1. Attorneys--discipline--motion to continue show cause hearing--abuse of discretion
standard
The Disciplinary Hearing Commission of the North Carolina State Bar (DHC) did not
abuse its discretion by denying defendant's motion to continue the show cause hearing resulting
from defendant's failure to provide the State Bar with documentation showing he had paid his
taxes in compliance with a consent order arising out of defendant's prior willful failure to timely
file federal individual income tax returns with the Internal Revenue Service for the calendar
years 1992 through 1996, because defendant failed to show sufficient grounds warranting a
continuance of the hearing when his accountant was present at the hearing and could have
testified to the information defendant contended required the DHC to continue the hearing.
2. Attorneys--suspension of law license--whole record test--severity of punishment
The whole record test revealed that the Disciplinary Hearing Commission of the North
Carolina State Bar's (DHC) suspension of defendant's license for ninety days was not excessive,
did not fail to account for evidence from which conflicting inferences could be drawn, and was
not beyond the appropriate measure of discipline as defined by the provisions of 27 N.C.A.C. §
1B.0114(x), because: (1) the unchallenged findings of fact were sufficient to support DHC's
conclusion of law that defendant had violated the 6 November 2001 consent order of discipline
and the violation was knowing and willful; (2) DHC found that defendant violated the consent
order, and therefore, it was permissible for DHC to suspend defendant's license; and (3) there
was no abuse of discretion regarding the severity of the punishment when defendant's violation
of the consent order was of the same nature as his original offense and DHC only activated a
small portion of the two-year suspension.
Carolin Bakewell for plaintiff-appellee.
Stark Law Group, PLLC, by Thomas H. Stark and W. Russell
Congleton, for defendant-appellant.
STEELMAN, Judge.
Defendant, Ralph Edward McLaurin, Jr., appeals from an order
of the Disciplinary Hearing Commission of the North Carolina State
Bar (DHC) suspending his license to practice law for ninety days.
For the reasons stated herein, we affirm the DHC's order.
Defendant was licensed to practice law in North Carolina in
1975 and practiced in Chatham County. On 29 June 1999, defendant
was charged in federal court with five counts of willful failure to
timely file federal income tax returns for the calendar years 1992
through 1996 in violation of 26 U.S.C. § 7203. On 7 October 1999,
defendant pled guilty to one count of misdemeanor failure to timely
file a federal income tax return for 1992. On 10 April 2000,
judgment was entered finding defendant guilty on one count and
dismissing the remaining four counts. The judgment placed
defendant on probation for one year subject to standard and special
conditions of supervision.
Following entry of judgment in federal court, the North
Carolina State Bar began its own investigation of defendant and
instituted disciplinary proceedings. The matter came on for
hearing before the DHC on 9 November 2001. Following that hearing,
defendant entered into a consent order of discipline with the State
Bar, in which he consented to the findings of fact, conclusions of
law, and an order of discipline. Specifically, the consent order
found that defendant “wilfully failed to timely file federal
individual income tax returns with the Internal Revenue Service for
the calendar years 1992 through 1996.” The DHC concluded that
defendant had been “convicted of a criminal offense showingprofessional unfitness in violation of N.C. Gen. Stat. § 84-
28(b)(1),” and that defendant had “committed criminal acts that
reflect adversely on his honesty, trustworthiness, or fitness as a
lawyer in other respects, in violation of Rule 8.4(b) of the
Revised Rules of Professional Conduct.” The consent order
suspended defendant's law license for a period of two years, but
stayed the suspension for three years subject to certain
conditions. The conditions relevant to this appeal required
defendant to: (1) timely file all state and federal tax returns;
(2) timely pay all required estimated or annual state and federal
taxes; and (3) provide the Secretary of the State Bar written
verification on or before April 15 of each year of the stayed
suspension that all required state and federal tax returns had been
filed or written verification that a timely extension was sought,
to be submitted within one week of the filing date of that return.
Finally, the consent order provided that if defendant failed to
comply with any one or more of the conditions, the DHC could lift
the stay and activate his suspension, or any portion thereof,
pursuant to § B.0114(x) of the North Carolina State Bar Discipline
and Disability Rules.
By the terms of the consent order, defendant was required to
provide written verification of his compliance as to his 2001 tax
returns by 15 April 2002. Having received no correspondence from
defendant, the State Bar wrote to defendant on 13 August 2002,
notifying him of the delinquency and asking him to produce the
required documentation. In response, defendant sent a handwrittennote, dated 22 August 2002, stating he had filed his 2000 tax
returns and had received an extension to file his 2001 returns.
On 13 January 2003, the State Bar requested defendant produce
copies of any extensions received for his 2001 tax returns, and to
advise the State Bar whether the 2001 return had been filed and the
taxes paid. When defendant failed to respond to the letter, the
State Bar filed a motion seeking an order to show cause. On 12
February 2003, the DHC issued a show cause order. Shortly
thereafter, defendant sent a letter to the State Bar stating that
his 2001 tax returns were timely filed after an extension was
granted. Defendant provided none of the documents requested in the
13 January 2003 letter. The 15 April 2003 deadline for submitting
written verification of the filing of his 2002 tax returns also
passed without defendant submitting any documentation to the State
Bar.
On 9 May 2003, the DHC held a hearing on the motion to show
cause and issued an order suspending defendant's license for ninety
days. Defendant moved to have the order set aside for lack of
notice of the hearing. On 9 July 2003, the DHC granted defendant's
motion for a stay of the order suspending his license for ninety
days. By order entered 2 September 2003, the DHC set a hearing on
defendant's motion for a new hearing for 7 November 2003. The
order also contained specific language notifying defendant that if
his motion was allowed, the new hearing on the State Bar's motion
to show cause would commence on 7 November 2003 immediately
following the conclusion of the hearing on defendant's motion. On 7 November 2003, the DHC granted defendant's motion for a
new trial, and defendant immediately moved for a continuance of the
hearing on the motion to show cause. Defendant argued he was
awaiting “other information” from his accountant that would show he
was in compliance with the consent order. The DHC denied
defendant's motion to continue. A hearing was held on 7 November
2003 on the DHC's show cause order.
After hearing evidence presented by the State Bar and
defendant, the DHC concluded that defendant committed knowing and
willful violations of the consent order, and ordered defendant's
license be suspended for ninety days. Defendant appeals.
[1] In defendant's first assignment of error he contends the
DHC erred in denying his motion to continue the show cause hearing.
We disagree.
Although defendant's assignment of error is couched in terms
of the DHC abusing its discretion in denying his motion for a
continuance, defendant argues in his brief the appellate standard
of review is the “whole record test.” It is true that the “whole
record test” is the standard of judicial review to be employed when
considering the adequacy of an administrative agency's findings of
fact in its final decision. See N.C. State Bar v. Talford, 356
N.C. 626, 632, 576 S.E.2d 305, 309-10 (2003); N.C. State Bar v.
DuMont, 304 N.C. 627, 642-43, 286 S.E.2d 89, 98-99 (1982) (DuMont
II). However, the “whole record test” is not the correct standard
of review when considering the appropriateness of a preliminary,
discretionary decision, such as a motion to continue. Rather, amotion to continue is addressed to the sound discretion of the
applicable tribunal, and will not be overturned absent a showing
that the decision was so arbitrary that it could not have been the
result of a reasoned decision. May v. City of Durham, 136 N.C.
App. 578, 581-82, 525 S.E.2d 223, 227 (2000). Continuances are
generally not favored and the party seeking the continuance has the
burden of showing sufficient grounds for it. Id. at 581, 525
S.E.2d at 227.
Defendant maintained that the reason for his failure to
provide the State Bar with documentation showing he had paid his
taxes in compliance with the consent order was because he was
waiting for a tax refund based upon losses incurred by a limited
liability company in which he had an interest. At the 7 November
2003 hearing, defendant claimed additional information regarding
his taxes would be forthcoming within a matter of a few days, at
most. Defendant had over two months to obtain any evidence he
believed would be crucial to his case. On 2 September 2003, the
DHC entered an order setting the hearing date for defendant's
motion for a new hearing and notifying him that if his motion was
granted the show cause hearing would be held on 7 November 2003.
Nevertheless, defendant failed to have this “additional
information,” which he contended would show his compliance with the
consent order. Further, defendant's counsel advised the DHC that
defendant's accountant was present at the hearing and could testify
as to this matter if necessary, and that they were ready to proceed
with the hearing on the motion to show cause if the continuance wasdenied. Defendant did not call the accountant as a witness at the
hearing.
Defendant failed to show sufficient grounds warranting a
continuance of the hearing, in that his accountant was present at
the hearing and could have testified to the information defendant
contended required the DHC continue the hearing. The DHC did not
abuse its discretion in denying defendant's motion to continue.
This assignment of error is overruled.
[2] In defendant's second assignment of error he contends the
DHC's suspension of his license for ninety days was excessive,
failed to account for evidence from which conflicting inferences
could be drawn, and was beyond the appropriate measure of
discipline as defined by statute.
Defendant first argues that the findings of fact do not
support the DHC's suspension of his license. When reviewing the
adequacy of administrative findings, we must apply the “whole
record test.” Talford, 356 N.C. at 632, 576 S.E.2d at 309-10;
DuMont II, 304 N.C. at 642-43, 286 S.E.2d at 98. Under the “whole
record test,” this Court must determine whether the DHC's findings
of fact are supported by the evidence when viewed in light of the
whole record, and whether those findings support its conclusions of
law. Talford, 356 N.C. at 632, 576 S.E.2d at 309. Such evidence
will be deemed sufficient if it is of a kind that a reasonable
person might accept as adequate to support a conclusion. Id. at
632, 576 S.E.2d 309-10. An order of discipline had already been entered against
defendant - a conditional stay of the suspension of his law
license. This hearing was on a motion to show cause, pursuant to
27 N.C.A.C. § 1B.0114(x), which provides that the DHC may “enter an
order lifting the stay and activating the suspension, or any
portion thereof, . . . if it finds that the North Carolina State
Bar has proven, by the greater weight of the evidence, that the
defendant has violated a condition.”
Our Supreme Court has directed that in order to correctly
apply the whole record test, the following analysis must be
performed to determine whether the DHC's decision has a “rational
basis in the evidence”: “(1) Is there adequate evidence to support
the order's expressed finding(s) of fact? (2) Do the order's
expressed finding(s) of fact adequately support the order's
subsequent conclusion(s) of law? and (3) Do the expressed findings
and/or conclusions adequately support the lower body's ultimate
decision?” Talford, 356 N.C. at 634, 576 S.E.2d at 311.
We need not address the first step in this analysis, since it
is well settled that where no exception is taken to a finding of
fact, the finding is presumed to be supported by competent evidence
and is binding on appeal, Koufman v. Koufman, 330 N.C. 93, 97, 408
S.E.2d 729, 731 (1991); and the findings of fact which defendant
did not assign as error are themselves sufficient to support the
conclusions of law. We now consider the second step in the analysis, whether the
order's express findings of fact adequately support its subsequent
conclusions of law. The unchallenged findings provide:
11. The order suspended Defendant's law
license for two years and stayed the
suspension of Defendant's law license for
three years, based on various conditions.
Pursuant to the order, Defendant was required,
inter alia, to timely pay all state and
federal income taxes.
12. Defendant agreed to pay all taxes on a
timely basis as a condition of the stay of the
suspension of his law license.
13. The Defendant failed to pay all estimated
annual income taxes and annual income taxes
due and owing for 2001 on a timely basis.
14. The Defendant testified that he did not
pay all of his federal income taxes for the
year 2001 because he believed that he would
ultimately receive a refund of taxes paid
owing to losses incurred by a partnership in
which he had an interest. The Defendant had
not received a refund as of the hearing date
herein.
15. The Defendant did not present any evidence
that he was unable to pay his entire annual
income taxes for the year 2001.
These unchallenged findings were sufficient to support the DHC's
conclusion of law that defendant had violated the 6 November 2001
consent order of discipline and the violation was knowing and
willful.
Finally, we consider the third step, whether the expressed
findings or conclusions adequately support the DHC's ultimate
decision to suspend defendant's license. If the DHC found that
defendant violated the consent order by the “greater weight of the
evidence,” then the DHC “may enter an order lifting the stay andactivating the suspension or any portion thereof[.]” 27 N.C.A.C.
§ 1B.0114(x). The DHC found that defendant violated the consent
order. Therefore, it was permissible for the DHC to suspend
defendant's licence.
Defendant further argues that the punishment imposed,
suspension of his law licence for ninety days, was too severe in
light of the balancing analysis set forth in Talford. See Talford,
356 N.C. at 638, 576 S.E.2d at 313 (holding that in order to
warrant the punishment of suspension or disbarment there must be a
clear showing of (1) how the attorney's actions resulted in
significant or potentially significant harm to the entities listed
in the statute, and (2) why suspension and disbarment are the only
sanctions that can adequately protect the public from future wrongs
by the offending attorney). The Talford analysis deals with the
appropriateness of a sanction imposed by the DHC in an initial
disciplinary hearing. In this case, an order of discipline had
been entered by consent. As provided in the consent order, the DHC
concluded that the appropriate discipline of defendant was the
suspension of his license for two years. Thus, it was unnecessary
to apply the Talford balancing analysis to determine the
appropriate discipline. Rather, the appropriate discipline for a
violation of the previous order was expressly set forth in the
consent order, which stated: “[i]f during the stay of the two-year
suspension, McLaurin fails to comply with any one or more
conditions stated in paragraphs 2(a)-(h) above, then the stay of
the suspension of his law license may be lifted as provided in§.0114(x) of the North Carolina State Bar Discipline & Disability
Rules.”
The only question before the DHC was how much of the two year
suspension should be activated. We review this decision under an
abuse of discretion standard. Because defendant's violation of the
consent order was of the same nature as his original offense, and
the DHC only activated a small portion of the two year suspension,
we discern no abuse of discretion. The DHC acted properly under
the provisions of 27 N.C.A.C. § 1B.0114(x). This assignment of
error is without merit.
For the reasons discussed herein, we affirm the ruling of the
DHC, suspending defendant's license to practice for ninety days.
AFFIRMED.
Judges WYNN and HUDSON concur.
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