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ATTORNEY disciplinary proceeding.
Attorney's license suspended.
¶1 PER CURIAM. We review a report filed
by Referee Jean A. DiMotto, recommending the
court suspend Attorney Walter W. Stern, III's
license to practice law for a period of 45 days
for three counts of professional misconduct.
No appeal has been filed so we consider this
matter pursuant to Supreme Court Rule (SCR)
22.17(2).
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¶2 We approve and adopt the referee's
findings of fact and conclusions of law. We
conclude that the seriousness of Attorney
Stern's misconduct warrants a 60-day license
suspension and we impose the full costs of this
proceeding on Attorney Stern. The OLR did not
seek restitution in this matter and no
restitution is ordered.
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¶3 Attorney Stern has been licensed to
practice law in Wisconsin since 1974 and has
been the subject of five previous
disciplinary proceedings. In August of 1988,
the Board of Attorneys Professional
Responsibility (BAPR), the predecessor to the
OLR, imposed a private reprimand on Attorney
Stern for professional misconduct consisting
of communicating on the subject of the
representation with a party he knew to be
represented by a lawyer without the consent
of that lawyer.
¶4 In September of 1992, BAPR publicly
reprimanded Attorney Stern for professional
misconduct consisting of advancing a factual
position without a basis; failing to maintain
the respect due courts of justice and
judicial officers; violating the Attorney's
Oath; and engaging in offensive personality.
Public Reprimand of Walter W. Stern, III, No.
1992-11 (electronic copy available at
https://compendium.wicourts.gov/app/raw/00030
5.html).
¶5 In November of 1993, Attorney Stern
consented to a private reprimand for
professional misconduct consisting of failing
to pay a third-party lien from settlement
proceeds after receiving notice of the lien.
BAPR Private Reprimand, No. 1993 25
(electronic copy available at
https://compendium.
wicourts.gov/app/raw/000111.html).
¶6 In March of 2008, Attorney Stern
consented to a private reprimand for
professional misconduct consisting of
committing criminal acts that reflected
adversely on his honesty, trustworthiness, or
fitness as a lawyer. The discipline was a
result of Attorney Stern pleading no contest
to a second and third offense of operating a
motor vehicle while under the influence. OLR
Private Reprimand, No. 2008-08.
¶7 In 2013, Attorney Stern's license was
suspended for two years for professional
misconduct consisting of engaging in conduct
resulting in his federal criminal conviction
for conspiring to commit money laundering.
In re Disciplinary Proceedings Against
Stern,
2013 WI 46, 347 Wis. 2d 552, 830 N.W.2d 674.
Two months later, his conviction was reversed
by the United States Circuit Court for the
Seventh Circuit. He was released from prison
and pled guilty to misdemeanor contempt of
court. Attorney Stern's license to practice
law was reinstated on February 4, 2016. In
re Reinstatement of Stern, 2016 WI 6, 366
Wis. 2d 431, 847 N.W.2d 93.
¶8 On January 30, 2020, the OLR filed a
complaint alleging that Attorney Stern
committed three counts of professional
misconduct involving his representation of
two clients. The OLR later amended its
complaint to add a fourth count, alleging
that Attorney Stern violated SCR 20:1.18(b)
by having a discussion with a prospective
client and thereafter by using or revealing
to other parties information he learned in
the consultation. However, the OLR dismissed
this fourth count on March 22, 2021.
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¶9 In April 2021, Attorney Stern
executed a no contest plea to the three
remaining counts of misconduct alleged in the
amended complaint and the parties executed a
stipulation that added some additional
context for the allegations. The parties
disputed the appropriate sanction. The OLR
recommended a 90-day license suspension and
Attorney Stern sought a public reprimand.
¶10 On August 6, 2021, the referee filed
findings of fact, conclusions of law, and a
recommendation. She accepted the parties'
stipulation and Attorney Stern's no contest
plea and, based on admissions in Attorney
Stern's Answer to the Amended Complaint as
well as the stipulation and no contest plea,
she determined that there was clear,
satisfactory, and convincing evidence that
Attorney Stern violated the three counts of
professional conduct, as alleged. The
referee recommended this court suspend
Attorney Stern's license to practice law for
45 days and impose full costs upon him.
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¶11 We will affirm a referee's findings
of fact unless they are 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. This court is free to impose
whatever discipline it deems appropriate,
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.
¶12 The first two counts of misconduct
pertain to Attorney Stern's representation of
F.J. Attorney Stern first met with F.J. and
F.J.'s mother (who had a power of attorney
for F.J.) on February 11, 2016, shortly after
his law license was reinstated following his
2013 license suspension. F.J. was seeking
legal representation in a pending child
support action, a dog bite injury case, and
regarding potential claims against a neighbor
and the Wauwatosa Police Department. As
Attorney Stern was aware, F.J. suffers some
cognitive challenges resulting from injuries
he sustained when he was the victim of a
serious beating several years ago.
¶13 Daniel Storm, f/k/a Daniel Slaughter,
an associate of Attorney Stern, also attended
this meeting. Daniel Storm had been working
as an investigator for Attorney Stern for
several months at the time of this meeting,
including while Attorney Stern's law license
was suspended. The parties stipulated that
Attorney Stern believed that F.J. had a
prior, lengthy relationship with Daniel
Storm, because Storm had posted bond for F.J.
when F.J. was held in the county jail.
Attorney Stern also believed that F.J. and/or
his mother acknowledged that they owed Storm
$17,000 for work that Storm had performed on
F.J.'s behalf.
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¶14 During that meeting, F.J. agreed to
pay $4,000 in fees for representation in each
of the child support and dog bite cases. At
the meeting, Attorney Stern provided F.J. and
his mother with a document entitled
"Promissory Note With Payment on Demand"
which stated that F.J. was to pay Attorney
Stern $25,000 by February 29, 2016 toward the
child support and dog bite matters ($8,000)
and for the work performed by Storm
($17,000). Attorney Stern also asked F.J.
and his mother to sign an "Irrevocable
Assignment" which purported to give Attorney
Stern the right to ask for $20,000 upon
demand toward the Promissory Note.
¶15 Critically, Attorney Stern did not
notify F.J. in writing of the desirability of
seeking independent counsel, give F.J. a
reasonable opportunity to seek the advice of
independent counsel on the transaction, or
obtain informed written consent from F.J.
regarding the essential terms of the
transaction and Attorney Stern's role in the
transaction and whether Attorney Stern was
representing F.J. in the transaction.
¶16 F.J. and his mother signed the
Promissory Note and the "Assignment" that
day. F.J. also signed a contingent fee
agreement for his representation for
potential claims against his neighbor, as
well as a contingent fee agreement for his
potential claims against the Wauwatosa Police
Department.
¶17 The OLR alleged, the parties
stipulated, and the referee concluded that by
having F.J. and his mother sign a promissory
note and assignment for $25,000 without
notifying them in writing of the desirability
of seeking, and giving them a reasonable
opportunity to seek, the advice of
independent counsel, and without informing
them and obtaining written consent from them
about the essential terms of the transaction
and Attorney Stern's role in the transaction
including whether he was representing them in
the transaction, Attorney Stern violated SCR
20:1.8(a).
¶18 On February 16, 2016, Attorney Stern
appeared for F.J. in the child support,
termination of parental rights and adoption
case in Winnebago County Circuit Court and
moved the court to appoint a guardian ad
litem for F.J. to provide the court with
information about F.J.'s competency.
Eventually, the court also approved a
stipulation allowing Attorney Stern to expend
$2,000 of funds retained in his trust account
to hire Dr. Terry Bruett to conduct a
psychological evaluation of F.J.
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¶19 There was a significant delay in
paying Dr. Bruett for the services he
provided. Accordingly, the OLR alleged, the
parties stipulated, and the referee concluded
that, by failing to promptly deliver $2,000
directly to Dr. Bruett from funds held in
trust for services rendered by Dr. Bruett,
Attorney Stern violated SCR 20:1.15(e)(l).
It is not disputed that Dr. Bruett has since
been paid in full.
¶20 The third count of professional
misconduct relates to Attorney Stern's
actions in the matter of the Estate of T.T.
In April 2016, T.T. died while in custody at
the Milwaukee County jail. T.T. was survived
by two adult sons, and other family members.
A Seattle law firm agreed to provide the
family with legal guidance and subsequently
contacted local Milwaukee counsel to assist
them. The family was advised to establish an
estate for T.T. so the estate could pursue
claims against Milwaukee County.
¶21 Initially, T.R., was the family's
main contact person and she offered to be the
estate's representative. Local counsel
prepared the estate paperwork, including a
Petition for Special Administration naming
T.R. as Special Administrator of the T.T.
Estate. T.T.'s adult children both consented
to this petition and T.R. was appointed
Special Administrator. On November 25, 2016,
T.R. signed a fee agreement to have the
Seattle firm represent the estate in
potential civil claims.
¶22 Meanwhile, T.T.'s adult sons had
elected to retain Attorney Stern. On January
3, 2017, Attorney Stern wrote to the Seattle
firm, advising them that T.T.'s adult son had
retained Attorney Stern "to represent him and
[T.T.'s] estate in proposed litigation
against Milwaukee County and those
responsible for this tragic event." He
received no reply. On January 5, 2017,
Attorney Stern wrote a similar letter to
local Wisconsin counsel.
¶23 On January 9, 2017, one of T.T.'s
adult sons advised local counsel that he
intended to have T.R. removed as Special
Administrator. On January 12, 2017, local
counsel emailed Attorney Stern informing
Attorney Stern that T.R. was still the
Estate's Special Administrator, and that she
had retained counsel.
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¶24 On January 12, 2017, Attorney Stern
emailed T.R. directly, indicating that he
intended to have her replaced as Special
Administrator. On January 14, 2017, Attorney
Stern again emailed T.R. directly about the
T.T. matter.
¶25 The OLR alleged, the parties
stipulated, and the referee concluded, that
by communicating directly with T.R.
concerning the T.T. matter, Attorney Stern
violated SCR 20:4.2(a).
¶26 Having accepted the stipulation and
no contest plea, the primary issue for the
referee was the appropriate sanction for
Attorney Stern's admitted misconduct. Again,
Attorney Stern sought a public reprimand
while the OLR sought a 90-day license
suspension.
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¶27 As aggravating factors, the OLR
pointed to Attorney Stern's prior
disciplinary history, the multiple misconduct
violations, and F.J.'s vulnerability. The
OLR acknowledged several mitigating factors
including an absence of a dishonest motive,
Attorney Stern's cooperation with the
disciplinary process, and his remorse.
¶28 In addition, the parties' stipulation
indicates that Attorney Stern's associate,
Daniel Storm, played a role in the F.J.
matter. Attorney Stern says that before the
initial meeting with F.J., Storm had already
prepared the documents to be given to F.J.
and he insisted those documents were
essential. Attorney Stern explains that he
added the handwritten notes to those
documents (indicating that the Promissory
Note would be replaced or followed by written
retainer agreements) and this, in fact, was
done. Attorney Stern never executed the
Promissory Note and it was not enforced.
¶29 In addition, when Attorney Stern
indicated he would pay Dr. Bruett, Storm
apparently "coaxed and influenced" Attorney
Stern into allowing him to act as agent for
the payment. Attorney Stern gave Storm the
$2,000 payment from his trust account but
Storm made only two partial payments to Dr.
Bruett totaling only 60 percent of the amount
owed to Dr. Bruett. Attorney Stern later
paid Dr. Bruett the balance from his personal
funds.
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¶30 The referee acknowledged that Storm
may have exercised a coercive influence on
Attorney Stern, but emphasized that it was
nonetheless Attorney Stern who impermissibly
presented the Promissory Note and Irrevocable
Assignment to F.J. and his mother for
signature, without the required written
explanations. However, the referee noted a
number of mitigating factors, stating:
"Attorney Stern did ameliorate the situation
by his handwritten note on the last page of
the Promissory Note, and his declination to
sign the Note." In addition, Attorney Stern
did follow through and provided F.J. with the
appropriate documents for establishing their
attorney-client relationship, and shortly
after Attorney Stern's initial meeting with
F.J., Attorney Stern asked the circuit court
to appoint a guardian ad litem for F.J. and
requested the psychological evaluation that
apparently helped resolve that case. The
referee also considered it "strongly
mitigating" that Attorney Stern provided pro
bono representation to F.J. in several other
matters and she acknowledged that "Attorney
Stern has absolutely expressed his sincere
remorse for his errors."
¶31 However, the referee concluded that a
public reprimand would be insufficient to
impress upon Attorney Stern the seriousness
of his misconduct. The referee specifically
noted that although his prior incidents of
misconduct were somewhat remote in time, this
is now the second time that Attorney Stern
has been disciplined for communicating with a
party he knew to be represented by a lawyer
without the consent of the person's lawyer.
¶32 Still, the referee was not persuaded
that a 90-day suspension was necessary,
explaining that the numerous mitigating
factors dictated a shorter suspension. The
referee opined that the cases cited by the
OLR in support of a 90-day suspension
involved more serious misconduct than that
committed by Attorney Stern. See, e.g.,
In
re Disciplinary Proceedings Against
Alfredson, 2019 WI 17, 385 Wis. 2d 565, 923
N.W.2d 869 (imposing 90-day suspension for,
inter alia, failing to hold client funds in
trust, failing to promptly deliver funds,
converting client funds, and failure to
cooperate with the OLR); In re Disciplinary
Proceedings Against Brey, 171 Wis. 2d 65,
490
N.W.2d 15 (1992) (imposing 60-day suspension
on district attorney with no prior discipline
for meeting with a represented defendant in
jail without his lawyer and discussing a plea
deal with him then misrepresenting his
conduct to the OLR); Public Reprimand of
Stephen W. Carpenter, No. 1992-9 (electronic
copy available at
https://compendium.wicourts.gov/app/raw/
000303.html) (attorney met with inmate three
times without counsel's consent). On
balance, the referee recommended this court
suspend Attorney Stern's license to practice
law for 45 days and that he be required to
pay the full costs of this disciplinary
proceeding.
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¶33 There is no showing that any of the
referee's findings of fact, based on the
parties' stipulation, are clearly erroneous,
so we adopt them. We also agree with the
referee's legal conclusions that Attorney
Stern violated the Supreme Court Rules noted
above and that Attorney Stern's misconduct
merits a license suspension. The cases cited
by Attorney Stern in support of his request
for a public reprimand are not persuasive.
Several involve lawyers who had no previous
discipline. See In re Disciplinary
Proceedings Against Preloznik, 169 Wis. 2d
137, 485 N.W.2d 249 (1992) (imposing public
reprimand on attorney not previously
disciplined who entered into a business
transaction with a client with potentially
differing interests without the client's
consent); In re Disciplinary Proceedings
Against Luther, 2017 WI 98, 378 Wis. 2d
330,
903 N.W.2d 791 (imposing public reprimand on
attorney with no previous discipline for her
role in in a fee based debt settlement plan).
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¶34 With respect to the appropriate
sanction, after careful consideration, we
agree with the referee's reasoning, but while
the referee recommended a 45-day license
suspension, a 60-day license suspension is,
generally, our minimum suspension length. We
are not persuaded that we should diverge from
this practice in this case. See In re
Disciplinary Proceedings Against Grady, 188
Wis. 2d 98, 108–09, 523 N.W.2d 564 (1994);
In
re Disciplinary Proceedings Against Gray,
2018 WI 39, ¶14, 381 Wis. 2d 56, 910 N.W.2d
923. This is Attorney Stern's sixth
disciplinary proceeding and it is concerning
that Attorney Stern committed the initial
misconduct in the F.J. matter a mere week
after his law license was reinstated. We
determine that a 60-day suspension is
appropriate discipline. As is our normal
practice, we deem it appropriate to impose
the full costs of this proceeding on Attorney
Stern.
¶35 IT IS ORDERED that the license of
Walter W. Stern, III, to practice law in
Wisconsin is suspended for a period of 60
days, effective January 4, 2022.
¶36 IT IS FURTHER ORDERED that Walter W.
Stern, III, shall comply with the provisions
of SCR 22.26 concerning the duties of an
attorney whose license to practice law has
been suspended.
¶37 IT IS FURTHER ORDERED that compliance
with all conditions of this order is required
for reinstatement. See SCR 22.29(4)(c).
¶38 IT IS FURTHER ORDERED that no
restitution is imposed upon Walter W. Stern,
III, in this matter.
¶39 IT IS FURTHER ORDERED that within 60
days of the date of this order, Walter W.
Stern, III, shall pay to the Office of Lawyer
Regulation the full costs of this proceeding,
which are $5,515.41 as of August 27, 2021.
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