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Leah Poulos Mueller is a Wisconsin-licensed
attorney admitted to practice on January 11,
1994, State Bar number: 1022710. Mueller
maintains a solo private practice in New
Berlin, Wisconsin. This reprimand is based
upon Mueller’s conduct in two matters.
FIRST MATTER
Mueller in 2010 began representing a
man on a claim that he was defrauded of his
investment in a business he helped found and
in which he was a minority shareholder. The
company was sold in 2010 to address its
financial problems and keep the business
viable. The buyer was a new company formed
and owned by three other shareholders who
owned a majority of the original company.
The man and the five Class B members from
the original company lost their investment.
Mueller filed both a direct action and a
derivative action on the man’s behalf.
First, the derivative action was dismissed
on summary judgment. The decision on the
derivative claim left open the possibility
that the man could pursue a derivative claim
if he obtained sufficient votes from the
Class B members authorizing the action.
Later, the direct action was also dismissed
on summary judgment on the basis that the
facts did not support any individual claims
by the man. The decision was not appealed.
Several years later, the man filed
three separate pro se lawsuits regarding the
same transaction, two in state court—a
direct, individual action and a derivative
action with the company named as the
plaintiff—and one in federal district court.
The defendants filed motions to dismiss in
each of the matters on the basis of claim
preclusion. The man, in response to the
motions, filed amended complaints in the
individual state court action and in the
federal action dismissing all but one
individual defendant and identifying the
defendant purchasing company as “new
company” instead of by its name. Soon
thereafter, Mueller agreed to represent the
man in the three pending cases. Mueller
then filed an amended complaint in the state
court derivative action.
In the federal case, the court
granted the defendant’s motion to dismiss on
the basis that the suit was barred by the
doctrine of claim preclusion as the man’s
claim had already been litigated in state
court. The man appealed the decision, pro
se, to the United States Court of Appeals
for the Seventh Circuit. The Seventh
Circuit affirmed the decision with respect
to the man’s state law claims as it
determined that claim preclusion did apply
because all the elements for claim
preclusion were present and the claims all
“arose from a common nucleus of operative
facts.” The court, however, remanded the
case to the district court to address the
man’s claims under federal securities law,
which the district court had not addressed
in its decision. The Seventh Circuit,
discussing the defendant’s motion for
sanctions, described the man’s arguments and
attempts to evade claim preclusion by using
different names for the old and new
companies as “bold and transparent
misrepresentations” and directed the
district court to consider investigating the
man’s conduct. On remand, Mueller continued
her representation of the man. The district
court determined that the securities claims
were barred by the statute of limitations
and the statute of repose. The district
court directed the defendant to file a
motion detailing the sanction request and
directed the man to file a current and
accurate financial statement. The defendant
filed a motion for sanctions, but Mueller
made no response to it and did not file the
man’s financial statement. Instead, Mueller
in letters to the court, which the court
determined were “unauthorized,” continued to
argue against the court’s dismissal of the
securities claim, an issue that had already
been decided. The court issued a written
decision of its ruling and granted the
defendant’s motion for sanctions finding
that the man’s “intransigence in pursuing
time-barred and already adjudicated claims
cannot be justified.” The man was ordered to
pay a sanction of $15,000, with Mueller
jointly liable for $5,000 of the sanction,
“due to her active, though later,
participation in this action and due to her
failure to respond in any way to the
sanctions motion.” Finally, the judge barred
the man from filing further federal claims
related to the 2010 transaction. The man
again pursued a pro se appeal. The
Seventh Circuit affirmed the decision and
also sanctioned the man for pursuing a
frivolous appeal. Mueller paid the $5,000
portion of the sanction for which she was
responsible.
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By maintaining the man’s federal lawsuit
when she knew that all the claims asserted
therein were either barred by claim
preclusion or by the statutes of limitation
and repose, conduct for which she was
sanctioned by the court, Mueller violated
SCR 20:3.1(a)(1). By failing to respond as
directed by the federal court to the motion
for sanctions and instead filing letters
presenting further argument on issues
already decided by the court and deemed
“unauthorized” by the court, Mueller
violated SCR 20:3.4(c).
In the state court cases, which
remained separate but were assigned to the
same judge, the man’s individual claim was
dismissed on the basis of claim preclusion.
The court allowed the derivative claim to
continue and permitted limited discovery on
the issue of whether the man had
authorization from the other shareholders to
bring the derivative claim. The defendants
in the direct claim moved for sanctions.
Mueller filed motions for reconsideration
and for a stay of the proceedings pending
the outcome of the Seventh Circuit appeal in
the federal case. Mueller also filed
another derivative lawsuit in state circuit
court even though the court allowed the
existing derivative action to continue. By
the time the court held a hearing on the
sanction motion as well as on Mueller’s
motions for a stay and reconsideration, the
Seventh Circuit had issued its decision
affirming the dismissal of the man’s claims
and remanding the case for a ruling on the
federal securities claims without any ruling
as to the viability of the claims. Mueller
in the state court hearing mischaracterized
the Seventh Circuit’s decision as vacating
and remanding the case and upholding the
man’s securities claims. The state court
granted the sanction motion, finding that
Mueller and her client had pursued actions
for the improper purpose of harassing the
defendants and that the proceeding was
frivolous. The court ordered that Mueller
pay a monetary sanction and that the man be
prohibited from filing any additional direct
state law claims arising out of the 2010
transaction, unless he had permission from
the trial court. Mueller paid the monetary
sanction of $5,923.50 for which she was
responsible.
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By maintaining the direct action lawsuit filed
by her client, when she knew or should have
known her client's direct claims were barred
by claim preclusion, having already been
adjudicated in the client’s 2012 lawsuit,
resulting in the court’s finding that the
action was frivolous and ordering the client
and Mueller sanctioned on that basis, Mueller
violated SCR 20:3.1(a)(1).
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Mueller filed an appeal of the dismissal of
the client’s individual case. In the course
of the appeal, Mueller repeatedly failed to
follow appellate briefing rules after
multiple
extensions. The Court of Appeals therefore
dismissed the appeal as a sanction for that
“egregious” conduct, noting that “Mueller’s
violations of this court’s orders and rules
have been persistent and substantial, and
have
impeded this court’s orderly and expeditious
processing of this appeal, squandering
judicial resources.” By this conduct
Mueller
violated SCR 20:3.4(c).
Mueller, as required by case law, filed a
separate appeal of the sanction order
against her.
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In the course of the appeal, the Court of
Appeals declined to accept Mueller’s reply
brief as a sanction for her non-compliance
with several appellate court rules, including
greatly exceeding the word limit, inserting
images of documents in her brief without
reference to where they could be found in the
appellate record, failing to sign the brief,
and certifying that the brief was sent on via
first-class mail when the postmark showed it
was sent on a different date via priority
mail. This conduct in failing to abide by
court rules violated SCR 20:3.4(c).
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The defendants in the second derivative
action moved for dismissal of that action on
the basis that proper service had not
occurred and that the claim was barred by
the statute of limitations. The court
agreed that proper service had not been
achieved and found that the affidavits of
service were not trustworthy. The court
dismissed the case on that basis. Mueller
moved for reconsideration of the dismissal.
At the hearing denying the motion for
reconsideration, the court found that
authenticated copies of the summons and
complaint were not served and evidence
submitted by Mueller asserting that
authenticated copies were served was not
possible, given the time of service versus
the time the authenticated copies were
obtained. By presenting evidence that was
not possible, Mueller violated SCR 20:3.3(a)
(3).
The litigation of the pending
derivative claim continued. The defendants
filed another motion for summary judgment.
Days before that motion was scheduled to be
heard, Mueller filed another derivative
action, the seventh lawsuit arising out of
the same transaction, adding as defendants
the attorneys representing the defendants in
the pending case. The court expressed
concern that the new filing was an attempt
to circumvent the court and create ethical
problems for the defendants’ attorneys. The
court granted summary judgment, finding that
Mueller’s client lacked the authority of the
other shareholders to bring a shareholder
derivative action. Mueller moved for
reconsideration. The court denied the
motion.
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By filing another derivative lawsuit, the
seventh based upon the same common nucleus of
operative facts, when the claims were already
the subject of a pending suit about to be
heard in a summary judgment motion, and by
including the attorneys for the prior
defendants as defendants in the seventh
lawsuit, Mueller violated SCR 20:3.1(a)(3).
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In the seventh lawsuit, the defendants filed
a motion to dismiss. Mueller failed to
timely file a responsive brief in accordance
with the local court rules. The court
allowed a brief extension of the deadline.
In the meantime, Mueller filed an amended
complaint adding the judge in the dismissed
derivative action as a defendant. Mueller
failed to meet the extended deadline given
for responding to the motion to dismiss.
Her request for an additional extension was
denied and the court dismissed the action
with prejudice based upon the finding that
Mueller’s repeated failure to comply with
the court’s orders and with Local Rules was
egregious. Mueller filed an untimely appeal
of the decision, but eventually dismissed it
voluntarily after the defendants moved for
dismissal. Mueller’s failure to abide by
Local Rules violated SCR 20:3.4(c).
SECOND MATTER
In a second litigation matter, Mueller
brought a lawsuit on behalf of a woman
alleging injury as a result of her ex-
husband’s failure to resolve their post-
judgment divorce disputes via a
collaborative divorce process. The woman
and her ex-husband had agreed to resolve
their divorce via a collaborative divorce
process, a voluntary form of alternative
dispute resolution intended to avoid
litigation. They signed an agreement
setting forth the parameters of the process,
which included the withdrawal of their
respective attorneys from representing them
further if the collaborative process failed
or if either party no longer wanted to use
the collaborative process. They also filed
a stipulation with the court acknowledging
that each was represented in the divorce by
his or her own counsel, and that the
collaborative process was voluntary and
could be terminated unilaterally by either
party with or without cause. Wisconsin has
not enacted any statutes providing for the
use of the collaborative law process instead
of Chapter 767, which governs divorce in
Wisconsin.
The parties reached a stipulation setting
forth the terms of their divorce. The
Marital Settlement Agreement (MSA) called
for the woman to make payments to her ex-
husband to equalize the property division.
In addition, a Parenting Plan established a
placement schedule for the parties’ two
minor children. The woman did not make the
equalization payments as specified under the
MSA nor was she, in the ex-husband’s view,
following the agreed upon placement
schedule. Efforts by the ex-husband’s
divorce counsel to resolve the disputes were
not successful and the ex-husband thus hired
new counsel who filed a contempt motion on
his behalf. The motion included the ex-
husband’s affidavit setting forth the
factual basis for the motion. The property
division issue was resolved when the woman
made the remaining payments she owed; a
guardian ad litem was appointed to
investigate the placement issues, which were
eventually resolved via a stipulation.
As the post-judgment dispute was concluding,
Mueller filed a lawsuit alleging that the
ex-husband’s pursuit of a contempt motion to
enforce the MSA violated the collaborative
process and Wisconsin law and that his
affidavit in support of the motion was a
“sham affidavit.” Mueller filed the lawsuit
against the woman’s ex-husband, the ex-
husband’s collaborative divorce counsel, and
the ex-husband’s post-judgment counsel.
Each of the defendants hired counsel for the
lawsuit filed by Mueller. Two of the
defendants filed motions to dismiss arguing
the suit had no legal basis and the third
defendant pursued summary judgment after
answering the complaint.
The court held a hearing on the motions to
dismiss and conducted an extensive, detailed
colloquy with Mueller as to the basis for
the assertion that the parties had entered a
contract by seeking to use collaborative law
principles to resolve their divorce and that
the defendants were prohibited by the
collaborative process from pursuing
enforcement of the terms of the marital
settlement agreement via a contempt motion
or order to show cause. The court found
that a breakdown of the collaborative
process did not entitle one to bring a
breach of contract claim and that the
allegation that the affidavit in support of
the contempt motion was a “sham” was a
delusional pleading. The court set a second
hearing to address the defendants’ request
for attorney’s fees/sanctions.
Mueller then filed a motion for a stay
pending a ruling by the court on oral
motions she claimed to have brought in the
dismissal hearing or, alternatively,
recusal. Mueller asserted recusal was
appropriate because the court was not
familiar with the plaintiff’s pleadings,
being too tired to thoroughly review them,
had minimal experience or knowledge of
collaborative divorce, and “did not just
demonstrate bias, but demonstrated a level
of emotional investment toward
defendant(s).” The transcript of the prior
hearing did not support Mueller’s motion for
a stay or recusal.
Mueller also filed an amended complaint, two
days before the scheduled hearing. The
amended complaint added the woman’s own
counsel in the divorce as a defendant. The
amended complaint again sought damages for
the failure of the collaborative process and
cited slightly different theories of
liability.
The court conducted the sanction hearing as
scheduled. The court denied Mueller’s
motion for recusal. The court deemed
Mueller’s other motions and the filing of
the amended complaint as a motion for
reconsideration of the court’s decision
dismissing the complaint. The court
affirmed its prior dismissal and clarified
that it was a dismissal with prejudice. The
court ruled that the lawsuit was frivolous,
granted costs and fees to the defendants,
enjoined the plaintiff from filing any
further lawsuits regarding the divorce and
required that if the plaintiff pursued an
appeal she would be required to deposit with
the Clerk of Circuit Court in trust the
total fees awarded.
Following the court’s ruling, Mueller filed
a motion for reconsideration, objected to
the proposed order submitted by the
defendants and submitted her own proposed
order to effectuate the court’s decision.
The court denied the motion for
reconsideration without further hearing and
rejected Mueller’s proposed order noting it
did not accurately reflect the court’s
ruling. Judgment for the defendants’
attorneys’ fees was entered against Mueller
and her client, jointly and severally.
Mueller objected to the judgment, filed
motions to strike the defendants’ letters
and invoices and for discovery, and filed a
proposed judgment stating that the court’s
dismissal was inconsistent with the law.
Mueller’s proposed judgment also erroneously
stated that the dismissal was without
prejudice. The judgment entered against
Mueller and her client remains unpaid.
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Mueller’s conduct in pursuing the frivolous
lawsuit violated SCR 3.1(a)(1). By filing a
motion and affidavit that misquoted the
court and mischaracterized the court’s
knowledge and experience, Mueller violated
SCR 20:3.3(a)(1). By filing a motion for
recusal that was not supported by the record
and contained erroneous statements about the
judge’s preparation and impartiality,
Mueller failed to maintain the respect due
courts of justice and judicial officers as
required by SCR 40.15, the Attorneys Oath,
and thereby violated SCR 20:8.4(g), and made
statements known to be false or with
reckless disregard as to their truth or
falsity concerning the integrity of a judge,
in violation of SCR 20:8.2(a). Finally, by
filing proposed orders that she knew did not
accurately reflect the court’s rulings,
Atty. Mueller violated SCR 20:8.4(c).
Mueller has no prior discipline.
In accordance with SCR 22.09(3), Attorney
Leah Poulos Mueller is hereby publicly
reprimanded.
Dated this 19th day of May, 2021.
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