complainant who reasonably could have believed that Rokahr was also their lawyer."

      . In its most basic form the full faith and credit clause merely requires us to recognize Rokahr was suspended from.the practice of law in Nebraska for one-year, which we obviously do. Signer, 533 S.W.2d at 536.

      . SDCL 31-22-1 declares that every owner of an isolated tract of land of at least ten acres not touched by a passable public highway may secure a sixty foot easement to gain access to the realty. We upheld the constitutionality of this statute in Frawley Ranches v. Lasher, 270 N.W.2d 366 (S.D.1978). Thus, we agree with the observation of the South Dakota Disciplinary Board that a written easement in this matter, as was prepared by Rokahr, transferred no ownership rights in land not already vested by statute. In fact, this statutory easement would exceed the grant of the easement drawn by Rokahr as the statutory easement becomes a public right-of-way. Id. For reasons we cannot ascertain, this was not addressed in the Nebraska disciplinary proceedings.


source: Caselaw Access Project

author: LAVORATO, Chief Justice.

license: Public Domain

text:
    In re the MARRIAGE OF Jennifer K. McCURNIN and David S. McCurnin Upon the Petition of Jennifer K. McCurnin, Appellee, And Concerning David S. McCurnin, Appellant.
    No. 02-0772.
    Supreme Court of Iowa.
    May 12, 2004.

      John R. Hearn, Des Moines, for appellant.
    Patricia A. Shoff and Diane M. Stahle of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, for appellee.
   LAVORATO, Chief Justice.

This is a proceeding to enforce a dissolution decree as to child support and to modify the decree to extend alimony. David S. McCurnin, against whom the application was filed, appealed from a district court judgment. He claimed the district court erroneously (1) found he was in arrears in child support, (2) computed his future child support, (3) extended alimony beyond a date set in the decree, and (4) awarded Jennifer K. McCurnin, who filed the application, attorney fees. David also challenged an interim child support award the district court entered following the appeal. Finally, David sought a credit against future child support for alleged overpayments of such support.

We transferred the ease to the court of appeals, which affirmed on all the issues save the interim child support award, an issue it did not address. We granted David’s application for further review.

On our de novo review, we find the district court and the court of appeals erroneously determined that David was in arrears in his child support and erroneously determined his future child support obligation. We also find that the district court and the court of appeals correctly determined that the decree should be modified by extending alimony beyond the date set in the decree and in awarding Jennifer attorney fees. However, we conclude the alimony contingency should be modified. Although the court of appeals did not address Jennifer’s request for appellate attorney fees, we conclude she is entitled to them. Finally, we reject David’s challenge to the district court’s interim support order and his request that he be awarded a credit for any alleged overpayments of child support.

Accordingly, we affirm in part as modified and vacate in part the court of appeals decision; we affirm in part as modified and reverse in part the district court judgment; and we remand the case with directions.

I. Background Facts.

On September 20, 1991, the district court entered a decree dissolving the parties’ twenty-year marriage. Five children were born of the marriage: Justin, born July 9, 1972; Misha, born April 5, 1976; Travis, born October 11, 1978; Caressa, born May 11, 1984; and Spencer, born April 23, 1987. The decree awarded the parties joint care, custody, and control of the minor children with Jennifer as the primary custodian subject to reasonable visitation in favor of David, so as not to interfere with the health, education, and welfare of the minor children.

The decree ordered David to pay child support in the amount of $1800 per month,

to commence on the 1st day of October, 1991, with a like payment to be made on the first day of each and every month thereafter, until such time as each child attains the age of 18 years, or graduates from high school, whichever event shall last occur; or dies, marries, or otherwise is legally emancipated, whichever event shall first occur. At such time as [David] is no longer obligated for the payment of child support for any of his children, pursuant to the provisions of this paragraph, at that time, his child support shall be adjusted to comply with the Child Support Guidelines then in effect....

Additionally, the decree ordered David to apply the appropriate Child Support Guideline percentage to any employee bonus income and pay that amount to Jennifer:

Additional child support, in an amount equal to the current Child Support Guideline percentage, shall be paid by [David] within 14 days from the receipt by [David] of any bonus income from his employer. Presently, such guidelines require payment of 51.5 percent of net monthly income.

The decree also imposed year-end income reporting obligations, as follows:

At the end of each calendar year, [David] shall provide [Jennifer] -with a copy of his W-2 for the preceding year. Should [Jennifer] become employed, [Jennifer] shall notify [David] and shall provide [David] with verification of net monthly pay, in order that the child support obligation, required pursuant to the provisions of this paragraph, may be adjusted, if necessary, in accordance with the Child Support Guidelines then in effect. At the end of each calendar year, [Jennifer] shall, upon receipt of her W-2, if any, immediately provide a copy of said W-2 to [David].
The intent of this Decree is that [David] will, during each calendar year, pay child support in accordance with the Child Support Guidelines in effect during the calendar year. A copy of said child support guidelines is, by this reference, made a part hereof, and is included as a part of this Decree.

The decree also ordered David to pay Jennifer alimony in the amount of $904 per month,

to commence on the 1st day of October, 1991, with a like payment to be made on the first day of each and every month thereafter, until such time as [Jennifer] shall die, remarry, of assume joint physical residence with an unrelated adult male, whichever event shall first occur. Provided, further, that the alimony payments required, pursuant to the provisions of this paragraph, shall terminate upon the 1st day of the 121st month of payment, i.e., November 1, 2001, unless, upon application by [Jennifer], filed at that time, [Jennifer] establishes that [Jennifer] is in need of, and entitled to, alimony beyond said date.

In addition to the periodic alimony, David was ordered to pay Jennifer a lump sum alimony payment of $4000 within ten days after entry of the decree.

The decree awarded Jennifer the marital homestead, investments in her name, two vehicles, and fifty percent of David’s 401 (k) plan. The decree also awarded Jennifer all of the household furniture, furnishings, and appliances in the homestead together with furs, jewelry, personal checking and savings accounts, and all other personal effects in her possession.

The decree awarded David the parties’ summer cottage property in Minnesota together with the household goods, furniture, and furnishings in the cottage. The decree also awarded David his boat, car telephone, personal checking and savings accounts, and all other personal effects in his possession. In addition, the decree awarded David all of his right, title, claim, and. interest in the Nellie McCurnin Trust.

The decree ordered David to pay 100 percent of the children’s tuition expenses at Dowling High School and 100 percent of the children’s college expenses until each child reached age twenty-two. He was also ordered to maintain medical, hospital, and dental insurance for the minor children and to maintain a life insurance policy in effect with the children as beneficiaries in an amount not less than $100,000 for so long as his child support obligation remains.

Since the decree, David has remarried and resides in West Des Moines. In connection with David’s purchase of his new residence, Jennifer executed a receipt and satisfaction acknowledging payment of all sums due to her through June 8, 1994.

Following entry of the decree, David paid off Jennifer’s share of his 401(k) plan in the amount of $18,570.19, which Jennifer used to pay off the mortgage on the residence awarded to her.

Since the entry of the decree, three of the parties’ minor children have attained the age of majority, completed the pursuit of their college education, and are now employed. The two youngest children, Caressa and Spencer, live with Jennifer. Caressa is a senior at Dowling High School, and Spencer is in the eighth grade at St. Augustin School.

Jennifer and David are in good health. At the time of the hearing on the matter now before us, Jennifer was working part-time. David has continued in the same employment that he had at the time of the dissolution.

II. Proceedings.

On October 18, 2000, Jennifer filed an application for modification of and application to enforce the decree of dissolution. In her application, Jennifer sought to extend the alimony beyond the date of the decree. As to the application to enforce the decree, Jennifer sought payment of child support from David’s bonus income, claiming she had “not been paid any additional child support from [David’s] bonus income.” She also asked that David pay her attorney fees and costs of the action.

On November 9, 2000, David answered the application and asserted a number of affirmative defenses. On April 16, 2001, David filed his own application to modify the decree, seeking to eliminate the prospect of future alimony payments, modify child support, and modify the parties’ obligations for the children’s college expenses. He also asked that the court order Jennifer to pay his attorney fees, expenses, and costs. Jennifer filed an answer, denying the material allegations and seeking to have the court order David to pay her attorney fees, expenses, and costs.

On September 18, 2001, the district court heard the matter and later filed its ruling. The court rejected David’s argument that only his earned income should be used to calculate child support, found that Jennifer agreed that payments were made directly to her, and found that David owed Jennifer $29,649 in back child support. The court also found that Jennifer had established a need for further alimony and awarded her alimony of $1500 per month starting November 1, 2001, “which shall terminate at her age 62, remarriage, or death whichever last occurs unless upon application by Jennifer at that time she can establish that she is in need of and entitled to alimony beyond that date.”

Based on the alimony award of $1500 per month, the court ordered David to pay $1465 per month in child support, “pursuant to the same terms and conditions of the Decree of Dissolution of Marriage previously entered in this matter on September 20,1991.”

The court also ordered David to pay Jennifer’s attorney fees in the amount of $12,000 and the costs.

Following entry of the court’s ruling, David filed a motion to enlarge, amend, and reconsider pursuant to Iowa Rule of Civil Procedure 1.904(2). The court specifically addressed some of the issues in the motion and rejected the balance of those issues.

Jennifer sought interim support, claiming David had not made any alimony payments in 2002 and that he did not plan to because he intended to appeal that part of the court’s order. David appealed and while the appeal was pending, the district court granted Jennifer’s application for interim increased child support after David filed a bond to stay enforcement of the alimony award. David appealed the interim support order as well and we consolidated the two appeals.

We transferred the case to the court of appeals, which affirmed the district court’s ruling regarding the issues David raised in his appeal. The court did not address the interim increased child support issue. Later, we granted David’s application for further review.

We set out additional facts as they relate to the issues we discuss.

III.Issues.

On appeal, David contends the district court erred in (I) finding that he was in arrears on child support payments, (2) computing his future child support on trust and other non-W-2 income, (3) modifying the decree by allowing alimony beyond the ten years specified in the decree, (4) increasing his child support during the appeal, and (5) awarding Jennifer attorney fees. David also contends the district court erred because it did not bar the alleged child support arrearages on the grounds of estoppel, laches, or accord, and satisfaction. Because of our determination of the issue of child support arrearages, we do not address this last issue. Finally, David asks that we award him a credit.on future child support for alleged overpay-ments of child support since the decree.

Jennifer asks for appellate attorney fees.

IV. Scope of Review:

Because this is an equitable proceeding, our review is de novo. See Iowa R.App. P. 6.4. In equity cases, especially when considering the credibility of witnesses, we give weight to the district court’s findings of fact, but we are not bound by them. Id. R. 6.14(6)(y). Because interpretation of child support guidelines is a legal question, our review of such interpretation is for errors at law. See Seymour v. Hunter, 603 N.W.2d 625, 626 (Iowa 1999).

V. Alleged Child Support Arrearages and Credit for Alleged Child Support Overpayments.

Because these issues are related, we discuss them together.

As mentioned, the district court found David to be in arrears by $29,649. In computing this amount, the district court accepted David’s testimony that he paid all of his child support including the support based'on his bonus income. The district court’s calculation of child support arrear-ages included David’s (1) yearly trust income from the Nellie McCurnin Trust, (2) trust and other capital gains distributions' from the same trust, including the $203,042 one-time capital gain from the sale of trust property in 1995, (3) David’s other personal non-W-2 income, such as interest and dividends, and (4) retirement contributions withheld from David’s paychecks.

David challenges the calculation of the arrearages on several grounds. He contends the decree was very specific in basing his child support on his W-2 income and does not contemplate child support based on any other income except W-2 income. In addition, he contends Jennifer never filed a pleading asking the court to modify the decree to include non-W-2 income on the ground that there existed a material and substantial change in circumstances not contemplated at the time of the decree warranting a change in the decree’s child support formula.

David testified that he reviewed his bank records for ten years and the Polk County child support records. From those records, he prepared exhibits showing that if only his W-2 income (monthly salary and year-end bonus) is considered he overpaid child support by $79,001, most of which was attributable to direct payments to Jennifer. According to his calculations, the overpayment resulted because he continued to pay year-round monthly support for five children even after two and later three turned eighteen, and he was no longer required to pay monthly child support for them. On cross-examination, he conceded he brought no records to court to substantiate payments made directly to Jennifer.

Jennifer testified David made all of his periodic child support and alimony payments, but was not satisfied that he had made all child support payments due on David’s bonus income. Like the district court, we find that David made all of his periodic child support payments and child support payments based on his bonus income. We also find that he made all of his alimony payments under the decree.

We reject David’s request for credit against future child support for the alleged overpayment for three reasons. First, he made no request for such a credit in his pleadings, his proposed findings to the district court, or in his post-trial motion to enlarge, amend, and reconsider pursuant to Iowa Rule of Civil Procedure 1.904(2). Second, the alleged overpayment is based strictly on David’s testimony with no supporting documentation, which casts considerable doubt as to the magnitude of his claim. Last, we consider him a volunteer to the extent that he made any over-payments and therefore not entitled to any credit.

That leaves for our determination the propriety of the district court’s inclusion of (1) yearly income from the Nellie McCurnin Trust, (2) trust and other capital gains distributions from the trust, including the $203,042 one-time capital gain from the sale of trust property in 1995, (3) David’s other personal non-W-2 income, such as interest and dividends, and (4) retirement contributions withheld from David’s paychecks.

For the following reasons, we agree with David that the district court erred in including any of this income. The decree here was a stipulated agreement. As such, once approved, the agreement is “interpreted and enforced as a final judgment of the court.” In re Marriage of Handeland, 564 N.W.2d 445, 446 (Iowa Ct.App.1997).

In determining the correct amount of child support, the net monthly income of the parties must be computed. State of Iowa ex rel. Nielsen v. Nielsen, 521 N.W.2d 735, 737 (Iowa 1994). Net monthly income means the gross monthly income less deductions for certain identified items. Iowa Ct. R. 9.5. All income that is not anomalous, uncertain, or speculative should be included for the purpose of determining a child support obligation. In re Marriage of Nelson, 570 N.W.2d 103, 105 (Iowa 1997) (one-time bonus not in-eluded in calculating guideline child support). As to bonus income, the payor’s income is evaluated to see if the amount paid was consistent from year to year. Id. If the bonus was' consistent, the bonus is included in the gross income figure. Id.

The decree requires David to pay Jennifer as part of child support a percentage of his employment bonus. In fact, the decree required David to give Jennifer a copy of his W-2 for the preceding year. The decree also required that if Jennifer became employed, she was to" notify David and provide him with “verification of net monthly pay, in order that the child support obligation, required pursuant to the provisions of this paragraph, may be adjusted, if necessary, in accordance with the Child Support Guidelines then in effect.” This language suggests that David’s net monthly income for child support purposes is limited to employment income reflected on his W-2. The decree did not require David to give Jennifer copies of his tax returns, which would include a figure for all income. The same' thing is true as far as Jennifer is concerned. The decree likewise required her to provide David a copy of her W-2 for the preceding year and did not require her to give David copies of her tax returns.

Moreover, the decree, which awarded David his interest in the Nellie McCurnin Trust, did not include, as David’s net monthly income, trust payments to David. He was not receiving payments from the trust at the time because his mother was still alive, and he was not entitled to receive such payments until her death. Nor did the decree make reference to David’s anticipated future receipt of trust income.

For all of these reasons, we are satisfied that the child support awarded in the decree was based solely on W-2 income — wages including bonuses. We note that Jennifer did not appeal following the entry of the decree. The decree was therefore res judicata as to what was to be considered in calculating David’s child support obligation until a modification changed its provisions. • See In re Bisenius, 573 N.W.2d 258, 260 (Iowa 1998).

We therefore conclude’ the district court and the court of appeals erroneously determined that David was in arrears concerning his child support obligation.

VI. Alimony.

As mentioned, according to the decree, Jennifer’s alimony was to terminate on November 1, 2001. She filed an application to modify the ' decree requiring David to continue the alimony. The district court obliged by awarding Jennifer alimony in the amount of $1500 per month starting November 1, 2001.

In his post-trial motion to enlarge, amend, and reconsider, David challenged the award. The main thrust of his argument in the district court was that Jennifer failed to show a substantial change in circumstances to justify continuation of the alimony.

Iowa Code section 598.21(8) (Supp.2001) allows for a modification of an alimony award “when there is a substantial change in circumstances.” This provision also provides that “[i]n determining whether there is a substantial change in circumstances, the court shall consider” a number of specifically listed factors. Among the factors relevant here are “[cjhanges in the employment, earning capacity, income or resources of a party” and “[ojther factors the court determines to be relevant in an individual case.” Iowa Code § 598.21(8)(a), (⅛).

Section 598.21(8) must be considered in light of other well-established principles governing modification. For example, the change in circumstances must be permanent or continuous rather than temporary and must not have been within the contemplation of the district court when the original decree was entered. In re Marriage of Maher, 596 N.W.2d 561, 565 (Iowa 1999). The party seeking to modify a dissolution decree must show, by a preponderance of the evidence, the change in circumstances. Id. at 564-65.

An unknown earning potential of a spouse may be considered in determining whether there has been a substantial change in circumstances sufficient to extend alimony. In re Marriage of Sjulin, 431 N.W.2d 773, 777 (Iowa 1988). Jennifer did not work outside the home during the parties’ twenty-year marriage and for five years after the dissolution. So her earning potential was unknown at the time of the decree.

Since 1995, Jennifer’s employment has been part-time and at minimum wage or slightly above. She has minimal clerical skills and no computer training. Until 2001, she has never made more than $4800 per year. Up to the time of the hearing on the modification, she had earned $5672.03 and estimated she would earn $8500 for the year. So her earning potential is now established, which by any measure is below poverty level.

Jennifer has not been able to work on a full-time basis or acquire additional employment skills since the dissolution because of the responsibilities of caring for the parties’ five children, who at the time of the dissolution ranged in age from four to nineteen. According to her testimony, which we accept, child care for the children was more than she could possibly earn at any job she could have. In addition, she simply had neither the time nor the money to return to school for further training.

Three of her children corroborated Jennifer’s testimony that she had 100 percent of the responsibility of caring for the children since the dissolution. She had little or no break from the day-to-day duties of parenting, including transporting the children to dentist and doctor appointments, school events, sports and extracurricular activities, cooking, cleaning, doing laundry and ironing, baking, grocery shopping, helping the children with their homework, taking responsibility for religious training, church attendance, and discipline. In addition, she and her children did yard work and house maintenance because of lack of funds to hire the work done. In the ten years since the dissolution, Jennifer has not been away from her children on a vacation or for any other reason except for one night for employment reasons in 1998. David never disputed any of this testimony.

Moreover, the children have never spent an overnight with David, who admitted that his visitation was sporadic and usually involved a dinner on a Sunday night once or twice a month. His lack of interaction with his children was of his own doing because Jennifer encouraged the children to see their father.

Given the number of children and the attendant responsibilities for them, it certainly was within the contemplation of the court that David would take on his share of responsibility, which would have allowed Jennifer to pursue whatever training he now claims she should have pursued to become self-sufficient.

One other fact that was not in contemplation of the court at the time of the decree is the asthmatic condition of the parties’ youngest son. The condition developed after the dissolution. The child’s condition has required Jennifer to negotiate with her part-time employers for the ability to leave on a moment’s notice because of the child’s asthma attacks that have occurred on a weekly basis for several years.

Jennifer’s primary assets include her home valued at $116,180 and securities valued at $22,000. In addition to outside income already mentioned, at the time of the modification hearing, Jennifer was receiving $904 per month in alimony and $2281 per month in child support. Her monthly expenses totaled approximately $4000 per month.

As far as David is concerned, his financial condition has vastly improved since the decree. In 1992, the year following the dissolution, his total income was $80,682. Over the last three years his income has averaged $113,288. As mentioned, in 1995 he received a distribution in excess of $200,000. In addition, he has a one-fourth interest in the Nellie McCurnin Trust which owns 'property valued at $1,400,000, and his interest in his pension plan is $119,000. David also has a defined benefit plan that will pay him $20,000 per year upon retirement. David did not include his assets in his financial statement prior to the modification hearing, so we have no way of knowing what his additional assets are other than his testimony concerning the pension plan, benefit plan, and his interest in the trust.

When asked whether he had the ability to continue paying alimony, David replied that he did.

Given all of this evidence, we are satisfied that Jennifer has shown a substantial change in circumstances justifying extension of the alimony beyond November 1, 2001 in the amount of $1500 per month. Moreover, from this evidence we find such change^ was not in the contemplation of the district court at the time of the decree. In addition, the change is not temporary but permanent; We therefore affirm the alimony award in the amount of $1500 per month until David’s retirement or Jennifer’s age sixty-five, whichever -shall last occur at which time the alimony will be $1500 per month less Jennifer’s social security payments until Jennifer’s - death, David’s death, or Jennifer’s remarriage, whichever shall first occur. This alimony contingency differs from that in the district court ruling. However, it is what Jennifer suggested in her district court proposed findings, which we think is appropriate.

VII. Future Child Support.

The district court’s award of child support in the amount .of $1465 per month is based on David’s average yearly income from 1998-2000, which includes his non-W-2 income consisting of interest and dividend income, capital gains distributions, and other income. We have already 'concluded that David’s non-W-2 income cannot be considered in determining David’s child support obligation. The proper amount of child support must be based, according to the decree, on David’s W-2 income and om Jennifer’s W-2 income. We remand for recalculation of David’s child support obligation consistent with this determination. In deciding how to handle the alimony award in calculating the child support obligation, the parties and the district court should consider our discussion on this issue in In re Marriage of Lalone, 469 N.W.2d 695, 696-97 (Iowa 1991).

VIII. Child Support During the Appeal.

David contends the district court erred by increasing child support during the appeal to $1824 per month. The court of appeals did not address this issue.

Following the post-trial motion, Jennifer sought interim support (either some alimony or an increased amount of child support) because David had quit paying alimony due to his intention to appeal. Because he was not paying alimony, Jennifer alleged she was unable to meet family expenses on the child support David was paying. David then filed a notice of appeal and later a supersedeas bond to stay the child support and alimony. David resisted the motion for interim support contending as he does now that the appeal deprived the district court of jurisdiction and the bond stayed execution on the judgment.

The general rule is that a perfected appeal deprives the district court of jurisdiction. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 628 (Iowa 2000). However, in this case, the district court certainly had jurisdiction to address the motion because it involved a collateral matter. See In re Estate of Tollefsrud, 275 N.W.2d 412, 418 (Iowa 1979) (concluding district court properly entertained surviving spouse’s request for support allowance while appeal was pending). In In re Marriage of Spiegel, this court held that a party should have the benefit of-a supersedeas bond unless the party seeking temporary support shows a need for the support. 553 N.W.2d 309, 321 (Iowa 1996).

Here, Jennifer proved to the satisfaction of the district court a need for the increased support to pay family expenses. Because we find no error on this issue, we affirm the district court’s interim order.

IX. Attorney Fees.

As mentioned, the district court awarded Jennifer trial court attorney fees in the amount of $12,000, which the court of appeals affirmed. The court of appeals did not address Jennifer’s request for appellate attorney fees. In her resistance to David’s application for further review, Jennifer did request that she be awarded appellate attorney fees.

David challenges the award of trial attorney fees. He contends that in modification proceedings the court may award attorney fees to the prevailing party pursuant to Iowa Code section 598.36 (2001). He argues that if Jennifer is unsuccessful on appeal in her application to modify alimony, then she is not entitled to attorney fees. And if she is successful, he asserts the fees awarded by the trial court are excessive. As to the application to enforce the decree for child support, David contends the statute does not allow attorney fees.

Generally, a party has no claim for attorney fees in the absence of a statutory or a contractual provision allowing such an award. Williams v. Van Sickel, 659 N.W.2d 572, 579 (Iowa 2003). Iowa Code section 598.36 provides: “In a proceeding for the modification of an order or decree under this chapter the court may award attorney fees to the prevailing party in an amount deemed reasonable by the court.” (Emphasis added.) Thus, as David concedes, this provision does permit the district court discretion to compensate the prevailing party in modification proceedings for attorney fees. In re Marriage of Guyer, 522 N.W.2d 818, 822 (Iowa 1994). Because Jennifer was successful as to her application to modify the dissolution decree to extend the alimony, she is entitled to trial and appellate attorney fees.

Her application to enforce child support, however, was not an application to modify but more akin to an order .to show cause or contempt under the provisions of Iowa Code section 598.24. That provision pertinently provides:

When an action for a modification, order to show cause, or contempt of a dissolution ... decree is brought on the grounds that a party to the decree is in default or contempt of the decree, and the court determines that the party is in default or contempt of the decree, the costs of the proceeding, including reasonable attorney fees, may be taxed against that party.

Iowa Code § 598.24 (emphasis added). Because we have found that David was not in default on his child support, Jennifer is not entitled to trial and appellate attorney fees for the time and effort spent on the application to enforce child support.

For these reasons, we must reverse the district court’s award of attorney fees and vacate the court of appeals decision on this issue. We remand for the district court to determine what amount of trial and appellate attorney fees should be awarded to Jennifer consistent with our discussion here.

X. Disposition.

In sum, we conclude as follows. The district court and the court of appeals erred in (1) finding that David was in arrears on child support payments and (2) computing his future child support based on trust and other non-W-2 income. Accordingly, we vacate the court of appeals decision and reverse the district court judgment on these issues.

The district court and the court of appeals correctly determined that the decree should be modified by allowing alimony beyond November 1, 2001, in the amount of $1500 per month. Accordingly, we affirm the court of appeals decision and the district court judgment on this issue. However, we modify the alimony award by adopting the contingency suggested by Jennifer.

Apart from these rulings by the district court and the court of appeals, we reject David’s request that he be awarded a credit on future child support for any alleged overpayments of child support.

On remand, the district court shall recalculate future child support according to the terms of the decree and based only on David’s W-2 income and Jennifer’s W-2 income.

Finally, we reverse the district court’s award of attorney fees and vacate the court of appeals decision on this issue. We remand for the district court to determine what amount of trial and appellate attorney fees should be awarded to Jennifer on the application for modification to extend alimony.

DECISION OF COURT OF APPEALS AFFIRMED IN PART AS MODIFIED AND VACATED IN PART; DISTRICT COURT JUDGMENT AFFIRMED IN PART AS MODIFIED, REVERSED IN PART, AND CASE REMANDED WITH DIRECTIONS.


author: /s/ Paul H. Anderson Associate Justice

text:
    In re PETITION FOR DISCIPLINARY ACTION AGAINST Martha G. SCHMITT, a Minnesota Attorney, Registration No. 147023.
    No. A04-1072.
    Supreme Court of Minnesota.
    June 15, 2004.
   ORDER

The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent Martha G. Schmitt has committed professional misconduct warranting public discipline, specifically, misappropriation of funds from an estate and from vulnerable clients and providing false ac-countings regarding funds she misappropriated. The Director has also filed a petition pursuant to Rule 16, Rules on Lawyers Professional Responsibility (RLPR), for temporary suspension of respondent from the practice of law pending the final determination of these disciplinary proceedings.

The parties have entered into a stipulation for temporary suspension of respondent from the practice of law pending the final determination of these disciplinary proceedings. Respondent waives her rights pursuant to Rule 16, RLPR, to oral argument and to contest this temporary suspension.

The court has independently reviewed the file and approves the jointly recommended suspension.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that effective immediately, respondent Martha G. Schmitt be, and the same is, temporarily suspended from the practice of law pending the final determination of these disciplinary proceedings. Respondent shall notify each of her clients of her inability to continue her representation of the client and otherwise shall comply fully with the requirements of Rule 26, RLPR.

BY THE COURT:

/s/ Paul H. Anderson Associate Justice


text:
    In re PETITION FOR DISCIPLINARY ACTION AGAINST John A. NELSON, a Minnesota Attorney, Registration No. 77938.
    No. A04-1037.
    Supreme Court of Minnesota.
    June 15, 2004.
   ORDER

The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action alleging that respondent John A. Nelson committed professional misconduct warranting public discipline, namely, respondent solicited and obtained $4,250,000 in investments from clients in businesses in which respondent owned an interest without fully disclosing to the clients the full and true status of the financial affairs of the businesses, without disclosing and obtaining the clients’ consent to his conflict of interest, and without advising the clients to seek independent counsel. The terms of the client investments were not fair and reasonable in that the investments were wholly unsecured, and full and true financial information was not provided to the clients. The businesses in which the clients invested have ceased doing business, and although insurance has paid a total of $700,000 to eleven of the twelve affected clients, over $2,000,000 of the client investments remains unpaid. Respondent’s conduct violated Minn. R. Prof. Conduct 1.8.

Respondent admits his conduct violated the Rules of Professional Conduct, waives his rights pursuant to Rule 14, Rules on Lawyers Professional Responsibility (RLPR), and has entered into a stipulation with the Director in which they jointly recommend that the appropriate discipline is disbarment and payment of $900 in costs and disbursements under Rule 24, RLPR.

This court has independently reviewed the file and approves the jointly recommended disposition.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent John A. Nelson is disbarred from the practice of law effective immediately. Respondent shall pay $900 in costs and disbursements under Rule 24, RLPR.

BY THE COURT:

/s/ Paul H. Anderson Associate Justice