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ATTORNEY disciplinary
proceeding. Attorney publicly
reprimanded.
¶1 PER CURIAM. We review the report
and recommendation of the referee that
Attorney Eric L. Crandall be publicly
reprimanded for his professional misconduct,
that he pay restitution to a client, and
that he pay the full costs of this
disciplinary proceeding, which were
$3,231.81 as of October 5, 2007.
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¶2 Attorney Crandall initially filed an
answer that denied the substantive
allegations of the complaint filed by the
Office of Lawyer Regulation (OLR). He later
stipulated, however, to the truthfulness of
those factual allegations and to having
committed each of the six counts of alleged
professional misconduct. The stipulation he
executed acceded to the OLR's request that
the referee, Attorney Stanley F. Hack,
recommend the imposition of a public
reprimand and the payment of costs. The
referee issued a report that essentially
tracked the OLR's complaint and the parties'
stipulation, except that the referee also
recommended that Attorney Crandall make a
restitution payment to his former clients.
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¶3 Attorney Crandall attempted to file
an appeal from the referee's report and
recommendation, but the court previously
ruled that his appeal was untimely. Thus,
the court's review proceeds under SCR 22.17
(2). In conducting our review, we uphold a
referee's findings of fact unless they are
shown to be clearly erroneous, but we review
the referee's conclusions of law on a de
novo basis. See In re Disciplinary
Proceedings Against Carroll, 2001 WI 130,
¶29, 248 Wis. 2d 662, 636 N.W.2d 718; In
re
Disciplinary Proceedings Against Sosnay,
209
Wis. 2d 241, 243, 562 N.W.2d 137 (1997).
Having established the proper factual and
legal setting, we determine the appropriate
level of discipline to be imposed under the
circumstances, independent 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.
¶4 Attorney Crandall was admitted to
the practice of law in Wisconsin in
September 1991. He has been the subject of
professional discipline on one prior
occasion. In February 2006 his license to
practice law in Wisconsin was suspended for
three months as discipline reciprocal to
that imposed by the Minnesota Supreme
Court. In re Disciplinary Proceedings
Against Crandall, 2006 WI 6, 287 Wis. 2d
102, 708 N.W.2d 690. The conduct leading to
that suspension involved neglecting client
matters, failing to communicate with clients
and to appear at their court proceedings,
failing to comply with discovery rules, and
failing to cooperate with the investigation
conducted by Minnesota's Office of Lawyers
Professional Responsibility.
¶5 The current disciplinary proceeding
grows out of Attorney Crandall's
representation of M.J. and C.J., a married
couple. According to the factual findings
in the referee's report, as stipulated by
Attorney Crandall, M.J. and C.J. hired
Attorney Crandall to help them remove
inaccuracies from their credit report
following their filing of a Chapter 7
bankruptcy petition.
¶6 When Attorney Crandall reviewed M.J.
and C.J.'s credit report, he noted that
M.J.'s credit report had been requested on
several occasions by Direct Merchants Credit
Card Bank (Direct Merchants). M.J.,
however, did not believe that he had an
account with Direct Merchants.
¶7 Attorney Crandall told M.J. and C.J.
that Direct Merchants' actions constituted a
violation of the federal Fair Credit
Reporting Act (FCRA). In February and March
2002 he sent two letters to Direct Merchants
requesting any credit application or
authorization in which M.J. had authorized
Direct Merchants to obtain access to his
credit report.
¶8 On April 12, 2002, Direct Merchants
sent a response to Attorney Crandall. That
letter asserted that in response to a
telemarketing call in January 2001, M.J. had
authorized Direct Merchants to review his
credit report. The letter also stated that
Direct Merchants had subsequently ordered
credit cards for M.J., which he should have
received in February or March 2001.
¶9 Attorney Crandall then sent two
letters to M.J. in which he asked M.J. to
respond to the statements in Direct
Merchants' response. M.J. did not respond
to Attorney Crandall's letters.
¶10 Despite not having heard from M.J.,
Attorney Crandall replied to Direct
Merchants' April 12, 2002, letter. Attorney
Crandall's letter stated that M.J. had
insisted that he had not given Direct
Merchants permission to review his credit
report, and that M.J. had never received any
credit cards from Direct Merchants.
Attorney Crandall demanded that Direct
Merchants provide copies of all records
relating to its alleged telephone call with
M.J. If such records were not provided,
Attorney Crandall threatened to bring an
action against Direct Merchants. Attorney
Crandall sent a copy of this letter to M.J.
¶11 Although he still had not received
any response from M.J., on June 28, 2002,
Attorney Crandall proceeded to file an
action against Direct Merchants in the
United States District Court for the Western
District of Wisconsin. The complaint
alleged that Direct Merchants had violated
the FCRA by accessing M.J.'s credit report
on three occasions without having a lawful
basis to do so.
¶12 On August 8, 2002, Attorney Crandall
sent a settlement letter to Direct
Merchants. Attorney Crandall asserted that
Direct Merchants faced possible financial
exposure of $389,000, which included
$200,000 for potential punitive damages and
$150,000 for attorney fees. Attorney
Crandall offered to settle the matter with
Direct Merchants for a payment of $150,000.
Attorney Crandall sent a copy of this letter
to M.J.
¶13 On August 13, 2002, counsel for
Direct Merchants sent a letter to Attorney
Crandall. That letter indicated that Direct
Merchants had a tape recording of the
January 2001 telemarketing call in which
M.J. had applied for a credit card and had
authorized Direct Merchants to review his
credit report. The letter also stated that
Direct Merchants had subsequently approved
M.J.'s credit application and had ordered
credit cards to be sent to him. Enclosed
with the letter was a copy of a March 2002
statement relating to M.J.'s account with
Direct Merchants. The letter further
advised that if M.J. no longer wished to
allow Direct Merchants to review his credit
report, he could submit a written request to
cancel his account. Finally, the letter
requested that M.J. voluntarily dismiss his
federal court complaint.
¶14 The next day Direct Merchants
provided a tape recording of the
telemarketing call. Direct Merchants
informed Attorney Crandall that the
recording showed that his client had no
valid basis for continuing the lawsuit. It
stated that if M.J. proceeded further with
the action, it would "avail itself of all
legal options."
¶15 Attorney Crandall sent a copy of the
letter and the tape recording to M.J. and
C.J. They have subsequently stated that
they believed that the lawsuit would be
terminated at that point. Attorney
Crandall, however, continued prosecuting the
federal claim. On August 26, 2002, Attorney
Crandall wrote to Direct Merchants'
counsel. He acknowledged that it was M.J.'s
voice on the recording of the telemarketing
call, but denied that M.J. had ever received
a credit card or a March 2002 account
statement from Direct Merchants. Attorney
Crandall alleged that the telemarketing call
had authorized Direct Merchants to review
M.J.'s credit report on only one occasion.
Thus, he claimed that Direct Merchants'
access of M.J.'s credit report on subsequent
occasions had still constituted a FCRA
violation.
¶16 Because Attorney Crandall refused to
dismiss the action, Direct Merchants filed a
motion for summary judgment and for
sanctions against M.J. On December 12,
2002, M.J. signed an affidavit in opposition
to the summary judgment motion. In the
affidavit, M.J. averred that he had
initially told Attorney Crandall that he had
not had direct contact with Direct Merchants
and that he had believed that statement to
be true at the time. He now admitted that
he had in fact applied for a Direct
Merchants' credit card during a January 2001
telemarketing call and acknowledged that
Direct Merchants had lawfully accessed his
credit report on one occasion in response to
his application. The affidavit stated,
however, that M.J. had never received any
credit card from Direct Merchants, that
Direct Merchants' access of his credit
report on subsequent occasions had therefore
been unlawful, and that on the day prior to
executing the affidavit M.J. had tried to
make two purchases with his Direct Merchants
credit card number, but had been
unsuccessful because the card number had
been rejected.
¶17 Although M.J.'s affidavit had been
designed to oppose Direct Merchants' summary
judgment motion, Attorney Crandall did not
file it with the court. Indeed, he filed
nothing in opposition to the summary
judgment motion. The U.S. District Court
scheduled the motion for a hearing, but
Attorney Crandall failed to inform either
M.J. or C.J. of that proceeding.
¶18 Since no opposition to the motion
had been filed, on December 31, 2002, the
court granted summary judgment to Direct
Merchants and dismissed M.J.'s claims. The
court, however, denied Direct Merchants'
request for sanctions against M.J. Attorney
Crandall failed to inform M.J. and C.J. of
the dismissal of M.J.'s complaint.
¶19 On January 8, 2003, Direct Merchants
filed a motion for reconsideration of the
denial of their motion for sanctions.
Although he had filed nothing in opposition
to the summary judgment motion, Attorney
Crandall now filed a brief in opposition to
the renewed request for sanctions and
attached the summary judgment affidavit that
M.J. had previously executed on December 12,
2002. The court scheduled a hearing on the
reconsideration motion, but Attorney
Crandall again failed to inform M.J. and
C.J. of that fact.
¶20 On March 19, 2003, the U.S. District
Court granted Direct Merchants' motion for
reconsideration of the sanction request and
entered a judgment against M.J. personally
in the amount of $4,747.77. Attorney
Crandall failed to inform M.J. and C.J. of
the judgment. They first learned of the
judgment against M.J. when they received a
letter from counsel for Direct Merchants on
July 18, 2003.
¶21 Attorney Crandall subsequently
forwarded correspondence to M.J. and C.J.
informing them of the judgment and asking
them to contact his office. After several
days of unsuccessful attempts, M.J. and C.J.
were finally able to speak with Attorney
Crandall, but did not receive a satisfactory
explanation of what had transpired in the
federal lawsuit. During this conversation,
Attorney Crandall stated that he concluded
from the tone of M.J. and C.J.'s voices that
they were firing him.
¶22 M.J. and C.J. reached an agreement
with Direct Merchants whereby on November
13, 2003, they paid $1,600 to Direct
Merchants. In exchange for this discounted
payment, Direct Merchants filed a
satisfaction of the sanctions judgment
against M.J.
¶23 On three occasions beginning in
January 2004, M.J. and C.J. requested
Attorney Crandall to return their file.
Attorney Crandall failed to comply with
their requests in a timely manner. He did
not return M.J. and C.J.'s file to them
until August 16, 2004.
¶24 In November 2003 M.J. and C.J. filed
a grievance with the OLR. They alleged that
Attorney Crandall had continued to prosecute
the action against Direct Merchants despite
having received evidence that undermined any
claim, that he had failed to return their
calls or otherwise keep them informed, and
that he had failed to return their file when
asked to do so.
¶25 In February and March 2004 the OLR
sent letters to Attorney Crandall attaching
M.J. and C.J.'s grievance and asking him to
submit a written response. Attorney
Crandall did not respond within the time
periods requested by the OLR. On March 30,
2004, Attorney Crandall did fax a letter to
the OLR. In his letter Attorney Crandall
stated that his current workload prevented
his timely response to the grievance and
that he would submit a written response by
April 5, 2004. He did not, however, respond
as promised. The OLR then delivered yet
another letter to Attorney Crandall, this
time by personal service, but he still did
not respond to the substance of the
grievance.
¶26 Ultimately, the OLR sought and this
court granted a temporary suspension of
Attorney Crandall's license to practice law
in Wisconsin due to his failure to cooperate
with the OLR's investigation. Almost a
month after his license was temporarily
suspended, Attorney Crandall finally
submitted a response to the grievance. On
the OLR's motion, this court reinstated
Attorney Crandall's license.
¶27 The OLR asked Attorney Crandall on
two additional occasions for further
information. On November 29, 2005, Attorney
Crandall responded to the OLR, stating that
he had already provided detailed and
comprehensive documents and thought any
additional response was unnecessary.
Attorney Crandall also asked for documents
that had been identified as having been
attached to the OLR's letters, but that he
alleged had been missing. Although the OLR
sent the appended documents to Attorney
Crandall, he did not provide any further
response.
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¶28 On the basis of these facts, the
referee concluded that by continuing to
insist that M.J. had no credit relationship
with Direct Merchants and to pursue a claim
against it despite receiving evidence that
M.J. had a credit relationship with Direct
Merchants and had authorized Direct
Merchants to access his credit report,
Attorney Crandall had knowingly advanced a
claim or defense that was unwarranted under
existing law and had knowingly advanced a
factual position without a basis for doing
so, in violation of former SCR 20:3.1(a)(1)
and (2). The referee also determined that
Attorney Crandall's failure to file M.J.'s
December 12, 2002, affidavit or a brief in
opposition to Direct Merchants' summary
judgment motion had constituted a violation
of SCR 20:1.3. The referee further
concluded that Attorney Crandall had
violated SCR 20:1.4(a) by failing to keep
his clients reasonably informed about their
matter, as evidenced by the approximately
four-month delay between the entry of the
judgment against M.J. and Attorney
Crandall's notification to M.J. and C.J. of
that fact. The referee also found that
Attorney Crandall's failure to return M.J.
and C.J.'s file in a timely manner had
constituted a failure to protect the
interests of a client upon termination of a
representation, in violation of SCR 20:1.16
(d). Finally, the referee concluded that
during two separate periods of time, before
and after the temporary suspension of his
license to practice law, Attorney Crandall
had willfully failed to provide a written
response to a grievance and to cooperate
with the OLR's grievance investigation, in
violation of SCRs 21.15(4) and 22.03(2) and
(6), all of which are actionable through SCR
20:8.4(f).
¶29 Given the parties' stipulation to
the facts described above and to the
existence of violations of the Supreme Court
Rules of Professional Conduct, we adopt the
factual findings contained in the referee's
report. We also adopt the referee's legal
conclusions that Attorney Crandall committed
six separate violations.
¶30 With respect to discipline, the
referee recommended that Attorney Crandall
be publicly reprimanded and that he be
required to pay the costs of the
disciplinary proceeding. This
recommendation was consistent with the terms
of the stipulation entered into by the OLR
and Attorney Crandall.
¶31 Having reviewed the record, we agree
that the seriousness of Attorney Crandall's
professional misconduct requires a public
reprimand. His lack of communication with
his clients, lack of diligence, failure to
return a client's file in a timely manner
and failure to cooperate with the OLR's
investigation are serious breaches of his
ethical duties as a lawyer in this state.
In addition to the discipline imposed, we
also agree that Attorney Crandall should be
required to pay the full costs of this
disciplinary proceeding.
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¶32 Although the OLR did not request a
restitution award in its complaint and the
subject was not mentioned in the parties'
stipulation, the issue was apparently raised
in a telephone conference that the referee
had with the parties following the filing of
the stipulation. Ultimately, Attorney
Crandall submitted a short response arguing
against the imposition of any restitution
award in favor of M.J. and C.J. In addition
to questioning the legal basis for a
restitution award where there had been no
such request affirmatively made by the OLR,
Attorney Crandall asserted that M.J. had
misled him by stating that he had never
applied for credit from Direct Merchants,
when in fact he had applied during a
telephone marketing call. Attorney Crandall
argued that once he learned the truth about
M.J.'s credit application, he focused not on
the original credit review by Direct
Merchants, but on Direct Merchants'
subsequent reviews of M.J.'s credit report.
Attorney Crandall asserted that those
subsequent reviews were unlawful under the
FCRA because M.J. had never received or
activated any Direct Merchants credit card,
and therefore, there had been no credit
relationship to authorize Direct Merchants'
ongoing credit reviews.
¶33 Attached to Attorney Crandall's
response was an unsigned copy of M.J.'s
affidavit in the federal action. The
affidavit, to which the OLR did not object,
acknowledged that M.J. had initially told
Attorney Crandall that he had never had any
contact with Direct Merchants. The
affidavit stated that M.J.'s memory had been
jarred by the recording of his call with a
Direct Merchants' representative and that,
given his request for a credit card during
that telemarketing call, Direct Merchants'
initial review of his credit report had been
lawful. The affidavit disputed, however,
Direct Merchants' claim that a welcome
packet and credit card had been sent to
M.J. It also stated that although M.J. had
received a March 2002 "statement," that
document was merely intended to give notice
of a class action settlement involving
Direct Merchants. The affidavit continued
that M.J. had never activated any Direct
Merchants' credit card. As proof of that
fact, the affidavit stated that M.J. had
attempted to use the credit card number over
the telephone to order items from two
catalog clothing companies, but the card
number had been rejected by both companies.
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¶34 The record does not show any
response by the OLR to Attorney Crandall's
filing. Nonetheless, in his report the
referee specifically recommended that
Attorney Crandall pay restitution to M.J.
and C.J. for the $1,600 payment that they
had made to Direct Merchants as satisfaction
of the sanctions judgment and for any legal
fees that they had incurred to negotiate the
settlement, plus interest until the
restitution was paid in full. The referee's
reasoning for the restitution recommendation
was that by the time the sanctions judgment
was entered, M.J. and C.J. had no longer
authorized Attorney Crandall to proceed with
the action in light of the fact that Direct
Merchants had proven that M.J. had in fact
applied for a credit card during a
telemarketing call. Thus, the referee
concluded that Attorney Crandall had
continued to prosecute the action although
M.J. and C.J. "thought it had been
resolved." The referee also relied on what
he believed was a contradiction in the
affidavit signed by M.J., and therefore in
Attorney Crandall's theory of the case. The
referee pointed out that M.J.'s affidavit
stated in one paragraph that he had never
received a credit card from Direct
Merchants, but in a later paragraph stated
that M.J. had unsuccessfully attempted to
use his Direct Merchants credit card to make
two purchases. The referee implied that
Attorney Crandall had to know that one or
the other of these statements could not be
true, and therefore, that his continued
prosecution of the action against Direct
Merchants had been frivolous.
¶35 Although we agree that Attorney
Crandall bears some responsibility for not
keeping M.J. and C.J. fully informed and for
the sanctions judgment that was entered
against M.J., we do not believe that he
alone should bear full responsibility for
the outcome of that case. It is undisputed
that Attorney Crandall's initial position in
negotiating with Direct Merchants and then
in his federal court complaint was based on
an inaccurate statement (Footnote: M.J.'s
affidavit implicitly stated that he had
forgotten about the telemarketing call with
the Direct Merchants' representative until
he saw the transcript of the call. We do
not express an opinion on whether this was
the case. Even if the telemarketing call
had been forgotten, M.J.'s statements that
no call had been received were still
inaccurate. It was those statements by M.J.
to Attorney Crandall that prompted the
filing of the federal complaint. Also,
there is no indication in the record that
either M.J. or C.J. objected to the filing
of the complaint on the basis of those
statements.) from M.J. that he had never
applied for a Direct Merchants credit card.
There is no indication in the record that
either M.J. or C.J. disagreed with the
filing of that complaint.
¶36 It is a fact that Direct Merchants
subsequently provided proof that M.J. had
applied for a credit card during a January
2001 telemarketing call. Attorney Crandall
forwarded Direct Merchants' letter on this
subject and a tape recording of the call to
M.J. According to the OLR's complaint, to
which Attorney Crandall stipulated, M.J. and
C.J. then "believed the lawsuit would be
ended." This factual finding, however, does
not mean that M.J. or C.J. directed Attorney
Crandall to dismiss the lawsuit. Indeed,
there is no allegation or factual finding to
that effect. It also does not mean that
M.J. and C.J. believed at that time, or at a
later time, that the lawsuit had in fact
been voluntarily dismissed. Indeed, it is
clear that M.J. knew at a later date that
the lawsuit had not been dismissed. He
subsequently signed an affidavit in which he
acknowledged applying for a credit card
initially, but explicitly denied ever
receiving one or making another telephone
call to Direct Merchants to activate it.
¶37 One might argue that M.J. could
simply have signed a document that his
lawyer gave to him without understanding its
contents or importance. The affidavit,
however, clearly showed on the top of the
first page that it was intended to be part
of the federal lawsuit. In addition, the
first paragraph of the affidavit stated that
the affidavit was being submitted in
opposition to Direct Merchants' motions for
summary judgment and for sanctions. M.J.
signed this affidavit well after he had
received the letter and tape recording from
Direct Merchants. The fact that he signed
such a document, even assuming an imperfect
understanding of the document's relevance,
shows that M.J. knew his lawsuit remained
active to some degree. His signature on the
affidavit simply cannot be squared with the
referee's implication that Attorney Crandall
was continuing to pursue the federal case
solely on his own.
¶38 In addition, it is not clear that
there is an internal contradiction in the
position taken by Attorney Crandall or in
the affidavit signed by M.J. after Direct
Merchants had proven that M.J. had initially
applied for a credit card. Attorney
Crandall's position after learning of the
tape recording of the telemarketing call was
that while M.J.'s initial application may
have authorized Direct Merchants' first
review of M.J.'s credit report, Direct
Merchants had no authority to make
continuing reviews of M.J.'s credit reports
because M.J. never activated, or even
received, a Direct Merchants credit card.
M.J.'s affidavit does not necessarily
undercut this position. Contrary to the
conclusion drawn by the referee, the
affidavit does not state that M.J. used a
physical credit card to attempt to make
purchases in December 2002. Rather, the
affidavit states that M.J. used the Direct
Merchants credit card number, which the
catalog companies rejected. Moreover, M.J.
never had to present a physical credit card
because he attempted these purchases over
the telephone. In addition, it is entirely
possible that M.J. obtained the credit card
number allegedly assigned to him by
Direct
Merchants from the March 2002 statement that
Direct Merchants allegedly sent to him or
from materials that were filed or produced
during the federal litigation. In any
event, it is not necessarily true that
M.J.'s affidavit and Attorney Crandall's
theory of the case were based on a logical
contradiction that Attorney Crandall should
have recognized, causing him to withdraw the
federal complaint.
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¶39 The bottom line is that we concur
with the referee that Attorney Crandall
bears some responsibility for the sanction
judgment entered against M.J., but we do not
believe that the responsibility lies solely
with him. He did not keep his clients
adequately informed and did not engage them
sufficiently in decisions about whether and
how to proceed with their claim. On the
other hand, there is no allegation in the
record that M.J. or C.J. instructed Attorney
Crandall to dismiss the lawsuit, and indeed
M.J. indicated his approval of continuing
the fight by executing an affidavit in
opposition to Direct Merchants' summary
judgment motion. Under these circumstances,
we conclude that it would be equitable for
Attorney Crandall to pay partial restitution
to M.J. and C.J. in the flat amount of
$1,000. This will avoid any further
litigation over possible attorney fees or
interest, which would be more costly than
any amounts at issue.
¶40 IT IS ORDERED that Eric L. Crandall
is publicly reprimanded for his professional
misconduct.
¶41 IT IS FURTHER ORDERED that within 60
days of the date of this order, Eric L.
Crandall pay to the Office of Lawyer
Regulation the costs of this proceeding. If
the costs are not paid within the time
specified and absent a showing to this court
of his inability to pay the costs within
that time, the license of Eric L. Crandall
to practice law in Wisconsin shall be
suspended until further order of the court.
¶42 IT IS FURTHER ORDERED that within 60
days of the date of this order, Eric L.
Crandall shall pay restitution to clients
M.J. and C.J. in the amount of $1,000. If
restitution to M.J. and C.J. is not paid
within the time specified and absent a
showing to this court of his inability to
pay the restitution amount within that time,
the license of Eric L. Crandall to practice
law in Wisconsin shall be suspended until
further order of this court.
¶43 IT IS FURTHER ORDERED that
restitution to clients M.J. and C.J. is to
be completed prior to paying costs to the
Office of Lawyer Regulation.
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