State ex rel. Counsel for Dis. v. Orr

State of NebraSka ex rel . C ouNSel for D iSCipliNe
of the NebraSka Supreme C ourt, relator , v.
Jeffrey l. orr , reSpoNDeNt.
759 N.W.2d 702
Filed January 30, 2009. 	No. S-07-911.
1. Disciplinary Proceedings. A proceeding to discipline an attorney is a trial de
novo on the record.
2. Disciplinary Proceedings: Proof. To sustain a charge in a disciplinary proceed-
ing against an attorney, a charge must be supported by clear and convincing
evidence.
3. Disciplinary Proceedings. Violation of a disciplinary rule concerning the prac-
tice of law is a ground for discipline.
4. Disciplinary Proceedings: Appeal and Error. When no exceptions to the refer-
ee’s findings of fact are filed by either party in an attorney discipline proceeding,
the Nebraska Supreme Court may, in its discretion, consider the referee’s findings
final and conclusive.
5. Disciplinary Proceedings. The basic issues in a disciplinary proceeding against
an attorney are whether discipline should be imposed and, if so, the type of dis-
cipline appropriate under the circumstances.
6. ____. Each attorney discipline case must be evaluated individually in light of its
particular facts and circumstances.
7. ____. For purposes of determining the proper discipline of an attorney, the
Nebraska Supreme Court will consider the attorney’s acts both underlying the
alleged misconduct and throughout the proceeding.
8. ____. The determination of an appropriate penalty to be imposed on an attorney
in a disciplinary proceeding requires the consideration of any aggravating or
mitigating factors.
9. ____. The purpose of a disciplinary proceeding against an attorney is not so much
to punish the attorney as it is to determine whether in the public interest an attor-
ney should be permitted to practice.
10. Rules of the Supreme Court: Attorneys at Law. The Nebraska Rules of
Professional Conduct are designed to provide guidance to lawyers and to provide
a structure for regulating conduct through disciplinary agencies. They are not
designed to be a basis for civil liability.
11. Attorneys at Law. It is inexcusable for an attorney to attempt any legal proce-
dure without ascertaining the law governing that procedure.
Original action. Judgment of public reprimand.
Kent 	L. 	Frobish, Assistant 	Counsel 	for 	Discipline, 	for
relator.
Mark 	A. 	Christensen 	and 	Brandon 	K. 	Dickerson, 	of
Cline, Williams, Wright, Johnson & Oldfather, L.L.P., for
respondent.
102 	277 NEBRASKA REPORTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:51 AM CST

heaviCaN, 	C.J., 	G errarD, 	StephaN, 	mCC ormaCk , 	and
miller-lermaN, JJ.
per C uriam.
INTRODUCTION
Jeffrey L. Orr, respondent in this attorney disciplinary pro-
ceeding, was found to have violated his oath of office as an
attorney and to have violated disciplinary rules requiring an
attorney to competently represent a client. The only issue pre-
sented is the appropriate sanction to be imposed.
FACTS
The underlying conduct in this case involves Orr’s repre-
sentation of Steve Sickler and Cathy Mettenbrink in connec-
tion with the franchising of a coffee shop business. Sickler
and Mettenbrink had opened their first coffee shop together,
Barista’s Daily Grind (Barista’s), in Kearney, Nebraska, in
December 2001. In September 2002, Sickler met with Orr and
asked whether Orr could help Sickler and Mettenbrink fran-
chise their business.
Orr was engaged in private practice in Kearney, and his
experience with franchising was limited. Orr testified that he
had read franchise agreements on behalf of clients who either
were or were interested in becoming franchisees, but had never
represented a franchisor. Orr’s role in those cases had been
to generally advise clients as to the rights of a franchisor and
duties of a franchisee under the agreement. Orr’s experience
had required him to review franchise agreements and disclo-
sure statements, but he had not reviewed state or federal law
governing franchising.
In response to Sickler’s inquiry, Orr stated that he had
recently reviewed a franchisee’s agreement and that he believed
he could “handle” the franchising of Barista’s. Orr told Sickler
and Mettenbrink that he would begin working on a franchise
agreement, and he completed the first draft in October 2002.
Orr stated that he had recently reviewed a restaurant franchise
agreement and then utilized that document when drafting the
Barista’s document. Although he had never before drafted a
franchise agreement, Orr believed it was simply “a matter of
contract drafting,” which he believed he was competent to do.
STATE Ex REL. COUNSEL FOR DIS. v. ORR 	103
Cite as 277 Neb. 102

Orr contacted an attorney in Washington, D.C., for assistance
with the trademark and copyright portions of franchising,
and that attorney warned Orr that franchising was a special-
ized field.
In December 2002, Orr drafted a disclosure statement. Orr
used the disclosure statement he had recently reviewed on
behalf of the previously mentioned franchisee, as well as “FTC
documents,” to finish the statement in January 2003. Orr’s
understanding was that a disclosure statement was required by
the Federal Trade Commission (FTC) in order to inform the
franchisee of the more important terms and conditions of the
franchise agreement.
From 2003 to 2006, Barista’s sold 21 franchises. In July
2004, Sickler was contacted by a banker in Colorado, inquir-
ing on behalf of a prospective franchisee. The banker requested
the “UFOC” of Barista’s, and, unaware of what a UFOC was,
Sickler referred the banker to Orr. Orr determined that the
then-current disclosure statement of Barista’s was “compliant
and valid” and could be used anywhere. Sickler testified that
Orr told him that the UFOC was a requirement of federal law
which Barista’s was “probably going to have to get” if it was
“going to be selling franchises out of state.”
In August 2004, Orr revised the franchise agreement and dis-
closure statement at Sickler’s request due to problems Barista’s
was having with a franchisee in Iowa. The Iowa franchisee
had been provided with copies of the initial franchise agree-
ment and disclosure statement. However, in February 2004,
the Iowa franchisee’s attorney sent a letter to Sickler sug-
gesting that Barista’s had not complied with federal disclo-
sure requirements.
Sickler and Orr dispute at what point Orr was provided with
a copy of that letter. But despite being aware that Barista’s was
working with prospective franchisees in Iowa and Colorado,
Orr did not advise Sickler to seek input from local counsel
in those states. And Sickler testified that the revised franchise
agreement and disclosure statement were also provided to pro-
spective franchisees in Kansas.
In October 2004, due to an unrelated dispute, Sickler and
Mettenbrink sued the Colorado franchisees to terminate the
104 	277 NEBRASKA REPORTS

franchises. A counterclaim was filed alleging deceptive and
unfair trade practices, violation of FTC rules, and viola-
tion of Nebraska’s Seller-Assisted Marketing Plan Act.1 Orr’s
associate, Bradley Holbrook, became lead counsel for this
litigation, although Orr remained primarily responsible for
the representation of Barista’s. Holbrook researched Nebraska
law and discussed the case with Orr, including the fact that
the Colorado franchisees were challenging the disclosure
statement.
Disagreements were also ongoing with the Iowa franchisee,
who eventually demanded rescission of the franchise agreement
based on Barista’s failure to comply with federal and Iowa dis-
closure laws. The Iowa franchisee’s attorney demanded that
Sickler return the franchise fee and pay attorney fees and other
damages, and informed Sickler that he and Mettenbrink could
be held personally liable under certain provisions of Iowa law.
Sickler then informed Orr of the problem. Orr advised Sickler
that the firm was going to contact an Omaha, Nebraska, attor-
ney for a second opinion. Holbrook then contacted the Omaha
attorney for a second opinion, which was provided in a June
2005 memorandum. It is not clear whether a copy of the memo-
randum was provided to Sickler and Mettenbrink, but they
were ultimately informed of its conclusions and advised by Orr
not to sell any more franchises without considerable changes to
the disclosure statement.
A third version of the disclosure statement was created and
used. Sickler stated he was told that the disclosure statement
was now “compliant with every state,” but Orr stated he also
told Sickler that for out-of-state franchises, Sickler should
get advice from local counsel. Orr stated that before the third
revision of the disclosure statement, he had been under the
impression that FTC requirements overrode state law. But
he advised Sickler to obtain local counsel because he had
become aware that state law could be more stringent than fed-
eral requirements.
The Iowa franchisee filed suit in Iowa and, according to
Sickler, 	obtained 	personal 	judgments 	against 	Sickler 	and
1 See Neb. Rev. Stat. §§ 59-1701 to 59-1762 (Reissue 2004).
STATE Ex REL. COUNSEL FOR DIS. v. ORR 	105
Cite as 277 Neb. 102

Mettenbrink. Barista’s sold seven more franchises using the
third disclosure statement, but was notified by the FTC in
November 2005 that Barista’s was under investigation. Holbrook
contacted an attorney specializing in franchise law regarding
the FTC investigation. The specializing attorney reviewed the
franchise documents of Barista’s and concluded those docu-
ments—including the third disclosure statement—did not com-
ply with FTC rules. The attorney characterized the deficiencies
as “major.”
Recognizing that it now had a conflict of interest, Orr’s law
firm withdrew from representing Sickler and Mettenbrink. The
attorney specializing in franchising law continued to represent
Sickler and Mettenbrink, and Barista’s, with respect to the FTC
issues. The FTC civil penalty has been suspended indefinitely,
and will not have to be paid so long as the disclosures of
Barista’s are truthful. By April 2006, however, the franchising
of Barista’s had “virtually been shut down.” Orr’s law firm has
paid for the revision of the franchising documents, as well as
the research and second opinion obtained regarding the original
franchising document.
Formal charges were filed against Orr on August 24, 2007,
alleging that Orr had violated several sections of the Nebraska
Rules of Professional Conduct and several sections of the now-
superseded Code of Professional Responsibility. This court
appointed a referee, and after a hearing, the referee found that
Orr had violated his oath of office as an attorney. The referee
also found that Orr had violated Canon 1, DR 1-102(A)(1), and
Canon 6, DR 6-101(A)(1) and (2), of the Code of Professional
Responsibility, as well as §§ 1.1 and 8.4(a) of the Nebraska
Rules of Professional Conduct (now codified at Neb. Ct. R. of
Prof. Cond. §§ 3-501.1 and 3-508.4(a)). DR 1-102(A)(1) and
§ 3-508.4(a) prohibit an attorney from violating the relevant
rules of conduct.
Section 3-501.1 provides that “[a] lawyer shall provide
competent representation to a client. Competent representation
requires the legal knowledge, skill, thoroughness, preparation
and judgment reasonably necessary for the representation.”
Similarly, DR 6-101 provides that a lawyer shall not handle a
legal matter “which the lawyer knows or should know that he
106 	277 NEBRASKA REPORTS

or she is not competent to handle, without associating with a
lawyer who is competent to handle it,” or “without preparation
adequate in the circumstances.” The referee recommended that
a public reprimand be issued.
Orr did not take exception to the referee’s report. This court
granted the Counsel for Discipline’s motion for judgment on
the pleadings, but ordered briefing and argument on the appro-
priate sanction to be imposed.
ANALYSIS
As an initial matter, we first note that because some of
the conduct at issue occurred prior to September 1, 2005,
it is governed by the now-superseded Code of Professional
Responsibility; other conduct occurred on or after September
1, the effective date of the Nebraska Rules of Professional
Conduct, and is therefore governed by those rules.2
[1-3] A proceeding to discipline an attorney is a trial de novo
on the record.3 To sustain a charge in a disciplinary proceeding
against an attorney, a charge must be supported by clear and
convincing evidence.4 Violation of a disciplinary rule concern-
ing the practice of law is a ground for discipline.5
[4] As noted, no exceptions were filed in response to the
referee’s report. When no exceptions to the referee’s findings
of fact are filed by either party in an attorney discipline pro-
ceeding, this court may, in its discretion, consider the referee’s
findings final and conclusive.6 We consider the finding of facts
in the referee’s report to be final and conclusive, and based
on those findings, we conclude that the formal charges are
supported by clear and convincing evidence. Specifically, we
conclude that Orr violated his oath of office as an attorney,7
2 See, e.g., State ex rel. Counsel for Dis. v. Switzer, 275 Neb. 881, 750
N.W.2d 681 (2008).
3 State ex rel. Counsel for Dis. v. Zendejas, 274 Neb. 829, 743 N.W.2d 765
(2008).
4 Id.
5 Id.
6 Id.
7 Neb. Rev. Stat. § 7-104 (Reissue 2007).
STATE Ex REL. COUNSEL FOR DIS. v. ORR 	107
Cite as 277 Neb. 102

DR 1-102(A)(1) and DR 6-101(A)(1) and (2) of the Code of
Professional Responsibility, and §§ 3-501.1 and 3-508.4(a) of
the Nebraska Rules of Professional Conduct. Accordingly, we
grant in part the Counsel for Discipline’s motion for judgment
on the pleadings.
[5] The basic issues in a disciplinary proceeding against an
attorney are whether discipline should be imposed and, if so,
the type of discipline appropriate under the circumstances.8
Neb. Ct. R. § 3-304 states that the following may be considered
as discipline for attorney misconduct:
(A) Misconduct shall be grounds for:
(1) Disbarment by the Court; or
(2) Suspension by the Court; or
(3) Probation by the Court in lieu of or subsequent to
suspension, on such terms as the Court may designate; or
(4) Censure and reprimand by the Court[.]
. . . .
(B) The Court may, in its discretion, impose one or
more of the disciplinary sanctions set forth above.
[6-8] Each attorney discipline case must be evaluated indi-
vidually in light of its particular facts and circumstances.9 This
court will consider the attorney’s acts both underlying the
alleged misconduct and throughout the proceeding.10 The deter-
mination of an appropriate penalty to be imposed also requires
the consideration of any aggravating or mitigating factors.11
[9,10] We have previously stated that “‘the purpose of a
disciplinary proceeding against an attorney is not so much to
punish the attorney as it is to determine whether in the public
interest an attorney should be permitted to practice.’”12 We also
note that while Orr’s conduct caused financial consequences
to his clients, the Nebraska Rules of Professional Conduct
8 State ex rel. Counsel for Dis. v. Petersen, 272 Neb. 975, 725 N.W.2d 845
(2007).
9 Zendejas, supra note 3.
10 See id.
11 Id.
12 State ex rel. NSBA v. Hogan, 272 Neb. 19, 27, 717 N.W.2d 470, 477
(2006).
108 	277 NEBRASKA REPORTS

“are designed to provide guidance to lawyers and to provide a
structure for regulating conduct through disciplinary agencies.
They are not designed to be a basis for civil liability.”13 For
those reasons, we accept the referee’s recommendation of a
public reprimand.
The referee explicitly found the existence of a number of
mitigating factors, including the fact that Orr had practiced
law for 40 years and has had no prior complaints or penalties.
The referee noted that a number of clients, business and com-
munity leaders, and members of the bar sent letters of support
and recommendation. Orr also has served the legal community
and the community at large. And while the conduct occurred
over a long period of time, only one client was involved, and
Orr’s misconduct was an isolated occurrence rather than part of
a recurring pattern.
Although the Counsel for Discipline argued that the appro-
priate sanction in this case was a 60-day suspension, Orr
failed to file exceptions to the referee’s findings of fact. The
referee found Orr negligently determined that he was com-
petent and did not knowingly engage in the practice of law
in which he was not competent. We have found no support
in the case law for a suspension for incompetence without
other misconduct, such as dishonesty.14 Furthermore, the
ABA Standards for Imposing Lawyer Sanctions provide the
appropriate sanction for an attorney’s lack of competence
under DR 6-101:
4.52 Suspension is generally appropriate when a lawyer
engages in an area of practice in which the lawyer knows
he or she is not competent, and causes injury or potential
injury to a client.
4.53 	Reprimand 	is 	generally 	appropriate 	when 	a
lawyer:
13 Nebraska Rules of Professional Conduct, Preamble ¶ 20.
14 See, State ex rel. Counsel for Dis. v. Pinard-Cronin, 274 Neb. 851, 743
N.W.2d 649 (2008); State ex rel. Counsel for Dis. v. Mills, 267 Neb. 57,
671 N.W.2d 765 (2003); State ex rel. Counsel for Dis. v. Rickabaugh, 264
Neb. 398, 647 N.W.2d 641 (2002); State ex rel. Nebraska State Bar Assn.
v. Holscher, 193 Neb. 729, 230 N.W.2d 75 (1975).
STATE Ex REL. COUNSEL FOR DIS. v. ORR 	109
Cite as 277 Neb. 102

(a) demonstrates failure to understand relevant legal
doctrines or procedures and causes injury or potential
injury to a client; or
(b) is negligent in determining whether he or she is
competent to handle a legal matter and causes injury or
potential injury to a client.15
[11] That is not to say we are unconcerned about Orr’s
conduct. We have said that “[i]t is inexcusable for an attorney
to attempt any legal procedure without ascertaining the law
governing that procedure.”16 As a lawyer who has been practic-
ing law for 40 years, Orr should have been aware that he was
not competent to represent franchisors, and he was warned by
another attorney that franchise law was a specialized area. At
the very least, Orr should have done the research necessary to
become competent in the area of franchise law. The fact that
Orr did little or no research into state or federal franchising law
until long after he first received notice that there was a problem
with the franchising documents is inexcusable.
We take this opportunity to caution general practitioners
against taking on cases in areas of law with which they have
no experience, unless they are prepared to do the necessary
research to become competent in such areas or associate
with an attorney who is competent in such areas. General
practitioners must be particularly careful when practicing in
specialty areas. “If a general practitioner plunges into a field
in which he or she is not competent, and as a consequence
makes mistakes that demonstrate incompetence, the Code
[of Professional Responsibility] demands that discipline be
imposed . . . .”17
Based upon our consideration of the record in this case, we
conclude that Orr violated his oath of office as an attorney,18
DR 1-102(A)(1) and DR 6-101(A)(1) and (2) of the Code of
Professional Responsibility, and §§ 3-501.1 and 3-508.4(a) of
15 ABA Standards for Imposing Lawyer Sanctions §§ 4.52 and 4.53 (2005).
16 Holscher, supra note 14, 193 Neb. at 737, 230 N.W.2d at 80.
17 Attorney Griev. Comm’n v. Brown, 308 Md. 219, 234, 517 A.2d 1111,
1118-19 (1986).
18 § 7-104.
110 	277 NEBRASKA REPORTS

the Nebraska Rules of Professional Conduct. For the above
reasons, we accept the recommendation of the referee and issue
a public reprimand.
CONCLUSION
The motion of the Counsel for Discipline is sustained in
part and in part overruled. We adopt the referee’s findings
of fact and find by clear and convincing evidence that Orr
violated DR 1-102(A)(1) and DR 6-101(A)(1) and (2) of
the Code of Professional Responsibility and §§ 3-501.1 and
3-508.4(a) of the Nebraska Rules of Professional Conduct,
as well as his oath of office as an attorney. It is the judg-
ment of this court that Orr should be, and hereby is, publicly
reprimanded.
JuDGmeNt of publiC reprimaND.
WriGht and C oNNolly, JJ., not participating.
State of NebraSka , appellee , v.
terreNCe D. moore , appellaNt.
759 N.W.2d 698
Filed January 30, 2009. 	No. S-08-417.
1. Statutes: Appeal and Error. Statutory interpretation presents a question of law,
for which an appellate court has an obligation to reach an independent conclusion
irrespective of the determination made by the court below.
2. Sentences: Appeal and Error. A sentence imposed within statutory limits will
not be disturbed on appeal absent an abuse of discretion by the trial court.
3. Sentences. When imposing a sentence, a sentencing judge should consider the
defendant’s (1) age, (2) mentality, (3) education and experience, (4) social and
cultural background, (5) past criminal record or record of law-abiding conduct,
and (6) motivation for the offense, as well as (7) the nature of the offense, and (8)
the violence involved in the commission of the crime.
4. ____. In imposing a sentence, the sentencing court is not limited to any mathe-
matically applied set of factors.
5. ____. The appropriateness of a sentence is necessarily a subjective judgment
and includes the sentencing judge’s observation of the defendant’s demeanor and
attitude and all the facts and circumstances surrounding the defendant’s life.
Appeal 	from 	the 	District 	Court 	for 	Douglas 	County:
W. mark aShforD, Judge. Affirmed.
STATE v. MOORE 	111
Cite as 277 Neb. 111