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Wisconsin Attorneys' Professional Discipline Compendium
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Disciplinary Proceedings Against Runyon
2020 WI 74, 9/9/20 (2020)
ATTORNEY disciplinary proceeding. Attorney's license revoked.
¶1 PER CURIAM. We review Referee L. Michael Tobin's report recommending that the court declare Attorney James T. Runyon in default and revoke his license to practice law in Wisconsin for professional misconduct. The referee also recommends that Attorney Runyon make restitution to the Wisconsin Lawyers' Fund for Client Protection (Fund) and to certain clients.
¶2 No appeal has been filed so we review the referee's report pursuant to Supreme Court Rule (SCR) 22.17(2). After review of the matter, we agree with the referee that, based on Attorney Runyon's failure to answer the Office of Lawyer Regulation's (OLR) complaint, the OLR is entitled to a default judgment. We further agree with the referee that revocation of Attorney Runyon's license is an appropriate sanction for his professional misconduct. We agree that Attorney Runyon should be required to make restitution to the Fund and certain clients and, finally, we conclude that he should be assessed the full costs of this proceeding which are $1,080.34 as of June 26, 2020.
¶3 Attorney Runyon was admitted to practice law in Wisconsin in 1978. His professional disciplinary history in Wisconsin consists of:
(a) A one-year suspension in 1984 for dishonest conduct, consisting of concealing fees from his law partners, and keeping them for himself. Attorney Runyon also gave false testimony at a John Doe proceeding concerning the withholding of those funds. In re Disciplinary Proceedings Against Runyon, 121 Wis. 2d 37, 357 N.W.2d 545 (1984);
(b) A 2006 private reprimand for dishonest conduct, based on Attorney Runyon entering into a separate agreement for fees without the knowledge or consent of his co-counsel in a products liability case. Private Reprimand No. 2006-11 (electronic copy available at https://compendium.wicourts.gov/app/raw/ 001883.html);
(c) A 60-day suspension in 2015 for failing to hold client funds in trust, converting client funds to cover disbursements to other clients, commingling personal funds in his trust account, and failing to keep necessary trust account records. In re Disciplinary Proceedings Against Runyon, 2015 WI 95, 365 Wis. 2d 32, 870 N.W.2d 228; and
(d) A 2017 public reprimand for misconduct for failing to give one client a written communication explaining the representation's scope or required fee information, failing to notify the client before removing fees from his trust account, and agreeing to pay another client's bills while she was incarcerated, but without explaining which bills he would pay, communicating his fee in writing, or promptly providing the client a complete accounting upon the close of the representation. Attorney Runyon also failed to communicate his fee in writing to another client, withdrew the client's entire advanced fee before it was earned, and did not provide the necessary notice after the representation ended. Public Reprimand of James T. Runyon, No. 2017-5 (electronic copy available at https://compendium.wicourts.gov/app/raw/ 002958.html).
¶4 Attorney Runyon's law license is also administratively suspended for failure to pay state bar dues, failure to comply with Continuing Legal Education requirements, and failure to submit the required trust account certification.
¶5 On September 5, 2018, Attorney Runyon signed a power of attorney appointing an attorney-in-fact to assist him in closing his law practice. On September 6, 2018, Attorney Runyon filed a petition seeking to voluntarily resign his Wisconsin law license, then filed an amended petition asking the court to suspend his law license immediately and indefinitely due to an unexplained medical incapacity. On October 9, 2018, this court temporarily suspended Attorney Runyon's Wisconsin law license for non-cooperation with the OLR, held Attorney Runyon's petition to voluntarily resign in abeyance, and denied his medical incapacity petition as premature. His law license remains subject to the temporary suspension for noncooperation.
¶6 On June 26, 2019, the OLR filed a disciplinary complaint against Attorney Runyon alleging that he committed 23 counts of professional misconduct in four client matters, and asking the court to revoke his law license and order restitution. Attorney Runyon was personally served with the complaint and order to answer on June 28, 2019. Referee James Erickson was appointed.
¶7 Attorney Runyon failed to respond to the OLR's complaint. On October 4, 2019, the OLR filed a notice of motion and motion for default judgment, serving it upon Attorney Runyon at his last known addresses. Attorney Runyon failed to file any written response to the motion and the OLR renewed its motion on January 21, 2020.
¶8 Referee Erickson withdrew from the case and Referee L. Michael Tobin was appointed on March 16, 2020. On April 21, 2020, Referee Tobin notified Attorney Runyon and counsel for the OLR by email of a scheduling conference and hearing on the default motion to be held on April 30, 2020. Attorney Runyon failed to appear or participate.
¶9 On May 21, 2020, the referee issued a report recommending that this court grant the OLR's motion for default judgment, based upon Attorney Runyon's failure to file an answer or appear in the proceeding. The referee found that the factual allegations of the OLR's complaint should be taken as true and proven by clear, satisfactory, and convincing evidence. The referee recommended revocation of Attorney Runyon's Wisconsin law license and the imposition of restitution as set forth herein.
¶10 On May 29, 2020, the OLR filed a restitution statement confirming its request for the restitution, as recommended by the referee. Attorney Runyon did not respond to the OLR's restitution statement.
¶11 Attorney Runyon did not appeal from the referee's report and recommendation, so we proceed with our review of the matter pursuant to SCR 22.17(2). We review a referee's findings of fact subject to the clearly erroneous standard. In re Disciplinary Proceedings Against Inglimo, 2007 WI 126, ¶5, 305 Wis. 2d 71, 740 N.W.2d 125. We review the referee's conclusions of law de novo. Id. We determine the appropriate level of discipline independent of the referee's recommendation. In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.
¶12 We agree with the referee that Attorney Runyon should be declared in default. In addition, the referee properly relied on the allegations of the complaint, which were deemed admitted by Attorney Runyon's failure to answer. We therefore agree with the referee that the factual allegations of the OLR's complaint may be taken as true and they prove by clear, satisfactory, and convincing evidence that Attorney Runyon committed all of the counts of misconduct alleged in the complaint.
¶13 With respect to the appropriate level of discipline, upon careful review of the matter, we agree with the referee's recommendation for revocation of Attorney Runyon's license to practice law in Wisconsin and the imposition of restitution. We will merely summarize the allegations of misconduct for each separate client matter.
Matter of A.D. and T.D. (Counts 1- 5)
¶14 In October 2017, Attorney Runyon was retained by two brothers, A.D. and T.D., to sell real estate held by the testamentary trust of their late mother. The property was sold and proceeds of the sale were to be divided between the brothers. On December 22, 2017, a title company sent Attorney Runyon a check for $135,785.42, payable to the P.A.T. Trust, representing the proceeds from the sale of the property. Over the next six months Attorney Runyon proceeded to empty this fund for his own benefit, while misrepresenting the status of the matter to his clients. By July 9, 2018, Attorney Runyon's trust account held only $48.35 attributable to the P.A.T. Trust. Around the same time, Attorney Runyon mailed his clients a brochure from the Fund and a copy of the check from the real estate sale, indicating they could try to recover their funds from the Fund. He then failed to respond to the OLR's requests for information about the grievance that ensued.
Matter of S.S. (Counts 6-10)
¶15 In October 2017, Attorney Runyon was retained by G.G. to represent S.S., a minor, regarding possible criminal allegations. Attorney Runyon was paid $10,000 in advanced fees but did not provide his clients with a written fee agreement. Attorney Runyon deposited the $10,000 in advanced fees into his trust account then proceeded to disburse the funds for his own use. Later that month, the Lincoln County District Attorney's Office closed its matter involving S.S. without filing charges. After some delay, Attorney Runyon told the clients he would return the advanced fee by August 11, 2018. He failed to do so. Instead, he sent the clients a handwritten letter suggesting they seek reimbursement from the Fund. The Fund eventually reimbursed G.G. for the fees paid on behalf of S.S.
Matter of M.B. (Counts 11-18)
¶16 In November of 2017, M.B. hired Attorney Runyon to recover $1,788.30 in erroneous fees incurred from Associated Bank. She paid Attorney Runyon a flat fee of $500 to commence a small claims action against Associated Bank. Attorney Runyon did not give her any written communication regarding the fee. Attorney Runyon did file a small claims action against Associated Bank and the parties settled the matter for $1,788.30 in exchange for dismissing the case. However, Attorney Runyon did not notify the court of the settlement, and it eventually issued a default judgment against Associated Bank. He then deposited the settlement check into his client trust account without informing his client that he had received the settlement. He then proceeded to disburse most of the settlement funds for his own purposes, while falsely telling his client that he had not yet received the settlement funds.
¶17 On February 6, 2018, Attorney Runyon told the client that the client could pick up a settlement check at Attorney Runyon's law office. When the client went to Attorney Runyon's office the next day, Attorney Runyon offered a check for $1,000, which the client declined, asking for the full settlement, consistent with the initial agreement.
¶18 The client commenced a small claims action against Attorney Runyon, who filed an answer claiming that M.B. owed him fees of $1,150 plus costs in her case. He attached a false itemized statement in support of this misrepresentation. He also failed to fully cooperate with the OLR's investigation into this matter.
¶19 In August 2018, a court trial was conducted in M.B.'s small claims case against Attorney Runyon. At the trial, Attorney Runyon testified that he had not received the settlement funds by early January of 2018, and that he was owed an hourly fee. The court rejected Attorney Runyon's arguments and granted judgment against him for $1,612.89, reflecting the Associated Bank settlement amount, less filing, service, and other costs. Attorney Runyon never satisfied the judgment. The Fund eventually reimbursed M.B.
Matter of R.G. (Counts 19-23)
¶20 In late July 2018, Attorney Runyon retained counsel to assist him with closing his practice. Nonetheless, on August 7, 2018, Attorney Runyon accepted representation of R.G. to negotiate a debt she owed. She paid Attorney Runyon $1,835 in advance. Attorney Runyon did not provide her with a written fee agreement and did not deposit the fees into his trust account. On or around September 24, 2018, Attorney Runyon falsely told R.G. that he was working on her matter. R.G. tried contacting Attorney Runyon after that date, but his phone number had been disconnected. Attorney Runyon has not refunded any of R.G.'s advanced payment. The Fund eventually reimbursed R.G.
¶21 The referee concluded that the OLR's complaint demonstrates that Attorney Runyon committed the 23 counts of misconduct, as alleged, involving four separate clients. In so doing, Attorney Runyon committed eight counts of misconduct in violation of SCR 20:8.4(c) (Counts 2, 4, 7, 9, 14, 15, 19, and 22). He made a false statement to a tribunal in violation of SCR 20:3.3(a)(l) (Count 17). He engaged in multiple trust account violations, violating SCR 20:1.15(b) (1) (Counts 3, 13), SCR 20:1.15(e)(1) (Counts 1 and 12), and SCR 20:1.16(d) (Counts 10, 23). He violated rules pertaining to fee agreements, including SCR 20:1.5(a) (Count 16), SCR 20:1.5 (b)(1) and (2) (Counts 6, 20), SCR 20:1.5(f) (Count 21), and SCR 20:1.5(h)(1) (Counts 8 and 11). In addition, for failing to cooperate with aspects of the disciplinary proceeding, Attorney Runyon violated SCR 22.03(2), enforceable via SCR 20:8.4(h) (Count 5) and SCR 22.03(6), enforceable via SCR 20:8.4(h) (Count 18).
¶22 With respect to his recommendation that we revoke Attorney Runyon's law license, the referee found instructive In re Disciplinary Proceedings Against Grogan, 2014 WI 39, 354 Wis. 2d 659, 847 N.W.2d 817. Attorney Grogan, like Attorney Runyon, had a prior disciplinary history. This court revoked his law license for misappropriating the funds of several clients; lack of diligence; for engaging in dishonest and fraudulent practices in multiple matters; and for failing to cooperate with the OLR's investigations into his misconduct.
¶23 We adopt the referee's findings and conclusions and we declare Attorney Runyon in default and we revoke his law license and impose the restitution, as recommended. The facts detailed in the complaint demonstrate a clear pattern of misconduct by Attorney Runyon and disregard for his obligations as an attorney in this state. He converted thousands of dollars he had obtained from the clients or their relatives for his own use and failed to respond to the numerous grievances filed by his clients. The severe sanction of the revocation of his license to practice law in Wisconsin must be imposed to protect the public from a repetition of this misconduct and to deter other attorneys from engaging in similar misconduct. We further agree with the referee that Attorney Runyon must be held responsible for the $135,785.42 he owes to the P.A.T. Trust and for the amounts that the Fund had to pay to the clients harmed by his misconduct. We further conclude that he shall bear the full costs of this disciplinary proceeding.
¶24 IT IS ORDERED that the license of James T. Runyon to practice law in Wisconsin is revoked, effective the date of this order.
¶25 IT IS FURTHER ORDERED that within 60 days of the date of this order, James T. Runyon shall pay restitution of $135,785.42 to the P.A.T. Trust.
¶26 IT IS FURTHER ORDERED that within 60 days of the date of this order, James T. Runyon shall pay restitution to the Wisconsin Lawyers' Fund for Client Protection in the amount of $10,000 for the claims of S.S. and G.G.; $1,612.89 for M.B.'s claim; and $1,835 for R.G.'s claim.
¶27 IT IS FURTHER ORDERED that within 60 days of the date of this order, James T. Runyon shall pay to the Office of Lawyer Regulation the costs of this proceeding, which are $1,080.34 as of June 26, 2020.
¶28 IT IS FURTHER ORDERED that payment of restitution is to be completed prior to paying costs to the Office of Lawyer Regulation.
¶29 IT IS FURTHER ORDERED that James T. Runyon shall comply, if he has not already done so, with the requirements of SCR 22.26 pertaining to the duties of a person whose license to practice law in Wisconsin has been revoked.
¶30 IT IS FURTHER ORDERED that James T. Runyon's petition for voluntary resignation of his law license, which was held in abeyance pending consideration of this disciplinary proceeding, is dismissed as moot.
¶31 ANN WALSH BRADLEY, J., did not participate.
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