S053579, Opinion — In re Gunter

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Submitted on the record December 11, 2007, reinstatement
denied March 27, 2008

In the Matter of
the Application for Reinstatement of
BRUCE A. GUNTER,
Applicant.
(SC S053579)
182 P3d 187

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CJS, Attorney and Client § 122.

# En Banc

Application for reinstatement to the practice of law in
Oregon.

Bruce A. Gunter filed the briefs for himself.

Jeffrey D. Sapiro, Disciplinary Counsel, Lake Oswego,
filed the brief for the Oregon State Bar.

PER CURIAM

Reinstatement denied.

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## PER CURIAM

Applicant Bruce A. Gunter requests that this court
reinstate him as an active member of the Oregon State Bar
pursuant to Rule of Procedure (BR) 8.1. The Bar admitted
applicant to practice in 1982. After moving to California in
1985, applicant transferred to inactive status. The Bar sus-
pended him in 1995 for nonpayment of Bar dues. Applicant
submitted a Form A (nondisciplinary) resignation in 2001.
Applicant moved back to Oregon and filed an application for
reinstatement in 2005. The Board of Governors determined
that applicant had failed to demonstrate that he presently
possessed good moral character and general fitness to prac-
tice law and recommended denying reinstatement. This
court referred the matter to the Disciplinary Board. After a
hearing, a trial panel issued an order denying reinstatement.
The trial panel found that, in light of applicant's past alcohol
and drug use, and some of his personal financial dealings,
applicant had failed to demonstrate by clear and convincing
evidence that he presently possessed good moral character
and the requisite knowledge and legal ability to practice law.
We review that order pursuant to BR 10.2. We agree with
the trial panel's ultimate recommendation and deny rein-
statement.

## REINSTATEMENT STANDARDS

BR 8.1 requires that an applicant make the following
showings:

"(b) Required Showing. Each applicant under this rule
must show that the applicant has good moral character and
general fitness to practice law and that the resumption of
the practice of law in this state by the applicant will not be
detrimental to the administration of justice or the public
interest. No applicant shall resume the practice of law
in this state or active membership status unless all the
requirements of this rule are met.

"(c) Learning and Ability. In addition to the showing
required in BR 8.1(b), each applicant under this rule who
has remained in a suspended or resigned status for more
than three years or has been enrolled voluntarily or invol-
untarily as an inactive member for more than five years

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must show that the applicant has the requisite learning
and ability to practice law in this state."

The Bar has the initial burden to provide evidence
that the applicant should not be readmitted to the practice of
law. BR 8.13. Applicant stipulated prior to the trial panel
hearing that the Bar had come forth with sufficient evidence
to meet that burden. Accordingly, under BR 8.12, applicant
bore the following burden of proof:

"An applicant for reinstatement to the practice oflaw in
Oregon shall have the burden of establishing by clear and
convincing evidence that the applicant has the requisite
good moral character and general fitness to practice law
and that the applicant's resumption of the practice of law in
this state will not be detrimental to the administration of
justice or the public interest."

"Clear and convincing evidence means that the truth of the
facts asserted is highly probable." In re Johnson, 300 Or 52,
55, 707 P2d 573 (1985) (quoting Supore et al v. Densmoor
et ux, 225 Or 365, 372, 358 P2d 510 (1961)) (internal quota-
tion marks omitted).

With respect to good moral character, applicant must
prove that he is "in all respects * * * a person who possesses
the sense of ethical responsibility and the maturity of char-
acter to withstand the many temptations which [he] will con-
front in the practice oflaw." In re Nash, 317 Or 354, 362, 855
P2d 1112 (1993) (internal quotation marks omitted; empha-
sis and brackets in original). This court's concern is whether
applicant presently is of good moral character. In re Griffith,
323 Or 99, 106, 913 P2d 695 (1996). However, evidence of
past conduct "may be relevant to that issue if rationally con-
nected to applicant's fitness to practice law." In re Fine, 303
Or 314, 317, 736 P2d 183 (1987).

This court addresses an analogous question concern-
ing a lawyer's past misconduct when it considers the possible
reinstatement of a lawyer following disbarment. This court
has held that an attorney who seeks reinstatement after dis-
barment must prove that he or she "has overcome and will
not again be influenced by the specific character flaw that led
to disbarment." Griffith, 323 Or at 106. In this case, applicant
has not been disbarred; applicant voluntarily resigned from

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the bar in 2001. Nonetheless, the Bar submits that the same
standard applies when a lawyer seeks reinstatement after
engaging in conduct sufficiently serious to warrant disbar-
ment, and that applicant's past conduct meets that criterion.
Applicant does not appear to disagree with that analysis.
Accordingly, we focus our inquiry on reformation. Id.

# FACTUAL BACKGROUND

We review the record that was before the Discipli-
nary Board de novo, pursuant to BR 10.6. We begin with a
detailed consideration of applicant's personal history. Before
his application to the Bar, applicant had some history of alco-
hol and drug use. He testified that, in high school, he had
used alcohol and marijuana.1 At the age of 18, he received a
misdemeanor DUII. He continued to use alcohol and other
drugs in college, but there was no evidence that any legal
problems resulted from his drug use, and he graduated with
honors. He then attended Lewis and Clark Law School. Dur-
ing his time there, he was arrested for criminal trespass in a
Portland bar after the bartender stopped serving alcohol to
him and he refused to leave. None of those facts prevented his
admission to the Bar in 1982.2

Following his admission to the Bar, applicant
worked as an associate at a Portland law firm. He continued
to use alcohol and marijuana, but did not do so during work.
However, at a firm picnic, applicant had too much to drink
and engaged in a verbal confrontation with one of the part-
ners regarding that partner's contributions to the firm. The
firm promptly terminated applicant from his job.

In 1985, applicant moved to San Francisco to become
a stockbroker. He transferred his Bar membership to inac-
tive status shortly thereafter. He succeeded as a stockbroker,
but he also continued drinking and began using cocaine on a
regular basis. He checked into a residential treatment unit in

1 Applicant's testimony on the subject of his early drug use was inconsistent.
He insisted that he had used only alcohol and marijuana during high school, but
other comments that he made at the hearing and in his deposition suggest that he
had used other drugs, such as cocaine, during that time as well.

2 The Bar conducted no hearing at the time of applicant's admission in 1982.
The evidence discussed in this opinion was adduced on the record of the reinstate-
ment proceeding.

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1992, but relapsed soon afterwards. Applicant testified that,
around 1994, he began preparing and smoking crack cocaine,
and thereafter he "basically didn't stop" for about two years.
At some point during that time, applicant's employer, Dean
Witter Reynolds Inc. (Dean Witter), terminated his employ-
ment for job abandonment, and the Bar suspended applicant
for nonpayment of bar dues. An investigative report by the
National Association of Securities Dealers (NASD) regarding
the dismissal stated that petitioner was fired for "failure to
report to work for three consecutive days without notifying
immediate supervisor." However, petitioner stated in his
deposition and at trial that his job performance before the
termination was "excellent," and that he suspected that the
firm wanted to get rid of him without having to deal with any
kind of legal complications because they suspected that he
was "having issues with drugs."

The criminal behavior that concerned the Bar
involved three incidents between 1994 and 1996, when appli-
cant was using crack cocaine. First, the police arrested appli-
cant on charges of stalking and verbally menacing his
ex-girlfriend. Applicant pleaded guilty to a misdemeanor
charge of stalking. He attended an inpatient treatment pro-
gram at the Betty Ford Center, but relapsed shortly after-
wards. Second, applicant was arrested and charged with pos-
session of cocaine on at least one occasion. Third, applicant
attempted to steal a girlfriend's car and struck a parking lot
attendant with the car, after which the police arrested him on
multiple charges. He pleaded guilty to a felony charge of driv-
ing under the influence of intoxicants and causing bodily
injury.3 Applicant spent a short period in jail and then
attended another inpatient treatment program at Henry
Ohlhoff House (HOH), and continued to attend meetings of
Cocaine Anonymous (CA) for a period of four years. Applicant
claimed that, subsequently, he made a conscious decision to
stop attending CA due to his discomfort at spending time
with former addicts and his desire to spend more time with
his family.

There is no evidence of any further drug use by
applicant after he left HOH in 1997, but applicant testified

3 Later, the court reduced that charge to a misdemeanor and dismissed it.

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that, after his probation for the DUII ended, he began drink-
ing again. When asked why, applicant responded that it
"wasn't a conscious decision" and that he had probably "had a
moment of weakness," but he also testified that his current
use of alcohol was infrequent. The Bar presented testimony
by Dr. Walton Byrd, a specialist in addiction medicine, who
stated that former addicts who remain clean and sober for
five years have only a five percent chance of relapsing into
addiction. However, Byrd also testified that applicant was
taking a risk by continuing to drink any amount of alcohol,
and that the chance of relapse for a "social drinker" such as
applicant is closer to 95 percent. Byrd based his testimony
about applicant's risk of relapse on a review of the records of
applicant's criminal charges, a written statement of appli-
cant's personal history, a document regarding applicant's
attendance, and applicant's deposition. However, Byrd did
not personally examine or evaluate applicant at any time.
Nothing in the record suggests that applicant's use of alcohol
has caused him actual problems since 1997.

After leaving HOH, applicant filed for bankruptcy,
in which he obtained an order discharging over $236,000 in
debt, including a number of credit card bills, an arbitration
award that Dean Witter had obtained requiring the return of
a signing bonus due to his abandonment of his job, and a
judgment against him for nonpayment of rent. Applicant
subsequently worked at a variety of jobs, including securities
firms, a high-tech start-up company, and a subrogation man-
agement firm. Applicant and the Bar had some disagree-
ments regarding his employment history, and we note the
material disagreements below.

First, as proof of his good character, applicant claims
that, while working in a clerical capacity at Global Strategies
Group (Global Strategies), a brokerage firm, he acted as a
source for a federal investigation of that firm's alleged
involvement with organized crime. Applicant testified about
his involvement with the investigation and presented the tes-
timony of a friend and his brother-in-law that he had told
them about his involvement. The trial panel noted that appli-
cant did not present any evidence from the investigators or
the government to corroborate his testimony. The trial panel

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found that applicant's involvement, as noted, did not inde-
pendently establish his good moral character, but did support
his claim that he left Global Strategies due to factors that
were beyond his control. We agree.

Second, after his DUII, applicant was subject to stat-
utory disqualification from the securities industry. In 1997,
applicant persuaded Lee Epstein, Chief Executive Officer of
Money Market One Investments (Money Market One), to
sponsor his efforts to regain his securities license from
NASD. Money Market One prepared a supervisory plan that
provided that Epstein would supervise applicant "in close
physical proximity" to Epstein, and that applicant would not
interact with retail customers. Applicant stated in his depo-
sition that Epstein "went through a fair amount of trouble" to
help him recover his NASD registration. However, applicant
did not take a position with Money Market One and, thus, did
not obtain registration with NASD. He asserted that Epstein
had not offered him adequate compensation for his work and
that Epstein was "taking advantage" of him. In 1999, appli-
cant accepted a job with Advanced Precision Technologies
(APT), a high-tech start-up company.4

Third, in 2005, applicant had a series of disputes
with management at American Commercial Claims Admin-
istrators (ACCA), a subrogation management firm that he
had joined in 2002. Applicant presented a series of memo-
randa that he had sent to management in January and
March 2005, detailing possible conflicts of interest that he
believed the company should have brought to the attention of
its clients. Applicant testified that the circulation of those
memoranda led to the firing of his immediate supervisor and
to a pattern of harassment of him by her replacement, and
that he ultimately accepted a severance package in August
2005 out of fear that, ifhe stayed with the firm, he would "end
up just being fired or worse."

Shortly after leaving ACCA, applicant and his wife
filed for bankruptcy and moved to Portland. Applicant and

As we discuss below, after leaving APT, applicant went on to work for other
securities firms.

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the Bar dispute the circumstances surrounding that move
and the motives behind it. The Bar asserts that the move, the
filing for bankruptcy, and applicant's loss of his job were
"part of a coordinated plan to obtain a new home in Portland
at the expense of his past creditors." Applicant insists that fil-
ing for bankruptcy was "the most sensible legal alternative"
given his situation. As the trial panel noted, the testimony
surrounding those events was "confusing and prolonged, but
it is important to try and establish the timeline of events and
then consider each side's interpretation of what the evidence
supports."

Applicant and his wife testified that, despite a com-
bined income of over $100,000, they were having difficulty
providing for themselves and their two small children due to
high living expenses in San Francisco. They accumulated a
considerable credit card debt and had outstanding federal
and state tax liens. Applicant and his wife testified that their
debt reflected everyday expenses, particularly child care, and
that, in 2005, they began to consider moving to another city
with less expensive housing and better public schools. Appli-
cant and his wife decided to move to Portland, and traveled
there at least twice prior to July 2005 to look for work.

In late July and early August 2005, applicant and
his wife obtained approval for two home loans of approxi-
mately $80,000 and $330,000. The applications were pre-
pared by a mortgage broker named Thomas Weed. Applicant
testified that, when he signed the applications for the loans,
the sections listing liabilities were blank, that his wife, not
he, primarily had arranged the loans, and he "probably
pretty much just signed it at * * * [his wife's] request and
direction." Weed testified that it was his normal practice to
instruct borrowers to leave those sections blank and fill them
out himself based on credit reports. Applicant also had failed
to disclose his existing federal tax liens on the application,
but Weed testified that he believed that applicant's wife had
disclosed the existence of those liens, and that he had not
included them on the application because the lender did not
require information about that kind of debt. We credit Weed's
testimony. The sale of the house closed in August.

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Meanwhile, as mentioned earlier, applicant was
involved in escalating disputes with his employer, ACCA,
that led to his acceptance of a severance package. Applicant's
wife testified that she already had been taking medication for
anxiety and depression at that point and, when applicant's
severance payment turned out to be far lower than she had
expected, she suffered a nervous breakdown and was unable
to start work in Portland. Applicant's wife applied for disabil-
ity payments in September 2005, listing her mother's
address in California as her address. She continued to receive
payments at that address until September 2006, nearly a
year after she had moved to Oregon. When asked why she
had continued to use the California address, applicant's wife
testified that she had been following the advice of her doctor.
Likewise, applicant applied for unemployment insurance at
the end of August 2005, listing his mother's address in
California as his address. Applicant testified that he had
done that because he did not know where he would be living,
even though he and his wife had already purchased the house
in Oregon.

At the end of September 2005, applicant and his wife
filed for bankruptcy and ultimately obtained an order dis-
charging approximately $89,000 of credit card debt and
$6,000 of past due rent on their California apartment. The
address of applicant's apartment was the only address that
applicant provided on the petition, but applicant and his wife
did list their recently purchased Oregon home among their
real property. Applicant and his wife testified that they had
ceased paying rent on their apartment due to a dispute with
their landlord. Specifically, they claimed that one of the ten-
ants was disrupting their right of quiet enjoyment and the
landlord had refused to take any action in response. The trial
panel noted that the owed rent was for part of August and
September, after applicant and his wife had closed their pur-
chase of the house in Portland. Applicant and his wife moved
to Oregon shortly afterwards. Since then, applicant's wife
has obtained employment as a real estate agent, while appli-
cant works as a realtor and cares for their children.

As evidence of his good character, applicant offered
the testimony of William Karger, a friend of his from high
school; Douglas Moore, his brother-in-law; and Carolyn

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Gunter, his wife. Their testimony centered primarily on the
fact that applicant generally had changed for the better since
he ended his drug use, and had become a responsible and lov-
ing husband and father. To the same effect, applicant offered
letters from Suzette Callejo, a friend of his wife's, and Claire
Twomey, their former nanny. Applicant also offered a letter
from Raymond Montgomery, a coworker of applicant's from
ACCA, and notes made from phone conversations between
the Bar and other former coworkers at ACCA, as evidence of
his ethics on the job.

# SUBSTANCE ABUSE ISSUES

With respect to his history of drug and alcohol abuse,
applicant must demonstrate "adequate resolution of any pre-
vious substance abuse problem[.]" Griffith, 323 Or at 107 (cit-
ing In re Rowell, 305 Or 584, 591, 754 P2d 905 (1988). The
Bar urges that, if applicant fails to demonstrate "clear
insight" into the reasons for his prior drug abuse or the dan-
ger that he will relapse into such behavior, then that failure
raises "substantial doubts" as to his good moral character. In
re Covington, 334 Or 376, 386, 50 P3d 233 (2002).

Applicant argues that he has demonstrated ade-
quate resolution of his previous substance abuse problems
because he has not used drugs or had problems with law
enforcement since completing treatment at HOH in 1997.
Applicant also insists that his personal and professional
achievements since that time demonstrate that he has
regained his good moral character. Finally, applicant asserts
that this court's decisions in Rowell, Covington, and In re
Beers, 339 Or 215, 118 P3d 784 (2005), warrant his reinstate-
ment.

The Bar responds that applicant is at risk for future
substance abuse due to his continued social drinking. The
Bar cites Byrd's testimony that former addicts who continue
to drink in moderation have a 95 percent chance of relapsing
into abuse. The Bar also states that, while applicant fre-
quently suggested that he understood the "issues" underly-
ing his problems with drugs and alcohol, he never identified
what those issues were or how he had dealt with them.

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We first examine the cases that applicant cites. In
Rowell, the applicant had smoked marijuana since his teen-
age years, and sold marijuana and amphetamines as a col-
lege student. 305 Or at 587. Rowell had been arrested and
charged with several offenses including possession of mari-
juana with intent to sell and possession of cocaine, and had
violated the conditions of his probation more than once. He
also had a history of alcohol abuse. Id. at 587-88. He eventu-
ally entered a rehabilitation program and stopped using
cocaine, but continued to drink socially, and continued to
smoke marijuana until two years before his application to the
Bar, which was four years before the court issued its decision.
Id. at 588-89. However, Rowell also presented evidence of
positive changes in his life, including character references
from people who had known applicant long enough to observe
a significant change in his character. Id. at 590. This court
found that the "slow, steady change in applicant's activities"
showed a "maturation process" that had started years before
and had steadily continued:

"In applicant's case, we find that four years without engag-
ing in the activities that evidenced his former unsatisfac-
tory character are sufficient to indicate that he has
changed. His personal, academic, professional and other
achievements in the last four years all support the conclu-
sion that applicant now is of good moral character."

Id. at 592. We allowed Rowell's application for admission. Id.
at 593.

In Covington, the applicant had begun drinking alco-
hol and using marijuana at the age of 13, continued that
behavior for several years, and was convicted of several mis-
demeanors due to behavior arising from his drinking and
drug use. 334 Or at 378. Covington began attending Alcohol-
ics Anonymous (AA) meetings and remained sober for a year,
but eventually relapsed; that pattern of recovery and relapse
recurred over several years. Id. at 378-79. Eventually, during
law school, Covington "hit bottom" and was using heroin,
cocaine, and methamphetamine. Id. at 379. Covington began
attending meetings of the Oregon Attorney Assistance Pro-
gram (OAAP) and AA, and remained sober from that time
forward. Id. However, the Bar presented testimony by a psy-
chologist, who had evaluated Covington at the Bar's request,

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that Covington had a "defensive style" and "tendency to
rationalize or externalize events," both of which increased his
risk of relapse. Id. at 386. This court noted that Covington
lacked "clear insight" into the reasons for his drug abuse and
the danger that he could relapse, that his most recent drug
use was "the most serious of his entire history," and that the
three years between his most recent drug use and the court's
decision were not "sufficient to overcome the concerns that
[his] psychological profile and history of past relapses have
generated." Id. at 386-87. We denied the application for
admission. Id. at 387.

In Beers, the applicant had a long history of using
drugs, including marijuana and cocaine, as well as convic-
tions for felony possession and various misdemeanors related
to his use of drugs. 339 Or at 217. Eventually, Beers was con-
victed of conspiracy to distribute cocaine and sentenced to
prison. Id. at 218. Beers stopped using drugs and began to
turn his life around while in prison. On release, he success-
fully held a variety of jobs and completed law school. His last
use of drugs had occurred over a decade before the court's
decision. Id. at 218-20. At Beers's character and fitness hear-
ing, Dr. Blakeslee, a psychologist who had evaluated Beers at
the Bar's request, testified that Beers had the moral charac-
ter and fitness to be a lawyer. Blakeslee was aware that
Beers continued to drink alcohol in moderation, and that
Beers had had one alcohol-related legal problem during law
school, when he jaywalked in front of a police officer while
intoxicated. Nonetheless, Blakeslee testified that Beers did
not suffer any addiction that would compromise his abilities
as a lawyer, and that Beers's likelihood of a relapse was mar-
ginal based on Beers's prolonged sobriety, stable employ-
ment, and marriage. Id. at 222-23. This court ultimately
allowed Beers's application, noting that there was "no basis
on this record" for questioning Blakeslee's conclusions. Id. at
226.

We announced in Rowell that:

"The length of time without evidence of unsatisfactory char-
acter needed to permit the conclusion that the actor is now
of good moral character varies with, among other things,
the person's age, the length of time that the unsatisfactory

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characteristics were evident and the nature of the unac-
ceptable behavior."

305 Or at 592. Applicant in this case has a long history of
drug and alcohol abuse, arguably lasting from his teenage
years until his work as a stockbroker during the 1990s, when
he was using crack cocaine. The nature and extent of appli-
cant's abuse were serious. He has been arrested for DUII,
criminal trespass, stalking, and vehicular assault. His alco-
hol and drug abuse have resulted in his termination from at
least one job and probably two. Applicant's history of abuse is
at least as serious, if not more, as that of the applicants in
Rowell, Covington, and Beers. However, applicant also has
been free of drug abuse for over a decade, and apparently has
remained drug free during stressful situations, including his
dispute with ACCA, his bankruptcy, his wife's nervous
breakdown, and his move to Portland. Thus, applicant has
been free of drugs for over twice as long as the applicant in
Rowell, and for nearly as long as the applicant in Beers.

The Bar nonetheless argues that applicant's occa-
sional alcohol consumption may cause problems in the
future. On similar facts, this court has rejected a similar
argument in both Rowell, 305 Or at 589, and Beers, 339 Or at
226. However, the Bar relies on the testimony of Byrd that
applicant's history "demonstrates that he suffers from the
disease of addiction" and that, because applicant suffers from
that disease, his social drinking puts him at a 95 percent
chance of relapse. Byrd testified that he based his testimony
on his review of applicant's criminal record, the records of
applicant's treatment at HOH, and applicant's deposition
before the Bar; however, as noted, Byrd did not interview or
meet with applicant at any time.

The evidence about whether applicant has overcome
his addiction to drugs is undermined at least to some degree
by Byrd's testimony suggesting that there is a very high like-
lihood of a relapse into addiction due to applicant's continued
consumption of alcohol. In our view, the evidence regarding
applicant's moral character in that regard is in conflict. We
cannot find that his drug and alcohol habits presently affect

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his ability to practice law and constitute a danger to the pub-
lic. We also cannot find affirmatively that applicant has over-
come his drug and alcohol habits so that he is not a danger to
the public. Applicant bears the burden of proof on that ques-
tion and must carry that burden by clear and convincing evi-
dence. We find that applicant has failed to carry his burden of
proof.

# ISSUES REGARDING EMPLOYMENT HISTORY AND FINANCIAL DEALINGS

Some aspects of applicant's employment history give
us greater cause for concern than his past substance abuse.
First, there is his termination from Dean Witter. The record
shows that, after terminating applicant's employment, Dean
Witter sought an arbitration award against applicant due to
his retention of a substantial signing bonus. Dean Witter won
an award of over $100,000 against applicant, which it later
reduced to a judgment. Applicant discharged that obligation
when he filed for bankruptcy in 1997. We have found in the
past that an applicant's lack of interest in making restitution
to those harmed by his past misconduct weighs against his
claim for reinstatement. In re Graham, 299 Or 511, 520-21,
703 P2d 970 (1985). Here, when the trial panel asked appli-
cant whether he had attempted to make amends with Dean
Witter and his other past creditors, applicant responded that
he "didn't give that a lot of thought," but acknowledged that
his behavior was selfish.

Second, there is the matter of applicant's relation-
ship with Money Market One. As mentioned above, applicant
was subject to a statutory disqualification by the NASD due
to his 1996 conviction for driving under the influence of intox-
icants and causing bodily injury. The record shows that, in
May 1997, Money Market One applied to NASD to employ
applicant as a registered representative selling money mar-
ket investments and proposed to provide a particular super-
visory plan for applicant. Applicant never went to work for
Money Market One, in part because he felt that he was being
taken advantage of. Applicant acknowledged in his deposi-
tion that Epstein of Money Market One "went through a fair
amount of trouble" to help him regain his license and "was

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pretty pissed off about the whole thing." Applicant insisted
that he did nothing wrong. However, in light of Epstein's
reaction, this event demonstrates that applicant had a diffi-
cult relationship with that business entity.

None of the issues raised by applicant's employment
history are dispositive of his application, but they do under-
mine his claim to good moral character to some extent. The
trial panel interpreted applicant's history negatively as
showing "evidence of situational ethics." We agree.

We have often considered evidence of an applicant's
handling of financial affairs in assessing whether he or she is
of good moral character. See In re Taylor, 293 Or 285, 293,
647 P2d 462 (1982) (listing cases). Applicants are "expected
to honor scrupulously all financial obligations." In re Scallon,
327 Or 32, 39, 956 P2d 982 (1998). In the cases of applicants
previously disbarred for misconduct who are "still in finan-
cial trouble," we have expressed concern at the "danger that
[the] continuing pressure of financial need may again lead
the [applicant] to violate the law and his professional trust."
In re Koken, 214 Or 357, 362, 329 P2d 894 (1958). In this case,
applicant's personal financial dealings gave the Bar cause for
concern. The trial panel was primarily troubled by the appli-
cant's recent applications for home loans, applications for
unemployment benefits, and bankruptcy filings. We deal
with each of those in turn.

Applicant signed home loan applications that left
the liability information blank, and relied on the mortgage
broker to fill in that section with information from the appli-
cant's credit report. The Bar insists that this "hardly reflects
the level of responsibility expected of lawyers when it comes
to reading and signing important legal documents." We dis-
agree. The mortgage broker testified credibly that, consistent
with his normal practice, he had instructed applicant and his
wife to leave the liability information blank. Applicant's inat-
tention to the significance of the blanks was somewhat irreg-
ular and less than commendable, but we are not convinced
that his failure to second-guess his mortgage broker raises
doubts as to his good moral character.

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The Bar also argues that the loan application failed
to disclose the tax debt that applicant and his wife were pay-
ing off at the time, that a question on the application "clearly
called for such disclosure," and that applicant signed the loan
application solely on the strength of his wife's assurance that
the mortgage broker had stated that the ultimate lender
would not require that information. Again, the Bar argues
that that behavior reflects a lack of responsibility on appli-
cant's part. The trial panel apparently agreed:

"[T]he facts are that even by his testimony he signed blank
forms ** * , and too readily relied on the advice and inter-
pretation of others such as the mortgage broker or his wife.
The role of the attorney is to take responsibility for the legal
meaning of what he is signing."

The trial panel apparently believed that applicant's respon-
sibilities as an attorney required him to second-guess and
refuse to cooperate with both his wife and the mortgage bro-
ker. At least in these circumstances, we disagree. The text of
the loan application arguably called for applicant to disclose
existing tax debt, but it was not clear. The mortgage broker
testified credibly that applicant's wife had disclosed the exis-
tence of a tax lien to him, and testified that he had told appli-
cant's wife that the lender did not require that information.
We do not believe that applicant acted unreasonably in rely-
ing on the mortgage broker's statements. Nor are we pre-
pared to announce that, as a rule, a lawyer must insist on
including information on a loan application when a mortgage
broker states that such information is not required. We reject
the Bar's argument that applicant's behavior with regard to
the loan applications reflects badly on his character.

The Bar also raised the question of applicant's appli-
cation for unemployment benefits. The trial panel noted that
applicant gave his mother's address in California on his
application for unemployment benefits, despite the fact that
he had already closed his purchase of the house in Oregon.
The trial panel, however, did not find that that action indi-
cated some kind of fraud on applicant's part. In our view, the
evidence on that question is not conclusive; it neither helps
nor hurts applicant's case and we do not attach great signifi-
cance to it.

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We are more concerned by applicant's bankruptcies.
The fact that applicant filed for bankruptcy, standing alone,
is not a factor that we consider in determining whether he
has good moral character. Taylor, 293 Or at 293. However,
the bankruptcy statutes do not prevent us from examining
the circumstances surrounding the bankruptcies, "as these
circumstances illustrate an applicant's judgment in handling
serious financial obligations." Id. A bankruptcy does not
reflect adversely on an applicant's character if it is compelled
by an "extraordinary hardship," such as "an unusual misfor-
tune, a catastrophe, an [overriding] financial obligation, or
unavoidable unemployment." Id. at 294 (quoting In re
Gahan, 279 NW2d 826, 831 (Minn 1979)). On the other hand,
we may find that applicant lacks good moral character if the
circumstances of the bankruptcy "show a selfish exercise of
legal rights and a disregard of moral responsibilities." Id. We
have held, however, that for an applicant seeking admission
to the bar, a past bankruptcy does not disqualify the appli-
cant per se. Scallon, 327 Or at 39.

Scallon is instructive on that point. In Scallon, sev-
eral years before applying for admission to the Oregon State
Bar, the applicant had filed for bankruptcy after several of
his creditors on his student loans sued him or threatened to
sue. Id. at 35. By Scallon's own admission, he had defaulted
on those loans because of poor handling of his financial
affairs. Id. at 35-36. This court held, however, that the bank-
ruptcy was no reason to disqualify Scallon from admission:

"[W]hen applicant could not manage his affairs success-
fully, and when his failure led to several legal actions being
filed or threatened against him, he was as entitled as any
other debtor to seek protection from his creditors in bank-
ruptcy. * * * We decline to hold that a bankruptcy in the
history of an applicant for admission to the Bar per se is dis-
qualifying, even if it appears that the financial difficulties
that led to the bankruptcy were the fault of the applicant."

Id. at 39. After the bankruptcy, however, Scallon continued
to experience financial difficulties due to his mishandling of
his money, and fell behind on his tax payments. That did not
disqualify him, either, because he had always filed returns
and acknowledged the taxes that he owed, and for the most
part, he had paid them. Id. at 41. Additional evidence showed

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that, while this court was holding Scallon's case under
advisement, he satisfied all of his delinquent tax obligations.
Id. at 38. This court held that the record contained sufficient
evidence of financial responsibility to justify Scallon's
admission:

"It *** appears to us that applicant understands and
appreciates the reasons that led to his past financial diffi-
culties, is determined to avoid their repetition, and is capa-
ble of carrying out that determination. In that regard,
applicant is willing to accept the recommendation * * * that
he be admitted conditionally."

Id. at 42. Accordingly, we admitted Scallon subject to several
conditions. Id.

Applicant's situation in the 1997 bankruptcy is not
identical to Scallon's. For one thing, Scallon's bankruptcy
was precipitated purely by his poor money management;
applicant's was prompted by debt that he had accumulated
largely due to his drug addiction. For another, the debts
discharged in the bankruptcy proceedings were different:
Scallon's only significant debt was about $27,000 in student
loans, whereas applicant discharged over $200,000 of debt
including consumer debt, a judgment for unpaid rent, and
the aforementioned judgment obtained against him by Dean
Witter. However, both Scallon and applicant "could not man-
age their affairs successfully," and that failure "led to several
legal actions being filed or threatened" against them.5 Both
applicants were entitled to seek protection from their credi-
tors in bankruptcy.

We are more concerned with applicant's behavior
after the 1997 bankruptcy. Scallon accumulated tax debt
after his bankruptcy due to his irresponsible financial behav-
ior, but he paid off all that debt. Id. at 36-38. Applicant, like
Scallon, accumulated federal and state tax debt between
2002 and 2005, as well as approximately $95,000 of con-
sumer debt. Applicant sought to then discharge his consumer

5 For example, by the time applicant filed for bankruptcy, Dean Witter had
already obtained its arbitration award against him and reduced that award to a
judgment.

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debt through yet another bankruptcy proceeding in 2005.6
There is no evidence that applicant's creditors had filed or
threatened suit against him. The timing of the bankruptcy
petition was particularly troubling: applicant filed after tak-
ing on over $400,000 of additional debt for a new house. The
fact that applicant sought bankruptcy protection twice in
eight years, and that he bought a house less than three
months before filing the second time, suggests that, unlike
Scallon, applicant does not appreciate the reasons for his past
financial difficulties and is not particularly determined to
avoid their repetition.

Applicant nevertheless insists that the debt that he
and his wife discharged in bankruptcy was primarily due to
"unforeseen expenses," particularly child care, and that he
and his wife purchased a house in Portland to get out of debt
and begin building up equity. Even if we accept those claims
at face value, they do not establish that applicant was com-
pelled to file for bankruptcy by any extraordinary hardship.
The expenses that come with raising a family generally do
not qualify as an unusual misfortune. They are a necessary
burden that everyone who chooses to raise a family knows
that they must bear. The fact that applicant discharged those
expenses in bankruptcy after taking on a much larger debt
for a new home suggests that applicant viewed the bank-
ruptcy proceeding as a convenient means of escaping the con-
sequences of his own inability to manage finances, rather
than as a remedy of last resort for unforeseen expenses.

Applicant also asserts that his decision to file for
bankruptcy was motivated by the fact that he and his wife
had both lost their jobs. As stated above, a bankruptcy will
not reflect adversely on applicant's character if it is moti-
vated by an extraordinary hardship, such as unforeseen
unemployment. We are not convinced, however, that this
unemployment was entirely unforeseen. The internal mem-
oranda that applicant submitted as exhibits indicate that he
was having difficulties with his supervisor at ACCA as early
as April, and applicant's testimony indicated that those dif-
ficulties had become severe by late July or early August,

" Applicant testified that he is in the process of paying his tax debt.

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when he and his wife obtained the loan. Applicant's testi-
mony also indicates that, when he and his wife visited
Portland in June and July, he was already looking for a new
job. In other words, applicant and his wife took on over
$400,000 of debt, over and above their existing consumer and
tax debt, at a time when applicant should have known that
his job was in jeopardy. That action suggests that applicant's
sense of financial responsibility was not much greater in
2005 than it was in 1997.

Applicant's character references also donothelp him
here. Applicant's friend, Karger, and brother-in-law, Moore,
both testified that applicant had become more responsible as
a husband and father, but cross-examination revealed that
neither witness was aware of the details of applicant's finan-
cial situation. Much of the character testimony that applicant
presented describes him as "responsible," but does not sup-
port applicant's specific claim that he has become more fis-
cally responsible since the 1997 bankruptcy. Even ifit did, we
would be inclined to give more evidentiary weight to the
bankruptcies themselves and the circumstances surrounding
them, as we discussed above.

Applicant has filed for bankruptcy twice in a span of
eight years, discharging similar consumer debts in the proc-
ess and purchasing a new house shortly before the later fil-
ing. The circumstances surrounding the bankruptcy raise
doubts as to the applicant's moral character. We do not nec-
essarily agree with the Bar's contention that those events
indicate "a coordinated plan to obtain a new home in
Portland at the expense of his past creditors." However, we
are left with a substantial doubt whether applicant is pre-
pared to honor his financial obligations in the manner
expected of lawyers admitted to the Bar.

# FINDINGS AND CONCLUSION

We find that applicant has failed to prove by clear
and convincing evidence that he has good moral character
and general fitness to practice law and that the resumption of
the practice of law in this state by him will not be detrimental

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to the administration of justice or the public interest. There-
fore, under BR 8.1, we deny his application for reinstatement
to the Oregon State Bar.

Reinstatement denied.