Disciplinary Proceedings Against Spangler
2016 WI 61, 7/8/2016 (2016)
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ATTORNEY disciplinary proceeding.
Attorney's license suspended.
¶1 PER CURIAM. We review a report and
supplemental report filed by referee James
R. Erickson recommending that Attorney
William J. Spangler's license to practice
law in Wisconsin be suspended for 60 days
for seven counts of professional misconduct
involving two client matters. The referee
also recommends that Attorney Spangler pay
the full costs of the proceeding, which are
$6,678.43 as of March 29, 2016.
¶2 Upon careful review of the matter,
we adopt the referee's findings of fact and
conclusions of law. We conclude, however,
that rather than the 60-day suspension
stipulated by the parties and recommended by
the referee, a six-month suspension of
Attorney Spangler's license to practice law
in Wisconsin is the appropriate sanction for
his misconduct. We also agree with the
referee that the full costs of the
proceeding should be assessed against
Attorney Spangler.
¶3 Attorney Spangler was admitted to
practice law in Wisconsin in 2003 and
practices in Eau Claire. He has no prior
disciplinary history.
¶4 On November 13, 2014, the Office of
Lawyer Regulation (OLR) filed a complaint
against Attorney Spangler alleging four
counts of misconduct arising out of Attorney
Spangler's representation of F.M. The
complaint averred that in June 2007,
Attorney Spangler filed a lawsuit on behalf
of F.M. in Eau Claire County circuit court.
Attorney Spangler was not able to obtain
service of an authenticated copy of the
summons and complaint on the defendant, and
the case was dismissed. Attorney Spangler
refiled the complaint in August 2008. This
time the defendant was served. The lawsuit
alleged that F.M. and the defendant had an
oral partnership to purchase real estate and
that F.M. had provided funds to purchase and
build a condominium fourplex. F.M. sought
an accounting and/or dissolution of the
partnership. The parties agreed to the
termination of the partnership relationship
but not to the specific terms of
dissolution. The lawsuit continued for the
purpose of obtaining a court determination
as to the respective rights and property
ownership of the parties.
¶5 The circuit court allowed the
parties a significant amount of time to
discuss settlement of the matter. In late
2009 a scheduling order was issued setting
the matter for a one-day trial to the court
on April 20, 2010. In correspondence to the
Eau Claire County clerk of circuit court
dated April 12, 2010, Attorney Spangler
stated that the parties had reached a
settlement and that F.M. desired to dismiss
the lawsuit. Attorney Spangler copied
opposing counsel on this letter but did not
copy F.M. The court signed an order
dismissing the matter without prejudice to
either party on April 14, 2010, and the
order was filed the following day.
¶6 Attorney Spangler had not consulted
with F.M. or obtained F.M.'s approval prior
to proposing and agreeing to the dismissal
of the lawsuit, nor did he inform his client
that the suit had been dismissed. Instead,
Attorney Spangler made a series of
misrepresentations and created a series of
false documents to mislead his client as to
the status of the lawsuit and its outcome.
¶7 In November 2010, despite knowing
that the suit had been dismissed, Attorney
Spangler spoke to F.M. by telephone and
represented to him that a judgment had been
obtained in F.M.'s favor but that collecting
on the judgment would be difficult given the
state of the real estate market at the time
and the defendant's financial situation. To
support his claim to F.M. that a judgment
had been obtained, Attorney Spangler created
fake findings of fact, conclusions of law,
and an order in the matter dated October 14,
2009. While Attorney Spangler did not forge
the judge's signature on the document, he
entered "/s/" on the signature line above
the judge's name. Attorney Spangler did not
provide this document to anyone but F.M.
Attorney Spangler also created a fake
judgment in the case, stating that F.M.
"shall be repaid his initial investment in
an amount of $102,000" and F.M. "does have
an [sic] recover of defendant taxable costs
and disbursement in the amount of $84,243."
Again, Attorney Spangler did not forge the
judge's actual signature on the fake
judgment, but on the signature line above
the judge's name entered "/s/." Again,
Attorney Spangler did not provide this
document to anyone but F.M.
¶8 F.M. subsequently asked Attorney
Spangler to pursue the defendant's insurance
company for payment. Attorney Spangler
prepared a demand letter addressed to the
insurance company, dated June 17, 2011. The
letter referred to previous correspondence
from Attorney Spangler to the insurance
company and stated a demand for $200,000.
The letter stated that in the absence of
payment of the demand amount within ten
days, Attorney Spangler would proceed with
legal action against the insurance company.
While the letter indicated it was being
copied to F.M., the Wisconsin commissioner
of insurance, and counsel for the defendant,
Attorney Spangler did not provide a copy of
the letter to anyone but F.M.
¶9 On August 1, 2011, Attorney Spangler
prepared and signed a letter facially
addressed to the Eau Claire County clerk of
court purportedly enclosing an original and
four copies of a complaint against the
insurance company. Attorney Spangler also
prepared and signed with a date of July 29,
2011, a civil complaint against the
insurance company. The complaint that
Attorney Spangler drafted and provided to
F.M. in the purported action against the
insurance company also showed a fabricated
file stamp indicating that the civil
complaint was filed in Eau Claire County
circuit court on August 9, 2011. Attorney
Spangler did not provide these documents to
anyone but F.M. He never filed the cover
letter or the civil complaint in circuit
court but instead used those documents to
mislead F.M. as to the status of the
representation and the steps taken on the
client's behalf.
¶10 On May 6, 2010, Attorney Spangler
created a fake order suspending license
purporting to suspend a real estate license
held by the defendant. The fake order was
purportedly issued by the chair of the
Wisconsin Realty Board. Attorney Spangler
did not forge an actual signature on the
fake suspension order that he created, but
on the signature line above the chair's
name, Attorney Spangler typed "/William H.
Hendricks/." There was no proceeding
resulting in an order of suspension against
the defendant, and "Wisconsin Realty Board"
is not the name of any Wisconsin regulatory
entity.
¶11 Prior to December 2011, while
Attorney Spangler was still trying to
perpetuate the fraud of having obtained a
judgment and pursued collection, he provided
F.M. with at least $45,000 of his own money
as funds purportedly obtained toward partial
satisfaction of the fake judgment.
¶12 F.M. eventually consulted with other
counsel and in December of 2011, Attorney
Spangler's lies and fabrications came to
light. In late December 2011, the
defendant's counsel was contacted by F.M.'s
new attorneys and was provided with copies
of at least some of the fake documents
created by Attorney Spangler. On or about
December 30, 2011, the defendant's counsel
contacted and then met with Attorney
Spangler, who admitted he had drafted a
series of false documents relating to the
case. Attorney Spangler and counsel for the
defendant each then promptly notified the
court in writing of the fabricated documents
that Attorney Spangler had produced.
¶13 F.M.'s civil claims against Attorney
Spangler were resolved pursuant to a January
2012 settlement agreement and release,
whereby Attorney Spangler agreed to execute
a promissory note and pay F.M. the sum of
$125,000. Attorney Spangler satisfied the
promissory note in December 2012.
¶14 The OLR's complaint alleged the
following counts of misconduct with respect
to Attorney Spangler's representation of
F.M.:
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[Count 1] By agreeing to the dismissal
of [F.M.'s Eau Claire County lawsuit], without
having consulted with his client, [F.M.], or
having his client's consent to the stipulated
dismissal of the lawsuit, [Attorney] Spangler
violated SCR 20:1.2(a).
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[Count 2] By agreeing to the dismissal
of [F.M.'s Eau Claire County lawsuit], without
having consulted with his client, [F.M.], or
having obtained his client's consent to the
stipulated dismissal of the lawsuit,
[Attorney] Spangler violated SCR 20:1.4(a)(1)
and (2).
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[Count 3] By failing to provide [F.M.]
with accurate information as to case status
and his efforts taken on [F.M.'s] behalf,
[Attorney] Spangler violated SCR 20:1.4(a)
(3).
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[Count 4] By intentionally providing
false information to [F.M.] regarding case
status and his efforts taken on [F.M.'s]
behalf, and further, by creating fake
documents to lend support to the
misrepresentations made to his client,
[Attorney] Spangler violated SCR
20:8.4(c).
¶15 Attorney Spangler filed an answer to
the OLR's complaint on January 12, 2015. The
referee was appointed on January 27, 2015.
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¶16 On April 1, 2015, the parties filed
a stipulation whereby Attorney Spangler
admitted the allegations in the OLR's
complaint. The parties jointly recommended
the imposition of a public reprimand. The
stipulation provided that the referee may,
if he saw fit, adopt paragraphs 1-27 of the
stipulation as his findings of fact and
adopt paragraphs 28-31 of the stipulation as
his conclusions of law. On April 16, 2015,
the referee issued a report expressly
adopting by reference and incorporating as
though fully set forth in the report
paragraphs 1-31 of the stipulation. The
referee said he was satisfied that the
parties' agreement for a public reprimand
was an appropriate level of discipline.
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¶17 On June 23, 2015, this court ordered
the parties to show cause why a suspension
of Attorney Spangler's license, rather than
a public reprimand, should not be imposed.
The OLR filed a response on July 6, 2015.
On August 6, 2015, this court granted
Attorney Spangler's motion for an extension
of time to file a response. On August 26,
2015, the parties filed a joint motion to
remand the matter to the referee for
additional findings. The motion averred
that counsel for Attorney Spangler had
informed the OLR that they had received
additional documents from counsel for
Attorney Spangler's former law firm
revealing an additional possible violation
of Wisconsin supreme court rules that was
substantially the same in nature as the
violation involved in the pending action and
occurring during roughly the same time frame
as the conduct at issue in the pending
proceeding. The parties agreed that the new
information would be best processed in
conjunction with and in the context of the
existing disciplinary proceeding. The OLR
said it was likely that the new information
would result in a supplemental or amended
stipulation and in the referee supplementing
or otherwise amending his report. This
court granted the motion for remand to the
referee on September 10, 2015.
¶18 On March 7, 2016, the parties filed
an additional stipulation which set forth
three additional counts of professional
misconduct arising out of Attorney
Spangler's representation of F.B. The
stipulation stated that between September
2003 and February 2011, Attorney Spangler
was employed as an attorney by the law firm
of Weld, Riley, Prenn & Ricci, S.C. [Weld
Riley] in Eau Claire and practiced in the
areas of transactional work, real estate
work, and some estate planning work.
¶19 The stipulation stated that in
December 2006, F.B. sent Attorney Spangler a
letter saying that he owned 50% of a
Wisconsin limited liability company, that
his partner and another person were trying
to force him out, and that he would like to
file suit for breach of contract.
¶20 The stipulation stated that on or
about January 5, 2007, an attorney of the
Weld Riley law firm met with F.B. to discuss
representing him in regard to the business
dispute. On or about January 11, 2007, the
Weld Riley attorney sent F.B. an engagement
letter saying that the attorney and Attorney
Spangler would be the principal attorneys
assigned to the case.
¶21 On January 22, 2007, Attorney
Spangler sent a draft complaint to F.B.
Attorney Spangler was also in communication
with the attorney representing F.B.'s
business partners in an attempt to negotiate
a resolution to the dispute. During the
first half of 2007, letters exchanged
between Attorney Spangler and counsel for
the other side did not result in a
settlement of the disputed issues. On April
16, 2007, the attorney for F.B.'s business
partner sent Attorney Spangler a settlement
offer in the amount of $30,000. Attorney
Spangler transmitted that offer to F.B., but
the offer was not acceptable to F.B. and he
rejected it.
¶22 On May 19, 2007, Attorney Spangler
sent an internal memorandum to the head of
litigation at Weld Riley, noting that the
F.B. matter was "a somewhat complicated
business divorce" that was "now ripe for
litigation." Attorney Spangler asked "if
someone would be able to handle litigation
on this matter" for him. The stipulation
avers that Attorney Spangler never wanted to
handle litigation, did not know what he was
doing with litigation, and was reaching out
to request that one of his litigation
colleagues handle the matter.
¶23 Attorney Spangler provided a copy of
a draft complaint to one of the litigation
associates at Weld Riley for review. In
July 2007, a draft complaint, summons, and
letter transmitting the complaint to the Eau
Claire County circuit court clerk were
prepared bearing signature lines for the
litigation associate's signature. The
documents were never sent or filed with the
court. On August 14, 2007, Attorney
Spangler emailed F.B. saying he had received
a voice mail message from F.B. and that he
and his litigation colleague were
"finalizing a summons and complaint which we
can file assuming the liquidation took place
as we believe it did." On August 22, 2007,
F.B. sent Attorney Spangler an email giving
him a "green light" on drafting the summons
and complaint.
¶24 Attorney Spangler subsequently sent
F.B. a draft complaint for his review. The
complaint was revised several times until
F.B. was satisfied with it. Attorney
Spangler fabricated a purported letter of
transmittal on Weld Riley law firm
letterhead addressed to the Eau Claire
County clerk of circuit court stating that
an original and three copies of a summons
and complaint, along with a check in the
amount of $256 in payment of the filing fee,
were enclosed. The purported letter was
never sent to the clerk of court, but it was
sent to F.B. The letter was created by
Attorney Spangler for the sole purpose of
misleading F.B. into believing Attorney
Spangler was sending the complaint with a
summons to the clerk of court commencing a
lawsuit on F.B.'s behalf. Attorney Spangler
printed across the top of each of the eight
pages of the complaint "cv-1105200704
Monday, November 05, 2007 10:21 EAU CLAIRE
COUNTY CLERK OF COURTS" to make it appear
that such complaint had in fact been filed
in the Eau Claire County clerk of courts'
office. On the first page of the complaint,
Attorney Spangler affixed a partial ink
stamp saying "RECEIVED NOV 05." The
complaint was never sent to or filed with
the Eau Claire County clerk of court.
¶25 Attorney Spangler provided a copy of
the transmittal letter and complaint to F.B.
F.B. reasonably believed the documents to be
an authentic filing with the Eau Claire
County circuit court when, in fact, the
documents had been fabricated and created
only to deceive F.B.
¶26 Over the course of approximately
five years, Attorney Spangler continued the
ruse, repeatedly making false
representations to F.B. about developments,
events, and occurrences as the non-existing
case supposedly progressed. Among the
reasons that Attorney Spangler told F.B. the
case was moving slowly were the outcome of a
supposed summary judgment motion that
Attorney Spangler told F.B. he had filed and
a forthcoming opinion that Attorney Spangler
told F.B. the Wisconsin supreme court was
expected to issue in a case with issues
relevant to issues in F.B.'s supposed case.
¶27 When Attorney Spangler left the Weld
Riley law firm in early 2011 and joined with
other attorneys in establishing a new law
firm, F.B. continued as Attorney Spangler's
client. Attorney Spangler's deception of
F.B. ultimately included the creation of a
false settlement, fabrication of a release,
and Attorney Spangler's use of his own money
to pay F.B. $75,000. The money was falsely
presented to F.B. as purportedly emanating
from a settling party when in fact no such
settlement existed.
¶28 The stipulation averred that the
OLR's additional fact finding revealed that
Attorney Spangler committed the following
counts of misconduct with respect to his
representation of F.B.:
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By misleading [F.B.] into believing that
he had filed and had, for years, been
prosecuting a lawsuit on [F.B's] behalf
against his former business associate, in
accordance with [F.B.'s] decision to proceed
with such litigation, when he had, in fact,
never filed such lawsuit, [Attorney] Spangler
failed to abide by his client's decision
concerning the objectives of representation,
in violation of SCR 20:1.2(a).
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By informing [F.B.] that he had filed
a lawsuit on [F.B.'s] behalf against his
former business associate; he was, for
years, actively prosecuting such pending
lawsuit; and [F.B.'s] case was settled by
the defendants paying $80,000 with an
exchange of releases when [Attorney]
Spangler knew no lawsuit had ever been
filed, [Attorney] Spangler failed to keep
the client reasonably informed about the
status of the matter, contrary to SCR
20:1.4(a)(3, and also that [Attorney]
Spangler failed to explain a matter to the
extent reasonably necessary to permit the
client to make an informed decision
regarding the misrepresentation, contrary to
SCR 20:1.4(b).
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By fabricating a false complaint and a
bogus letter of transmittal to the Clerk of
Court which was provided to [F.B.] with the
intent to deceive him, by intentionally
misrepresenting to [F.B.] that a lawsuit had
been filed on his behalf and was, for years,
being prosecuted against his former business
associate, by falsely leading his client to
believe that a motion for summary judgment
was filed and denied by the Court and by
falsely informing [F.B.] that his former
business associate had paid $80,000 in
connection with a settlement of the lawsuit
and the signing of releases, [Attorney]
Spangler engaged in conduct involving
dishonesty, deceit and misrepresentation, in
violation of SCR 20:8.4(c).
¶29 The stipulation noted that Attorney
Spangler's counsel forwarded four affidavits
on Attorney Spangler's behalf, which were
reviewed and considered by the OLR director.
The affidavits included testimony from two
character witnesses who have known Attorney
Spangler personally and professionally, an
affidavit of Attorney Spangler's counsel
regarding counsel's communications with
F.B., who advised Attorney Spangler's
counsel that he was satisfied with the
$75,000 he received from Attorney Spangler
as a settlement for the lawsuit that was
never brought, and an affidavit of Attorney
Spangler in which he notes the professional
and personal cost he has borne because of
his actions. The parties agreed and
stipulated that a 60-day suspension of
Attorney Spangler's license to practice law
was an appropriate sanction for his
misconduct. The parties requested the
referee to approve the additional
stipulation and file a supplemental or
amended report and recommendation.
¶30 On March 7, 2016, the referee filed
a supplemental report adopting paragraphs
numbered 1-23 in the second stipulation as
additional findings of fact and adopting as
conclusions of law paragraphs 24a-24c of the
second stipulation.
¶31 The referee agreed with the parties
that a 60-day suspension of Attorney
Spangler's license was an appropriate
sanction. While the referee agreed that
Attorney Spangler clearly breached his legal
duties to his clients, the legal profession,
the public interest, and the rules of
professional conduct, the referee noted that
Attorney Spangler "has stepped forward as a
responsible person by fully admitting his
professional failures." The referee also
noted Attorney Spangler has provided
financial recompense to the satisfaction of
his client. In addition, the referee said
the three affidavits supplied by Attorney
Spangler were further evidence of the high
community respect for Attorney Spangler.
The referee said:
The sad thing about this whole matter
is that there was no need for [Attorney
Spangler] to mislead his client. All that
[Attorney Spangler] needed to do was to
admit to his law firm that he felt incapable
of taking on and initiating contested
litigation. If the law firm was
unsympathetic, he could have expressed his
regrets to his client and turned down the
case, referring the client to outside
counsel. Instead, he took on years of
subterfuge in misleading the client.
¶32 Considering all of the rather
unusual circumstances involved, the referee
agreed with the parties that a 60-day
suspension was an appropriate sanction. The
referee also recommended that Attorney
Spangler pay the costs of the proceeding.
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¶33 A referee's findings of fact are
affirmed unless clearly erroneous.
Conclusions of law are reviewed de novo.
See In re Disciplinary Proceedings
Against Eisenberg, 2004 WI 14, ¶5, 269
Wis. 2d 43, 675 N.W.2d 747. The court may
impose whatever sanction it sees fit,
regardless of the referee's recommendation.
See In re Disciplinary Proceedings
Against Widule, 2003 WI 34, ¶44, 261 Wis.
2d 45, 660 N.W.2d 686.
¶34 There is no showing that any of the
referee's findings of fact are clearly
erroneous. Accordingly, we adopt them. We
also agree with the referee's conclusions of
law that Attorney Spangler violated the
supreme court rules set forth above.
¶35 With respect to the appropriate
level of discipline, upon careful review of
the matter, we conclude that a 60-day
suspension is an inadequate sanction.
Attorney Spangler's actions in the two cases
at issue here are troubling. Attorney
Spangler engaged in an elaborate web of
deception that included creating false
documents and meticulously adding fake file
stamps and other notations to make them
appear to be genuine. He managed to
perpetuate his ruses for years, leading his
clients to believe that they had live
lawsuits pending when, in fact, Attorney
Spangler had voluntarily dismissed F.M.'s
suit and never filed F.B.'s action.
¶36 In many cases that come before this
court, an attorney accepts a retainer and
then fails to do the work for which he or
she was retained. Such behavior is
undoubtedly serious, but it is a passive
type of error. Attorney Spangler's conduct
in creating a series of false documents for
the sole purpose of misleading his clients
into believing that they had lawsuits
pending was an affirmative act of deception
and a betrayal of the trust his clients
placed in him.
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¶37 We recognize that there are a number
of mitigating factors here. Attorney
Spangler has no prior disciplinary history.
The conduct at issue occurred between 2007
and 2011. We note that in its response to
this court's order to show cause, the OLR
commented that Attorney Spangler had alerted
the OLR to some significant family concerns
and problems and, according to Attorney
Spangler, F.M. turned out to be a difficult
client with whom Attorney Spangler did not
feel he could be candid once he concluded
F.M.'s case was not as strong as Attorney
Spangler initially thought. We also note
that Attorney Spangler has repeatedly
expressed remorse for his misconduct and he
has paid restitution to both clients. We
have also reviewed the affidavits filed on
Attorney Spangler's behalf and note that the
affiants speak highly of him and find him to
be trustworthy. Nonetheless, the
seriousness of the misconduct at issue here
leads us to conclude that a suspension in
excess of 60 days is warranted.
¶38 Although no two disciplinary
proceedings are identical, we note that on
at least two prior occasions, we disciplined
attorneys who falsified documents. In In
re Disciplinary Proceedings Against
Fitzgerald, 2006 WI 58, 290 Wis. 2d 713,
714 N.W.2d 925, an attorney told her client
that an insurance company was willing to
settle her claims for a payment of some
$5,000 and that the insurance company would
also pay the client's medical bills when, in
fact, no such offer was ever made. To
perpetuate the ruse that a settlement had
been made, the attorney deposited personal
funds into her business account and then
transferred those funds to her trust account
for the purpose of using the funds to pay
her client her proportionate share of the
purported settlement. The attorney was
suspended for 90 days. She had no prior
disciplinary history.
¶39 In In re Disciplinary Proceedings
Against Mauch, 2007 WI 109, 304 Wis. 2d
541, 736 N.W.2d 141, an attorney deceived a
client into believing his case had been
settled and used his own funds to pay the
alleged settlement. The attorney's license
was suspended for 90 days. Attorney Mauch
had previously been publicly reprimanded on
two occasions.
¶40 Even though Attorney
Spangler has no prior disciplinary history
and even though we acknowledge the existence
of various other mitigating factors, we
conclude that the misconduct at issue here
is more serious than the misconduct at issue
in either Fitzgerald or Mauch and
calls for a more severe sanction. The ruses
in Fitzgerald and Mauch were of
relatively short duration and involved only
one case. By contrast, Attorney Spangler
falsified documents in two cases and, over
the span of years, created a whole host of
documents for the sole purpose of misleading
his clients into believing that their suits
were pending when in fact they were not.
Accordingly, we conclude that a six-month
suspension of Attorney Spangler's license to
practice law in Wisconsin is an appropriate
sanction. A six-month suspension, which
will require Attorney Spangler to file a
petition for reinstatement, see SCR
22.28(3), will impress upon him the
seriousness of his misconduct and deter
other attorneys from engaging in similar
misconduct in the future. We agree with the
referee that Attorney Spangler should bear
the full costs of this proceeding.
¶41 IT IS ORDERED that the
license of William J. Spangler to practice
law in Wisconsin is suspended for a period
of six months, effective August 12, 2016.
¶42 IT IS FURTHER ORDERED that
within 60 days of the date of this order,
William J. Spangler shall pay to the Office
of Lawyer Regulation the costs of this
proceeding, which are $6,678.43.
¶43 IT IS FURTHER ORDERED that
William J. Spangler shall comply with the
provisions of SCR 22.26 concerning the
duties of an attorney whose license to
practice law has been suspended.
¶44 IT IS FURTHER ORDERED that
compliance with all conditions of this order
is required for reinstatement. See SCR
22.28(2).
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