In the Matter of the Discipline of Brian W. Steffensen
Office of Professional Conduct, Appellee. Brian W. Steffensen, Appellant,
District, Salt Lake The Honorable Todd M. Shaughnessy No.
L. Walker, Barbara Townsend, Adam C. Bevis, Salt Lake City,
W. Steffensen, Salt Lake City, for appellant
Justice Himonas authored the opinion of the Court, in which
Chief Justice Durrant, Associate Chief Justice Lee, Justice
Pearce, and Justice Petersen joined.
Brian Steffensen appeals the judgment of the district court
disbarring him from practicing law for violations of the Utah
Rules of Professional Conduct involving, inter alia,
failure to file taxes. Mr. Steffensen asks this court to
reverse the district court's findings of misconduct,
direct that the case against him be dismissed, and vacate the
sanction of disbarment. We affirm the district court's
findings of misconduct, reverse the district court's
imposition of sanctions, and remand to the district court for
a new sanctions determination.
After graduating from Stanford Law School in 1980, Mr.
Steffensen became a member of the bar and began working as a
lawyer in a large firm. He primarily represented a major bank
focused on transactional work and real estate development. He
left the firm approximately seven years later, continuing to
work as a lawyer in a sole proprietorship. Then, in 1995, Mr.
Steffensen incorporated the first of his many professional
Mr. Steffensen repeatedly failed to maintain accounting
practices that would keep his law firms viable. Mr.
Steffensen acknowledges his "gross negligen[ce]"
in "failing to file . . . employee withholding tax
returns." Additionally, Mr. Steffensen opened a new law
firm each time the previous one financially floundered. To
date, Mr. Steffensen has incorporated five firms subsequent
to his sole proprietorship. Financial trouble led to the
demise of at least three previous firms,  with taxes left
unpaid. The law firm currently in operation is AAA Law, PC.
Mr. Steffensen's first incorporated law firm-Brian W.
Steffensen, a Professional Law Corporation (Firm #1)-operated
from 1995 to 2001 and closed, resulting in an Internal
Revenue Service (IRS) seizure of all assets "because of
his failure to pay withholding taxes." Mr. Steffensen
also had problems with the Utah State Tax Commission with
Firm #1. Mr. Steffensen admits having someone apply for a
withholding account number for Firm #1 in 1995. So he has
known since at least 1995 that he had a responsibility to
withhold money from the employees' paychecks and pay that
money to the Tax Commission. He also admits to knowing that
filing a return was required even if no taxes were due and
claims that he filed all returns for Firm #1. And, although
he filed returns, he never remitted the taxes.
Upon the heels of the IRS seizure, Mr. Steffensen established
Steffensen Law, PC (Firm #2), which operated from 2002 to
2003. Operations under this firm ended due to "the exact
same problems with payroll and the Tax Commission" as
the first. In the same year, 2003, Mr. Steffensen started his
third law firm, S Law, P.C. (Firm #3), which ceased operation
in 2007 "because the financial and tax irregularities
continued to exist." When Firm #3 closed, Mr. Steffensen
established his next firm, SB Law, PC (Firm #4), which
remained in operation until 2013. When that firm was in
financial jeopardy, he established AAA Law, PC (Firm #5), Mr.
Steffensen's currently operating law firm.
The Tax Commission began to scrutinize Mr. Steffensen's
employee tax withholding practices in 2006 when the filing
process of one of his employees was suspended and came under
review by the Tax Commission because her W2 from Firm #3 did
not have a state withholding tax number. The Tax Commission
investigated both Mr. Steffensen's business and personal
taxes. While the Tax Commission started with investigating
only Mr. Steffensen's law firm listed on the questionable
W2, it soon discovered several withholding accounts for other
businesses and began investigating those as well.
In September 2008, the Tax Commission completed an
investigation of Mr. Steffensen and recommended he be
criminally charged with violating: (1) Utah Code section
76-8-1101(1)(c)(i), Failure to File; (2) Utah Code section
76-8-1101(1)(d)(i), Willful Evasion; and (3) Utah Code
section 76-6-513(2), Unlawful Dealings of Property by a
The Tax Commission's investigation uncovered a number of
potential violations of tax law on Mr. Steffensen's part.
As of July 2008, Firm #1 had an unpaid outstanding
withholding tax account balance of $44, 395.46. Mr.
Steffensen broke seven payment arrangements regarding this
balance. Regarding Firm #2, Mr. Steffensen perpetuated the
same problems he had with the first firm. Additionally, Mr.
Steffensen used invalid state withholding tax identification
numbers, and the W2s he distributed to employees falsely
declared that money had been withheld and remitted. And, as
of September 2008, he still owed $48, 895.17 for withholding
taxes, penalties, and interest for tax years 2002-2006.
Moreover, in operating Firm #3, Mr. Steffensen failed to file
withholding returns for 2003 through 2006. He failed to remit
withholdings for this firm's entire existence.
In May 2009, Mr. Steffensen was charged with one count each
of Failing to Render a Proper Tax Return (for tax years 2003-
2008), Intent to Evade (for tax years 2003-2008), and
Unlawful Dealing of Property by a Fiduciary (for years
2003-2006). On March 1, 2010, Mr. Steffensen entered into a
diversion agreement with the State in which he did not admit
to guilt but did admit there was probable cause for the
charges against him. In that agreement, the charges were
amended to an "attempt to commit a crime," Utah
Code § 76-4-101,  namely "knowingly and intentionally,
and without a reasonable good faith basis, fail[ing] to make,
render, sign or verify any return within the time required by
law," id. § 76-8-1101(1)(c)(i). Mr.
Steffensen in turn paid all taxes along with penalties.
After receiving notice of Mr. Steffensen's criminal
charges in September 2009, the Office of Professional Conduct
(OPC) alleged three violations in its case against Mr.
Steffensen. The first claim under rule 8.4(b) of the Utah
Rules of Professional Conduct is that Mr. Steffensen engaged
in criminal conduct that reflects adversely on his fitness to
practice law. The second claim under rule 8.4(c) is that he
engaged in dishonest conduct. And the third claim under rule
8.4(a) is that he engaged in misconduct by violating or
attempting to violate the Utah Rules of Professional
The district court concluded that Mr. Steffensen violated
rule 8.4(b) and (c) of the Utah Rules of Professional
Conduct. The court found professional misconduct under rule
8.4(b) for "committ[ing] the criminal act [under Utah
Code section 76-8-1101(1)(c)(i)] of Failing to Render a
Proper Tax Return [and] . . . committ[ing] the criminal act
[under Utah Code section 76-4-101] of Attempted Failing to
Render a Proper Tax Return." The district court
concluded that these "committed criminal acts,"
established "[b]y a preponderance of the evidence,"
"reflect adversely on [Mr. Steffensen's] honesty,
truthfulness or fitness as a lawyer [i]n other
The district court concluded that Mr. Steffensen committed
professional misconduct under rule 8.4(c) because he
"engaged in conduct involving dishonesty, fraud, deceit,
or misrepresentation."In addition to the criminal acts
under rule 8.4(b), the district court found (1) that Mr.
Steffensen, "in the context of operating the law
firm," failed "to remit to the Tax Commission the
amounts that [his] employees were ultimately obligated to pay
in their taxes," which was "dishonest;" (2)
that he distributed "W2s to [his] employees stating that
the tax monies had been withheld and remitted" when they
had not, which constituted a misrepresentation; and (3)
"that he presented [financial statements] to his bank in
order to get a loan" that were in conflict with
"forms he presented to the Tax Commission to obtain a
financial hardship exemption" and therefore that
"Mr. Steffensen's statements about his income and
finances [that] he presented to the Tax Commission to receive
a financial hardship exemption contained material
The district court held a sanctions hearing and concluded
that the violations of the Utah Rules of Professional Conduct
justified the disbarment of Mr. Steffensen under Rule
Governing the Utah State Bar 14-605(a)(1) and (a)(2). Mr.
Steffensen appeals. We have jurisdiction pursuant to article
VIII, section 4 of the Utah Constitution and Utah Code
The Utah Supreme Court has a constitutional mandate to
"govern the practice of law, including . . . the conduct
and discipline of persons admitted to practice law."
Utah Const. art. VIII, § 4. Because of this mandate,
professional discipline cases form a unique subset of the
cases we hear and have a unique standard of review.
While we generally "presume that the [lower
tribunal's] findings of fact are correct" unless
clearly erroneous, in attorney discipline cases we
"reserve the right to draw inferences from basic facts
which may differ from the inferences drawn by the [lower
tribunal]." In re Discipline of Babilis, 951
P.2d 207, 213 (Utah 1997) (alterations in original)
(citations omitted). Additionally, although "we always
give serious consideration to the findings and [rulings] of
the [district court]," "we must treat the ultimate
determination of discipline as our responsibility."
Id. (alterations in original) (citations omitted).
We therefore must "make an independent determination of
the correctness of the discipline the district court
imposed." In re Discipline of Lundgren, 2015 UT
58, ¶ 9, 355 P.3d 984 (citation omitted) (internal
quotation marks omitted); see also In re Discipline of
Crawley, 2007 UT 44, ¶ 17, 164 P.3d 1232.
In our analysis, we first clarify the interpretation and
application of rule 8.4(b) and (c) of the Utah Rules of
Professional Conduct discussing violations of professional
misconduct. And, finding that Mr. Steffensen did commit
professional misconduct, we then turn to the imposition of
sanctions for those violations to determine whether the court
applied the proper standard in its sanctioning of him. On the
record before us, we find that the district court erred in
its imposition of sanctions for Mr. Steffensen's
violations, but understandably so given the inconsistencies
in the comment section of rule 8.4.
VIOLATIONS OF THE UTAH RULES OF PROFESSIONAL CONDUCT
This court regulates members of the bar both by
constitutional mandate and inherent authority. Utah Const.
art. VIII, § 4 ("The Supreme Court by rule shall
govern the practice of law, including admission to practice
law and the conduct and discipline of persons admitted to
practice law."); Barnard v. Utah State
Bar, 804 P.2d 526, 528 (Utah 1991) ("[T]he
authority of this Court to regulate the admission and
discipline of attorneys existed as an inherent power of the
judiciary from the beginning." (citation omitted)). In
order to maintain the integrity of the profession, we
promulgate the Rules of Professional Practice to guide
lawyers and judges in matters of discipline. In Utah,
[a] lawyer is a representative of clients, an officer of the
legal system and a public citizen having special
responsibility for the quality of justice. Every lawyer is
responsible to observe the law and the Rules of Professional
Conduct, shall take the Attorney's Oath upon admission to
the practice of law, and shall be subject to the Rules of
Lawyer Discipline and Disability.
Utah R. Prof'l Conduct pmbl. 1. Chapter 13 of the Supreme
Court Rules of Professional Practice establishes the Utah
Rules of Professional Conduct.
To assist with our regulatory responsibility, we have
authorized and designated the Utah Bar Association (Bar) to
administer the rules and regulations which govern the
practice of law in Utah. R. Governing Utah State Bar 14-102.
Responsibilities of the Bar include, but are not limited to,
advancing "the administration of justice according to
law;" "regulat[ing] and disciplin[ing] . . .
persons practicing law;" "maintain[ing] integrity .
. . and high standards of conduct among those practicing
law;" and "promot[ing] professionalism, competence
and excellence in those practicing law." Id.
14-202; see also id. 14-102. The OPC aids the Bar in
performing the duties related to violations of the Utah Rules
of Professional Conduct. Id. 14-504.
Under the Rules Governing the Utah State Bar, the OPC can
bring a formal complaint charging an attorney with
professional misconduct before the district court with the
permission of a screening panel. Id. 14-511(a). When
"[f]ormal disciplinary and disability proceedings"
are convened, they "are civil in nature."
Id. 14-501(c). This remains true even when, as here,
questions of criminal conduct arise in finding a violation of
the Utah Rules of Professional Conduct. Id.; see
also In re Discipline of Steffensen, 2016 UT 18, ¶
12, 373 P.3d 186. Such cases are also bifurcated, meaning
that they are conducted in two phases: adjudication of the
allegations of misconduct and, if necessary, a determination
of the appropriate sanction. R. Governing Utah State Bar
In these proceedings brought before the district court by the
OPC, the court concluded Mr. Steffensen violated both rule
8.4(b) and (c). Mr. Steffensen challenges the admissibility
of evidence that the court allowed in his adjudication
hearing as well as the court's determination of his
mental state. He argues that the evidence was irrelevant and
prejudicial. We hold that the evidence was relevant and
admissible. Mr. Steffensen also argues that the district
court's determination that his actions were "knowing
and intentional" was not supported by the evidence. We
disagree and affirm the district court's findings of fact
and conclusions of law at the adjudication hearing.
Admission of Evidence and ...