MANKATO — A Mankato attorney has been suspended after a state office found he mismanaged funds that were under dispute in a divorce case.
Karl O. Friedrichs is being suspended from practicing law for at least 90 days following a finding of professional misconduct by the Office of Lawyers Professional Responsibility.
Friedrichs denies the allegations involving a divorce case a few years ago rose to the level of professional misconduct, according to court documents.
But Friedrichs agreed to a suspension rather than fighting the claims before the Minnesota Supreme Court. The state’s top court issued an order this week approving the settlement reached between Friedrichs and the Office of Lawyers Professional Responsibility.
The Supreme Court is charged with disciplining attorneys that practice in Minnesota. The Office of Lawyers Professional Responsibility is a state agency that investigates complaints against attorneys and makes recommendations to the Supreme Court.
The investigating agency found Friedrichs had inappropriately taken funds out of a trust account to pay himself and another attorney who worked for him.
Friedrichs or the attorney who represented him in the complaint did not respond to requests for comment.
According to documents filed in the case:
Friedrichs represented a client in real estate matters and a divorce from 2014 to 2017. The client inherited a residential property and Friedrichs administered a trust into which more than $154,000 from the sale of the property was deposited.
The client’s spouse claimed the trust should be considered joint marital property of which she should get a share in the divorce, while the client claimed he alone should be entitled to his inheritance.
Nearly $16,000 was withdrawn to pay off the mortgage on the inherited property. Friedrichs informed the spouse’s attorney the remaining funds would be held in the trust and the spouse could access it to pay her expenses.
Nearly $10,000 was subsequently given to the spouse for attorney fees. Friedrichs also withdrew nearly $59,000 to pay legal fees charged to his client, most of it by his own firm.
When a judge ordered nearly $117,000 from the trust be awarded to the spouse, there was less than $70,000 left in the trust. Friedrichs used his own funds to restore the trust to the amount ordered by the judge.
The Office of Lawyers Professional Responsibility found that Friedrichs’ withdrawals from the disputed trust without consent from the opposing attorney constituted misconduct.
Friedrichs assumed his client’s spouse wouldn’t be awarded more than half of the trust funds and thus could use his client’s half to pay his fees.
The office also faulted Friedrichs for not disclosing the true amount of funds currently in the account on court documents.
Friedrichs claims he did not intentionally deceive the opposing counsel or the judge. He “regrets his failure to follow best practices and any confusion his actions caused,” a written response to the complaint states.
The suspension goes into effect Jan. 27 and Friedrichs will have to wait 90 days and pay a $900 fine and prove he is current on continuing education requirements before he may be reinstated. Friedrichs also will have to take and pass the Multistate Professional Responsibility Examination.
Friedrichs has been practicing law since 1983, according to state records. He ran unsuccessfully for Blue Earth County attorney in 2014.
He was in the news last year for filing a lawsuit against the city of North Mankato and a church. Filed on behalf of a resident, the city challenged the granting of an ordinance variance for an electronic sign outside Holy Rosary Catholic Church. The suit was dropped after the city changed its ordinance.
Friedrichs also serves as chairman of the Lime Township Board and the VINE board of directors.