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ATTORNEY reinstatement
proceeding. Reinstatement denied.
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1. PER CURIAM. This is an appeal by John
Miller Carroll from the findings of fact,
conclusions of law, and recommendations of
Referee Konrad Tuchscherer regarding Mr.
Carroll's petition for reinstatement of his
license to practice law in Wisconsin.
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2. We review this matter pursuant to SCR
22.33
(1) and (2). Mr. Carroll was determined not
to have satisfied the requirements for
reinstatement. The referee recommended that
after the denial of the reinstatement
petition Mr. Carroll be permitted to again
seek reinstatement in nine months pursuant
to SCR 22.33(4). The referee also
recommended that he pay the costs of the
Office of Lawyer Regulation (OLR) in this
proceeding.
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3. Except as will be noted, we approve the
findings and conclusions of the referee and
determine that Mr. Carroll has failed to
meet his burden of proof to establish the
requirements for reinstatement. Accordingly,
we accept the referee's recommendation that
his petition for reinstatement be denied.
However, we determine that Mr. Carroll can
petition for reinstatement six months after
the date of this opinion.
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4. Mr. Carroll was admitted to practice law
in
Wisconsin in 1987 and has a substantial
attorney disciplinary history. In 1992 he
received a private reprimand for failing to
hold funds in trust in which both he and his
former law firm claimed an interest. In 1997
he received a private reprimand for
performing work for a client after his
services were terminated and for
misrepresenting that he had filed a motion
on behalf of the client. In 1999 he received
a public reprimand for neglect of a matter,
for failing to communicate with a client,
and failing to return a retainer.
5. This reinstatement proceeding stems from
Mr. Carroll's one-year suspension which
commenced on January 10, 2002. See In
re
Disciplinary Proceedings Against Carroll,
2001 WI 130, 248 Wis. 2d 662, 636 N.W.2d
718. In that disciplinary proceeding he was
found guilty of eight counts of professional
misconduct, four of which were related to
trust account and associated retainer and
legal fee matters. The other four involved
failure to diligently pursue a client's
claim, failure to keep a client reasonably
informed about the status of a matter,
failure to disclose to and cooperate with
the Board of Attorneys Professional
Responsibility, and engaging in conduct
involving dishonesty,
fraud/deceit/misrepresentation. Our opinion
stated:
[His conduct] demonstrated a pattern of
deception and misdealing with clients that
runs to the very heart of the integrity of
the attorney-client relationship. . . . [G]
iven the number of violations found here, as
well as the previous violations for which
Attorney Carroll was reprimanded, it is
apparent that there is a substantial need
for others to be protected from his
propensity for misconduct. . . . [I]t is
equally apparent, given his three prior
reprimands, that Attorney Carroll has a
substantial disregard for the rules of
professional conduct and likely will commit
future violations unless a serious sanction
is imposed now.
248 Wis. 2d 662, par. 41.
6. Finally, while suspended Mr. Carroll
consented to the issuance of a public
reprimand for pre-suspension conduct
involving loaning funds to a personal injury
client in conjunction with pending
litigation.
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7. Mr. Carroll petitioned for reinstatement
on
October 23, 2002, and the hearing was held
on April 15, 2003. The referee's report was
issued on June 2, 2003.
STANDARD FOR REINSTATEMENT
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8. SCR 22.31(1) provides the standard to be
met
for reinstatement. Specifically, the
petitioner by clear, satisfactory, and
convincing evidence must show that he or she
has the moral character to practice law,
that his or her resumption of the practice
of law will not be detrimental to the
administration of justice or subversive of
the public interest, and that he or she has
complied with SCR 22.26 and the terms of the
suspension. In addition to these three
requirements, SCR 22.29(4) states related
requirements that the petition for
reinstatement "shall show." All of these
additional requirements are also effectively
incorporated into SCR 22.31(1).
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9. This court will adopt the referee's
findings
of fact unless clearly erroneous. In re
Disciplinary Proceedings Against Charlton,
174 Wis. 2d 844, 498 N.W.2d 380 (1983). The
court does not grant deference to the
referee's conclusions of law and reviews
them on a de novo basis. In re
Disciplinary Proceedings Against Norlin,
104 Wis. 2d 117, 310 N.W.2d 789 (1981). The
court may also impose whatever sanction it
sees fit regardless of the referee's
recommendation. In re Disciplinary
Proceedings Against Widule, 2003 WI 34,
261 Wis. 2d 45, 660 N.W.2d 686.
10. The focus of this reinstatement was on
the
following standards.
MORAL CHARACTER
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11. Mr. Carroll called only one witness to
testify regarding his moral character. The
witness testified that he had known Mr.
Carroll for six or seven years, was never in
business with or a past client of his, and
was unfamiliar with the specific reasons for
his license suspension. However, the witness
was of the opinion that Mr.
Carroll "definitely" would be fit to
practice law. He also stated: "I can say as
a person I know John and I feel like he's a
good friend and I've seen him around people,
I've seen him interact with enough
people. . . . I can't believe that he would
do anything that would ever harm anyone."
The witness stated that Mr. Carroll had
expressed remorse to him for the conduct
leading to the suspension.
12. The witness further stated that he
was
good friends with a recently-deceased
attorney who had planned to testify on Mr.
Carroll's behalf at the reinstatement. When
asked whether the attorney would have
testified on behalf of Mr. Carroll, the
witness said only that "we haven't discussed
it a lot, but I did hear that, yes."
13. In opposition, a former client of
Mr.
Carroll testified that he had done a poor
job on the case and had threatened him. Mr.
Carroll countered with an affidavit from a
subsequent attorney for the client who
asserted that the client was dishonest.
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14. The referee discounted the evidence
presented by Mr. Carroll's friend, concluded
as a matter of law that Mr. Carroll had
failed to call any favorable witnesses
having credible evidence to offer on his
moral character, and therefore further
concluded as a matter of law that he had
failed to meet his burden to prove moral
character by clear, satisfactory, and
convincing evidence.
15. We adopt the findings of fact and
conclusions of law of the referee with
respect to the moral character element. We
cannot conclude that the referee's findings
are clearly erroneous. Furthermore, assuming
the findings to be accurate, they clearly
support the conclusion that the moral
character element was not satisfied.
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16. We acknowledge that "moral character"
is not
defined in the rules. However, the term is
not reasonably subject to confusion. An
individual would commonly be expected to
demonstrate moral character by examples of
ethical, fair, principled, and generally
good conduct. The "good character"
requirement is also reflected in SCR 22.29(4)
(e) which requires the petitioner to
demonstrate that his or her conduct since
the suspension has been exemplary and above
reproach. Thus, the focus is on the
petitioner's conduct and character since the
suspension.
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17. Mr. Carroll's offer of proof on this
issue
was clearly inadequate. Vague and conclusory
testimony by a single friend with no
examples bolstering the opinion does not
meet the petitioner's burden to present
clear, satisfactory, and convincing
evidence. The friend's statement concerning
what the deceased attorney would have
testified, while not barred since the rules
of evidence do not apply at a reinstatement
proceeding,6 was equally vague and
unpersuasive. Mr. Carroll perhaps might have
satisfied his burden by presenting multiple
(although no particular number is required)
witnesses giving examples of his post-
suspension activities in a favorable light,
whether they be business, civil, or personal
related. Given Mr. Carroll's long
disciplinary history, particularly involving
mishandling of funds, he might also have
provided any examples of post-suspension
proper use of funds entrusted to him. In any
event, what Mr. Carroll did provide did not
approach the minimum necessary to sustain
his burden of proof.
PRACTICE OF LAW DURING SUSPENSION
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18. Mr. Carroll was advised in a December
2001
letter from the OLR that pursuant to SCR
22.29(4)(b) he should avoid holding himself
out to the public as an attorney, including
using checks identifying himself as such.
The referee admitted into evidence an
exhibit from the OLR showing that as of
August 2002 Mr. Carroll was nonetheless
still maintaining a checking account at a
credit union designating him as
an "attorney." In addition, there was
evidence that during February 2003 he opened
an escrow account at the same credit union,
again as an "attorney" or at least this is
how the credit union listed him on its
records.
19. In defense, Mr. Carroll claimed that
he
was not holding himself out to the public as
an attorney. He noted that the checking
account was opened prior to suspension and
when he actually issued post-suspension
checks on the account he manually crossed
off the "attorney" label. He further argued
that the escrow account simply did not
contain an "attorney" designation, which the
OLR concedes is the case.
20. The referee's finding of fact that Mr.
Carroll's pre-suspension checking account
still utilized checks with the
printed "attorney" designation is not
clearly erroneous. However, the referee's
finding that an escrow account was later
opened with a similar designation is clearly
erroneous.
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21. In any event, we do not adopt the
referee's
conclusion of law that Mr. Carroll failed to
demonstrate that he was not holding himself
out as an attorney during the suspension
period. While it would have been better for
him to order new checks, rather than simply
cross off the "attorney" designation each
time he used the check, that hardly rises to
the level of practicing law during his
suspension period. We also do not accept the
OLR's argument that at the very least Mr.
Carroll was holding himself out to the
financial institution as an attorney. That
conclusion is simply not reasonable.
CLOSING OF TRUST ACCOUNT
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22. A particular focus of the reinstatement
proceeding was on Mr. Carroll's trust
account difficulties during the suspension.
SCR 22.31(1), SCR 22.29(4)(h), and the
suspension decision all required Mr. Carroll
to comply with SCR 22.26 relating to
activities following suspension. SCR 22.26(1)
(d) requires the attorney to close his or
her practice during the period of
suspension. The closing of the practice
necessarily requires closing of a trust
account.
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23. The OLR required Mr. Carroll to close
his
trust account by January 25, 2002, 15 days
after the effective date of the suspension.
After he filed his compliance affidavit with
the OLR, he had telephone conversations with
it that eventually resulted in a February 7,
2002, letter from the OLR that acknowledged
there were still funds in the trust account,
and that he was having difficulty locating
the clients who were to receive the funds.
The OLR volunteered to assist Mr. Carroll in
locating the clients and, if that did not
prove successful, it indicated it
would "work with you to determine the best
course of action." The trust account was not
closed until June 14, 2002.
24. The referee made the following
findings
of fact:
(1) Mr. Carroll did not timely close
the trust account.
(2) Mr. Carroll misled the OLR in
early February 2002 into believing there was
only $8000 in the trust account remaining to
be paid back to clients when, in fact, there
was $20,000 in the account.
(3) When a disbursement in April 2002
was made to a client, the trust account was
overdrawn. Mr. Carroll then commingled $1000
of his personal funds into the trust account
to cover the payment.
(4) At some point prior to closure of
the account Mr. Carroll improperly
distributed $2500 of the trust funds to
himself.
(5) In February 2003 Mr. Carroll had
to open an escrow account to cover trust
account disbursements of over $2000 that in
reality had not occurred as of June 14,
2002.
(6) In general, the reconciliation and
maintenance of the trust account during the
period of closure was insufficient.
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25. The referee concluded as a matter of
law
that Mr. Carroll violated SCR 22.26(1)(d) by
failing to properly and promptly close his
trust account and therefore failing to
properly close his practice during the
suspension period.
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26. Mr. Carroll's argument in response to
the
findings is as follows:
(1) There never was a set time within
which to close the trust account. Rather, he
was permitted by the OLR to keep it open
until all clients could be found. The OLR
substantially-if not entirely-concedes
this point.
(2) He never led the OLR into believing
there was $8000 in trust when in fact there
was $20,000. Rather, he simply told the OLR
that two clients were owed $8000, not that
this was the balance in the account.
Further, he told the OLR in a February 2002
telephone conversation that there was
approximately $10,000 in the account. Once
again, the OLR has not argued that the
referee's finding on this was entirely
correct.
(3) He concedes he deposited $1000 of his
own funds into the trust account to assure
the checks issued from the account would
clear.
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(4) He concedes that he improperly
disbursed
$2500 to himself when in fact the amount
should have been $157. He claims there was
confusion as to what amount a particular
client was owed and as soon as he became
aware of the unintentional error he
rectified it, again by his own funds.
(5) He concedes that he had to later
open up
an escrow account to cover discrepancies
that had not been resolved as of June 14,
2002, in particular the erroneous
disbursement of trust funds to himself.
(6) He claimed he did accurate
reconciliations of the trust account in 2002
and presented an exhibit to that effect.
27. We adopt some of these findings of
fact
but reject others as clearly erroneous:
(1) The finding that Mr. Carroll did not
timely close his trust account is clearly
erroneous. The evidence does not reflect
that there was a set time in which to close
the trust account once the OLR was aware
that he was having difficulty locating some
former clients. Although he may not have
finally closed the account as quickly as
would have been desirable, there is
insufficient evidence to conclude that he
clearly exceeded an established date for
closure.
(2) The finding that Mr. Carroll misled
the
OLR as to the amount in the trust account in
February 2002 was clearly erroneous. There
is no persuasive proof that he overstated
the amount in the account.
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(3) In light of his concession, we adopt
the finding of fact that Mr. Carroll
improperly commingled his personal funds
into the trust account in order to meet an
April 2002 payment.
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(4) We adopt the finding of fact that Mr.
Carroll improperly distributed $2500 of the
trust funds to himself when the amount
should have been substantially less, as he
also concedes. He pleads confusion as an
excuse and rectified the situation as soon
as he was aware of the error, but that does
not affect the fact that the impropriety
occurred. We cannot dismiss this as
an "honest error" as he requests.
(5) We adopt the finding of fact that
subsequent to the closure of the trust
account Mr. Carroll had to open an escrow
account to cover additional trust account
disbursements that in reality had not
occurred as of the date of closure, yet
another concession.
(6) We adopt the finding of fact that
the reconciliation and maintenance of the
trust account during the period of closure
was in general insufficient. At the very
least, Mr. Carroll's improper disbursement
to himself demonstrates that the
reconciliation and maintenance of the
account was not satisfactory.
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28. We accordingly agree with the referee's
conclusion of law that Mr. Carroll violated
SCR 22.26 during the period of suspension by
failing to properly operate and promptly
close his trust account.
RESUMPTION OF THE PRACTICE OF LAW
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29. In order to alleviate concern over his
demonstrated inability to properly maintain
a trust account, Mr. Carroll testified that
upon reinstatement he would have his
criminal clients execute a fee agreement
that would, at the very least, reduce the
likelihood of him ever having to return any
retainer. The referee found that this was a
flat-fee retainer agreement which would not
allow for any refund to any client under any
circumstances. The referee was therefore
concerned that Mr. Carroll's proposed
agreement would arguably violate SCR 20:1.5
(a) which requires an attorney's fee to be
reasonable and SCR 20:1.16(d) which requires
an attorney to refund any advance payment of
a fee that has not been earned.
30. As a result, the referee concluded
as a
matter of law that Mr. Carroll had failed to
prove that his resumption of the practice of
law would not be detrimental to the
administration of justice or subversive of
the public interest.
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31. Mr. Carroll has argued on appeal, and
the
OLR concedes, that the referee misunderstood
his proposed agreement and that it does
permit a refund of unearned retainer.
Nonetheless, the OLR argues that his intent
still was to avoid any obligation or return
any unearned fees in criminal cases. It also
noted that Mr. Carroll would have to have a
trust account for civil cases, particularly
to disburse settlements.
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32. We hold that the referee's finding of
fact
that the proposed fee agreement did not
allow for any refunds to clients was clearly
erroneous. However, we still conclude as a
matter of law, as did the referee, that Mr.
Carroll has not met his burden to
demonstrate that his resumption of the
practice of law would not be detrimental to
the administration of justice or subversive
of the public interest.
33. Regardless of how Mr. Carroll's
proposed
criminal fee agreement can be characterized,
the heart of the problem is that even he
recognizes his continued inability to
properly handle his trust account affairs.
Given his substantial disciplinary history,
particularly as it relates to trust fund
difficulties, we cannot conclude that Mr.
Carroll has made a good faith effort to
demonstrate that his trust fund problems are
behind him and that his resumed practice of
law would be free of misconduct in that
regard.
SANCTION AND COSTS
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34. Although the deficiencies in Mr.
Carroll's
proof of several requirements for
reinstatement have been noted, the primary
deficiency with his petition involves his
trust account activities. His history of
trust account difficulties, his difficulties
in closing his trust account during the
suspension, and his inadequate plan for
proper trust account management upon
reinstatement, all greatly concern this
court. Mr. Carroll has done virtually
nothing to assure this court that upon his
reinstatement to the practice of law he
would be able to avoid the problems that
have contributed to his long history of
disciplinary problems.
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35. Pursuant to SCR 22.33(4) a petitioner
normally may again file a petition for
reinstatement nine months after denial.
However, we have the discretion to
effectively reduce that period. See,
e.g., In re Disciplinary Proceedings
Against Eisenberg, 122 Wis. 2d 627, 363
N.W.2d 430 (1985). In this instance we
determine that Mr. Carroll should be
permitted to file for reinstatement six
months after the date of this opinion. He
has indicated that he has been a licensed
real estate broker in Wisconsin for
approximately three months. His activities
during that period plus the subsequent six
months may enable him on his reapplication
to cast his moral character in better light
and demonstrate through specific examples
that his handling of funds and maintenance
of escrow and similar accounts is likely to
improve so that we can safely conclude that
he is fit to resume the practice of law
without danger to the public.
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36. The OLR seeks the costs of this
proceeding
pursuant to SCR 22.24. Mr. Carroll opposes
this on two grounds.
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37. First, he submits that an unspecified
portion of the costs should not be assessed
against him because they resulted from the
OLR's investigation of a claim concerning
his conduct which it allegedly abandoned at
the hearing. He submits the OLR's position
was frivolous and he should therefore not
have to pay for the costs for that portion
of the investigation.
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38. Second, he has moved this court to
preclude
the OLR from recovering any costs whatsoever
because it did not file its statement of
costs within 14 days after this appeal was
assigned for submission to the court.
39. We reject Mr. Carroll's position and
deny
his motion.
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40. First, it does not appear that the OLR
abandoned the subject claim entirely but
simply did not pursue it at the hearing.
Even if the claim had been pursued, it would
not have affected the result here given Mr.
Carroll's clear deficiency in establishing
his moral character and his fitness to
resume the practice of law. He failed to
meet his burden to satisfy the requirements
for reinstatement, regardless of whether the
OLR prevailed on all of its specific claims,
and therefore he should have to pay all of
the costs.
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41. Second, we reject Mr. Carroll's
contention
that the OLR violated the time requirement
in SCR 22.24(2). Pursuant to In re
Disciplinary Proceedings Against Bult, 142
Wis. 2d 885, 419 N.W.2d 245 (1988) the date
of submission is the date of oral argument.
The time limit is also not jurisdictional
and is subject to extension by this court.
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42. IT IS ORDERED that the petition of John
Miller Carroll for the reinstatement of his
license to practice law in Wisconsin is
denied.
43. IT IS FURTHER ORDERED that Mr.
Carroll
may again file a petition for reinstatement
six months after the date of this decision.
44. IT IS FURTHER ORDERED that Mr.
Carroll's
motion regarding costs is denied and that he
shall pay the costs of this proceeding.
45. DIANE S. SYKES, J., did not
participate.
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