STATE OF MINNESOTA
IN SUPREME COURT
A23-0080
Original Jurisdiction Per Curiam Took no part, Hennesy, Gaïtas, JJ.
In re Petition for Disciplinary Action against Filed: August 14, 2024 Michael B. Padden, a Minnesota Attorney, Office of Appellate Courts Registration No. 0177519.
________________________
Susan M. Humiston, Director, Timothy M. Burke, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.
Michael B. Padden, Lake Elmo, Minnesota, pro se.
SYLLABUS
Absent any mitigating factors, disbarment is the appropriate discipline for an
attorney who misappropriates client funds.
OPINION
PER CURIAM.
The Director of the Office of Lawyers Professional Responsibility (Director) filed
a petition and a supplementary petition for disciplinary action against respondent
Michael B. Padden. Padden answered the initial petition, but he failed to answer the
supplementary petition. In the supplementary petition, the Director alleged, in part, that
Padden misappropriated client funds, forged his client’s signature to conceal the
1 misappropriation, failed to return unearned client fees, neglected client matters, and failed
to cooperate with the Director’s investigation. Based on Padden’s failure to answer, the
referee deemed the allegations in the supplementary petition admitted. After a three-day
evidentiary hearing, the referee found that Padden had committed additional misconduct.
The referee found no mitigating factors. Based solely on the allegations deemed admitted
in the supplementary petition, and in the absence of any mitigating factors, we disbar
Padden from the practice of law.
FACTS
Padden gained admission to the Minnesota bar in 1986. He has the following
disciplinary history: (1) In 1996, Padden received a private admonition for failing to enter
into a written contingent fee agreement with a client and failing to return that client’s file
upon request; (2) in 2017, Padden received a public reprimand for agreeing to settle a case
without his client’s consent, failing to communicate the settlement agreement to the client,
providing financial assistance to his client, and making a false statement to the court; and
(3) in 2019, Padden received a private admonition for failing to deposit advanced costs into
a trust account and failing to maintain receipts of cash payments, countersigned by the
payor.
On January 17, 2023, the Director filed a petition for disciplinary action against
Padden. Padden answered that petition, denying some of the factual allegations while
conceding others, and denying any rule violations. We referred the matter to a referee. On
August 18, 2023, the Director filed a supplementary petition against Padden. Padden failed
to answer the supplementary petition, and the allegations contained therein were
2 deemed admitted by order of the referee. See Rule 13(b), Rules on Lawyers Professional
Responsibility (RLPR) (“If the respondent fails to file an answer . . . , the [petition’s]
allegations shall be deemed admitted . . . .”).
The referee held a three-day evidentiary hearing in October 2023. Following the
hearing, the referee issued findings of fact and conclusions of law, ultimately
recommending that Padden be disbarred. On December 29, 2023, we suspended Padden
pursuant to Rule 16(e), RLPR. Padden ordered a transcript of the hearing. He challenges
some of the referee’s findings of fact and conclusions of law but concedes others. Padden
also challenges the referee’s recommended discipline of disbarment.
The referee’s findings of fact and conclusions of law regarding the allegations of
misconduct in the initial petition for disciplinary action included findings of trust account
violations, as well as misconduct regarding two separate matters for S.S. and J.W., the
K.J.K. matter, the M.C. matter, the K.J. matter, and the L.A. matter. 1 We have no need,
however, to detail these matters further or to reach Padden’s challenges to the findings and
conclusions regarding these matters. Instead, we focus below only on the misconduct
alleged in the Director’s supplementary petition for disciplinary action. Because Padden
failed to timely answer the supplementary petition, those allegations were deemed admitted
by order of the referee. See Rule 13(b), RLPR (“If the respondent fails to file an
1 Although we refer to the referee’s findings and conclusions here, we make no determination that Padden committed any misconduct alleged in the initial petition for disciplinary action, and the allegations in the initial petition do not inform our discipline decision.
3 answer . . . , the petition’s allegations shall be deemed admitted . . . .”). These allegations
serve as the sole basis for our subsequent analysis on the appropriate discipline for
Padden’s misconduct because they are deemed admitted and, as we discuss below, are
serious enough—on their own— to warrant disbarment.
The J.V.-C. Matter
In 2021, J.V.-C., an undocumented immigrant, was arrested in California and
extradited to Minnesota on an outstanding warrant. While in custody, J.V.-C. retained
Padden to represent him for a $30,000 flat fee. J.V.-C. and Padden agreed that if J.V.-C.
received a sentence of more than a year—which would trigger deportation proceedings—
Padden would refund $25,000 of that fee to J.V.-C.’s wife. As written, the fee agreement
failed to comply with Minn. R. Prof. Conduct 1.5(b)(1) (governing flat fee agreements),
and it misstated the amount to be refunded to J.V.-C.’s wife if the conditions for a refund
were met.
An updated fee agreement brought the original into compliance with Rule 1.5(b)(1),
but again failed to accurately state the amount to be refunded. In a text exchange with
J.V.-C.’s wife, who inquired as to why that amount was incorrectly stated, Padden affirmed
his understanding that he would refund the $25,000 if J.V.-C. were deported. Padden and
J.V.-C. then executed another updated fee agreement, accurately setting out the terms of
the fee refund.
J.V.-C.’s wife wired Padden $30,000. On June 3, 2022, J.V.-C. was sentenced to
20 months in prison. Per Padden’s agreement with J.V.-C., this sentence—and the
4 attendant deportation proceedings—required Padden to refund $25,000 to J.V.-C.’s wife.
Padden failed to refund that $25,000.
On June 6, 2022, a few days after J.V.-C.’s sentencing, Padden met with J.V.–C. in
custody. J.V.-C. executed an authorization allowing Padden to speak to state employees
regarding J.V.-C.’s case (“DOC Authorization”). Padden asked that J.V.-C. let him retain
the $25,000. J.V.-C. declined.
In early July 2022, J.V.-C.’s wife began reaching out to Padden about the $25,000,
sharing her bank account information so that he could complete the wire transfer. Padden
responded that he could not give her any information without J.V.-C.’s permission. J.V.-C.
gave Padden that permission on July 14, 2022 but also affirmed that he did not consent to
Padden keeping any amount of the flat fee over $5,000.
On August 3, 2022, Padden sent J.V.-C.’s wife the original fee agreement, with a
handwritten attachment entitled “Amendment to Fee Agreement,” which appeared to be
executed by Padden and J.V.-C. on June 6, 2022—the day that J.V.-C. signed the DOC
Authorization. But Padden never presented this amendment to J.V.-C., and J.V.-C. did not
execute the amendment or agree that Padden could retain the $25,000. Instead, J.V.-C.’s
signature on the amendment was forged.
Padden has returned no portion of the $25,000 to J.V.-C. or J.V.-C.’s wife. This has
been a hardship on J.V-C.’s wife, who is raising their children and needed that money to
build a well. Without the money for the well, the family was forced to take out an
expensive loan to cover the expense.
5 In the J.V.-C. matter, Padden violated Minn. R. Prof. Conduct 8.4(c) 2 by creating a
forged fee agreement purportedly entitling himself to $25,000, and failing to remit any
portion of those funds, thereby intentionally misappropriating client funds; Minn. R. Prof.
Conduct 4.1 3 and 8.4(c) by making knowingly false representations to J.V.-C.’s wife;
and Minn. R. Prof. Conduct 8.1(a), 4 8.4(c), and 8.4(d) 5 by making knowingly false
representations to the Director in sending her the forged fee agreement in connection with
her investigation and claiming that J.V.-C. signed the agreement.
The H.J. Matter
In August 2022, H.J. retained Padden and signed a fee agreement, pursuant to which
H.J. paid an $8,500 advance fee. Padden did not obtain a receipt countersigned by H.J. for
this payment, and he did not deposit the fee into his trust account. Three days after
retaining Padden, H.J. terminated the representation and requested a full refund, which
Padden refused. Padden stated that he had spent more than 30 hours on the matter and that
the $8,500 was a “lump sum.”
2 See Minn. R. Prof. Conduct 8.4(c) (“It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit, or misrepresentation . . . .”). 3 See Minn. R. Prof. Conduct 4.1 (“In the course of representing a client a lawyer shall not knowingly make a false statement of fact or law.”).
4 See Minn. R. Prof. Conduct 8.1(a) (“[A] lawyer . . . in connection with a disciplinary matter, shall not . . . knowingly make a false statement of material fact . . . .”).
5 See Minn. R. Prof. Conduct 8.4(d) (“It is professional misconduct for a lawyer to . . . engage in conduct that is prejudicial to the administration of justice . . . .”).
6 In the H.J. matter, Padden violated Minn. R. Prof. Conduct 1.15(h), as interpreted
by Appendix 1 thereto, 6 by failing to obtain a receipt countersigned by H.J.; Minn. R. Prof.
Conduct 1.5(b)(3) 7 by failing to refund the unearned portion of the $8,500 flat fee; and
Minn. R. Prof. Conduct 1.15(a) 8 and 1.15(c)(5) 9 by failing to deposit the $8,500 advance
fee into his trust account until earned.
The R.L. Matter
In May 2022, Padden represented R.L. in several cases for a $5,000 flat fee. A few
months later, Padden withdrew from each case, though they were pending, and failed to
refund the unearned portion of the fee.
In the R.L. matter, Padden violated Minn. R. Prof. Conduct 1.5(b)(3) by failing to
refund the unearned portion of the $5,000 flat fee.
6 See Minn. R. Prof. Conduct 1.15(h) (“Every lawyer engaged in private practice of law shall maintain or cause to be maintained on a current basis books and records sufficient to demonstrate income derived from, and expenses related to, the lawyer’s private practice of law . . . .”); see also Minn. R. Prof. Conduct Appendix 1(I)(6) (“Cash payments must be documented by a receipt countersigned by the payor, which identifies the client on whose behalf the cash payment was received.”). 7 See Minn. R. Prof. Conduct 1.5(b)(3) (“Whenever a client has paid a flat fee . . . and the lawyer-client relationship is terminated before the fee is fully earned, the lawyer shall refund to the client the unearned portion of the fee. If a client disputes the amount of the fee that has been earned, the lawyer shall take reasonable and prompt action to resolve the dispute.”). 8 See Minn. R. Prof. Conduct 1.15(a) (“All funds of clients or third persons held by a lawyer or law firm in connection with a representation shall be deposited in one or more identifiable trust accounts . . . .”). 9 See Minn. R. Prof. Conduct 1.15(c)(5) (“A lawyer shall . . . deposit all fees received in advance of the legal services being performed into a trust account and withdraw the fees as earned.”).
7 Failure to Attend Court Hearings
In 2023, Padden failed to appear for at least five court hearings in four matters. The
matters in which Padden failed to appear are: (1) the S.Y.I. matter, in which Padden twice
failed to appear for S.Y.I.’s plea hearing and, on the second failure to appear, a warrant
was issued for S.Y.I.’s arrest; (2) the S.M.K. matter, in which Padden failed to timely
appear for a pretrial hearing and was unaware that his client had failed to complete a class
that would permit him to resolve the case by plea agreement; (3) the Q.D.C. matter, in
which Padden failed to appear at a sentencing hearing; and (4) the J.J.S. matter, in which
Padden and J.J.S. did not appear for a criminal trial, and Padden then failed to comply with
the requirements to withdraw from his representation of J.J.S.
In these matters, Padden violated Minn. R. Prof. Conduct 1.3 10 and 8.4(d) 11 by
failing to appear for the hearings in the S.Y.I., S.M.K., Q.D.C., and J.J.S. matters; and
Minn. R. Prof. Conduct 1.16(c) 12 and 3.4(c) 13 by failing to comply with the requirements
to withdraw as J.J.S.’s counsel.
10 See Minn. R. Prof. Conduct 1.3 (“A lawyer shall act with reasonable diligence and promptness in representing a client.”). 11 See Minn. R. Prof. Conduct 8.4(d) (“It is professional misconduct for a lawyer to . . . engage in conduct that is prejudicial to the administration of justice . . . .”). 12 See Minn. R. Prof. Conduct 1.16(c) (“A lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation.”). 13 See Minn. R. Prof. Conduct 3.4(c) (“A lawyer shall not . . . knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists . . . .”).
8 Failure to Cooperate with the Director’s Investigation
During the Director’s investigation into Padden’s misconduct, Padden failed to
respond to many of the complaints against him. The supplementary petition alleges that
Padden failed to respond to the complaint in the J.V.-C. matter, the complaint of prosecutor
M.L., the complaints of two clients, 14 the complaint of the Honorable Juanita Freeman, and
the complaint of the Honorable Sheridan Hawley.
The referee concluded that Padden violated Minn. R. Prof. Conduct 8.1(b) 15 and
Rule 25(a), 16 RLPR, by failing to cooperate with the Director’s investigation of his trust
account and client matters.
ANALYSIS
If a party orders a transcript, “none of the [referee’s] findings of fact or conclusions
shall be conclusive.” Rule 14(e), RLPR. In such a case, we review a referee’s findings of
fact and conclusions that a lawyer has violated a rule of professional conduct for clear error.
In re Kaminsky, 999 N.W.2d 866, 874 (Minn. 2024). Here, Padden ordered a transcript.
But because of the unique circumstances of this case, we need not review the
referee’s findings and conclusions regarding the allegations in the initial petition for
14 The Director later informed the referee that Padden responded to one of the clients’ complaints shortly before the evidentiary hearing. 15 See Minn. R. Prof. Conduct 8.1(b) (“[A] lawyer . . . in connection with a disciplinary matter, shall not . . . knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority . . . .”). 16 See Rule 25(a), RLPR (“It shall be the duty of any lawyer who is the subject of an investigation or proceeding under these Rules to cooperate with . . . the Director . . . .”).
9 disciplinary action for clear error. The Director filed two petitions for disciplinary action
against Padden. Padden answered the initial petition but failed to answer the
supplementary petition. See Rule 13(a), RLPR (“Within 20 days after service of the
petition, the respondent shall file an answer in this Court, with proof of service.”). Based
on Padden’s failure to answer the supplementary petition, and following the Director’s
motion, the referee deemed the allegations in that petition admitted in an order granting
summary relief for the Director. See Rule 13(b), RLPR (“If the respondent fails to file an
answer within the time provided . . . , the allegations shall be deemed admitted . . . .”).
When the allegations in a petition for disciplinary action are deemed admitted,
the only remaining task is for us to determine the appropriate sanction for the
attorney’s misconduct. In re Ulanowski, 834 N.W.2d 697, 701 (Minn. 2013). Because
disbarment—the most severe discipline we impose—is the appropriate discipline for the
allegations deemed admitted in the supplementary petition, we need not review any of the
referee’s findings or conclusion regarding the misconduct alleged in the initial petition for
disciplinary action.
A.
We first address whether there are any grounds for us to vacate the referee’s order
deeming the allegations in the supplementary petition admitted. Padden challenges the
referee’s findings and conclusions on the deemed-admitted allegations, but he does not
seem to challenge the referee’s authority to deem those allegations admitted. And Padden
cites to no legal authority, and to nothing in the record, in support of an argument that the
referee should not have granted summary relief for the Director on the allegations in the
10 supplementary petition. We have denied an attorney’s request to vacate an order deeming
allegations in a petition for disciplinary action admitted when the attorney failed “to offer
a credible explanation for [the] delay” and the “proposed answer [was] effectively a general
denial.” In re Swensen, 743 N.W.2d 243, 246–47 (Minn. 2007), modified on reh’g
(Minn. 2008). In that case, we concluded that there was no “authority for vacating, over
the objection of the Director, an order . . . deeming facts to be admitted as a result of a
failure to answer in a timely manner.” Id. at 246.
Beyond Padden’s lack of citation to evidence or authority, he still has not filed or
served an answer to the supplementary petition. Padden challenges the referee’s order by
arguing that he and his attorney made a “mistake” in failing to timely answer, but these
general claims that he and his counsel were negligent do not provide a “credible
explanation” for the delay. See id. at 246–47 (denying an attorney’s motion to vacate the
court’s order deeming the allegations in the petition admitted that was filed “more than
eight weeks after respondent was served with the petition”). Under these circumstances,
we decline to vacate the referee’s order for summary relief on the allegations in the
supplementary petition, and we accept the admission of those allegations as controlling.
For this reason, Padden’s challenges to the referee’s findings and conclusions related to the
allegations in the supplementary petition are not properly before us.
B.
Because the referee ordered that the allegations in the supplementary petition be
deemed admitted and there is no basis for us to vacate that order, the only issue before us
on the allegations in the supplementary petition is the appropriate discipline to impose.
11 These admitted allegations—including that Padden misappropriated $25,000 in client
funds and then concealed the misappropriation by forging a client’s signature on an
amended fee agreement—are serious. Alone, they warrant disbarment, and as set forth
below, we conclude that disbarment is appropriate here. Accordingly, we decline to
address Padden’s challenges to the referee’s findings and conclusions on the allegations
not deemed admitted, because any error therein by the referee would not impact the
appropriate discipline, and any allegations otherwise proven merely provide additional
support for Padden’s disbarment.
The purpose of professional discipline “is not to punish the attorney but rather to
protect the public, to protect the judicial system, and to deter future misconduct by the
disciplined attorney as well as by other attorneys.” In re Rebeau, 787 N.W.2d 168, 173
(Minn. 2010). To determine the appropriate discipline for an attorney, we consider four
factors: (1) the nature of the misconduct; (2) the cumulative weight of the disciplinary
violations; (3) the harm to the public; and (4) the harm to the legal profession. In re
Kleyman, 960 N.W.2d 566, 572 (Minn. 2021). “We also consider aggravating and
mitigating circumstances” when determining the appropriate discipline. Id. And “although
we impose discipline on a case-by-case basis, we look to similar cases for guidance” and
to ensure consistent discipline. In re Capistrant, 905 N.W.2d 617, 620 (Minn. 2018). We
have also held that disbarment is the appropriate discipline for misappropriation of client
funds in the absence of any mitigating factors. See, e.g., In re Lee, 3 N.W.3d 278, 284
(Minn. 2024); In re Bradley, 7 N.W.3d 604, 609 (Minn. 2024); In re De Rycke, 707 N.W.2d
370, 374 (Minn. 2006).
12 The allegations from the supplementary petition, deemed admitted, consist of the
(1) J.V.-C. matter; (2) the H.J. matter; (3) the R.L. matter; (4) the four matters in which
Padden failed to attend court hearings (the S.Y.I. matter, the S.M.K. matter, the Q.D.C.
matter, and the J.J.S. matter); and (5) certain allegations of noncooperation with the
Director’s investigation.
We first consider the nature of Padden’s misconduct, the most serious of which was
misappropriation of client funds. Misappropriation occurs when “funds are not kept in
trust and are used for a purpose other than one specified by the client.” In re Taplin,
837 N.W.2d 306, 311 (Minn. 2013) (citation omitted) (internal quotation marks omitted).
Here, the supplementary petition establishes that Padden misappropriated J.V.-C.’s
payment. Specifically, Padden retained $25,000 that he was obligated to refund to
J.V.-C.’s wife under the relevant fee agreement. Misappropriation alone “usually warrants
disbarment absent clear and convincing evidence of substantial mitigating factors.” In
re Rhodes, 740 N.W.2d 574, 579 (Minn. 2007) (citation omitted) (internal quotation
marks omitted).
Padden used forgery to conceal or explain away his misappropriation. Specifically,
Padden forged J.V.-C.’s signature on an amended fee agreement that purported to entitle
Padden to $25,000. When misappropriation involves “other ethical violations in addition
to the misappropriation, particularly misrepresentations to conceal the misappropriation,
mitigating factors usually will not militate against disbarment.” In re Rooney, 709 N.W.2d
263, 272 (Minn. 2006); In re Samborski, 644 N.W.2d 402, 407 (Minn. 2002) (stating that
an attorney’s “dishonesty after his misappropriation of funds further support[ed]
13 disbarment” where the attorney “made misrepresentations and gave false documents to
clients to conceal the misappropriation”).
Padden also engaged in other serious misconduct. In the H.J. matter, Padden failed
to deposit an $8,500 advance fee into trust and failed to refund the unearned portion of that
fee. In the R.L. matter, Padden failed to refund the unearned portion of a $5,000 flat fee.
Failing to return unearned fees is “serious misconduct” because clients are “deprived of the
use of their funds without any explanation.” Taplin, 837 N.W.2d at 312.
Noncooperation with the Director’s investigation is itself “independent grounds for
serious discipline.” In re Villanueva, 931 N.W.2d 816, 823 (Minn. 2019). The Director
sent Padden notices of investigation into the complaints against him, many of which
Padden failed to answer. Failure to cooperate with a disciplinary investigation can
“warrant indefinite suspension on its own” and “increase the severity of the disciplinary
sanction when connected with other professional misconduct.” Rhodes, 740 N.W.2d at
579.
Finally, we consider “other disciplinary rule violations” more severely when paired
with “serious client neglect and incompetence.” In re Fru, 829 N.W.2d 379, 389
(Minn. 2013); In re Udeani, 984 N.W.2d 550, 553 (Minn. 2023). Padden’s other
disciplinary rule violations include (1) the failure to appear at a hearing in the S.Y.I. matter,
resulting in the issuance of a bench warrant for S.Y.I.’s arrest; (2) the failure to timely
appear for S.M.K.’s pretrial hearing without notice to the court or prosecution; (3) the
failure to appear for Q.D.C.’s sentencing without notice to the court or prosecution; (4) the
14 failure to appear for J.J.S.’s trial without notice to the court or prosecution; and (5) the
failure to comply with the requirements to withdraw as J.J.S.’s counsel.
Next, we consider “the cumulative weight of all of the professional misconduct in
determining the appropriate sanction.” Rhodes, 740 N.W.2d at 580. “We distinguish
between a brief lapse in judgment or a single, isolated incident and multiple instances of
misconduct occurring over a substantial amount of time, the latter of which warrants
greater discipline.” Lee, 3 N.W.3d at 283 (citation omitted) (internal quotation marks
omitted). Thus, “the cumulative weight and severity of multiple disciplinary rule violations
may compel severe discipline even when a single act standing alone would not have
warranted such discipline.” In re Oberhauser, 679 N.W.2d 153, 160 (Minn. 2004).
In 2022 and 2023, Padden misappropriated client funds, failed to return unearned
fees, failed to appear at hearings across multiple client matters, and violated many rules of
professional conduct. His misconduct was neither a “brief lapse in judgment” nor a “single,
isolated incident.” See Ulanowski, 834 N.W.2d at 703 (citation omitted) (internal quotation
marks omitted) (concluding that misconduct spanning “more than a year” was not a brief
lapse in judgment).
We also measure harm to the public based on “the number of clients harmed [and]
the extent of the clients’ injuries.” In re Coleman, 793 N.W.2d 296, 308 (Minn. 2011)
(citation omitted) (internal quotation marks omitted). In the supplementary petition, the
Director named seven clients that Padden has harmed through his misconduct. Most
egregiously, Padden misappropriated $25,000 from J.V.-C., causing J.V.-C.’s family
serious financial harm. The family had borrowed the $25,000 to pay Padden and, due to
15 Padden’s misappropriation, was then unable to afford the construction of a new well on
their property. Consequently, the family had to borrow additional money and pay interest
on that loan. J.V.-C. testified that he and his wife raise six children together. To date,
Padden has not returned to J.V.-C., or J.V.-C.’s wife, the $25,000 owed to them. Padden
also harmed H.J. and R.L. by failing to return the unearned fees he retained in connection
with their representation.
Finally, we consider harm to the legal profession. The misappropriation of client
funds “is a breach of trust that reflects poorly on the entire legal profession and erodes the
public’s confidence in lawyers.” Rooney, 709 N.W.2d at 270. And J.V.-C. testified that
he “lost faith in lawyers” because of Padden’s misconduct.
The referee permitted Padden to present evidence of mitigation at the evidentiary
hearing, but eventually concluded that no mitigating factors were present. Padden testified,
in support of mitigation, that he has recently been diagnosed with post-traumatic stress
disorder (PTSD) and that he has suffered from depression for most of his life. Padden
provided almost no evidence of these conditions other than his own testimony, 17 but he
does cite to emails between his counsel and the Director that reference his mental health
17 At the evidentiary hearing, the Director asked Padden whether part of discovery included inquiries into his mental health issues. Padden responded that he “had told [the Director] what my issues were in an email” and was then provided “with medical authorizations.” The Director then asked Padden, “And for a few reasons those authorizations just didn’t work out; correct?” Padden replied, “Yeah, that’s what you told me. I mean, I thought we -- we filled them out first and then filled them out a second time. I was surprised when you told me that the second way we did them wasn’t correct, so -- I don’t know.”
16 issues. 18 Padden also claims that he was experiencing various problems throughout the
time of his misconduct that negatively affected his business, including that he lost his phone
and that his longtime assistant briefly went to work elsewhere. The referee, assessing
Padden’s credibility and the evidence presented, rejected these arguments in support of
mitigation.
For a severe psychological disorder to be a mitigating factor, an attorney must
establish (1) that they have a severe psychological problem; (2) that the psychological
problem was the cause of the misconduct; (3) that they are undergoing treatment and are
making progress to recover from the psychological problem which caused or contributed
to the misconduct; (4) that the recovery has arrested the misconduct; and (5) that the
misconduct is not likely to recur. In re Weyhrich, 339 N.W.2d 274, 279 (Minn. 1983).
Padden’s own testimony, without more, does not meet this burden of proof, as it
fails to establish the severity of his condition or that it caused his misconduct. In re Jones,
834 N.W.2d 671, 678–79 (Minn. 2013) (concluding that the referee did not clearly err in
finding that an attorney’s depression was not a severe psychological disorder, and did not
cause him to misappropriate client funds, despite testimony by his psychologist that he
suffers from severe depression). For this reason, the referee did not clearly err in
concluding that Padden’s depression and PTSD are not mitigating factors.
18 These emails include correspondence from Padden’s then-counsel to the Director, stating that Padden failed to respond to certain complaints due, in part, to his depression. In another email from Padden to the Director, Padden states that he has not yet responded to the complaints against him because he has pneumonia, depression, and PTSD, he recently finished a second-degree murder trial, and he is taking Zoloft (or its equivalent). In that email, Padden also states that he is going to start seeing a therapist.
17 Padden also claims, in support of mitigation, that he has practiced law for decades
and is a very good attorney, and that he has waived fees for his clients in the past. Evidence
in support of this contention came from Padden’s testimony, and from that of his former
clients who testified in the Director’s case-in-chief and acknowledged that Padden
achieved good results for them.
That an attorney has obtained “excellent results” for “sometimes difficult clients”
has been treated as a mitigating factor by a referee. In re Hartke, 529 N.W.2d 678, 683
(Minn. 1995). But we have also stated that, where evidence of reputation or “excellent
results” comes only from testimony, the “referee is in the best position to assess the
relative weight to give to witnesses’ testimony.” In re Albrecht, 779 N.W.2d 530, 538
(Minn. 2010); see also In re Wentzel, 711 N.W.2d 516, 520 n.1 (Minn. 2006). Because
the referee determined, based on the testimony of Padden and his former clients, that any
acknowledgments that Padden did good work for those clients “were given grudgingly at
best,” the conclusion that this evidence of reputation or excellent results is not a mitigating
factor was not clearly erroneous.
In sum, the referee did not clearly err in finding no mitigating factors. And, although
the referee found several aggravating factors, we need not consider them because,
regardless of those aggravating factors, in the absence of any mitigating factors,
misappropriation of client funds warrants disbarment. Lee, 3 N.W.2d at 284; Bradley,
18 7 N.W.3d at 609. Accordingly, we conclude that the appropriate discipline for Padden is
disbarment. 19
CONCLUSION
For the foregoing reasons, respondent Michael B. Padden is disbarred from the
practice of law in the State of Minnesota, effective on the date of this opinion. Respondent
must comply with Rule 26, RLPR (requiring notice to clients, opposing counsel, and
tribunals), and must pay $900 in costs under Rule 24(a), RLPR.
Disbarred.
HENNESY, J., not having been a member of the court at the time of submission,
took no part in the consideration or decision of this case.
GAЇTAS, J., not having been a member of the court at the time of submission, took
no part in the consideration or decision of this case.
19 On March 13, 2024, the Director filed a motion to strike portions of Padden’s addendum. Padden filed a response, and we deferred ruling on the motion pending consideration of the merits of this case. In re Padden, A23-0080, Order at 1 (Minn. filed Apr. 3, 2024). To the extent that the materials at issue in the addendum are outside of the record, we now grant the Director’s motion to strike pursuant to Minn. R. Civ. App. P. 110.01. On June 21, 2024, Padden filed a motion seeking permission to file miscellaneous documents with our court. These documents pertain to matters alleged in the initial petition. Because our conclusion regarding the appropriate discipline for Padden is based solely on the allegations in the supplementary petition, we deny Padden’s motion to file miscellaneous documents as moot.