No Conditional Admissions In Minnesota Bar Discipline; Attorney Sanctioned For Fee Sharing And Knifing Former Miss South Dakota’s Boyfriend

The Minnesota Supreme Court imposed an indefinite suspension with no right to reapply for five years on charges

alleging two counts of misconduct: (1) an improper referral and fee-sharing arrangement and (2) a first-degree assault conviction.

The court

At a hearing before the referee, [attorney] Riehm admitted the allegations in the Director’s petitions as part of an oral stipulation for discipline, and the parties agreed to recommend that we indefinitely suspend Riehm for a minimum of 5 years. But Riehm now contends that he may withdraw his admissions if we decide not to impose the parties’ recommended discipline. We conclude that Riehm unconditionally admitted the Director’s allegations of misconduct as part of the oral stipulation; therefore, he cannot now withdraw his admissions. We further hold that, as a matter of law, an attorney may not condition his or her admissions to allegations of misconduct on receiving a particular disposition from our court. Finally, after considering Riehm’s admissions and the recommendations of the Director and the referee, we indefinitely suspend Riehm from the practice of law for a minimum of 5 years.

The fee sharing

Riehm’s misconduct began with an improper referral and fee-sharing arrangement. Around August 2010 Riehm entered into a secret referral agreement with M.M., an associate at another law firm. Riehm promised to pay M.M. one-third of any attorney fees recovered in matters referred by M.M. M.M. referred over 100 matters to Riehm, and Riehm undertook representation in at least 23 of these matters. Riehm paid M.M. approximately $11,000 in return for the referrals. Although Riehm’s retainer agreements with the referred clients stated that Riehm may share attorney fees with another lawyer, the retainer agreements did not disclose Riehm’s referral and fee-sharing arrangement with M.M. Additionally, Riehm took steps to prevent M.M.’s firm from learning about the arrangement. Riehm wrote checks for the referral fees payable to M.M. personally, used M.M.’s home address on the checks, delivered the checks personally, and sent communications to M.M.’s personal e-mail account.

Beginning around March 2011 Riehm entered into a similar arrangement with R.D., another associate at M.M.’s firm. Riehm undertook representation of at least one client that R.D. referred, but Riehm did not make any payments to R.D. Riehm’s retainer agreement with the referred client did not disclose that he had agreed to share fees with R.D.

The parties had twice submitted a stipulation for discipline

One of the allegations in the petition, which Riehm unconditionally admitted, was that Riehm had “assisted M.M. in secreting the arrangement from” M.M.’s firm. Yet, the stipulation stated that Riehm “unknowingly assisted M.M. in the conduct referenced in the petition.” (Emphasis added.) Because of these contradictory statements, we ordered the parties to file memoranda or a new stipulation clarifying whether Riehm admitted to purposefully hiding the referral arrangement from M.M.’s firm. The parties’ memoranda expressed conflicting interpretations of the stipulation, and we therefore rejected the second stipulation.

Another fly entered the ointment

During the time period in which we were considering the first stipulation, Riehm committed an assault. In the early morning hours of January 1, 2014, Riehm stabbed a fellow bar patron with a steak knife, puncturing the victim’s lung. Riehm was charged with one count of first-degree assault, Minn. Stat. § 609.221, subd. 1 (2014). After a bench trial on stipulated facts, the district court found Riehm guilty and convicted him of the offense.

There was another stipulation entered before a referee

To discern the scope of the parties’ oral stipulation, we need look no further than the elementary principles of contract law. A contract is formed when two or more parties exchange bargained-for promises, manifest mutual assent to the exchange, and support their promises with consideration.

The effect of the stipulation

Riehm seems to argue that if we reject the recommended discipline, then the parties’ agreement to enter into the stipulation lacked consideration. According to Riehm, the concept of a binding agreement “would have no meaning at all if the relinquishment of a right was not conditioned upon the receipt of some other benefit.” The “benefit” Riehm seems to expect is an indefinite suspension of a minimum of 5 years, as opposed to a more severe penalty, such as disbarment. Under this logic, if we impose a harsher sanction than the one proposed in the parties’ stipulation, then Riehm will not have obtained the benefit of his bargain. We are not persuaded.

Consideration merely requires “that one party to a transaction voluntarily assume an obligation on the condition of an act or forbearance by the other party.” U.S. Sprint Commc’ns Co. v. Comm’r of Revenue, 578 N.W.2d 752, 754 (Minn. 1998). Riehm received a significant benefit from the parties’ agreement to enter into a stipulation: the Director recommended a minimum 5-year suspension rather than disbarment. Riehm’s argument is meritless.

To summarize, Riehm unconditionally admitted the allegations of misconduct in the first amended petition and the second amended petition and agreed that, based on these admissions, the parties would recommend that he receive a minimum 5-year suspension. Riehm is not entitled to withdraw his admissions at this stage of the proceedings.

Conditional admissions are not permitted

the Director has advised attorneys that they may not conditionally admit allegations of professional misconduct. The Director is correct. We hold that, in attorney discipline matters, an attorney may not condition his or her admissions to allegations of professional misconduct on receiving a specific disposition from our court.

Sanction

Although we recognize that Riehm cooperated with the Director’s investigation, we are troubled by Riehm’s conduct before our court. In November 2014 Riehm entered into an internally contradictory stipulation. Riehm now argues that the July 2015 stipulation was conditional; yet, he admitted at oral argument that he did not raise this issue with the Director before putting the terms of the agreement on the record before the referee. Riehm’s positions border on frivolous and have substantially delayed resolution of this matter.

…we must decide the appropriate discipline for Riehm’s misconduct. This is a close issue. Riehm’s misconduct is serious and arguably warrants disbarment. But we give some deference to the Director’s decision to enter into a stipulation, and we also give weight to the referee’s recommendation. Moreover, a minimum 5-year suspension is lengthy and subject to reinstatement procedures, see Rule 18, RLPR. Accordingly, we impose the parties’ recommended discipline of an indefinite suspension for a minimum of 5 years.

The Star Tribune reported on the assault and civil judgment obtained by the victim.

Jurors have decided a personal injury attorney must pay more than $200,000 to a man he stabbed in the rib cage with a steak knife in the lobby of a posh hotel in downtown Minneapolis.

The clash during New Year’s revelry ringing in 2014 at Manny’s Living Room and Prohibition Bar on the main level of the W Minneapolis Hotel in Foshay Tower was ignited when the victim made a suggestive joke about his beauty queen fiancée and his attacker’s wife, according to court records.

The verdict against Michael Riehm by the Hennepin County District Court jury awaits final judgment by Judge Bridget Sullivan. Riehm has already been convicted of felony first-degree assault and put on supervised probation for seven years in his attack on Daniel Kerkinni, 31, of Edina.

Most of the money awarded by the jury is for Kerkinni’s medical expenses, with smaller amounts for “pain, disability and emotional distress” and loss of earnings. There’s also a $25,000 punitive judgment against Riehm. The overall total Riehm is liable for could shrink, depending on what Kerkinni’s health insurance covers for the injuries.

The operators of Manny’s Steakhouse and the hotel were also sued, but not found liable by the judge. Kerkinni’s suit contended that the bar and hotel employees failed to do enough to break up the confrontation involving an “obviously intoxicated” Riehm.

And described the incident

The criminal complaint against Riehm further detailed that Kerkinni heard Riehm’s wife, Heather Griego, compliment his fiancée, Sitania Syrovatka, on her looks. Kerkinni then explained to Griego that Syrovatka, a model and 2002 Miss South Dakota, “was already taken.” That comment upset Griego and Riehm, according to the charging document.

The criminal complaint continued:

Riehm and Kerkinni got in a shoving match that bar security broke up. Sometime later, Griego tried to kick Kerkinni in the groin. Riehm intervened, and again bar security broke up the two.

A waitress told police she saw Riehm get the knife and say, “Nobody hits my wife in the face.”

(Mike Frisch)