author: SNYDER, J.

text:
    Kenosha Hospital & Medical Center, Plaintiff-Respondent, v. Jesus E. Garcia, Defendant, Richter Industries, Inc., Garnishee-Defendant-Appellant.

    Court of Appeals

      No. 02-1727.

      Submitted on briefs May 8, 2003.

    — Decided June 11, 2003.

    2003 WI App 142
    (Also reported in 667 N.W.2d 851.)

      On behalf of the garnishee-defendant-appellant, the cause was submitted on the briefs of Christopher W. Rose of Rose & Rose, Kenosha.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Ronald L. Diersen, Kenosha.
    On behalf of The Bankruptcy Insolvency & Creditors' Rights Section of the State Bar of Wisconsin, a nonparty brief was filed by Susan V. Kelley, Chair, Paul A. Lucey and John C. Thomure, Jr. of Michael, Best & Friedrich, LLP, Milwaukee, and Daniel R. Freund of Freund Law Office, Eau Claire.
    Before Nettesheim, PJ., Anderson and Snyder, JJ.

       Petition to review granted 9-12-03.

   SNYDER, J.

¶ 1. Richter Industries, Inc. (Richter) appeals from a judgment of the circuit court granting default judgment - against it and an order denying its motion to vacate the judgment. Richter argues that service of the motion for judgment against it was improper as it was not served on an officer, director or managing agent of the corporation. In addition, Richter argues that Kenosha Hospital & Medical Center (Kenosha Hospital) violated an automatic stay of the United States Bankruptcy Court when Kenosha Hospital requested default judgment against Richter. We disagree and affirm the judgment and order.

FACTS

¶ 2. On June 29, 2001, Kenosha Hospital filed a complaint for collection against Jesus E. Garcia and Guadalupe Garcia (Garcia). Kenosha Hospital alleged that it had supplied Garcia with medical services and Garcia owed it a balance of $20,888.85. On August 28, 2001, the circuit court ordered judgment in Kenosha Hospital's favor against Garcia for $20,888.85, plus costs and disbursements. Judgment was entered on August 29, 2001; an earnings garnishment notice with Richter the named garnishee was filed on September 25, 2001, and was served on Richter's payroll department in Kenosha, Wisconsin.

¶ 3. A motion for judgment was filed by Kenosha Hospital against Richter on December 17, 2001. An affidavit of service for the motion for judgment indicates service was made on December 19, 2001, on "Jane Doe," a secretary at Richter who would not give the process server her name but indicated she was a person in charge. On January 2, 2002, a hearing was held on this motion; Richter did not appear and the circuit court found that Richter was responsible for the amount owed by Garcia. Judgment was entered against Richter in the amount of $20,784.21 on January 7, 2002.

¶ 4. On January 10, 2002, a notice of bankruptcy was filed on behalf of Garcia, indicating that Garcia had filed for bankruptcy in the United States Bankruptcy Court for the Eastern District of Wisconsin wherein Kenosha Hospital had been named as a creditor. On May 10, 2002, Richter filed a motion to vacate the default judgment against it. Richter argued that service had not been properly made and that pursuant to 11 U.S.C. § 524(a)(1), the underlying judgment against Garcia was void, as was the judgment against Richter.

¶ 5. A motion hearing was held on June 12, 2002, wherein the circuit court denied Richter's motion to vacate the default judgment. A judgment was entered indicating that the judgment granted on January 7, 2002, was to remain in effect. Richter appeals.

DISCUSSION

¶ 6. We examine the circuit court's decision to grant a default judgment under the erroneous exercise of discretion standard. Oostburg State Bank v. United Sav. & Loan Ass'n, 130 Wis. 2d 4, 11-12, 386 N.W.2d 53 (1986). Richter first argues that the notice of motion for default judgment was not properly served as it was not served upon an officer, director or managing agent of the corporation as required by Wis. Stat. § 801.11(5) (a) (2001-02). We conclude that Richter was properly served.

¶ 7. Wisconsin Stat. § 812.35 governs the commencement of an earnings garnishment action. The judgment creditor, here Kenosha Hospital, must file a garnishment notice. Sec. 812.35(1). Upon filing the notice and payment of the requisite fee, the clerk of court then issues two earnings garnishment forms. Sec. 812.35(2). Upon receipt of these forms, the creditor must then serve one of the forms upon the debtor and the other form upon the employer/garnishee. Sec. 812.35(3). This statute permits service by first class mail, by certified mail with return receipt requested or by "[a]ny means permissible for the service of a summons in a civil action, other than publication." Sec. 812.35(3)(a)3.

¶ 8. Here, the notice was served by certified mail with an executed return receipt signed by Erik Richter. This satisfies one of the service options recognized by Wis. Stat. § 812.35(3). Richter does not object to this service and the action was therefore properly commenced. Instead, Richter's complaint refers to the service of Kenosha Hospital's notice of motion and motion for default judgment pursuant to Wis. Stat. § 812.41 after commencement of the action. However, a person in default is not entitled to notice of an application for judgment. Wis. Stat. § 801.14(1).

¶ 9. Wisconsin Stat. § 801.14(2) applies to service of pleadings and other papers after the action has been commenced. Section 801.14(2) allows for various forms of service after commencement of an action, including mailing; service is "complete upon mailing." Here, Kenosha Hospital personally served "Jane Doe" at Richter who, while declining to provide her name, indicated that she was a person in charge. It is self-evident that when service of papers after commencement of an action can be accomplished by mailing, a less formal mode of service, personal service by a process server, the most formal kind known to law, also satisfies the requirements of § 801.14(2). The notice of motion for default judgment was properly served upon Richter.

¶ 10. The next question before us concerns the authority of the circuit court to adjudicate garnishment proceedings against an employer/garnishee in light of pending bankruptcy proceedings of the employee (debtor). In other words, what effect, if any, does the automatic stay of Title 11 of the United States Bankruptcy Code have upon Kenosha Hospital's ability to pursue Richter for failing to respond to the garnishment notice? Because no property of Garcia's bankruptcy estate was implicated by the proceedings under Wis. Stat. § 812.41 against Richter, there is no violation of the automatic stay and the circuit court was within its jurisdiction to enter judgment against Richter.

¶ 11. Wisconsin Stat. § 812.35(1) through (3) mandates that a judgment creditor file an earnings garnishment notice with the clerk of court and serve the notice and forms on the judgment debtor and the employer/garnishee. The judgment debtor can file an answer to the earnings garnishment at any time before or during the earnings period of the garnishment order. Wis. Stat. §812.37(1). Pursuant to Wis. Stat. § 812.39(1), the employer/garnishee is required to pay over the debtor's nonexempt wages to the judgment creditor between five and ten business days after the payday of each pay period. If the employer/garnishee will not owe the debtor any earnings during the garnishment period, the employer/garnishee is required to send a statement informing the creditor as such within seven days of receipt of the garnishment forms. Sec. 812.35(5). The earnings period subject to a garnishment is thirteen weeks from the date of service of the garnishment notice upon the employer/garnishee. Sec. 812.35(6). If the employer/garnishee fails to pay over funds to which the creditor is entitled, the creditor can move for default judgment against the employer/garnishee for the entire unsatisfied judgment against the debtor. Wis. Stat. § 812.41(1).

¶ 12. Title 11 U.S.C. § 362 (2002), part of the United States Code on bankruptcy, addresses an automatic stay and states:

(a) Except as provided in subsection (b) of this section, a petition ... operates as a stay,, applicable to all entities, of -
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;
(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title;
(3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate;
(4) any act to create, perfect, or enforce any lien against property of the estate;
(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and
(8) the commencement or continuation of a proceeding before the United States Tax Court concerning the debtor.

¶ 13. When a debtor files a petition in bankruptcy, the automatic stay prohibits virtually all acts by creditors to collect pre-petition claims against the debtor and precludes all actions affecting the property of the debtor's bankruptcy estate. Acts undertaken in "wilfull violation" of the automatic stay are void and may expose the violator to monetary sanctions and punitive damages. 11 U.S.C. § 362(h).

¶ 14. The automatic stay provisions of 11 U.S.C. § 362(a) protect the interests of creditors by preventing the dissection of a debtor's assets by creditors levying on the debtor's property. See Mann v. Chase Manhattan Mortgage Corp., 316 F.3d 1, 3 (1st Cir. 2003). This encourages the policy of equal treatment of creditors of equal standing. The automatic stay is designed to prevent the "disorderly, piecemeal dismemberment of the debtor's estate outside the bankruptcy proceedings." Id.

¶ 15. A garnishment proceeding is a judicial action within the meaning of 11 U.S.C. § 362(a). See In re Mims, 209 B.R. 746, 748 (Bankr. M.D. Fla. 1997). Courts interpreting garnishment statutes similar to Wisconsin's have concluded that the automatic stay provisions of 11 U.S.C. § 362(a) do not prevent a judgment creditor from seeking to collect from an employer/ garnishee the amount the employer/garnishee failed to withhold and pay to the judgment creditor. See In re Waltjen, 150 B.R. 419, 426 (Bankr. N.D. Ill. 1993) (an action against an employer for its failure to comply with the garnishment procedures is not an action against the debtor or his estate when the creditor is solely seeking to recover from the nondebtor employer); see also In re Gray, 97 B.R. 930, 936-37 (Bankr. N.D. Ill. 1989) (when an Illinois garnishee had not withheld property or responded to garnishment process, enforcement of default judgment against the garnishee does not violate the automatic stay); see also In re Sowers, 164 B.R. 256, 259 (Bankr. E.D. Va. 1994) (creditor's attempt to satisfy the judgment against the employer/garnishee was not a violation of the automatic stay because "[i]t was this corporate liability which the [judgment creditors] were trying to collect after the debtor's petition was filed" and not the debt owed by the debtor); see also United States v. Allen Bros. of Homer, Inc., 36 B.R. 920, 922-23 (Bankr. M.D. La. 1984) (United States, in state employee's bankruptcy case, not precluded by automatic stay from proceeding against the State of Louisiana which, as employer/garnishee of debtor, failed to withhold amounts from wage payments as required by garnishment proceedings as garnishment action was against neither debtor nor his estate).

¶ 16. Here, Kenosha Hospital served the garnishment complaint on the employer/garnishee Richter on October 2, 2001. However, Richter did not withhold or pay over Garcia's nonexempt wages but instead paid all wages earned during that period to Garcia. As a result, on December 17, 2001, Kenosha Hospital moved for default judgment against Richter as a garnishee pursuant to Wis. Stat. § 812.41(1) and the circuit court entered an order for judgment on January 2, 2002, and a default judgment on January 7, 2002, against Richter. Garcia's bankruptcy petition was filed on January 7, 2002.

¶ 17. None of Garcia's earnings are at stake here because none of Garcia's wages were withheld by Richter. If no earnings are withheld by the employer/ garnishee, then the employer/garnishee has no property belonging to the debtor or his bankruptcy estate. Gray, 97 B.R. at 935-37. Thus, an action against Richter for its failure to respond to the garnishment complaint is not an action against Garcia or his bankruptcy estate. Id.; see also Waltjen, 150 B.R. at 426. Any action taken by Kenosha Hospital against Richter with regard to a claim under Wis. Stat. § 812.41 does not involve Garcia's estate or a collection against Garcia personally. Consequently, the automatic stay provisions of 11 U.S.C. § 362(a) do not apply.

¶ 18. Richter relies upon Chase Lumber and Fuel Co. v. Koch, 197 B.R. 654 (Bankr. W.D. Wis. 1996), to argue that the circuit court had no jurisdiction to adjudicate the garnishment proceedings and enter judgment against it. Chase Lumber is inapplicable to the situation at hand.

¶ 19. Chase Lumber involved a judgment debtor's wages that had been withheld by his employer. Id. at 659. The debtor continued to have an interest in these wages because he retained the right to contest the garnishment; prior to the time the garnishee is liable under the statute, a judgment debtor may challenge the underlying judgment and assert his rights to the funds withheld by the garnishee. Id. at 659-60. The Chase Lumber court found that since the debtor retained an equitable right to the garnished funds for the pay period in which the bankruptcy petition was filed, those funds were the property of the estate, protected by the automatic stay provisions of 11 U.S.C. § 362(a). Chase Lumber, 197 B.R. at 660.

¶ 20. That is not the factual situation currently before us. None of Garcia's wages were withheld by Richter as garnishee. Richter does not have possession of any funds in which Garcia retains an equitable right and there are no funds of the bankruptcy estate at issue. Chase Lumber has no relevance here.

CONCLUSION

¶ 21. The notice of motion for default judgment was properly served upon Richter; Richter does not challenge the service commencing the action and the personal service on a person who purported to be a "person in charge" satisfies the requirements of Wis. Stat. § 801.14(2) pertaining to service of other papers after the action has been commenced. Furthermore, the automatic stay provisions of 11 U.S.C. § 362(a) do not prohibit Kenosha Hospital from pursing a claim against Richter under Wis. Stat. § 812.41 when the garnishment action gives rise to a new and independent claim against Richter. Therefore, the circuit court had the authority to enter the default judgment against Richter.

By the Court. — Judgment and order affirmed.

       All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       Bankruptcy is a highly technical and specialized area of the law. At our request, the Bankruptcy Insolvency & Creditors' Rights Section of the State Bar of Wisconsin promptly and graciously submitted an amicus curiae brief. We greatly appreciate its cooperation in this matter.


source: Caselaw Access Project

author: NETTESHEIM, EJ.

license: Public Domain

text:
    Estate of Gerald F. Gonwa, by James M. Gonwa, Representative and Special Administrator, Gerald Gonwa Irrevocable Trust and Janice Gonwa Irrevocable Trust, Petitioners-Appellants, v. Wisconsin Department of Health and Family Services, Respondent-Respondent.
    Court of Appeals

      No. 02-2901.

      Submitted on briefs April 23, 2003.

    — Decided June 11, 2003.

    2003 WI App 152
    (Also reported in 668 N.W.2d 122.)

      On behalf of the petitioners-appellants, the cause was submitted on the briefs of Michael D. Dean of Michael D. Dean, L.L.C. of Waukesha.

      On behalf of the respondent-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and Maureen McGlynn Flanagan, assistant attorney general.
    Before Nettesheim, EJ., Brown and Snyder, JJ.
   NETTESHEIM, EJ.

¶ 1. The estate of Gerald F. Gonwa and the Gerald Gonwa Irrevocable Trust and Janice Gonwa Irrevocable Trust appeal from a circuit court order upholding a decision of the Wisconsin Department of Health and Family Services that applied a divestment penalty against Gerald pursuant to Wis. Stat. § 49.454 (2001-02) in considering his application for medical assistance (MA). The Department determined that Gerald divested assets when he and his spouse, Janice, sold a $150,000 private annuity to an irrevocable trust.

¶ 2. The Estate raises claims of due process, waiver and lack of jurisdiction against the Department based on the Department's failure to raise the divestment issue at Gonwa's first hearing before the administrative law judge (ALJ). We reject the Estate's arguments. We conclude that Gerald's due process rights were not violated because he did not have a property intérest in MA benefits. We further conclude that the Department has an ongoing duty to review MA eligibility and therefore did not waive its right to address Gerald's divestment of assets or lose jurisdiction to decide his eligibility.

¶ 3. At issue in this case is whether a private annuity held in an irrevocable trust is governed by the general divestment statute, Wis. Stat. § 49.453 or by Wis. Stat. § 49.454, which specifically addresses the treatment of trusts in determining MA eligibility. The Department determined, pursuant to § 49.454(3)(b), that the Gonwas' sale of a $150,000 private annuity to an Irrevocable Trust that prohibits payments to Gerald or payments made for his benefit is a divestment pursuant to § 49.453. Giving due weight to the Department's decision, we conclude that its interpretation of the applicable MA statutes is reasonable. We therefore affirm the circuit court order upholding the Department's determination.

BACKGROUND

¶ 4. On February 21, 2000, Gerald and Janice established the Gerald and Janice Gonwa Irrevocable Trust Agreement. The Irrevocable Trust named Gerald and Janice as initial trust income beneficiaries and Gerald's children, James Gonwa and Patricia West, as principal beneficiaries. That same day, Gerald and Janice sold to the Irrevocable Trust $150,000 of assets pursuant to a Private Annuity Agreement. Pursuant to the terms of the annuity, Janice, as the "community spouse," was to receive $1,424.55 per month beginning May 1, 2000. As of March 2002, the annuity amortization schedule reflected abalance of $135,813.13 remaining to be paid to Janice from the annuity.

¶ 5. Gerald was born on September 10, 1930. At the time of the Department's final decision, he was a seventy-one-year-old institutionalized resident of Washington county. He entered a nursing home in March 2000 and first applied for institutional MA on June 15, 2000. That application was denied due to excess assets in the form of an IRA account, failure to complete verification, and a determination that he had divested $150,000 into an annuity. On October 12, 2000, Gerald reapplied for institutional MA seeking backdated eligibility. The Washington County Department of Social Services issued a Notice of Decision on November 6, 2000, informing Gerald that his application had been denied for all periods requested due to income in excess of MA program limits.

¶ 6. Gerald sought review of this determination and ALJ Kenneth Duren conducted a "fair hearing" on January 24, 2001. Duren issued a proposed decision on February 2, 2001, determining that Gerald was ineligible for MA. The Department then issued a final decision deeming Gerald to be eligible but finding that Janice had to contribute substantial funds to Gerald's "post-eligibility cost of care." The Department remanded the case to the county for redetermination. Gerald petitioned for judicial review of the Department's decision in Case No. 01-CV-0368.

¶ 7. On remand, the Department sent a "manual negative notice" to Gerald on March 23, 2001, indicating that his application had been denied due to divestment to the Trust. Gerald appealed this ruling to the Division of Hearings and Appeals on April 19, 2001. On May 2, 2001, the Department sent a memo to Gerald explaining the county's determination that the Trust had divested $150,000 in funds during the "look-back period" when it purchased the private annuity, thereby creating divestment ineligibility from February 21, 2000, until January 1, 2003.

¶ 8. The issue presented by Gerald's April 19 appeal was whether the county agency correctly denied his application due to the divestment to an irrevocable trust. Also at issue was whether the Department was barred from considering the annuity based on administrative rules and due process. In a written decision issued on March 21, 2002, ALJ Gary M. Wolkstein determined that the agency acted properly in denying Gerald's application. Citing to the MA Handbook, Wolkstein determined that payments from a trust to anyone other than the institutionalized person are a divestment. Because the payments from the Trust-funded annuity were made to Janice, the community spouse, as opposed to Gerald, the institutionalized person, Wolkstein determined that Gerald divested assets and that the divestment made Gerald "asset ineligible" for institutional MA until January 1, 2003. Wolkstein's determination was issued in the form of a final decision of the Department on March 21, 2002. Gerald petitioned for judicial review of the Department's decision in Case No. 02-CV-0306.

¶ 9. The circuit court consolidated Gerald's cases. In a written decision issued September 5, 2002, the circuit court upheld the Department's determination that Gerald was ineligible for MA based on the divestment of assets. The circuit court found that because the provisions of the Irrevocable Trust prevented any payment to Gerald or for his benefit once he had applied for MA, despite being funded with his assets, the assets had been transferred within the meaning of Wis. Stat. § 49.454(3)(b), thereby subjecting him to the divestment penalty set forth in Wis. Stat. § 49.453(2) and (3).

¶ 10. Gerald's estate appeals.

DISCUSSION

Waiver/Due Process

¶ 11. The Estate begins by arguing, as it did before ALJ Wolkstein and the circuit court, that the Department lost jurisdiction to determine the divestment question and violated Gerald's right to due process by finding him eligible for MA benefits following the first hearing and then later finding him ineligible based on the divestment of assets. The Estate argues that the Department waived its right to deny Gerald benefits based on divestment of assets because it knew of the private annuity at the time of the first hearing but "failed to prepare and argue" it.

¶ 12. The Department responds that Gerald was not found eligible at the first hearing. In support, the Department notes that the matter was remanded with instructions to "review and re-determine [Gerald's] eligibility for MA." Therefore, the Department reasons that Gerald did not have a property interest in MA benefits and his due process rights were not violated. The Department additionally argues that it has an ongoing responsibility to determine eligibility and that Gerald bears the burden of proving eligibility.

¶ 13. In order to demonstrate a right to procedural due process, a person must establish that a constitutionally protected property or liberty interest is implicated. Stipetich v. Grosshans, 2000 WI App 100, ¶ 24, 235 Wis. 2d 69, 612 N.W.2d 346. Property interests are not created by the Constitution, but are created and defined "by existing rules or understandings that stem from an independent source such as state law-rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Id. (citing Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972)). In order to "have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He [or she] must have more than a unilateral expectation of it." Id. (citing Bd. of Regents of State Colleges, 408 U.S. at 577).

¶ 14. Here, the parties disagree as to whether the Department found Gerald to be eligible for MA benefits at the first hearing. The Department's decision directs:

That the matter is remandéd to the county agency with instructions to rescind the denial of petitioner's application for Institutional — MA; review and re-determine his eligibility for MA, attributing all annuity payments to the community spouse, for all periods for which he may be eligible under his application including backdating, with written notice.

We agree with the Department that this language does not indicate a determination that Gerald was eligible for MA. As the Department states in its March 21, 2002 decision, the remand to the county for redetermination "reopened [Gerald's] MA application process." Rescinding the denial of MA benefits and remanding for a review and redetermination simply placed Gerald's application in its original posture — neither granted nor denied.

¶ 15. We also reject Gerald's contention that the Department waived its right to address the annuity issue by failing to raise it at the first hearing. The record reflects that the county representative attempted to raise the issue of whether the private annuity agreement was a divestment at the first hearing, but after ascertaining that the question involved an issue separate from the excess income issue, the ALJ denied her request. The Department's second denial of Gerald's benefits was then based on the divestment of assets.

¶ 16. The Department's duties with respect to MA are set forth in Wis. Stat. § 49.45(2), which provides in part that the Department shall "[e]xercise responsibility relating to fiscal matters . . . and general supervision of the [MA] program" and "[determine the eligibility of persons for [MLA]." See § 49.45(2)(a)l and 3. The Department argues that these duties are ongoing and, even when MA eligibility is established initially, eligibility is still subject to redetermination especially when, as here, the local agency has information suggesting divestment. Moreover, the MA Handbook sets out post-eligibility procedures by which the Department may reexamine all eligibility factors that are subject to change to decide if eligibility continues. See MA Handbook § 29.2.0. Given the Department's duties as set forth in § 49.45(2)(a)l and 3 and the procedures set forth in the MA Handbook, we conclude that an initial determination of eligibility does not preclude a later redetermination of that status.

¶ 17. Finally, the Department correctly points out that it is the duty of the applicant, here Gerald, to demonstrate MA eligibility. See Wis. Admin. Code § HFS 102.03; 2 B. Abramson et al., Advising Older Clients and Their Families § 11.20 (1999) ("An applicant must prove his or her eligibility by submitting verification of all facts relevant to the eligibility determination."). The applicant must provide information regarding his or her assets and divestments. See § HFS 102.03(3)(h) and MA Handbook Appendix § 37.3.0. Thus, MA eligibility is not a default position that the Department must rebut but rather a privilege for which the applicant must prove eligibility.

¶ 18. We conclude that the Department did not waive its right to make a determination of ineligibility due to divestment of assets. The Department has an ongoing duty to ensure that a MA recipient is eligible and the recipient bears the ongoing burden of proving eligibility. We further conclude that Gerald's due process rights were not violated by the Department's eligibility determination. An individual could only claim a property interest in MA benefits if he or she were in fact eligible for those benefits. We therefore turn to the merits of the Estate's argument.

Applicable Law

¶ 19. Medical assistance is a joint federal and state program aimed at ensuring medical care for those who cannot pay for their own care. See Tannler v. DHSS, 211 Wis. 2d 179, 190, 564 N.W.2d 735 (1997). To be eligible for MA in Wisconsin, an applicant must meet the financial requirements set forth in Wis. Stat. ch. 49. Pursuant to Wis. Stat. § 49.453, an applicant can become ineligible for certain MA benefits if he or she transfers assets in a manner prohibited by statute. These transfers are prohibited in order to prevent those who can afford to pay for their own medical needs from receiving medical assistance. See Tannler, 211 Wis. 2d at 190.

¶ 20. In an effort to prevent circumvention of Medicaid requirements, the Medicaid statutes are constantly evolving and have been revised repeatedly, causing consternation to providers, applicants, lawyers and judges. The following excerpt captures this sentiment:

"There can be no doubt but that the statutes and provisions in question, involving the financing of Medicare and Medicaid, are among the most completely impenetrable texts within human experience. Indeed, one approaches them at the level of specificity herein demanded with dread, for not only are they dense reading of the most tortuous kind, but Congress also revisits the area frequently, generously cutting and pruning in the process and making any solid grasp of the matters addressed merely a passing phase," Rehabilitation Ass'n of Virginia v. Kozlowski, 42 F.3d 1444 (4th Cir. 1994).

Johnson v. Guhl, 91 F. Supp. 2d 754, 758 (D.N.J. 2000). Wisconsin Supreme Court Justice Shirley S. Abraham-son echoed this theme in her concurrence in Tannler, 211 Wis. 2d at 191 (footnote omitted):

Anyone who works with medical assistance statutes begins by appreciating that the federal and state statutes are extremely complex and may fairly be described as incomprehensible. The statutes are characterized by ambivalence and ambiguity, by a confusing mix of means-tested programs and entitlements, and by uneasy compromises among different and often conflicting policies.

¶ 21. Bearing these cautions in mind, we turn to the issue in this case which involves both the general provisions regarding transfers and divestment of assets, including annuities, under Wis. Stat. § 49.453, and the Medicaid trust statute, Wis. Stat. § 49.454 Also relevant to the issue on appeal are the administrative rules governing MA eligibility set forth in Wis. Admin. Code ch. 103 and the guidelines set forth in the Department's Medicaid policy manual, the "MA Handbook."

¶ 22. Wisconsin Stat. § 49.453 governs the divestment of assets. Subsection 49.453(2) addresses ineligibility for MA for institutionalized individuals such as Gerald. It provides that "if an institutionalized individual or his or her spouse .. . transfers assets for less than fair market value on or after the institutionalized individual's look-back date, the institutionalized individual is ineligible for medical assistance ... [f] or nursing facility services." Sec. 49.453(2)(a)l. The look-back date is "the date that is 36 months before, or with respect to payments from a trust or portions of a trust that are treated as assets transferred by the covered individual under s. 49.454(2) (c) or (3)(b) the date that is 60 months before . .. the covered individual is both an institutionalized individual and has applied for medical assistance." Sec. 49.453(l)(f)l.

¶ 23. Wisconsin Stat. § 49.454 specifically addresses the treatment of trust amounts by the Department. Regarding irrevocable trust amounts, it provides in relevant part:

(1) Applicability, (a) Except as provided in sub. (4), this section applies to an individual with respect to a trust if assets of the individual or the individual's spouse were used to form all or part of the corpus of the trust and if any of the following persons established the trust other than by will:
1. The individual.
2. The individual's spouse.
(3) TREATMENT OF IRREVOCABLE TRUST AMOUNTS. For purposes of determining an individual's eligibility for, or amount of benefits under, medical assistance:
(b) Any portion of an irrevocable trust from which, or any income on the corpus from which, no payment could under any circumstances be made to or for the benefit of the individual, is considered to be an asset transferred by the individual subject to s. 49.453. The asset is considered to be transferred as of the date of the establishment of the trust, or, if later, the date on which payment to the individual was foreclosed. The value of the trust shall be determined for purposes of s. 49.453 by including the amount of any payments made from that portion of the trust after that date. (Emphasis added.)

Sec. 49.454(1) & (3).

¶ 24. The issue in this case is whether a private annuity held in an irrevocable trust is governed by the general divestment statute, Wis. Stat. § 49.453, or by Wis. Stat. § 49.454, which specifically governs the treatment of trust amounts for purposes of MA eligibility. The Department determined that § 49.454 applied to the Gonwas' assets held in the Irrevocable Trust despite the fact that they were sold to the Irrevocable Trust as a private annuity.

Standard of Review

¶ 25. The construction of the MA statutes and their application to undisputed facts present a question of law that we review de novo. Tannler, 211 Wis. 2d at 183. While we are not bound by an agency's conclusion of law, we defer to an agency's decision in certain circumstances. Id. In doing so, we generally accord an administrative agency's statutory interpretation one of three levels of deference: great weight, due weight or no deference. Id. at 184.

In order to accord great weight deference, a court must conclude that: 1) the agency was charged by the legislature with the duty of administering the statute; 2) the interpretation of the agency is one of long-standing; 3) the agency employed its specialized knowledge or expertise in forming the interpretation; and 4) the agency's interpretation will provide consistency and uniformity in the application of the statute.
If an agency conclusion does not meet all of the criteria necessary to accord it great weight deference, this court may give "due weight" deference to the agency conclusions. Due weight deference, the middle level of review, is appropriate "if the agency decision is 'very nearly' one of first impression." However, if the case is one of first impression for the agency and the agency lacks any special expertise, then the court must review the agency's conclusion de novo.

Id. (citations omitted).

¶ 26. Gonwa contends that the Department's determination is only entitled to deference when it is consistent with the MA Handbook. Gonwa argues that the Department's decision deviates from the MA Handbook and therefore a de novo standard is appropriate. See Keip v. DHFS, 2000 WI App 13, ¶¶ 13-15, 232 Wis. 2d 380, 606 N.W.2d 543 (a de novo standard of review is appropriate when an agency's position on an issue has been inconsistent). However, for reasons set forth below, we do not conclude that the Department's decision is inconsistent with its handbook. Therefore, we agree with the Department that due weight deference is appropriate.

¶ 27. Under the due weight standard, we will sustain the agency's interpretation if it is reasonable— even if another interpretation is equally reasonable. However, we need not sustain the agency's interpretation if another interpretation is more reasonable than the one employed by the agency. UFE, Inc. v. LIRC, 201 Wis. 2d 274, 287, 548 N.W.2d 57 (1996).

Divestment of Assets

¶ 28. The transaction underlying this appeal occurred in February 2000, when Gerald and Janice sold to the "Gerald F. and Janice R. Gonwa Irrevocable Trust" $150,000 pursuant to a Private Annuity Agreement. Pursuant to the terms of the Private Annuity Agreement, the Irrevocable Trust would make payments to the Gonwas, except when one intended to make an application for Medicaid, all payments under the Private Annuity Agreement would be allocated and paid out to the nonapplying spouse and the applying spouse "shall not be entitled to any payments" under the Agreement.

¶ 29. Similarly, the trust agreement names both Gerald and Janice as the "Settlor" of the Irrevocable Trust and the "Income Beneficiary." However, pursuant to the provisions governing the disposition of principal and income, at such time as either intends to make application for Medicaid, "then in that event, all of the income of this Trust shall be allocated and paid out to the Settlor who is not making an application .... The Settlor who is making said application (or for whose benefit the application is being made) shall not he entitled to any payments of income under this trust." (Emphasis added.)

¶ 30. The parties disagree as to whether the sale of a private annuity to an irrevocable trust is governed by Wis. Stat. § 49.453 or Wis. Stat. § 49.454. The purpose of statutory construction is to determine and give effect to the legislative intent, which is ascertained by considering the language of the statute and, if necessary, the scope, history, context, subject matter and object intended to be remedied or accomplished. State v. Delaney, 2003 WI 9, ¶ 13, 259 Wis. 2d 77, 658 N.W.2d 416. We first look to the language of a statute and attempt to interpret it based on "the plain meaning of its terms." Id., ¶ 14. When construing multiple statutes, we seek to harmonize them. Id., ¶ 13. "It is a cardinal rule of statutory construction that conflicts between statutes are not favored and will be held not to exist if the statutes may otherwise be reasonably construed." Id. (citation omitted).

¶ 31. Gerald contends that the conveyance is governed by the general divestment statute, Wis. Stat. § 49.453, which prohibits only the conveyance of assets for "less than fair market value." He also argues that the MA Handbook expressly permits conveyance of assets from an institutionalized person to his or her spouse. Gerald contends that he remains eligible for MA because he transferred assets for a fair market value and transferred them to his spouse. The Department argues that whether the sale of the private annuity complied with § 49.453 is not relevant because Wis. Stat. § 49.454, which specifically governs irrevocable trusts, governs Gerald's conveyance of assets.

¶ 32. The law supports the Department's argument. The general rule of statutory construction in Wisconsin where two statutes relate to the same subject matter is that the specific statute controls over the general statute. Gottsacker Real Estate Co., v. DOT, 121 Wis. 2d 264, 269, 359 N.W.2d 164 (Ct. App. 1984). Here, both Wis. Stat. §§ 49.453 and 49.454 overlap in the treatment of divestments. However, § 49.453 is a general statute while § 49.454 is a specific statute dealing not only with irrevocable trusts, but also the circumstances under which prohibited payments to the MA recipient are "considered to be an asset transferred by the individual." See § 49.454(3)(b).

¶ 33. In essence, the Department rejected Gerald's contention that it must treat the conveyance of his assets to the Irrevocable Trust as an annuity simply because the income payments from the Irrevocable Trust are structured like those of a conventional annuity. The Department cites to federal guidelines which advise that trust provisions are to be given precedence over the general transfer of assets provisions and that assets placed in trust should be dealt with "exclusively under the trust provisions." See Transmittal No. 64, § 3259.6G., "Use of Trust vs. Transfer Rules for Assets Placed in Trust." The Medicaid trust provisions "apply regardless of why the trust was established; whether the trustees have or exercise any discretion under the trust; any restriction of when and whether distributions can be made from the trust; or any restrictions on the use of distributions." Johnson, 91F. Supp. 2d at 763.

¶ 34. Gerald relies on § 14.12.3 of the MA Handbook which provides that the policies described in the "trusts section" do not apply to annuitiés. However, § 14.12.2 of the MA Handbook addresses irrevocable trusts and provides that the creation of an irrevocable trust is a divestment if created during the look-back period or any time after. According to the MA Handbook, "the divested amount is the total amount of the created trust" or, if funds are added to an irrevocable trust, "[t]he divested amount is the amount of added funds." MA Handbook § 14.12.2. Under either provision, the assets in the Irrevocable Trust are clearly divested for purposes of MA eligibility. Although the MA Handbook is not a statute or a rule, we again are confronted -with a specific provision prevailing over a general provision. Because § 14.12.2 specifically envisions that the creation of an irrevocable trust can constitute a divestment, we agree with the Department that § 14.12.3 excepting annuities from the trust provisions addresses annuities that are not held in an irrevocable trust.

¶ 35. In applying the statutes, the Department determined that regardless of whether the asset held in an irrevocable trust is transferred as an annuity, it is nevertheless held in an irrevocable trust. Wisconsin Stat. § 49.454(l)(a) expressly applies to "an individual with respect to a trust" if that trust was established by the individual or his or her spouse and "if assets of the individual or the individual's spouse were used to form all or part of the corpus of the trust." (Emphasis added.) In specifically addressing irrevocable trusts, § 49.454(3)(b) provides that "[f]or purposes of determining an individual's eligibility for, or amount of benefits under, medical assistance . . . [ajny portion of an irrevocable trust from which, or any income on the corpus from which, no payment could under any circumstances be made to or for the benefit of the individual, is considered to be an asset transferred by the individual subject to s. 49.453 [the divestment statute]." (Emphasis added.)

¶ 36. The Department's construction is consistent with the purpose of MA and the Medicaid trust statutes. As the Department points out, the MA provisions governing treatment of trust assets were enacted in 1993 in an effort to further tighten loopholes. See Skindzier v. Comm'r of Soc. Servs., 784 A.2d 323, 330 (Conn. 2001). In addressing divestment, the House Committee on Energy and Commerce stated in its report recommending passage of a Medicaid qualifying trust statute:

The Committee feels compelled to state the obvious. Medicaid is, and always has been, a program to provide basic health coverage to people who do not have sufficient income or resources to provide for themselves. When affluent individuals use Medicaid qualifying trusts and similar "techniques" to qualify for the program, they are diverting scarce Federal and State resources from low-income elderly and disabled individuals, and poor women and children. This is unacceptable to the Committee.

Cohen v. Comm'r of Div. of Med. Assistance, 668 N.E.2d 769, 772 (Mass. 1996) (citing H.R. Rep. No. 265, 99th Cong., 1st Sess., pt.l, at 72 (1985)).

¶ 37. Here, the Irrevocable Trust expressly prohibits payments to Gerald or payments made for his benefit, in the event he applied for MA. Therefore, although the Irrevocable Trust was established by Gerald and Janice and funded with their assets, see Wis. Stat. § 49.454(l)(a), "no payment could under any circumstances be made to or for the benefit of Gerald," see § 49.454(3)(b). Section 49.454(3)(b) clearly identifies such an asset as "transferred by the individual" and subject to treatment as a divested ásset under Wis. Stat. § 49.453.

¶ 38. Finally, we reject the Estate's contention that the spousal exception set forth in § 14.4.0(8) of the MA Handbook and 42 U.S.C.A. § 1396p(c)(2)(B)(i) applies to Gerald's transfer of assets. The spousal exception provides that "[a] divestment that occurred in the lookback period or any time after does not affect eligibility if... [t]he institutionalized person ... divests a nonhomestead asset... to [a] spouse." MA Handbook § 14.4.0(8) (emphasis omitted). However, the Estate's argument overlooks that the $150,000 private annuity was not transferred to Janice but rather to an irrevocable trust.

¶ 39. Giving due weight to the Department's final decision and order, we conclude that the Department's interpretation of Wis. Stat. § 49.454 as applying to a private annuity held in an irrevocable trust is reasonable.

CONCLUSION

¶ 40. We conclude that the Department's construction of Wis. Stat. § 49.454 is reasonable. We therefore affirm the Department's determination finding Gerald ineligible for MA assistance based on a divestment of assets.

By the Court. — Order affirmed.

       All references to the Wisconsin Statutes are to the 2001-02 version.

       Gerald Gonwa died in December 2001, and his wife, Janice Gonwa, died shortly thereafter. This appeal is brought on behalf of Gerald's estate by the Gonwas' son, James Gonwa, as the personal representative of the estate.

       Á "community spouse" is a person who is married to an institutionalized person but is not himself or herself an institutionalized person. Tannler v. DHSS, 211 Wis. 2d 179, 181 n.1, 564 N.W.2d 735 (1997) (citing Wis. Admin. Code § HSS 103.065(3) (b); Medical Assistance Handbook § 23.2.1).

       Pursuant to Wis. Stat. § 49.45(34), the Department has created a medical assistance manual ("MA Handbook"). The MA Handbook is designed to assist state and local agencies in implementing the federal MA program. See Tannler, 211 Wis. 2d at 184.

       Pursuant to Wis. Admin. Code § HA 3.09(9)(a), "Except for a proposed decision... or by order in a specific case, the decision of the administrative law judge shall be the final decision of the department in proceedings under this chapter."

       The Gerald Gonwa Irrevocable Trust and the Janice Gonwa Irrevocable Trust also appeal. Unless the context requires otherwise, we refer to the collective appellants as "the Estate."

       The Wisconsin medical assistance statutes at issue, Wis. Stat. §§ 49.453 and 49.454, are based on the respective federal statutes set forth in 42 U.S.C.A. §§ 1396r and 1396p(c) and (d).

       This document is part of the State Medicaid Manual available at http://cms.hhs.gov/manuals/pub45/pub_45.asp at Chapter 3 "Eligibility."

       This exception is also set forth in the federal statutes at 42 U.S.C.A. § 1396p(c)(2)(B)(i), which provides that certain transfers of assets will not render an individual ineligible for MA to the extent that "the assets — (i) were transferred to the individual's spouse or to another for the sole benefit of the individual's spouse." Like the spousal exception set forth in the MA Handbook, this exception does not apply to the Gonwas' Irrevocable Trust, Not only were the assets transferred to a trust as opposed to Janice or another individual, but the assets were not transferred for Janice's "sole benefit" since the Gon-was1 children were the principal beneficiaries.

       We therefore do not address the Estate's arguments, premised on the application of Wis. Stat. § 49.453, which pertain to the value of the annuity or the disbursement of annuity income. See Sweet v. Berge, 113 Wis. 2d 61, 67, 334 N.W.2d 559 (Ct. App. 1983).


author: PER CURIAM.

text:
    In the Matter of Disciplinary Proceedings Against Walter A. Paget, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Walter A. Paget, Respondent.
    Supreme Court

      No. 03-0159-D.

      Decided October 7, 2003.

    2003 WI 130
    (Also reported in 669 N.W.2d 731.)
   PER CURIAM.

¶ 1. We review the findings of fact, conclusions of law, and recommendations of Referee John Schweitzer for sanctions, pursuant to SCR 22.17(2). Attorney Walter A. Paget was found to have engaged in unprofessional conduct in the course of his practice of law in violation of the Rules of Professional Conduct. The referee recommended a 60-day suspension of Attorney Paget's license to practice law and payment of $927.35 in costs.

¶ 2. We approve the findings, conclusions, and recommendations, and determine that the seriousness of Attorney Paget's misconduct warrants the imposition of these sanctions.

¶ 3. Attorney Paget was licensed to practice law in Wisconsin in 1992. On May 29, 1998, he consented to the imposition of a private reprimand for having knowingly engaged in the practice of law while his license was suspended for a period during 1997 for a Continuing Legal Education (CLE) violation. On June 8, 1999, he was again administratively suspended for failure to comply with CLE requirements and it is his activity during the period of this suspension that forms the basis for the present proceeding.

¶ 4. On January 17, 2003, the Office of Lawyer Regulation (OLR) issued a complaint against Attorney Paget claiming that he had practiced law in 2001 while his license was administratively suspended. The complaint alleged one count in violation of SCR 31.10(1). Attorney Paget did not answer and otherwise has not contested the matter or appealed from the referee's report which was filed on May 15, 2003.

¶ 5. The complaint alleged, and the referee so found, that on five dates in 2001 Attorney Paget appeared as defense counsel in four Milwaukee County court cases, all involving the same client. Further, the complaint alleged, and the referee so found, that on unspecified dates during the period of Attorney Paget's CLE suspension he appeared in five additional Milwaukee County Circuit Court cases involving three clients.

¶ 6. The referee found that discipline was necessary to prevent further misconduct by Attorney Paget, to insure that if he returns to the practice of law he will practice competently and ethically, to deter other attorneys from engaging in similar misconduct, and to foster Attorney Paget's rehabilitation by instilling in him appreciation for the consequences of violating the Rules of Professional Conduct. The referee's opinion was that these goals could be achieved by the imposition of the 60-day suspension recommended by the OLR.

¶ 7. We adopt the findings of fact and conclusions of law of the referee. Attorney Paget's misconduct represents a serious failure to comply with the Rules of Professional Conduct. Furthermore, the referee's recommendation of a sanction is appropriate discipline for this conduct.

¶ 8. IT IS ORDERED that the license of Attorney Walter A. Paget to practice law in Wisconsin is suspended for a period of 60 days, effective November 11, 2003.

¶ 9. IT IS FURTHER ORDERED that Attorney Paget comply with the provisions of SCR 22.26 concerning the duties of an attorney whose license to practice law has been suspended.

¶ 10. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Paget shall pay $927.35 to the OLR representing the costs of this proceeding. If these costs are not paid within the time specified, and absent a showing to this court of an inability to pay the costs within that time, the license of Attorney Paget to practice law shall remain suspended indefinitely until further order of the court.

       SCR 22.17(2) provides:
      (2) If no appeal is filed timely, the supreme court shall review the referee's report; adopt, reject or modify the referee's findings and conclusions or remand the matter to the referee for additional findings; and determine and impose appropriate discipline. The court, on its own motion, may order the parties to file briefs in the matter.

       SCR 31.10(1) provides:
      (1) If a lawyer fails to comply with the attendance requirement of SCR 31.02, fails to comply with the reporting requirement of SCR 31.03(1), or fails to pay the late fee under SCR 31.03(2), the board shall serve a notice of noncompliance on the lawyer. This notice shall advise thé lawyer that the state bar membership of .the lawyer shall be automatically suspended for failing to fde evidence of compliance or to pay the late fee within 60 days after service of the notice. The board shall certify the names of all lawyers so suspended under this rule to the clerk of the supreme court and to each judge of a court of record in this state. A lawyer shall not engage in the practice of law in Wisconsin while his or her state bar membership is suspended under this rule.


text:
    In the Matter of Disciplinary Proceedings Against William J. Gilbert, Attorney at Law: Office of Lawyer Regulation, Complainant, v. William J. Gilbert, Respondent.
    Supreme Court

      No. 03-0445-D.

      Decided October 7, 2003.

    2003 WI 131
    (Also reported in 669 N.W.2d 725.)
   PER CURIAM.

¶ 1. We review the referee's recommendation that Attorney William J. Gilbert's license to practice law in Wisconsin be suspended for six months for professional misconduct. That misconduct consists of failing to act with reasonable diligence and promptness in representing a client, failing to keep a client reasonably informed about the status of a matter, failing to hold property of a client or property in which both the lawyer and client claim an interest in trust separate from the lawyer's own property until there is an accounting and a severing of their interests, failing to surrender papers and property to which the client was entitled upon termination of representation, and failing to cooperate with the Office of Lawyer Regulation (OLR) in the investigation of grievances. The referee also recommended that Attorney Gilbert be required to pay the costs of the proceeding and that in the event he seeks to have his license reinstated following the suspension, the reinstatement be subject to certain conditions.

¶ 2. We determine that the seriousness of Attorney Gilbert's professional misconduct warrants a suspension of his license to practice law for six months. We also agree that Attorney Gilbert should pay the costs of the proceeding and that his reinstatement be subject to the conditions identified by the referee.

¶ 3. Attorney Gilbert was admitted to practice law in Wisconsin in 1971 and practiced in Hudson. On June 12, 2003, this court suspended Attorney Gilbert's license after he failed to respond to an order to show cause relating to his willful failure to respond or cooperate in the OLR's investigation of his conduct. His license remains suspended.

¶ 4. The complaint filed by the OLR alleged misconduct with respect to two former clients. The first client retained Attorney Gilbert in November of 1999 to represent him in a divorce. The client paid Attorney Gilbert a retainer fee of $1500. Attorney Gilbert deposited the $1500 retainer into his office checking account. At the time the money was deposited not all of the $1500 had been earned. Attorney Gilbert failed to perform any work on the divorce action after March 31, 2000. The client called Attorney Gilbert on numerous occasions asking for updates on the status of his case. Attorney Gilbert failed to return the client's phone calls. The client also wrote to Attorney Gilbert at least three times requesting an itemized statement and requesting a return of any unused portion of the retainer. Attorney Gilbert failed to respond to the client's letters and failed to provide the client with either an itemized statement or a return of any unearned portion of the retainer fee.

¶ 5. Attorney Gilbert withdrew from representation of the client on September 22, 2000. Successor counsel, Attorney Daniel Demaio, entered an appearance in the case on June 27, 2001. Attorney Gilbert failed to send the client's file to Attorney Demaio, in spite of Attorney Demaio's request that he do so.

¶ 6. The client filed a grievance against Attorney Gilbert. On April 11, 2002, the OLR staff sent Attorney Gilbert a letter asking him to submit a written supplemental response addressing specific issues. Attorney Gilbert failed to respond. On May 2, 2002, the OLR staff sent a second request, by both regular and certified mail, requesting a response from Attorney Gilbert. Attorney Gilbert again failed to respond. The OLR staff telephoned Attorney Gilbert on two occasions and left voicemail messages requesting a response. Attorney Gilbert failed to return the OLR's telephone calls.

¶ 7. The OLR's complaint also alleged that Attorney Gilbert engaged in misconduct in his representation of two clients who hired him to represent them in a condemnation review against the Wisconsin Department of Transportation (DOT) concerning property the clients owned in St. Croix county. Attorney Joseph Ryan was the clients' Minnesota attorney. On August 8, 1999, Attorney Ryan forwarded a $2500 check to Attorney Gilbert for advance payment of costs. In his cover letter Attorney Ryan requested that Attorney Gilbert provide him with a breakdown of the application of the $2500. Attorney Gilbert failed to provide an accounting, claiming he had lost his trust account records for the relevant time period. Attorney Gilbert said he placed the check in his trust account and paid out costs on the clients' behalf.

¶ 8. In December of 1999 Attorney Gilbert reached a settlement with the DOT by which the DOT agreed to pay the clients an additional $5528.16. The DOT's attorney, a State of Wisconsin assistant attorney general, faxed a stipulation, order for dismissal, and release to Attorney Gilbert on December 20, 1999. On January 21, 2000, the DOT's attorney sent Attorney Gilbert the releases to be executed by his clients along with a State of Wisconsin check in the amount of $5528.16. Attorney Gilbert failed to notify his clients in writing of his receipt of the check and failed to disburse the check to them. Attorney Gilbert lost the settlement check, made no prompt or diligent effort to locate it, and failed to obtain a replacement check.

¶ 9. A status hearing in the condemnation matter was scheduled for March 13, 2000. Prior to that hearing the DOT's attorney sent two letters to the judge stating that Attorney Gilbert had failed to respond to the DOT attorney's January 21, 2000, letter. Attorney Gilbert failed to appear at the March 13, 2000, status hearing. The circuit court dismissed the action with prejudice, noting that the DOT had paid Attorney Gilbert's clients an additional $5528.16.

¶ 10. Both the clients and Attorney Ryan attempted to contact Attorney Gilbert on numerous occasions to determine the status of the settlement check. Attorney Gilbert failed to respond to any of the clients' calls and spoke with Attorney Ryan only once. On December 3, 2001, Attorney Ryan contacted the DOT's attorney to obtain a replacement check. On January 2, 2002, the DOT's attorney forwarded a letter to Attorney Gilbert requesting permission to forward the replacement check to Attorney Ryan. Attorney Gilbert failed to respond to the letter. Following a January 28, 2002, letter, to which Attorney Gilbert again did not respond, the DOT's attorney sent Attorney Ryan a replacement check.

¶ 11. Attorney Ryan filed a grievance against Attorney Gilbert. On March 27, 2002, the OLR staff sent a letter to Attorney Gilbert asking him to submit a written response to Attorney Ryan's grievance on or before April 19, 20002. Attorney Gilbert failed to respond. On May 2, 2002, the OLR staff sent a second request, by certified mail, requesting a response from Attorney Gilbert. Attorney Gilbert again failed to respond. The OLR staff telephoned Attorney Gilbert on two occasions and left voicemail messages requesting a response. Attorney Gilbert failed to return the OLR's telephone calls.

¶ 12. The OLR filed a complaint against Attorney Gilbert on February 18, 2003. Janet Jenkins was appointed as referee. Attorney Gilbert was personally served with the order to answer but did not file an answer. The referee found Attorney Gilbert to be in default.

¶ 13. The referee concluded that by failing to perform any work on the first client's divorce action after March 31, 2000, Attorney Gilbert violated SCR 20:1.3. The referee also concluded that by failing to respond to the first client's written and telephonic inquiries and by failing to apprise the client of the status of the divorce action, Attorney Gilbert violated SCR 20:1.4(a). The referee further concluded that by failing to deposit and hold in trust the $1500 retainer received from the first client until the fees were earned, and by failing to provide the first client with an account of the funds upon his request, Attorney Gilbert violated SCR 20:1.15(a) and (d). The referee also concluded that by failing to turn over the first client's file to successor counsel, Attorney Gilbert violated SCR 20:1.16(d). In addition, the referee concluded that by failing to file a written supplemental response to the first client's grievance despite the OLR's written request to do so, Attorney Gilbert willfully failed to cooperate with the OLR in the investigation of this matter, as defined in SCR 22.001(9)(b), in violation of SCR 22.03(6).

¶ 14. With respect to Attorney Gilbert's representation of the second client, the referee concluded that by failing to take prompt and diligent steps to find the lost settlement check or to have a replacement check issued, by failing to respond to written requests from the DOT's attorney regarding the settlement check and its replacement, and by failing to appear at the March 13, 2000, status hearing, Attorney Gilbert violated SCR 20:1.3. The referee also concluded that by failing to keep the second client or Attorney Ryan reasonably informed about the status of the settlement check, and by failing to respond to requests for information from the clients and Attorney Ryan, Attorney Gilbert violated SCR 20:1.4(a).

¶ 15. The referee also found that by failing to promptly notify the clients or Attorney Ryan in writing of the receipt of the settlement check and by failing to promptly deliver to them the funds to which they were entitled, and by failing to render an accounting of the $2500 check to Attorney Ryan, Attorney Gilbert violated SCR 20:1.15(b). The referee further concluded by failing to retain required trust account records concerning the $2500 advanced to Attorney Gilbert by Attorney Ryan for the clients' costs, Attorney Gilbert violated SCR 20:1.15(e). Finally, the referee concluded that by failing to file a written response to Attorney Ryan's grievance, after notification by the OLR by both regular and certified mail, Attorney Ryan willfully failed to cooperate with the OLR in the investigation of the matter, as defined in SCR 22.001(9)(b), in violation of SCR 22.03(2), and SCR 22.03(6).

¶ 16. In discussing the appropriate sanction for Attorney Gilbert's misconduct, the referee commented:

It is particularly difficult to make a recommendation for sanctions when the attorney who is the subject of the misconduct action fails to participate in the action. One cannot ascertain whether the misconduct was intentional or negligent or what problems or conditions may have affected the attorney and which might serve as an explanation for the misconduct. Moreover, one has no way of gauging whether the attorney's potential for rehabilitation is great or nonexistent or whether there are any mitigating factors. By choosing not to participate in the action, the attorney has reduced himself to simply a collection of allegations against him. Having no basis on which to judge William J. Gilbert, the man, I can only judge his misconduct.

¶ 17. The referee concluded that a six-month suspension of Attorney Gilbert's license to practice law was appropriate. The referee noted that in both matters clients had paid substantial sums to Attorney Gilbert for his assistance and in both cases Attorney Gilbert did some initial work on the files and then stopped, almost as if he had vanished. The referee noted that Attorney Gilbert failed to respond to phone calls and letters, both from the clients themselves and from the OLR. The referee also commented that having practiced for more than 30 years, Attorney Gilbert knew or should have known what was required of him with respect to trust accounting, and the referee said the fact that Attorney Gilbert had not previously run afoul of the trust accounting rules demonstrated that for the better part of his legal career he did follow the rules.

¶ 18. The referee said since Attorney Gilbert chose to remain silent it was impossible to even speculate as to the cause of his misconduct. The referee said, "[w]hat we are left with is a lawyer who appears to either no longer care about his ethical responsibilities or who, for some unknown reason, is incapable of caring. Both possibilities raise grave concern for the protection of Gilbert's present and potential future clients." The referee recommended that Attorney Gilbert's license to practice be suspended for six months and that he be required to pay the costs of the proceeding.

¶ 19. The referee also recommended that, in the event Attorney Gilbert seeks to have his license reinstated following the six-month suspension, the reinstatement be subject to the following conditions: (1) That he provide a full and complete accounting to Attorney Ryan and the first client in their respective matters; (2) that he submit a business or office management plan which establishes a daily diary, a daily calendar, an appropriate filing system that reflects daily entries, and an appropriate billing system; (3) that he meet with a mentor on a periodic basis to ensure compliance with these conditions; and (4) in the event the required accountings for the two client matters are unavailable or if the accountings reveal Attorney Gilbert did not earn all of the first client's retainer or utilize all of the second client's costs advance, that Attorney Gilbert be required to pay restitution for the amounts not spent or earned.

¶ 20. A referee's findings of fact on a disciplinary matter will not be set aside unless clearly erroneous. In re Disciplinary Proceedings Against Sosnay, 209 Wis. 2d 241, 243, 562 N.W.2d 137 (1997). Conclusions of law are reviewed de novo. In re Disciplinary Proceedings Against Carroll, 2000 WI248, 248 Wis. 2d 662, 675, 636 N.W2d 718. Since the referee's findings of fact have not been shown to be clearly erroneous, we adopt them. We also conclude, as did the referee, that the seriousness of Attorney Gilbert's misconduct warrants the suspension of his license to practice law in Wisconsin for six months. We further agree with the referee that Attorney Gilbert shoúld be required to pay the costs of this proceedings, and we also agree that in the event he seeks to have his license reinstated, the reinstatement should be subject to the conditions discussed above.

¶ 21. IT IS ORDERED that the license of Attorney William J. Gilbert to practice law in Wisconsin remains suspended for a period of an additional six months, effective the date of this order.

¶ 22. IT IS FURTHER ORDERED that Attorney William J. Gilbert comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been suspended, if he has not already done so.

¶ 23. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney William J. Gilbert pay to the Office of Lawyer Regulation the costs of this proceeding. If the costs are not paid within the time specified and absent a showing to this court of his inability to pay the costs within that time, the license of Attorney William J. Gilbert to practice law in Wisconsin shall remain suspended until further order of the court.

¶ 24. IT IS FURTHER ORDERED that in the event Attorney William J. Gilbert seeks to have his license reinstated following the suspension, the reinstatement be subject to the following conditions: (1) That he provide a full and complete accounting to Attorney Ryan and the first client in their respective matters; (2) that he submit a business or office management plan which establishes a daily diary, a daily calendar, an appropriate filing system that reflects daily entries, and an appropriate billing system; (3) that he meet with a mentor on a periodic basis to ensure compliance with these conditions; and (4) in the event the required accountings for the two client matters are unavailable or if the accountings reveal Attorney Gilbert did not earn all of the first client's retainer or utilize all of the second client's costs advance, that Attorney Gilbert be required to pay restitution for the amounts not spent or earned.

       SCR 20:1.3 provides: "Diligence. A lawyer shall act with reasonable diligence and promptness in representing a client,"

       SCR 20:1.4(a) provides: "(a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information."

       SCR 20:1.15(a) and (d) provide:

        (a) A lawyer shall hold in trust, separate from the lawyer's own property, that property of clients and third persons that is in the lawyer's possession in connection with a representation or when acting in a fiduciary capacity. Funds held in connection with a representation or in a fiduciary capacity include funds held as trustee, agent, guardian, personal representative of an estate, or otherwise. All funds of clients and third persons paid to a lawyer or law firm shall be deposited in one or more identifiable trust accounts as provided in paragraph (c). The trust account shall be maintained in a bank, savings bank, trust company, credit union, savings and loan association or other investment institution authorized to do business and located in Wisconsin. The trust account shall be clearly designated as "Client's Account" or "Trust Account" or words of similar import. No funds belonging to the lawyer or law firm, except funds reasonably sufficient to pay or avoid imposition of account service charges, may be deposited in such an account. Unless the client otherwise directs in writing, securities in bearer form shall be kept by the attorney in a safe deposit box in a bank, savings bank, trust company, credit union, savings and loan association or other investment institution authorized to do business and located in Wisconsin. The safe deposit box shall be clearly designated as "Client's Account" or "Trust Account" or words of similar import. Other property of a client or third person shall be identified as such and appropriately safeguarded. If a lawyer also licensed in another state is entrusted with funds or property in connection with an out-of-state representation, this provision shall not supersede the trust account rules of the other state.
      (d) When, in the representation, a lawyer is in possession of property in which both the lawyer and another person claim interests, the property shall be treated'by the lawyer as trust property until there is an accounting and severance of their interests. If a dispute arises concerning their respective interests, the portion in dispute shall continue to be treated as trust property until the dispute is resolved.

       SCR 20:1.16(d) provides:
      (d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law.

       SCR 22.001(9)(b) provides: "(9) 'Misconduct' means any of the following: (b) Failure to cooperate in the investigation of a grievance."

       SCR 22.03(6) provides: "(6) In the course of the investigation, the respondent's wilful failure to provide relevant information, to answer questions fully, or to furnish documents and the respondent's misrepresentation in a disclosure are misconduct, regardless of the merits of the matters asserted in the grievance."

       SCR 20:1.15(b) provides:
      (b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person in writing. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall render a full accounting regarding such property.

       Both the OLR's complaint and the referee's report erroneously cite to SCR 1.14(e), a nonexistent supreme court rule. The rule applicable to retention of trust account records is SCR 20:1.15(e) which provides:
      (e) Complete records of trust account funds and other trust property shall be kept by the lawyer and shall be preserved for a period of at least six years after termination of the representation. Complete records shall include: (i) a cash receipts journal, listing the sources and date of each receipt, (ii) a disbursements journal, listing the date and payee of each disbursement, with all disbursements being paid by check, (iii) a subsidiary ledger containing a separate page for each person or company for whom funds have been received in trust, showing the date and amount of each receipt, the date and amount of each disbursement, and any unexpended balance, (iv) a monthly schedule of the subsidiary ledger, indicating the balance of each client's account at the end of each month, (v) a determination of the cash balance (checkbook balance) at the end of each month, taken from the cash receipts. and cash disbursement journals and a reconciliation of the cash balance (checkbook balance) with the balance indicated in the bank statement, and (vi) monthly statements, including canceled checks, vouchers or share drafts, and duplicate deposit slips. A record of all property other than cash which is held in trust for clients or third persons, as required by paragraph (a) hereof, shall also be maintained. All trust account records shall be deemed to have public aspects as related to the lawyer's fitness to practice.

       SCR 22.03(2) provides:
      (2) Upon commencing an investigation, the director shall notify the respondent of the matter being investigated unless in the opinion of the director the investigation of the matter requires otherwise. The respondent shall fully and fairly disclose all facts and circumstances pertaining to the alleged misconduct within 20 days after being served by ordinary mail a request for a written response. The director may allow additional time to respond. Following receipt of the response, the director may conduct further investigation and may compel the respondent to answer questions, furnish documents, and present any information deemed relevant to the investigation.


text:
    In the Matter of Disciplinary Proceedings Against Bruce J. Meagher, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Bruce J. Meagher, Respondent.
    Supreme Court

      No. 03-1185-D.

      Decided October 8, 2003.

    2003 WI 132
    (Also reported in 669 N.W.2d 733.)
   PER CURIAM.

¶ 1. We review the stipulation filed by Attorney Bruce J. Meagher and the Office of Lawyer Regulation (OLR) pursuant to SCR 22.12, which sets forth findings of fact and conclusions of law regarding Attorney Meagher's professional misconduct. The parties stipulated to a six-month suspension of Attorney Meagher's license to practice law in Wisconsin, to be imposed retroactive to the date of his temporary suspension, November 12, 2002.

¶ 2. We accept the parties' stipulation and recommendation that a suspension of six months, imposed retroactively, is appropriate discipline for Attorney Meagher's misconduct.

¶ 3. Attorney Meagher was admitted to practice in 1980. On November 12, 2002, Attorney Meagher's license to practice law in Wisconsin was temporarily suspended, pursuant to SCR 22.20(1), in connection with his conviction for violation of a federal wire wagering law. That conviction forms the basis for one of the counts of misconduct described herein. Attorney Meagher has no other disciplinary history.

¶ 4. On May 2, 2003, the OLR filed a complaint against Attorney Meagher, which alleged two counts of misconduct. The complaint alleged that Attorney Meagher represented a client when the representation of that client was directly adverse to another client without reasonably believing the representation would not adversely affect the relationship with the other client and without obtaining each client's written consent in violation of SCR 20:1.7(a). The complaint further alleged that Attorney Meagher engaged in criminal conduct that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects in violation of SCR 20:8.4(b).

¶ 5. On or about May 20, 2003, the OLR and Attorney Meagher filed a stipulation pursuant to SCR 22.12, in which Attorney Meagher stipulated to the misconduct charged in the OLR's complaint and to the sanctions sought by the OLR.

¶ 6. The facts giving rise to the violation of SCR 20:1.7(a), relating to Attorney Meagher's representation of a client despite the existence of a conflict of interest are set forth in the stipulation, and described herein.

¶ 7. Kenneth Flannery (Flannery) is a Minnesota businessman who sold benefit and payroll services. Flannery had an ongoing attorney-client relationship with Attorney Meagher. Steve Haskins (Haskins) is a Minnesota businessman who was a consultant for and provider of employee benefits programs.

¶ 8. In January 1998 Flannery and Haskins asked Attorney Meagher to represent them in a joint business venture to develop an employee benefits software program. Attorney Meagher was hired to set up one or more limited liability corporations (LLCs), intended to merge the businesses of Flannery and Haskins. Attorney Meagher filed Minnesota Articles of Organization to create two new LLCs for Flannery and Haskins, for operation of the joint business venture.

¶ 9. On January 28,1998, Attorney Meagher sent Flannery and Haskins, for discussion purposes, drafts of two operating agreements for the new LLCs. These operating agreements contemplated that Flannery and his existing companies would own a 60 percent interest in each, and Haskins and his existing company would own a 40 percent interest. Neither operating agreement was ever executed.

¶ 10. Haskins' company wrote a check to Attorney Meagher in partial payment of Attorney Meagher's legal services. Haskins' company made other payments on behalf of the new companies and the development of the software program, totaling over $200,000. Haskins represents that those payments constituted his capital contribution to the new companies. Attorney Meagher asserts that he did not know of these investments at the time they were made.

¶ 11. The process for the new LLCs was never entirely concluded, in that the operating agreements were never signed. Flannery and Haskins continued to negotiate the terms of the joint business venture.

¶ 12. During the spring, summer, and early fall of 1999, according to a subsequent arbitrator's decision, Flannery allegedly "waged a campaign to discredit" Haskins, steal away his existing clients, and to set up a competing business. Flannery also allegedly contacted two of Haskins' employees regarding creation of the new competing business (EBIG).

¶ 13. Attorney Meagher was hired to incorporate EBIG. Although EBIG was intended to compete with Haskins' business, Attorney Meagher did not obtain consent from Haskins for this representation.

¶ 14. As of October 1, 1999, the two employees left Haskins' firm and started doing business as EBIG. They contacted Haskins' clients and encouraged them to switch to their new company. Flannery entered into separate negotiations with Haskins to purchase Haskins' existing company. Haskins retained new counsel. Attorney Meagher undertook representation of Flannery in the negotiations without seeking or obtaining written consent from Haskins or Flannery regarding any conflict of interest.

¶ 15. After intense negotiations in which Attorney Meagher was involved, Haskins and Flannery signed a sale agreement. The sale price that Flannery was to pay Haskins was based on a percentage of the profits of the company over the next ten years.

¶ 16. Haskins' counsel drafted documents, including a letter of intent, to effectuate the sale and presented them for Attorney Meagher's review. Attorney Meagher responded that he and Flannery were "flabbergasted" to discover how much the proposed closing documents deviated from the letter of intent. Attorney Meagher threatened to file a lawsuit seeking specific performance.

¶ 17. One of the provisions in the documents to which Attorney Meagher objected involved the new competing company, which Attorney Meagher had formed for Flannery and for Haskins' former employees. In the midst of negotiations, Haskins wrote to Flannery requesting corporate information regarding the joint business venture in which he had invested some $200,000. Flannery denied that Haskins had any ownership interest in the joint business venture. Attorney Meagher also asserted in subsequent correspondence that Haskins' requests for information about the joint venture, regarding which Attorney Meagher had previously provided legal representation, were "frivolous."

¶ 18. The sale from Haskins to Flannery was never consummated. Flannery sought to enforce the sale agreement through arbitration proceedings. Attorney Meagher did not represent Flannery in those proceedings, but did appear as a witness.

¶ 19. The OLR complaint alleged that by representing Flannery when the representation of Flannery was directly adverse to Haskins, and when the representation adversely affected the relationship with Haskins, and by not obtaining written conflict waivers from Flannery or Haskins, Attorney Meagher represented a client when the representation of that client will be directly adverse to another client without reasonably believing the representation will not adversely affect the relationship with the other client and without each client's written consent, in violation of SCR 20:1.7(a).

¶ 20. The stipulation executed by Attorney Meagher and the OLR also describes the facts giving rise to Attorney Meagher's violation of SCR 20:8.4(b). In April 2002, Attorney Meagher entered a guilty plea to one count of violating the federal Wire Wagering Act, 18 U.S.C. § 1084, by virtue of his ownership interest in Gold Medal Sports (GMS), an offshore gambling operation that took sports bets from United States citizens via wire communications. On July 18, 2002, Attorney Meagher was sentenced to one-month's imprisonment followed by five months of home confinement without electronic monitoring and one year of supervised release. Attorney Meagher also paid a $20,000 fine. Attorney Meagher stipulated that this conviction and the circumstances surrounding it demonstrate that Attorney Meagher engaged in criminal conduct that reflects adversely on a lawyer's honesty, trustworthiness or fitness as a lawyer in other respects in violation of SCR 20:8.4(b).

¶ 21. In addition to stipulating to the misconduct set forth above, the parties stipulated to discipline in the form of a six-month suspension of Attorney Meagher's license to practice law in Wisconsin, to be imposed retroactive to the date of his temporary suspension, November 12, 2002. The stipulation provides further that it is not the result of a plea bargain and reflects neither a reduction of the charges nor a reduction of the level of discipline originally sought by the OLR. The OLR is not seeking imposition of costs in this matter.

¶ 22. We approve the stipulation and adopt the stipulated facts and conclusions of law. We agree that Attorney Meagher's misconduct warrants the suspension of his license to practice law. We accept the parties' stipulation that a six-month suspension, imposed retroactive to November 12, 2002, the date his license was temporarily suspended, is appropriate discipline for this offense. Therefore,

¶ 23. IT IS ORDERED that the license of Bruce J. Meagher to practice law in Wisconsin is suspended for a period of six months, effective November 12, 2002.

¶ 24. IT IS FURTHER ORDERED that, if he has not already done so, Attorney Bruce J. Meagher must comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been suspended.

¶ 25. PATIENCE D. ROGGENSACK, J., did not participate.

       SCR 22.12 provides: Stipulation.
      (1) The director may file with the complaint a stipulation of the director and the respondent to the facts, conclusions of law regarding misconduct, and discipline to be imposed. The supreme court may consider the complaint and stipulation without the appointment of a referee.
      (2) If the supreme court approves a stipulation, it shall adopt the stipulated facts and conclusions of law and impose the stipulated discipline.
      (3) If the supreme court rejects the stipulation, a referee shall be appointed and the matter shall proceed as a complaint filed without a stipulation.
      (4) A stipulation rejected by the supreme court has no evidentiary value and is without prejudice to the respondent's defense of the proceeding or the prosecution of the complaint.

       SCR 22.20(1) provides:
      Summary suspension. Upon receiving satisfactory proof that an attorney has been found guilty or convicted of a serious crime, the supreme court may summarily suspend the attorney's license to practice law pending final disposition of a disciplinary proceeding, whether the finding of guilt or the conviction resulted from a plea of guilty or no contest or from a verdict after trial and regardless of the pendency of an appeal.

       SCR 20:1.7(a) provides: "A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless: (1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and (2) each client consents in writing after consultation."

       SCR 20:8.4(b) provides: "It is professional misconduct for a lawyer to: commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects."


text:
    In the Matter of Disciplinary Proceedings Against Robert J. Parent, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Robert J. Parent, Respondent.
    Supreme Court

      No. 03-2506-D.

      Decided October 21, 2003.

    2003 WI 134
    (Also reported in 670 N.W.2d 541.)
   The Court entered the following order on this date:

Attorney Robert J. Parent has filed a petition for consensual license revocation under SCR 22.19(3). He was admitted to practice law in Wisconsin in 1982 but his license was suspended on October 31, 2002 for failure to pay State Bar dues; on November 12, 2002, by order of this court, for willful failure to respond or cooperate in an Office of Lawyer Regulation (OLR) grievance investigation and because his continued practice of law was a threat to the public and to the administration of justice; and on June 2, 2003 for failure to comply with continuing legal education reporting requirements.

OLR is currently investigating Parent in fifteen matters. The primary matter involves a federal criminal conviction for depositing a forged check, for which he is currently incarcerated in a federal prison facility. The other allegations concern: (1) his cash withdrawals from a representative payee account; (2) multiple instances of his lack of diligence and failure to communicate with his clients on the closing of his office; (3) multiple instances of his failure to either return his client files or advance payments of fees; and, (4) multiple instances of his lack of cooperation with OLR grievance investigations.

In his petition, Parent acknowledges that he cannot successfully defend himself against these allegations of professional misconduct, that he is aware of his right to a formal hearing and his opportunity to defend against these allegations, and that he voluntarily waives the right to such a formal hearing.

OLR has responded and recommends that the petition be granted.

IT IS ORDERED that the petition for consensual license revocation of Attorney Robert J. Parent is granted. The revocation of his license to practice law in Wisconsin shall be effective on the date of this order. To the extent he has not already done so, he must comply with SCR 22.26 relating to activities following license revocation.