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ATTORNEY reinstatement proceeding.
Reinstatement granted upon conditions.
¶1 PER CURIAM. We review a report
filed by Referee James C. Boll recommending
that the court reinstate the license of
Michael R. Bauer to practice law in
Wisconsin with certain conditions. No
appeal has been filed from the referee's
report and recommendation. Accordingly, our
review proceeds pursuant to Supreme Court
Rule (SCR) 22.33(3). Upon careful review of
the matter we adopt the referee's findings
and conclusions and agree that Attorney
Bauer's petition for reinstatement should be
granted upon the recommended conditions as
described below. We also direct that the
costs of this current reinstatement
proceeding, totaling $4,093.40, be paid by
Attorney Bauer.
¶2 Attorney Bauer was admitted to
practice law in Wisconsin in 1988. He
practiced law in Madison. He also owned a
business, Sports Advisors, Inc., which
related to his work as an agent for several
National Football League players. Before
the complaint giving rise to his current
license suspension Attorney Bauer had not
previously been subject to professional
discipline.
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¶3 On June 24, 2016, the Office of
Lawyer Regulation (OLR) filed a disciplinary
complaint against Attorney Bauer alleging 28
counts of professional misconduct. The
complaint alleged that between December 2013
and October 2014, Attorney Bauer mishandled
client funds held in trust, comingled
personal funds in his trust account, failed
to keep proper trust account records,
exercised a lack of diligence, failed to
properly communicate with clients, failed to
promptly refund unearned fees and repeatedly
failed to cooperate with the OLR's
investigations. Ultimately, following
litigation, it was determined that Attorney
Bauer committed 22 counts of misconduct and
converted $376,818.63. In re Disciplinary
Proceedings Against Bauer, 2018 WI 49, 381
Wis. 2d 474, 912 N.W.2d 108. Although the
dollar amount is staggeringly high, it bears
noting that it was undisputed that Attorney
Bauer's clients received all monies due to
them.
¶4 On April 5, 2019, Attorney Bauer
filed a petition seeking the reinstatement
of his Wisconsin law license. The OLR
conducted an investigation and initially
opposed the petition. The court appointed
Referee Boll, who conducted an evidentiary
hearing on November 12, 2019, in Madison.
Attorney Bauer testified and presented
several character witnesses who voiced
support for his reinstatement.
¶5 On December 12, 2019, the referee
issued a report concluding that Attorney
Bauer had satisfied his burden of proof and
had met the requirements for reinstatement
set forth in SCR 22.31. The referee
recommends reinstatement with certain
conditions, and the imposition of costs.
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¶6 When we review a referee's report
and recommendation, we 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 Eisenberg, 2004 WI 14,
¶5, 269 Wis. 2d 43, 675 N.W.2d 747.
¶7 During review, the court ascertained
that Attorney Bauer had commenced a
voluntary Chapter 7 bankruptcy proceeding in
the United States Bankruptcy Court for the
Western District of Wisconsin. Michael R.
Bauer and Kathleen R. LaRocque, 3-19-
13610-
bhl. On January 23, 2020, Attorney Bauer's
former law partner, Attorney Daniel P. Bach,
filed in that bankruptcy proceeding a
"complaint to determine dischargeability of
a debt" seeking an order excepting the debt
owed to Attorney Bach from discharge under
11 U.S.C. § 523(a)(2)(B), 11 U.S.C. § 523(a)
(4) and 11 U.S.C. § 523(a)(6), and for a
judgment in the amount of $678,900.87
"representing treble damages . . . on the
$226,300.29 paid by [Attorney Bach] due to
Bauer's actions." Attorney Bach's claim
clearly related to this disciplinary
proceeding. Accordingly, on February 18,
2020, the court ordered the parties to
advise the court why the reinstatement
petition should not be held in abeyance
pending resolution of the bankruptcy
proceeding.
¶8 On February 26, 2020, the OLR filed
a statement agreeing that the matter should
be held. On March 3, 2020, Attorney Bauer
filed a two-page statement asking the court
to decide the reinstatement "based upon the
facts found by the Referee in its decision
dated December 9, 2019." On May 19, 2020 we
held the reinstatement petition in abeyance
pending resolution of the bankruptcy
proceeding. On September 15, 2020, Attorney
Bauer advised the court that the dispute
involving Attorney Bach had been resolved.
The OLR confirmed this statement in a report
filed on October 1, 2020. The parties agree
the court may proceed with Attorney Bauer's
reinstatement petition.
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¶9 Supreme Court Rule 22.31(1) sets
forth the standards to be met for
reinstatement. 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 to the public interest, and that
he or she has complied with SCR 22.26 and
the terms of the order of suspension. In
addition, SCR 22.31(1)(c) incorporates the
statements that a petition for reinstatement
must contain pursuant to SCR 22.29(4)(a)-(k)
and (4m). Thus, the petitioning attorney
must demonstrate that the required
representations in the reinstatement
petition are substantiated.
¶10 The referee found that Attorney
Bauer: desires to have his license
reinstated, 22.29(4)(a); has not practiced
law in Wisconsin during the period of his
suspension, SCR 22.29(4)(b); has complied
fully with the terms of the order of
suspension or revocation and will continue
to comp1y with them unti1 his 1icense is
reinstated, SCR 22.29(4)(c); and has
maintained competence and learning in the
law by attending identified educational
activities, SCR 22.29(4)(d). The referee
further found that Attorney Bauer's conduct
since the suspension has been exemp1ary and
above reproach, SCR 22.29(4)(e); he has a
proper understanding of and attitude toward
the standards that are imposed upon members
of the bar and will act in conformity with
the standards, SCR 22.29(4)(f); and that he
can safely be recommended to the legal
profession, the courts, and the public as a
person fit to be consulted by others and to
represent them and otherwise act in matters
of trust and confidence and in general to
aid in the administration of justice as a
member of the bar and as an officer of the
courts, SCR 22.29(4)(g). The referee found
that Attorney Bauer has fully complied with
the requirements set forth in SCR 22.26, SCR
22.29(4)(h); he has explained the proposed
use of his law license if reinstated, SCR
22.29(4)(j); and he has offered a full
description of all of his business
activities during the period of suspension,
satisfying SCR 22.29(4)(k). The referee
specifically found that Attorney Bauer has
the moral character to practice law.
¶11 The referee observed that no
restitution was ordered in the underlying
disciplinary proceedings and noted that no
claims were made to the Wisconsin Lawyers'
Fund for Client Protection against Attorney
Bauer. Accordingly, the referee determined
that Attorney Bauer has satisfied SCR
22.29(4m). See also ¶¶7-8 (addressing
resolution of Attorney Bach's claims against
Attorney Bauer in the bankruptcy
proceeding).
¶12 The referee addressed two particular
concerns raised by the OLR: his access to
client trust accounts in light of his
financial condition, namely a high level of
debt, and the serious nature of Attorney
Bauer's underlying misconduct. The referee
observed that debt alone is not a
disqualifying factor for reinstatement.
However, where previous misconduct coupled
with strained personal finances creates an
enhanced risk to the public, high debt
levels may be a valid concern. Here, the
referee noted that Attorney Bauer had filed
for bankruptcy which the referee accepted as
evidence that Attorney Bauer had a viable
plan to address his personal finances.
After the referee's report was filed, the
bankruptcy court discharged most of Attorney
Bauer's debts.
¶13 In addition, the referee observed
that Attorney Bauer testified that he would
not object to reasonable conditions being
placed on his reinstatement as it relates to
his use of or access to client trust funds.
The recommended conditions are designed, in
part, to address these concerns.
¶14 The referee then considered the
OLR's stated concern about the seriousness
of the underlying misconduct. The referee
acknowledged that Attorney Bauer's
underlying misconduct was not the result of
an honest mistake or sloppy bookkeeping. It
was intentional and dishonest. Without
discounting the seriousness of the
underlying misconduct, the referee noted
that Attorney Bauer has served the
suspension imposed by this court and the
referee was persuaded that Attorney Bauer's
resumption of the practice of law will not
be detrimental to the administration of
justice or subversive of the public
interest.
¶15 We agree with the referee that
Attorney Bauer has met his burden of proof
with respect to all elements needed to
justify his reinstatement. Moreover, his
period of suspension has been over six
months longer than ordered by this court
because of the delays resulting from his
underlying bankruptcy proceeding.
¶16 As stated by the referee in the
underlying proceeding, for some reason, the
"wheels came off" Attorney Bauer's trust
account management practices in 2014. The
conversions occurred between December 2013
and October 2014 and consisted of
"labyrinthine transfers" that "seemed to
constantly be in the process of 'robbing
Peter to pay Paul' and, in some cases, to
pay Michael Bauer." However, once
confronted, Attorney Bauer admitted guilt as
to many of the allegations; no clients lost
funds; he fully cooperated with the OLR
investigation; and he expressed remorse for
his misbehavior. He had no prior discipline
over what had been an otherwise
distinguished 20-year legal career.
¶17 The referee in this reinstatement
proceeding observed that Attorney Bauer has
expressed regret for his conduct and found
that Attorney Bauer's testimony and the
evidence adduced through the testimony of
his character witnesses demonstrated that he
has taken responsibility for his actions.
He completed the OLR's Trust Account
Management Seminar in 2018. We accept the
referee's conclusion that Attorney Bauer's
resumption of the practice of law will not
be detrimental to the administration of
justice or subversive of the public interest
and that he has met his burden of proof with
respect to all elements needed to justify
his reinstatement.
¶18 We agree, however that it is
appropriate to impose certain conditions on
Attorney Bauer's practice of law. We
require Attorney Bauer to provide quarterly
trust account and business accounting
records to the OLR for a period of two years
after the date of his reinstatement. As the
referee observed, this requirement is
consistent with conditions we have imposed
in other attorney reinstatement proceedings
where we sought to address concerns about
trust account management. See, e.g.,
In re
Disciplinary Proceedings Against Malloy,
2019 WI 16, 385 Wis. 2d 554, 923 N.W.2d 876;
In re Disciplinary Proceedings Against
Mulligan, 2017 WI 50, 375 Wis. 2d 133, 895
N.W.2d 34; and In re Disciplinary
Proceedings Against Curtis, 2018 WI 13,
379
Wis. 2d 521, 907 N.W.2d 91.
¶19 IT IS ORDERED that the license of
Michael R. Bauer to practice law in
Wisconsin is reinstated, effective the date
of this order.
¶20 IT IS FURTHER ORDERED that, as a
condition of the reinstatement of his
license to practice law in Wisconsin,
Michael R. Bauer is required to provide
quarterly trust account and business
accounting records to the Office of Lawyer
Regulation for a period of two years after
the date of this reinstatement.
¶21 IT IS FURTHER ORDERED that within 60
days of the date of this order, Michael R.
Bauer shall pay to the Office of Lawyer
Regulation the costs of this proceeding,
which are $4,093.40 as of December 23, 2019,
or enter into a payment agreement plan with
the Office of Lawyer Regulation for the full
payment of costs over a period of time.
¶22 IT IS FURTHER ORDERED that
compliance with all of the terms of this
order remains a condition of Michael R.
Bauer's license to practice law in
Wisconsin.
¶23 JILL J. KAROFSKY, J. did not
participate.
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