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Paul Strouse (“Strouse”) is a Wisconsin-
licensed attorney whose State Bar
identification number is 1017891. Strouse
practices law in Milwaukee, Wisconsin.
Strouse was first licensed to practice law
in Wisconsin on October 3, 1991.
FIRST MATTER
On August 21, 2007, Strouse filed a Chapter
13 Voluntary Petition for Bankruptcy on
behalf of his clients in United States
Bankruptcy Court, Eastern District of
Wisconsin.
As part of the Chapter 13 plan, the clients
initially agreed to exclude their promissory
note to American Honda Finance Corporation
(“Honda”) from the plan and to make car
payments separately. However, Strouse’s
clients fell behind on their car payments
and Honda filed a Motion for Relief from
Stay in December of 2007. Honda sought to
repossess the 2004 Honda Accord purchased by
Strouse’s clients.
Strouse objected to Honda’s Motion for
Relief from Stay and succeeded in resolving
the dispute with Honda over his clients’
late payments to Honda. In January of 2008,
Strouse filed and obtained approval of an
amended plan and established a payment plan
for his clients. However, consistent with
his clients’ wishes, Strouse did not
incorporate the Honda vehicle into the
amended plan, and his clients remained
obligated to make their car payments to
Honda separately and outside the plan filed
with the bankruptcy court.
The clients failed to make their car
payments in April and May of 2008. On June
5, 2008, Honda filed a new Motion for Relief
from Stay. Strouse informed his clients in
writing that Honda had filed a motion and
requested that they contact him with
instructions.
In response, Strouse’s clients contacted him
and specifically requested that he modify
their Chapter 13 plan to include the amounts
owed on the Honda vehicle. While the relief
sought by his clients would increase their
payments to the Trustee as part of a
modified plan, his clients were motivated by
a desire to keep their vehicle as well as
reduce their debt payments as much as
possible. Such relief is consistent with
the intent and purposes of the bankruptcy
code.
Strouse did not immediately comply with his
clients’ request and did not file a proposed
amended plan with the court.
The clients contacted Strouse’s office
personnel by telephone seeking to have their
bankruptcy plan amended to include their
vehicle. Office personnel informed the
clients that Strouse had been informed about
the clients’ request yet Strouse failed from
June of 2008 through August of 2008 to
respond to their inquiries concerning the
modification.
In addition, Honda representatives attempted
to obtain information from Strouse regarding
his plans to amend the bankruptcy plan.
When Strouse failed to respond to its
requests for information, Honda obtained an
order from Judge James Shapiro on June 25,
2008 granting it relief from the automatic
stay and authorizing repossession of the
clients’ vehicle.
Thereafter, Honda contacted Strouse’s
clients and informed them that it intended
to repossess the vehicle. Unable to obtain
help from their attorney, Strouse’s clients
negotiated directly with Honda to prevent
repossession of their automobile, agreeing
to pay hundreds of dollars in debt arrears
to the company.
Following receipt of payment from Strouse’s
clients, a Honda representative attempted to
contact Strouse regarding his clients’ plan
to include the vehicle in the bankruptcy
proceeding. A Honda representative
telephoned Strouse on August 28, 2008 and
again on September 19, 2008. Strouse did
not respond to the telephone calls from
Honda.
Threatened with the repossession of their
vehicle again, one of the clients travelled
to Strouse’s office in October of 2008 to
request that Strouse amend their plan. The
client was unsuccessful in obtaining an
appointment with Strouse. The client
enlisted the help of her husband and the two
of them travelled to Strouse’s office
together and once again requested that
Strouse amend their bankruptcy plan to
include payments on their vehicle.
On October 16, 2008, one of Strouse’s
clients filed a grievance with OLR against
Attorney Strouse.
On October 27, 2008, more than four months
after their initial request to amend the
bankruptcy plan, Strouse filed an amended
plan with the bankruptcy court on behalf of
his clients incorporating the Honda lien
into the plan. According to Strouse, a law
clerk had left his firm in August of 2008,
and he did not notice that his clients’ plan
had not been modified.
On December 17, 2008, OLR forwarded a formal
investigation letter to Strouse.
Strouse responded to OLR’s letter on January
11, 2009, and accepted responsibility for
the delay in amending his clients’
bankruptcy plan.
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By failing over a four-month period to draft
a modified bankruptcy plan that would
incorporate his clients’ request that a
vehicle be added to the plan, Strouse
violated SCR 20:1.3 that states, “A lawyer
shall act with reasonable diligence and
promptness in representing a client.”
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By failing to respond to client inquiries or
otherwise keep the clients reasonably
informed as to the status of their request
for preparation and filing of an amended
bankruptcy plan, Strouse violated SCR 20:1.4
(a)(3) and (4), that state in pertinent
part, “A lawyer shall … (3) Keep the client
reasonably informed about the status of the
matter; and (4) Promptly comply with
reasonable requests by the client for
information.”
SECOND MATTER
On September 20, 2007, a man hired Strouse
to represent him in his Chapter 7 bankruptcy
matter. The man paid Strouse $839.00 in
attorney fees and filing fees. Strouse
filed the bankruptcy petition on September
20, 2007 to immediately stop his client’s
wage garnishment and on October 8, 2007,
Strouse filed complete schedules for his
client. On November 12, 2007, Strouse sent
the firm garnishing his client’s wages (“the
firm”), a demand letter requesting the
return of preferential transfer funds in the
amount of $1,007.67. The firm returned the
funds.
In early February 2008, Strouse was informed
that the court had dismissed his client’s
bankruptcy without discharge because no
proof to indicate that his client had
completed a required course in financial
management had been filed. Strouse informed
his client that he would acquire the
completion certificate and file a motion to
reopen his bankruptcy.
Strouse failed to file the motion to reopen,
misrepresented to his client that he had
filed a motion to reopen and that he had
obtained a discharge order, prepared a false
discharge order, and then gave the false
discharge order to his client without
informing his client, the court, or other
participating parties that the order was
false.
Following the dismissal of the bankruptcy,
the firm that had garnished his client’s
wages renewed a garnishment action against
Strouse’s client. Unaware that the August
11, 2008 discharge order prepared by Strouse
was false, the client gave his employer a
copy and in turn the employer gave the firm
a copy of the discharge order.
In November of 2008, Strouse’s client called
him to notify him that the firm had again
attempted to garnish his wages. Strouse
immediately filed the motion to reopen his
client’s bankruptcy. On December 2, 2008,
the firm received a copy of the false
discharge order from his client’s employer
and a copy of the motion to reopen the
bankruptcy. In addition, the firm contacted
the bankruptcy court and confirmed that his
client’s bankruptcy had been dismissed
without discharge. On December 4, 2008, the
firm filed an objection to the motion and
brought to the court’s attention the
conflicting information it had concerning
his client’s bankruptcy, to include a copy
of the false discharge order. In its
objection the firm stated his belief that
the debtor may have committed an intentional
fraud on the court.
After reviewing the firm’s objection,
Strouse contacted the firm who agreed that
for $1,500.00 (the amount his client owed
plus costs) it would withdraw its
objection. Strouse hand-delivered a
cashier’s check to the firm. The firm
withdrew its objection and Strouse filed an
affidavit of no objection.
On January 7, 2009, the bankruptcy judge,
Judge James E. Shapiro (“Judge Shapiro”),
U.S. Bankruptcy Court, Eastern District of
Wisconsin held a hearing on the objection.
Strouse and a firm representative were at
the hearing. Strouse’s client was not
present at the hearing. The judge took
testimony from the firm, held in abeyance
Strouse’s motion to reopen pending
examination of Strouse’s client under oath,
and stated, “I expect your office to find
out what happened and get more information
as to how that erroneous discharge got sent
… I want to find out that regardless. So
that won’t be a basis for stopping that
because that’s a very serious charge, and I
want to find out what happened.” Strouse
advised the judge he would produce his
client.
Subsequent to the January 7, 2009 hearing,
Strouse self-reported his conduct in a
letter to OLR and in a letter hand-delivered
to Judge Shapiro. In both letters, Strouse
admitted that he created and gave the false
bankruptcy discharge order to his client.
In addition, Strouse stated that he did so
because he was pressed for time, he had not
been able to file the Motion to Reopen, and
he did not expect that his client would do
anything with the order.
On January 26, 2009, Strouse filed a motion
to withdraw as counsel stating that he
created a conflict during the course of the
representation which made it impossible for
him to represent his client. Strouse’s
motion to withdraw was granted on February
2, 2009.
On February 27, 2009, as the result of
Strouse’s preparation of a false discharge
order, Judge Shapiro ordered that Strouse be
suspended from practicing in U. S.
Bankruptcy Court, Eastern District of
Wisconsin for six months, commencing on
April 1, 2009.
Strouse refunded the legal fee he received
from his client, reimbursed his client for
the original filing fee for the bankruptcy
petition, paid the fee for reopening his
client’s case, and assisted his client in
obtaining successor counsel.
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By failing for over ten months to file a
motion to re-open his client’s bankruptcy
case, Strouse failed to act with reasonable
diligence and promptness in representing a
client, in violation of SCR 20:1.3 that
states, “A lawyer shall act with reasonable
diligence and promptness in representing a
client.”
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By intentionally creating a false bankruptcy
discharge order, Strouse violated SCR 20:8.4
(c) that states, “It is professional
misconduct for a lawyer to engage in conduct
involving dishonesty, fraud, deceit or
misrepresentation.”
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By providing his client with false
information regarding case status, including
that he had filed a motion to reopen the
bankruptcy proceeding when he had not yet
done so, and that he had received a
discharge order, aggravated by Strouse’s
creation and delivery of a fabricated
discharge order to the client, Strouse
violated SCR 20:1.4(a)(3) and SCR 20:8.4(c),
that state, “A lawyer shall keep the client
reasonably informed about the status of a
matter,” and “It is professional misconduct
for a lawyer to engage in conduct involving
dishonesty, fraud, deceit or
misrepresentation.”
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By failing at a motion hearing to clarify
the origin of the discharge order, knowing
that he had created it, and causing the
court and the firm to remain uncertain as to
the source of the discharge order, Strouse
again violated SCR 20:8.4(c).
Strouse has no prior discipline.
In accordance with SCR 22.09(3), Attorney
Paul Strouse is hereby publicly reprimanded.
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