The Florida Bar v. Susan K. W. Erlenbach

138 So. 3d 369, 39 Fla. L. Weekly Supp. 304, 2014 WL 1698380, 2014 Fla. LEXIS 1459
CourtSupreme Court of Florida
DecidedMay 1, 2014
DocketSC10-1793
StatusPublished
Cited by5 cases

This text of 138 So. 3d 369 (The Florida Bar v. Susan K. W. Erlenbach) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Florida Bar v. Susan K. W. Erlenbach, 138 So. 3d 369, 39 Fla. L. Weekly Supp. 304, 2014 WL 1698380, 2014 Fla. LEXIS 1459 (Fla. 2014).

Opinions

PER CURIAM.

We have for review an uncontested referee’s report recommending that Susan K.W. Erlenbach be found guilty of professional misconduct and suspended for eighty-nine days, followed by a two-year period of probation. We have jurisdiction. See art. V, § 15, Fla. Const. After considering the parties’ responses to our order to show cause,1 we approve the referee’s findings of fact and recommendations of guilt. We disapprove the recommended sanction and, instead, impose a one-year suspension, followed by a two-year period of probation.

FACTS

The Florida Bar filed a complaint alleging that Respondent Susan K.W. Erlen-bach had engaged in ethical misconduct. The case was referred to a referee to make findings of fact, recommendations as to guilt, and recommend a disciplinary sanction. Before the referee, the parties stipulated to facts that support a recommendation that Respondent is guilty of violating Rules Regulating the Florida Bar 3-4.3 (commission of an act that is unlawful or contrary to honesty and justice) and 4-8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation). The referee has submitted a report to the Court based on the parties’ stipulation, in which the referee made the following findings of fact and recommendations.

Respondent has failed to file timely joint tax returns for the tax years 1997, 1998, 1999, 2000, 2001, 2002, 2004, 2005, and 2006, even after the extensions permitted by the Internal Revenue Service (IRS). Also, Erlenbach sought and received a discharge of liability for the taxes, interest, and penalties due for tax years 1998, 1999, 2000, 2001, 2002, 2003, 2004, and 2005. She presently owes taxes, interest, and penalties to the Department of Treasury for tax years 2006, 2007, 2008, and 2009. The failure to file tax returns as required by the Internal Revenue Code is a violation of the Bar rules. See Fla. Bar v. Behm, 41 So.3d 136 (Fla.2010); Fla. Bar v. Marks, 376 So.2d 9 (Fla.1979).

There was no evidence that Respondent attempted to evade responsibility for personal income taxes. The delays in filing the personal tax returns occurred during periods when Erlenbach was preoccupied not only with her law practice but with caring for several members of her extended family who had serious medical conditions from the middle 1990s through 2006. The IRS has imposed significant financial penalties and interest for the late tax returns, but has not charged her with a crime. Respondent has made payments in excess of $500,000 toward past due taxes, interest, and penalties.

In addition, Erlenbach withheld federal income tax, social security tax, and Medicare tax from employees of her professional association, “Susan K.W. Erlenbach, P.A.,” but failed to pay the sums withheld over to the Department of the Treasury as required by the Internal Revenue Code. Respondent engaged in this activity intermittently from 2006 through 2008. As a result, the IRS determined that Respondent’s professional association and Respon[371]*371dent individually owe a total of $13,634.05. Erlenbaeh and the IRS have agreed to a payment plan, which Erlenbaeh is following by making monthly payments as required by the agreement. More than half of this debt had been paid by the time of the hearing before the referee. The referee found that Erlenbach’s failure to remit employment taxes was not based upon greed or selfish motivation. Her lifestyle was not, and is not, lavish. The referee found that her failure to pay the withhold-ings and the employer’s matching share is due to poor business management of her practice’s finances.

Erlenbach’s intentional failure to pay the Department of the Treasury the funds that were withheld from her employees constitutes violations of 26 U.S.C. § 7202, “Willful failure to collect or pay over tax,” and 26 U.S.C. § 7203, “Willful failure to file return, supply information, or pay tax.” Although Erlenbaeh has not been charged with or convicted of any misdemeanor or felony for her misdeeds, the failure to pay the funds withheld from employees to the federal government violates Bar rules 3-4.3 and 4-8.4(c). Respondent has a repayment agreement with the IRS and is performing her obligations under the agreement. Also, she has admitted that her failure to file timely joint personal tax returns, failure to pay her joint income tax obligations, and failure to pay withholdings violate Bar rules 3-4.3 and 4 — 8.4(c). Er-lenbach has accepted responsibility for her misconduct.

With regard to aggravating factors, Respondent has been the subject of three prior disciplinary proceedings. The first ease, in 2001, resulted in a finding of minor misconduct, admonishment, and one year of probation. For the second case, which occurred in 2006, Erlenbaeh received a public reprimand and two years of probation. In the third case, in 2007, she was the subject of a petition for contempt for failing to comply with the terms of her disciplinary probation. She was suspended in July 2007 subject to her suspension being lifted upon compliance with the terms of probation. Respondent’s suspension was lifted in October 2007 and she completed her probationary period without further incident. Her prior disciplinary cases in 2006 and 2007 are aggravating factors.

The second aggravating factor is that Respondent’s repeated late filing of tax returns and failure to pay taxes demonstrate a pattern of misconduct. She failed to pay over her employees’ withheld taxes to the federal government in 2006, 2007, and 2008.

The third aggravating factor is that Er-lenbach has been practicing law since 1982, so she is experienced as an attorney.

As for mitigating factors, Respondent has admitted that she failed to pay federal income taxes, failed to timely file federal income tax returns, and failed to pay money withheld from her law firm’s employees. She has admitted to violating Bar rules 3-4.3 and 4-8.4(c). Erlenbaeh has accepted responsibility for her misconduct, expressed remorse, and cooperated during these proceedings.

An extensive number of judges and attorneys testified that Respondent is an able advocate who vigorously represents her clients in a capable and professional manner. The witnesses’ testimonies indicate that Respondent enjoys a good professional and ethical reputation among her clients, other attorneys, and the judiciary. She provides valuable legal services to her clients, many of whom could not afford an attorney but for her.

Next, Respondent has put in place procedures to avoid any continued violation of the regulations regarding tax withholdings. [372]*372Also, she has established a payment schedule to repay the taxes due and has paid more than fifty percent of those amounts.

Further, Erlenbach provides services as an advocate to many clients who are underprivileged and whose rights would otherwise not be protected by a skilled advocate. She has actively provided legal services for the less fortunate for the past twenty years.

In addition, the personal and emotional problems Respondent was experiencing were a substantial contributing factor in her misconduct. Her financial problems occurred during the same period that: (1) her husband had been diagnosed with and was being treated for cancer, and (2) there was an economic decline in her geographic area due to termination of the space shuttle program.

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Bluebook (online)
138 So. 3d 369, 39 Fla. L. Weekly Supp. 304, 2014 WL 1698380, 2014 Fla. LEXIS 1459, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-florida-bar-v-susan-k-w-erlenbach-fla-2014.