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ATTORNEY disciplinary
proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review a report
filed by referee Robert E. Kinney
recommending that the court suspend the
Wisconsin law license of Attorney Tina M.
Dahle for two years and six months; require
Attorney Dahle to pay restitution as
described herein; and require Attorney Dahle
to pay the full costs of this disciplinary
proceeding, which total $11,911.68 as of
December 8, 2014. No appeal has been filed
in this matter, so our review proceeds
pursuant to Supreme Court Rule (SCR) 22.17
(2).
¶2 We adopt the referee's findings of
fact and conclusions of law and we agree
that Attorney Dahle's license to practice
law in Wisconsin should be suspended for two
years and six months. We also agree with
the referee that Attorney Dahle should be
required to pay the full costs of this
proceeding. For the reasons explained in
this opinion, we accept part of the
recommendation regarding restitution.
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¶3 Attorney Dahle was admitted to the
Wisconsin State Bar in 2002 and practiced in
the Green Bay area. On April 24, 2012, her
law license was suspended for failure to
cooperate with the Office of Lawyer
Regulation's (OLR) investigation into some
of the grievances giving rise to this
disciplinary proceeding. Her license is
also subject to an administrative suspension
for failure to pay Wisconsin State Bar dues,
failure to file a trust account
certification, and noncompliance with
continuing legal education requirements.
She has no other prior disciplinary
history. Her license remains suspended.
¶4 In May 2013, the OLR filed a
complaint alleging 50 counts of professional
misconduct. Over the ensuing months, the
OLR investigated several additional
grievances filed against Attorney Dahle. As
a result, the OLR amended its disciplinary
complaint several times, culminating in the
filing of a third amended complaint on June
4, 2014, alleging 55 counts of professional
misconduct.
¶5 Attorney Dahle briefly contested
some of the charges but ultimately entered
pleas of "no contest" to all 55 charged
counts of misconduct. She opted to forego
an evidentiary hearing and to address the
issue of sanctions in writing.
¶6 The referee proceeded to find
misconduct as to each of the 55 counts
charged. Specifically, the referee
incorporated by reference key portions of
the original complaint, second amended
complaint, and third amended complaint, and,
based on the uncontested facts contained in
those paragraphs, the referee determined
that there was an adequate factual basis for
each of the 55 charges alleged in the
complaint and amendments thereto. We wholly
agree with the referee that the facts
alleged by the OLR support a conclusion of
professional misconduct on each of the 55
counts of misconduct set forth in the
complaint, as amended.
¶7 The allegations of misconduct at
issue are varied and numerous. Attorney
Dahle failed to commence actions prior to
the expiration of statutes of limitations,
failed to appear in court on several cases,
and missed filing deadlines for briefs,
discovery, and witness disclosures. She
essentially abandoned her law practice and
her clients in 2012 when she closed her
office without notice. Her clients were
left with cases in a state of neglect with
no way to contact their attorney. In
addition, she borrowed or took some $400,000
from clients without regard to conflict of
interest restrictions and requirements.
Attorney Dahle also repeatedly failed to
respond to inquiries from the OLR, resulting
in her temporary suspension from the
practice of law.
¶8 In sum, Attorney Dahle does not
contest, the referee concluded, and we agree
that Attorney Dahle committed the following
ethical violations:
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• seven violations of SCR 20:1.3
(failure to act with reasonable diligence
and promptness);
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• ten violations of SCR 20:1.4(a)(3)
and (4) (failure to keep the client
reasonably informed and comply with requests
for information);
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• one violation of SCR 20:1.5(a)
(collecting an unreasonable fee);
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• one violation of SCR 20:1.5(b)(1)
and (2) (failure to have a written fee
agreement);
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• two violations of SCR 20:1.8(a)
(entering into a business transaction with a
client without proper prior disclosure and
consent of terms and lawyer's role in
transaction);
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• 11 violations of various SCR 20:1.15
trust account rules (failure to promptly
deliver funds to which a client or third
party is entitled to receive; disbursing
funds from trust account before the deposit
from which those funds are to be disbursed
has cleared; failure to provide written
notice to client at least five days prior to
disbursing funds in trust for payment of
fees; failure to provide written accounting
to client upon final distribution of trust
property; and disbursing funds from trust
account via telephone transfer);
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• seven violations of SCR 20:1.16(d)
(failure to notify clients of termination of
representation and return client files and
other property);
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• one violation of SCR 20:3.4(c)
(knowingly disobeying an order of a
tribunal);
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• three violations of SCR 20:8.4(c)
(engaging in dishonesty, fraud, deceit, or
misrepresentation); and
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• 12 violations of SCR 22.03(2) and
(6), enforced via SCR 20:8.4(h) (failure to
promptly and fully cooperate with an OLR
investigation).
¶9 The OLR sought a three-year
suspension of Attorney Dahle's license to
practice law in Wisconsin. Attorney Dahle
asked that her law license be suspended "for
no more than one year," noting that her law
license has been suspended since April 24,
2012. She suggests there was some delay by
the OLR in prosecuting the matter. She
asked that her suspension be imposed
retroactive to the date of her temporary
license suspension.
¶10 The referee stated and considered
the factors that must be evaluated when
considering discipline, noting that
the "seriousness, nature and extent of the
misconduct here is nothing short of
breathtaking." The referee observed that
misappropriation or conversion of client
funds is one of the most serious acts of
lawyer misconduct because it violates the
fundamental principle of the lawyer-client
relationship and places the lawyer's
pecuniary interest above the client's
interest. Misappropriation of client funds
frequently warrants revocation. See
In re Disciplinary Proceedings Against
Bult, 142 Wis. 2d 885, 890, 419 N.W. 2d
246 (1988). Indeed, the referee considered
whether Attorney Dahle's license should be
revoked, but was mindful that license
revocation is not always appropriate for
misappropriation or conversion of client
funds. Id. at 890-91.
¶11 Ultimately, the referee considered
the mitigating facts of Attorney Dahle's
lack of previous misconduct and her eventual
cooperation with the OLR and determined that
a suspension of two years and six months was
sufficient discipline for the misconduct
committed in this case. See In re
Disciplinary Proceedings Against Cooper,
2007 WI 37, 300 Wis. 2d 61, 729 N.W.2d 206;
In re Disciplinary Proceeding Against
Tully, 2005 WI 100, 283 Wis. 2d 124, 699
N.W. 2d 882. The referee rejected Attorney
Dahle's request to make her suspension
retroactive to the date of her temporary
license suspension, observing, correctly,
that any "delay" in prosecuting this matter
is likely due to Attorney Dahle's initial
failure to cooperate with the OLR's efforts
to investigate the many grievances filed
against her.
¶12 The undisputed facts show a clear
pattern of neglect by Attorney Dahle of her
clients' needs and objectives and disregard
of her obligations as an attorney. We agree
with the referee's observation that the
recommended suspension of two years and six
months both recognizes Attorney Dahle's
eventual full cooperation with the
disciplinary process and does not unduly
depreciate the seriousness of her
professional misconduct.
¶13 We further agree that full costs
shall be imposed on Attorney Dahle.
Attorney Dahle has not alleged any factors
that would justify a reduction in costs.
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¶14 We now consider the question of
restitution. First, the OLR has advised the
court that no restitution is warranted in a
number of the client matters implicated in
this proceeding and we accept that
assessment. The parties agreed and the
referee recommended that Attorney Dahle
should be ordered to comply with any final
monetary order or judgment issued in Jane
C. Kelley v. Tina M. Dahle, et al., United
States District Court, Eastern District of
Wisconsin, Case No. 11-CV-600. We agree
with this recommendation as well.
¶15 The OLR declined to seek restitution
in the matter of J.P., who loaned Attorney
Dahle money that she failed to repay. J.P.
obtained a judgment of $116,684.02 against
Attorney Dahle in Brown County Circuit Court
Case No. 11-CV-1237, but Attorney Dahle then
filed for bankruptcy and identified J.P. as
a creditor. The record before the court
indicates that the client did not avail
himself of the procedures for challenging
discharge under federal law and this debt
was discharged. The referee declined to
make a formal recommendation regarding
restitution to J.P. but observed that "[e]
very lender assumes the risk that a loan may
not be repaid, and/or that the loan
obligation may be discharged in
bankruptcy." We accede to the parties'
assertion that no restitution order should
issue with respect to this client matter.
¶16 We next consider whether Attorney
Dahle's bankruptcy should preclude this
court from ordering restitution to two other
former clients. During proceedings before
the referee, the OLR requested that Attorney
Dahle be ordered to pay $7,007.72 in
restitution to L.G. and $4,911.51 in
restitution to J.B.
¶17 Shortly before the referee filed his
report, Attorney Dahle objected to
restitution in these client matters, stating
that she had identified these individuals as
creditors in her Chapter 7 bankruptcy
proceeding, that neither filed an adversary
proceeding or a claim in her bankruptcy
proceeding, and that the debts were
discharged.
¶18 The referee was not persuaded. The
referee found that, unlike the matter of
J.P., the funds Attorney Dahle had in her
possession relating to L.G. and
J.B. "consisted strictly of trust account
property belonging to others" and
recommended that the court order Attorney
Dahle to pay restitution to L.G. and J.B.
¶19 Neither party appealed the referee's
report. However, after the referee filed
his report, the OLR provided the court with
a restitution statement, as is standard
practice. The OLR advised the court that it
no longer seeks restitution for L.G. and
J.B. based on the fact that these clients
were listed and noticed as creditors in
Attorney Dahle's bankruptcy proceeding. The
OLR states:
Such information . . . brings the
circumstances outside of one of the OLR
restitution criteria factors. That factor
is that Attorney Dahle's rights in a
collateral proceeding (e.g., a future
reinstatement proceeding) will likely be
prejudiced if restitution is ordered to be
paid to [these clients] when federal
bankruptcy law eradicates the underlying
debt and Attorney Dahle's obligation to pay
it.
The OLR recognized that "assessing this
issue delves into federal preemption issues
not previously specifically addressed in
prior Wisconsin attorney discipline or
reinstatement proceedings." The OLR
acknowledges the considerations and
rationale discussed by the referee in
recommending restitution, in which the
referee questioned Attorney Dahle's "attempt
to get out of repaying [her clients] by
discharging these debts in bankruptcy."
Nevertheless, the OLR explains that, "to be
consistent with OLR's existing restitution
criteria, OLR's Director determined to
discontinue its restitution request."
¶20 The question is whether a lawyer can
trump this court's ability to order
restitution in the context of a disciplinary
proceeding by filing bankruptcy when the
lawyer's misconduct involved conversion of
client funds. Attorney Dahle asserted this
position quite late in this disciplinary
proceeding so the issues were not fully
developed. The dilemma identified by the
OLR raises questions: (1) whether
imposition of the disputed restitution in
this lawyer disciplinary matter is
consistent with state and federal law where,
as here, the underlying subject of the
restitution has been discharged in
bankruptcy; and (2) whether such a
restitution order is a permissible
rehabilitative condition of any future
reinstatement proceeding.
¶21 In view of these unresolved
questions, we will not order Attorney Dahle
to pay restitution to L.G. and J.B. at this
time. However, prior to any reinstatement
of Attorney Dahle's Wisconsin law license,
we will revisit the issue. See SCR 22.29
(4m) (any attorney petitioning for
reinstatement from a disciplinary suspension
of six months or more is required to allege
and demonstrate that the attorney "has made
restitution to or settled all claims of
persons injured or harmed by [the
attorney's] misconduct . . . or, if not, the
[attorney's] explanation of the failure or
inability to do so").
¶22 IT IS ORDERED that the license of
Tina M. Dahle to practice law in Wisconsin
is suspended for a period of two years and
six months, effective the date of this order.
¶23 IT IS FURTHER ORDERED that Tina M.
Dahle shall pay restitution to Jane Kelley
consistent with any final monetary order or
judgment issued in Jane C. Kelley v. Tina
M. Dahle, et al., United States District
Court, Eastern District of Wisconsin, Case
No. 11-CV-600.
¶24 IT IS FURTHER ORDERED that within 60
days of the date of this order, Tina M.
Dahle shall pay to the Office of Lawyer
Regulation the costs of this proceeding.
¶25 IT IS FURTHER ORDERED that the
restitution to Jane Kelley specified above
is to be completed prior to paying costs to
the Office of Lawyer Regulation.
¶26 IT IS FURTHER ORDERED that, as a
condition of reinstatement of her license to
practice law in Wisconsin, Tina M. Dahle
will be required to demonstrate to this
court the legal and/or factual basis to
justify any failure to reimburse L.G. and
J.B. for unearned client fees or funds that
she held in trust for them.
¶27 IT IS FURTHER ORDERED that, to the
extent she has not already done so, Tina M.
Dahle shall comply with the provisions of
SCR 22.26 concerning the duties of a person
whose license to practice law in Wisconsin
has been suspended.
¶28 IT IS FURTHER ORDERED that
compliance with all conditions of this order
is required for reinstatement. See SCR
22.28(2).
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