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ATTORNEY reinstatement proceeding.
Reinstatement denied.
¶1 PER CURIAM. Attorney James M.
Schoenecker has appealed Referee James W.
Mohr Jr.'s recommendation that Attorney
Schoenecker's petition for the reinstatement
of his license to practice law in Wisconsin
be denied. Upon careful review, we agree
with the referee that Attorney Schoenecker
has failed to meet his burden of proof to
establish the requirements for reinstatement
at this time. Accordingly, we accept the
referee's recommendation that the petition
for reinstatement be denied. However, we
determine that Attorney Schoenecker can
again petition for reinstatement six months
after the date of this opinion. As is our
usual practice, we further conclude that
Attorney Schoenecker should be required to
pay the full costs of this reinstatement
proceeding, which are $6,809.66 as of March
23, 2018.
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¶2 Attorney Schoenecker was admitted to
practice law in Wisconsin in 2004. He is a
graduate of Boston College and Columbia Law
School. He practiced briefly in New York,
practiced at Quarles & Brady in Milwaukee
for a time, and then went to a small law
firm in Delavan called the Clair Law
Offices. In 2011, Attorney Schoenecker's
license was suspended for three years.
See
In re Disciplinary Proceedings Against
Schoenecker, 2011 WI 76, 336 Wis. 2d 253,
804 N.W.2d 686. Much of the misconduct in
that case arose out of Attorney
Schoenecker's personal and professional
relationship with his former fiancé, M.F.
In December 2007, Attorney Schoenecker and
M.F. opened a joint checking account. M.F.
also obtained a home equity line of credit
and made a loan of $48,500 to Attorney
Schoenecker. Attorney Schoenecker executed
a promissory note whereby he promised to
repay the loan with interest. Two days
after making the loan, M.F. learned that
Attorney Schoenecker had made cash
withdrawals from her checking account at a
casino, resulting in a $1,500 negative
balance in her account. Thereafter, M.F.
closed the joint checking account and ended
her engagement to Attorney Schoenecker.
¶3 Attorney Schoenecker repaid some of
the loan balance. At some point, M.F. filed
a collection action against Attorney
Schoenecker. The parties reached a
settlement and Attorney Schoenecker paid
M.F. some $32,000 as part of a full
resolution of the financial issues between
them.
¶4 In December 2008 Attorney
Schoenecker used M.F.'s personal information
to enter her business account without her
permission and make checks payable to
himself. He was able to cash a $950 check,
but an attempt to cash two more checks was
apparently unsuccessful. As a result of
those actions, Attorney Schoenecker was
charged in two separate criminal
proceedings. In a Walworth County case, he
pled guilty to one felony count of identity
theft and was placed on two years of
probation and ordered to make restitution
and pay court costs. In a separate Waukesha
County case, he pled guilty to a misdemeanor
charge of theft-moveable property. The
Waukesha court imposed and stayed a sentence
of four months in jail and placed Attorney
Schoenecker on probation for one year. He
was also required to pay M.F. restitution as
well as pay court costs.
¶5 In 2008, Attorney Schoenecker became
an associate at the Clair Law Offices. He
informed the law firm he was representing
M.F., so she was considered a client of the
firm. Contrary to Clair Law Offices'
policy, Attorney Schoenecker sent invoices
to M.F. in the fall of 2008 showing that she
owed over $13,000. A substantial number of
the entries on the invoices were fraudulent.
¶6 In addition to the misconduct
involving M.F., Attorney Schoenecker also
set up his own separate law firm on the side
while he was working as an associate
attorney for the Clair Law Office and did
not inform the firm of this fact.
¶7 The final part of Attorney
Schoenecker's misconduct giving rise to the
three-year suspension involved fraudulent
statements on his own personal bankruptcy
proceeding.
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¶8 In 2016, Attorney Schoenecker
received an additional one-year license
suspension. See In re Disciplinary
Proceedings Against Schoenecker
(Schoenecker
II), 2016 WI 27, 368 Wis. 2d 57, 878
N.W.2d
163. The misconduct in that case concerned
his involvement in a business partnership he
entered into in 2012 with M.M. and T.H. The
men established a limited liability company
called GameMaster, LLC. T.H. gave Attorney
Schoenecker $25,000 in cash as his capital
contribution, and M.M. contributed $20,000.
Instead of immediately depositing T.H.'s
$25,000 into a GameMaster account, Attorney
Schoenecker deposited the bulk of the money
into his own personal checking account. He
also used company funds to pay his personal
credit card bills without preapproval from
his partners, and he withdrew funds from
company accounts in order to gamble at
Potawatomi Casino in Milwaukee.
¶9 Attorney Schoenecker filed a
petition for the reinstatement of his law
license on January 30, 2017. The Board of
Bar Examiners filed a report saying Attorney
Schoenecker had complied with all continuing
legal education requirements for
reinstatement. The Office of Lawyer
Regulation (OLR) recommended against
reinstatement. A public hearing was held
before Referee Mohr on July 18, 2017.
¶10 Attorney Schoenecker testified at
the hearing that he is employed by a
landscape maintenance, snow removal, and
condominium property maintenance company.
The owner of the company submitted a letter
saying that he would feel comfortable with
Attorney Schoenecker returning to the legal
profession and that he trusts Attorney
Schoenecker with company trucks and credit
cards.
¶11 Attorney Schoenecker also testified
that during the term of his suspension he
has volunteered at his church, set up a
chess club at a middle school, and assisted
elderly neighbors with household tasks.
¶12 Attorney Schoenecker testified that
in 2015 he started seeing a mental health
professional who specializes in gambling
addictions, James Harrison. Attorney
Schoenecker said with Mr. Harrison's help he
has been able to abstain from gambling.
Attorney Schoenecker also explained that he
banned himself from the Potawatomi Casino,
and he also attends Gamblers Anonymous
meetings. Mr. Harrison wrote a letter
saying "if [Attorney Schoenecker] continues
with his treatment plan, utilizes his
support system, makes the changes that are
necessary in his life, and continues to act
and live responsibly, the chance for the
situation to re-occur is minimal." Mr.
Harrison went on to state that in his
professional opinion, if Attorney
Schoenecker's law license were reinstated,
"he would continue to perform his duties as
an attorney in an extremely professional
manner. His prognosis is excellent."
¶13 T.H., one of the GameMaster
partners, testified against Attorney
Schoenecker's reinstatement petition. He
said he did not feel his dispute with
Attorney Schoenecker was resolved fairly,
and he said he did not believe Attorney
Schoenecker has the moral character to
practice law in Wisconsin. T.H. said, "In
my personal opinion anyone who can treat a
lifelong friend the way I have been treated,
you can get as much as help as you want for
gambling problems, that doesn't change the
core person in my opinion."
¶14 Edward Thompson, an attorney at
Clair Law Offices, also testified in
opposition to Attorney Schoenecker's
reinstatement. He said Attorney Schoenecker
was employed at the law offices in 2008 and
2009. When asked if Attorney Schoenecker
would be trustworthy and have the moral
character to practice law after having been
treated for a gambling addiction, Attorney
Thompson replied:
I have some concern about that in
regard to
how he treated his employment relationship
with Clair Law Offices, how he treated his
ex-fiancée, and then how I read – with
regard to the bankruptcy filings and with
regard to GameMaster, the gentleman who was
here earlier, I have some concerns that he's
breaching trust with people he is closest
to. So yeah, I have a concern whether he
would do that with clients.
¶15 M.F. also testified in opposition to
Attorney Schoenecker's reinstatement. She
said she was reimbursed the money that
Attorney Schoenecker took from her, but she
said she did not believe he had ever
expressed sincere or genuine remorse for his
misconduct. When asked if, assuming
Attorney Schoenecker has been treated for a
gambling problem, she would deem him to be
trustworthy and having the moral character
to practice law, her response was "Certainly
not . . . I'm scared for the public if he
keeps his law license." She went on to
say:
He's an opportunist. He's shown to be
an
opportunist. [He] will take advantage at any
point he can. He has taken advantage of his
next of kin, myself being his fiancée, two
best friends, and the gentleman from Clair
Law Office.
¶16 On cross-examination, M.F. said that
the opinions she expressed came from
"information or experiences I had over ten
years ago."
¶17 Attorney Schoenecker's father and
his sister both testified on Attorney
Schoenecker's behalf. Attorney
Schoenecker's sister said he has overcome
his gambling addiction. A childhood friend
of Attorney Schoenecker's also testified on
Attorney Schoenecker's behalf. In addition,
Attorney Schoenecker submitted a number of
letters from acquaintances who supported his
reinstatement petition.
¶18 The referee issued his report on
August 18, 2017. The referee termed the
case "a difficult matter" since on one hand
it was quite clear Attorney Schoenecker
desires his law license back and wishes he
could atone for his past misconduct, but on
the other hand, "the gravity and extent of
his past conduct is troubling." The referee
said all of Attorney Schoenecker's
misconduct amounted to "selfish and either
illegal or immoral acts." The referee said
while Attorney Schoenecker blamed all of the
misconduct on his gambling addiction,
clearly a number of the instances of
misconduct have nothing to do with gambling,
i.e., "lying to the partners of the law
firm, improperly obtaining the firm's
financial records, setting up a separate,
undisclosed business operation, and lying
under oath in bankruptcy court." The
referee said all three of the OLR's
witnesses testified they have serious doubts
about Attorney Schoenecker's
trustworthiness, and all said he never
expressed any sense of apology or remorse to
them for his conduct.
¶19 The referee said reinstatement
hearings are not only an examination of what
has taken place from the time of the
original discipline until reinstatement is
sought, but also an attempt to predict the
future. The referee noted that this court
has admonished referees that the primary
focus of a reinstatement hearing should be
on the petitioner's conduct between the
suspension and the hearing. See In re
Disciplinary Proceedings Against Carroll,
2004 WI 19, ¶16, 269 Wis. 2d 172, 675 N.W.2d
792. However, the referee said the facts of
the original misconduct must also be taken
in to account to help predict whether, going
forward, the petitioner will satisfy the
requirements of moral character. The
referee said:
It is my considered opinion that given
the
seriousness of his past conduct; given his
failure to account for moral lapses other
than blaming a gambling addiction; given his
failure to explain how moral lapses
unrelated to the gambling addiction have
been cured; and given his failure to present
any significant testimony necessary to
overcome the strong testimony of three of
his victims, I cannot in good conscience say
that Schoenecker has met the high burden of
proof imposed on him by SCR 22.31.
¶20 Schoenecker's appeal argues that the
OLR, in opposing reinstatement, has
submitted only the testimony of individuals
who were harmed by conduct that has already
been accounted for and who have no first
hand knowledge of anything of substance that
has occurred since the suspensions.
Attorney Schoenecker argues that in essence
what the OLR is now saying is that it
regrets its decision to stipulate to the
level of discipline in the two underlying
cases, and it believes the suspensions
should have been longer.
¶21 Attorney Schoenecker argues that the
referee's recommendation against
reinstatement is not supported by the
evidence. He says that the referee's
findings about him were, overall, favorable,
and he points out that the referee found
Attorney Schoenecker's testimony to be
sincere; that he admitted engaging in some
"really bad behavior;" that he sought
counseling; he paid restitution; he has been
working as a laborer and was promoted to
supervisor; and that he never realized "how
privileged he was to have been a lawyer."
¶22 Attorney Schoenecker argues the only
testimony in opposition to his reinstatement
was based on outdated information and
hearsay. He says while past conduct can be
relevant to a determination as to whether a
petitioner has the moral character to resume
the practice of law, this court has said
that a hearing "should not amount to a
retrial of the original disciplinary case."
See In re Disciplinary Proceedings
Against
Penn, 2002 WI 5, ¶7, 249 Wis. 2d 667, 673
N.W.2d 287.
¶23 Attorney Schoenecker says all three
OLR witnesses were clearly still upset and
all had formed subjective beliefs based on
old or second hand information. Attorney
Schoenecker says that while it is
understandable those witnesses would still
be upset, they each testified they had no
useful knowledge of his conduct since the
time of his suspensions and instead based
their conclusions about his current fitness
to practice law on their prior experience
with him and on what they learned from other
OLR witnesses. Attorney Schoenecker argues
that the OLR did not offer a single piece of
competent evidence that contradicted
Attorney Schoenecker's evidence about his
conduct and character since the time of his
offenses, and he says the fact people
aggrieved by his prior conduct are still
aggrieved by it is not a reasonable basis to
oppose his reinstatement.
¶24 Attorney Schoenecker argues he has
met his burden of proof to show that he can
safely be reinstated to the practice of law.
He says his witnesses have first-hand,
recent information about his character,
fitness, and abilities. He says he has
taken steps to learn what was driving his
negative behavior and how to avoid repeating
it, including attending Gamblers Anonymous
meetings and seeking counseling from a
licensed professional. He says he intends
to remain in treatment, and he says he has
taken responsibility for his actions and is
truly sorry for the harm he has caused
others. Attorney Schoenecker argues that
denying him reinstatement at this point
would serve only to punish him, not to
protect the public.
¶25 The OLR argues that the referee
correctly concluded that Attorney
Schoenecker failed to meet his burden of
proof for reinstatement. Specifically, the
OLR says the referee appropriately found
that Attorney Schoenecker failed to show the
requisite moral character for reinstatement
and failed to present adequate evidence or
testimony that his moral lapses have been
cured. The OLR also says the referee
properly found that Attorney Schoenecker
continued to blame his behavior on his
gambling addiction and failed to explain
that the moral lapses unrelated to gambling
have been addressed. The OLR says Mr.
Harrison's report, which says that Attorney
Schoenecker's prognosis with regard to
relapsing with respect to his gambling
problem is excellent if he continues with
his treatment plan, is insufficient to
support a finding of fitness for
reinstatement because "Harrison's report is
only as good as the information provided to
him by Schoenecker. If Schoenecker was not
truthful with his therapist or did not
provide him with all the necessary
background information, then this court
should not rely solely on the report as a
sufficient basis for reinstatement."
¶26 The OLR says contrary to Attorney
Schoenecker's claims, the OLR did not
present Attorney Schoenecker's victims as
witnesses in order to retry the prior
disciplinary matters, but rather to rebut
Attorney Schoenecker's claim that he has the
current moral character to practice law in
Wisconsin. The OLR also argues that
Attorney Schoenecker's reinstatement
presentation exhibited a lack of remorse for
his victims.
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¶27 Supreme Court Rule 22.31(1) provides
the standard to be met for reinstatement.
Specifically, the petitioner must show by
clear, satisfactory, and convincing evidence
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 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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¶28 This court will adopt the referee's
findings of fact unless they are clearly
erroneous. Conclusions of law are reviewed
de novo. See In re Disciplinary
Proceedings
Against Jennings, 2009 WI 26, ¶22, 316
Wis.
2d 6, 762 N.W.2d 648.
¶29 Upon careful review of the matter,
we adopt the referee's findings and
conclusions and agree with the referee that
at this time Attorney Schoenecker has failed
to meet his burden of demonstrating that he
has met the high burden of proof imposed
upon him by SCR 22.31. We do not reach this
decision lightly. Attorney Schoenecker has
not practiced law since 2011. The record
demonstrates that he has made progress
toward addressing the root causes of the
behavior that led to his two suspensions.
He is to be commended for attending Gamblers
Anonymous meetings and continuing to seek
treatment from Mr. Harrison. His volunteer
efforts in the community are also
commendable. However, we share the
referee's concern that Attorney Schoenecker
has failed to fully account for moral lapses
other than his gambling addiction, and he
has failed to explain how the moral lapses
unrelated to the gambling addiction have
been addressed to insure they will not recur
in the future. In addition, we concur with
the referee that Attorney Schoenecker's
failure to present live testimony, either
from Mr. Harrison or other character
witnesses who could speak to whether
Attorney Schoenecker has the current moral
character to practice law in Wisconsin,
impeded him in demonstrating that he has met
his burden of proof under SCR 22.31.
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¶30 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
Carroll, 2004 WI 19, 269 Wis. 2d 172, 675
N.W.2d 792. In this case we conclude that
Attorney Schoenecker should be permitted to
file a new petition for reinstatement six
months after the date of this opinion. In
the new reinstatement proceeding he may be
able to present himself in a better light
and demonstrate through live testimony and
specific examples that he is fit to resume
the practice of law without danger to the
public. As is our normal practice, we deem
it appropriate to impose the full costs of
this reinstatement proceeding on Attorney
Schoenecker, which are $6,809.66 as of March
23, 2018.
¶31 IT IS ORDERED that the petition of
James M. Schoenecker for the reinstatement
of his license to practice law in Wisconsin
is denied.
¶32 IT IS FURTHER ORDERED that Attorney
Schoenecker may again file a petition for
reinstatement six months after the date of
this decision.
¶33 IT IS FURTHER ORDERED that within 60
days of the date of this order, James M.
Schoenecker shall pay to the Office of
Lawyer Regulation the costs of this
reinstatement proceeding, which are
$6,809.66 as of March 23, 2018.
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¶34 SHIRLEY S. ABRAHAMSON, J.
(concurring). As I wrote in dissent in
In re Disciplinary Proceedings Against
Mandelman, 2018 WI 56, _ Wis. 2d _, _
N.W.2d _, the court is not consistent in its
rulings on reinstatement.
¶35 I join the concurrence of Justice
Annette Kingsland Ziegler with regard to the
reinstatement of Attorney Schoenecker.
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¶36 ANNETTE KINGSLAND ZIEGLER, J.
(concurring). I agree with the court
that
at this time Attorney Schoenecker has failed
to establish the requirements for the
reinstatement of his license to practice law
in Wisconsin. I write separately because I
have concern that the court may appear to be
suggesting that if certain things are done,
Attorney Schoenecker will be reinstated.
See majority op., ¶30. The majority's
comments about what Attorney Schoenecker
might do differently the next time around
should not, in my view, be read as
prophesying what the court's decision will
be in a subsequent reinstatement proceeding.
At a subsequent proceeding Attorney
Schoenecker bears the burden of
demonstrating to the court that he should be
reinstated. The criteria the court today
suggests may or may not prove to be
sufficient.
¶37 For the foregoing reason, I
respectfully concur.
¶38 I am authorized to state that
Justice SHIRLEY S. ABRAHAMSON joins this
concurrence.
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