text:
    In the Matter of Disciplinary Proceedings Against James R. Duchemin, Attorney at Law: Lawyer Regulation System of the State of Wisconsin, by Ronald R. Smith, Special Investigator, Complainant-Appellant, v. James R. Duchemin, Respondent-Respondent.
    Supreme Court

      No. 01-2227-D.

      Oral argument January 23, 2003.

    Decided March 20, 2003.

    2003 WI 19
    (Also reported in 658 N.W.2d 81.)

      For the complainant-appellant there were briefs by Paul W Schwarzenbart, Madison, and oral argument by Paul W. Schwarzenbart.

    For the respondent-respondent there was a brief by Webster A. Hart, Stephanie L. Finn and Herrick, Hart, Duchemin, Spaeth, Sullivan & Schumacher, S.C., Eau Claire, and oral argument by Webster A. Hart.

   PER CURIAM.

¶ 1. The Lawyer Regulation System (LRS) appeals from the referee's findings of fact and conclusions of law entered following a hearing held on the LRS complaint filed with this court on August 21, 2001, against Attorney James R. Duchemin. That complaint alleged that Attorney Duchemin had violated SCR 20:1.6 by revealing to an acquaintance, Jill Johnson, the fact that Johnson's daughter, Jennifer Mayer, had contacted him about possibly retaining him to represent her (Jennifer Mayer) in a divorce action. The LRS asserted that Mayer had not expressly authorized Attorney Duchemin to disclose that information to Johnson or to discuss with Johnson the circumstances surrounding gifts or loans of money by Johnson to Mayer and her husband. Furthermore, the LRS asserted that the disclosures made by Attorney Duch-emin were not impliedly authorized as necessary to carry out his possible representation of Mayer, nor were such disclosures made under circumstances listed in SCR 20:1.6. The LRS asked this court to issue a private reprimand to Attorney Duchemin for his alleged violation of SCR 20:1.6.

¶ 2. Following a public hearing the referee appointed in this matter, Attorney John Fiorenza, concluded that Attorney Duchemin had not violated SCR 20:1.6; further, the referee recommended that the LRS's complaint against Attorney Duchemin be dismissed and that no costs be assessed against him. Based on the undisputed facts as found by the referee, which we determine to be not clearly erroneous and which we therefore adopt, see In re Disciplinary Proceedings Against Carroll, 2001 WI 130, ¶ 29, 248 Wis. 2d 662, 675, 636 N.W.2d 718, we conclude that Attorney Duchemin's disclosures, which were the focus of the LRS's complaint, were impliedly authorized in order for him to carry out his then nascent representation of Jennifer Mayer. Accordingly, we adopt the referee's findings and his recommendation, we dismiss the LRS complaint against Attorney Duchemin, and we absolve him of any costs in this matter.

¶ 3. Attorney James R. Duchemin was licensed to practice law in Wisconsin in 1970 and has never before been the subject of a disciplinary proceeding. He practices law in Eau Claire where he primarily engages in family law and divorce work.

¶ 4. The referee heard the following testimony at a public hearing held on the LRS's disciplinary complaint against Attorney Duchemin and, based on the testimony, made several findings of fact.

¶ 5. Attorney Duchemin frequents a public restaurant near his office. Jill Johnson has worked at that establishment for several years as a cook and she and Attorney Duchemin have been acquainted for approximately 11 years. Sometime before August 7, 2000, Johnson told her daughter, Jennifer Mayer, who was then experiencing marital difficulties, that she should retain Attorney Duchemin to represent her; Johnson recommended Attorney Duchemin to Jennifer as a "good lawyer" for her to hire.

¶ 6. On August 7, 2000, Attorney Duchemin encountered Jill Johnson at the restaurant. Ms. Johnson asked Duchemin if he would mind speaking to her daughter, Jennifer, whom he did not know, about representing Jennifer in a possible divorce action. Attorney Duchemin told Ms. Johnson that he would "be happy to talk to her."

¶ 7. When Attorney Duchemin returned to his office he received a message asking him to call Jennifer Mayer who had just called seeking an appointment. Attorney Duchemin returned Ms. Mayer's call and in their subsequent telephone conversation, Duchemin obtained certain preliminary information, including the fact that that morning Ms. Mayer's husband had an appointment with his lawyer to discuss the couple's marital difficulties. Attorney Duchemin informed Ms. Mayer what his fees would be if she retained him and told her that he would send her a packet of information concerning his representation. At the conclusion of that telephone conversation, Attorney Duchemin understood that Jennifer Mayer had not retained him, nor had she instructed him to start a divorce action on her behalf. As he told her he would, Attorney Duchemin mailed Jennifer Mayer the packet of information and forms to complete, anticipating that she would schedule an appointment when she was ready to proceed and retain him to represent her in a divorce action.

¶ 8. During their five- to ten-minute telephone conversation, Jennifer Mayer told Attorney Duchemin that before and during the marriage, Jill Johnson had provided both Jennifer and her husband, Randy, with money to support the family's trucking business. However, it was unclear to Attorney Duchemin from Ms. Mayer's report whether that money had been advanced by Jill Johnson as loans or as gifts. Jennifer Mayer later testified that she asked Attorney Duchemin "if I brought it [the agreement the Mayers had with Ms. Johnson] in if he could look at it, because my mother had wanted me to ask him about it." Mayer also acknowledged in her testimony that both she and her mother were concerned about the money Ms. Johnson had provided and Jennifer Mayer agreed that she wanted her mother to be protected. Jennifer Mayer later claimed, however, that she never told Attorney Duchemin that she wanted him to represent her in a divorce action, nor had she authorized him to file a divorce action for her. She also asserted that she never told Attorney Duchemin that he should talk to her mother about the loans or gifts of money or anything else relating to a possible divorce between Ms. Mayer and her husband.

¶ 9. After his telephone conversation with Jennifer Mayer Attorney Duchemin later that day returned to the restaurant where he again spoke with Jill Johnson. Attorney Duchemin told Ms. Johnson that her daughter had called him that morning. Attorney Duch-emin then asked Ms. Johnson about the financial agreements she had with her daughter and son-in-law. He asked Ms. Johnson if she had loaned or given the money to the couple; he also asked Ms. Johnson if she had any documentation concerning these transactions. Attorney Duchemin told Ms. Johnson that she should, if she could, provide all the details and documentation about the money advances because it would be important if a divorce action were to be commenced.

¶ 10. Attorney Duchemin acknowledged that he had not told Jennifer Mayer that he was going to talk to her mother about these money transactions and he also acknowledged that he had not been formally retained by Jennifer Mayer at that point. Attorney Duchemin asserted, however, that he believed he was authorized to discuss the issue of representation and the issue of finances with Jill Johnson because he needed to find out "... whether or not there were loans or gifts to this young lady if I was going to competently be able to assist her in her case and to do so in a timely manner."

¶ 11. Jennifer Mayer never returned the forms to Attorney Duchemin retaining him as her attorney. Attorney Duchemin subsequently sent her a $90 bill for his services.

¶ 12. Jennifer Mayer thereafter filed a grievance with the Office of Lawyer Regulation against Attorney Duchemin complaining that she had neither expressly nor impliedly authorized him to discuss any part of her telephone conversation with Duchemin with her mother. Ms. Mayer admitted, however, that she knew that Attorney Duchemin and her mother were friends, and also that she knew her mother understood that Ms. Mayer was going to call Attorney Duchemin about representing her in a possible divorce action. Furthermore, Ms. Mayer acknowledged that she had told Attorney Duchemin that she was concerned that her mother be "protected" and that she did not want her husband to avoid repayment of the money to her mother. Jennifer Mayer also conceded that she had never told Attorney Duchemin not to tell her mother about the telephone conversation, nor had she instructed Attorney Duchemin not to talk to or ask her mother about the money transactions.

¶ 13. The LRS complaint against Attorney Duch-emin subsequently asserted that his conversation with Jill Johnson after his telephone conversation with Jennifer Mayer violated SCR 20:1.6 because Jennifer Mayer had not expressly authorized Attorney Duch-emin to disclose to Ms. Johnson information related to Ms. Mayer's "possible retention of [Duchemin] relative to a divorce action ...." The LRS complaint also alleged that the disclosure made by Duchemin to Ms. Johnson was not"... impliedly authorized as necessary to carry out the possible representation" nor was it made under circumstances permitted by SCR 20:1.6.

¶ 14. As noted, after a public hearing, the referee issued his report detailing the facts as presented at the hearing and making specific findings of fact which, in pertinent part, state:

3. On August 7, 2000, Jill Johnson asked the Respondent [Attorney Duchemin] if he would represent her daughter and if he would talk to her concerning a divorce matter.
4. That on August 7, 2000, Jennifer Mayer contacted the Respondent and left a message for him to call her back.
5. That on August 7, 2000, the Respondent returned Mrs. Mayer's call and there was a discussion concerning a potential divorce case.
6. That on August 7, 2000, the Respondent and Jennifer Mayer had a telephone conversation concerning the potential divorce case.
7. That on August 7, 2000, Jill Johnson and the Respondent had a conversation at the restaurant at approximately 1:30 p.m.
8. That the only other person in the restaurant at the time of the conversation between Jill Johnson and the Respondent was Larry Bryn.
9. That Mr. Bryn did not hear any part of the conversation between Jill Johnson and the Respondent.
10. That the Respondent asked Jill Johnson a question about the loans during that conversation.
11. That the Respondent did not disclose any infor- . mation which he obtained from Mrs. Mayer during their phone conversation.
12. That during the conversation of August 7, 2000 with Mrs. Johnson, the Respondent did not make any derogatory references to Randy Mayer.

¶ 15. Based on these findings, the referee concluded that Attorney Duchemin did not violate SCR 20:1.6. And as noted, the referee recommended that the complaint be dismissed and that no costs be assessed against Attorney Duchemin.

¶ 16. The LRS's primary argument on its appeal is that Finding of Fact #11 to the effect that Attorney Duchemin had not disclosed any information he had obtained from Ms. Mayer during the phone conversation, is actually a conclusion of law; according to the LRS, that conclusion is erroneous as a matter of law because SCR 20:1.6 broadly proscribes disclosure of information "relating to representation." The LRS maintains the rule does not proscribe disclosure of information "obtained from a client." But see In Re Disciplinary Proceedings Against Harman, 2001 WI 71, 244 Wis. 2d 438, 628 N.W.2d 351, where the Office of Lawyer Regulation had alleged, the referee so found, and this court agreed that a lawyer had violated SCR 20.1.6(a) by disclosing information the lawyer had "obtained" while representing a client. Id. at ¶¶ 2, 30, 33. The LRS insists that because there was no express or implied authorization for any disclosure, Attorney Duchemin's admitted conversation with Jill Johnson after his telephone conversation with his potential client, Jennifer Mayer, constituted a violation of SCR 20:1.6(a) as a matter of law.

¶ 17. Moreover, according to the LRS, common sense suggests that until Jennifer Mayer decided to proceed with a divorce action with Attorney Duchemin representing her, Duchemin should not have disclosed any details of Ms. Mayer's contact with him to Jill Johnson even though Johnson had recommended Attorney Duchemin to her daughter as a good lawyer to represent her in a divorce action. The LRS also maintains that by initiating a discussion with Jill Johnson about her financial agreements with her daughter and son-in-law, Attorney Duchemin revealed information to Jill Johnson about representation of a client. Therefore, the LRS insists that the referee erred as a matter of law in concluding that Attorney Duchemin's discussion with Johnson did not involve a disclosure within the meaning of SCR 20:1.6(a). Furthermore, the LRS asserts that based on the undisputed facts, there is no reasonable scenario under which it could be concluded that Jennifer Mayer had impliedly authorized the disclosure.

¶ 18. We disagree. We assume, for purposes of this opinion, that the conversation between Attorney Duch-emin and Jennifer Mayer created a lawyer-prospective client relationship sufficient to subject Attorney Duch-emin to the duties regarding client confidentiality set out in SCR 20:1.6. See Restatement (Third) of the Law Governing Lawyers § 15 (2000) at page 140, which notes that a lawyer must treat information disclosed by a prospective client as confidential even if the client or lawyer decides not to proceed with the representation. We believe, however, that under the particular facts and circumstances of this case, Attorney Duchemin was impliedly authorized to discuss with Jill Johnson not only the fact that her daughter, as Johnson suggested, had contacted him about possible representation, but also to ask Johnson about documentation she may have regarding the money transactions she had with her daughter and son-in-law. These facts, none challenged by the LRS on this review and none clearly erroneous include: (1) Jill Johnson recommended Duchemin as a good lawyer for her daughter to hire to represent her in a possible divorce; (2) Jill Johnson asked Duchemin, whom she had known for 11 years, if he would talk to her daughter about possible representation; (3) Jennifer Mayer in fact, as her mother urged, telephoned Duchemin about possibly representing her in the divorce action; (4) during that conversation Ms. Mayer told Duchemin that she wanted her mother "protected" with respect to the money her mother had advanced both before and during the marriage; (5) complying with her mother's request, Jennifer Mayer asked Duch-emin if he would look at the agreement; and (6) Jennifer Mayer had not instructed Duchemin not to talk to her mother nor mention to her mother that Ms. Mayer had called him as her mother had suggested.

¶ 19. We conclude under these circumstances that even though Attorney Duchemin had not been formally retained by Jennifer Mayer to represent her, any disclosures he may have made to Jill Johnson after his telephone conversation with her daughter, were at the very least, impliedly authorized so that he could carry out his then pending representation of Ms. Mayer. We conclude under these particular facts and circumstances that Attorney Duchemin was impliedly authorized to discuss the matter with Jill Johnson. Accordingly, we adopt the referee's findings of fact and conclusions of law and we accept the referee's recommendation that this proceeding be dismissed without costs.

¶ 20. IT IS ORDERED that this disciplinary proceeding is dismissed without costs.

¶ 21. JON E WILCOX, J., did not participate.

       At the time of the events involved in this matter, the respondent, Attorney James R. Duchemin, was a member of the District 8 Professional Responsibility Committee. Effective October 1, 2000, Wisconsin's attorney disciplinary process underwent a substantial restructuring. The name of the body responsible for investigating and prosecuting cases involving attorney misconduct was changed to the Office of Lawyer Regulation and the supreme court rules applicable to the Lawyer Regulation System were also revised. Because Attorney Duchemin was a lawyer regulation system participant, the grievance filed against him in this matter was referred to a special investigator pursuant to SCR 22.25(1). The special investigator subsequently submitted his report to the special preliminary review panel established pursuant to SCR 22.25(5); that panel, pursuant to SCR 22.25(7), then determined that there was cause to proceed and the special investigator then filed a complaint against Attorney Duchemin pursuant to SCR 22.08(2) and SCR 22.11.

       SCR 20:1.6 prohibits lawyers from revealing information related to the representation of a client to others without client consent after consultation, or unless such disclosure is impliedly authorized or otherwise required by the rule. Specifically, SCR 20:1.6(a) provides as follows: "(a) A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation ...."


source: Caselaw Access Project

author: SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE.

license: Public Domain

text:
    Eric M. Schmitz, Plaintiff-Appellant-Petitioner, v. Firstar Bank Milwaukee, Defendant-Respondent,  Putnam Mutual Funds Corporation, Putnam Investments, Northern Trust Company, Fortis Investors, Inc., and Putnam Fiduciary Trust Company, Defendants.
    Supreme Court

      No. 01-2139.

      Oral argument January 16, 2003.

    Decided March 25, 2003.

    2003 WI 21
    (Also reported in 658 N.W.2d 442.)

      For the plaintiff-appellant-petitioner there were briefs by Joseph G. Doherty and Doherty Law Offices, S.C., West Bend, and oral argument by Joseph G. Doherty.

    For the defendant-respondent there was a brief by Gary P. Lantzy and Kohner, Mann & Kailas, S.C., Milwaukee, and oral argument by Gary P. Lantzy.

       Motion for reconsideration denied 7-1-03.

   SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE.

¶ 1. This is a review of a published decision of the court of appeals, Schmitz v. Firstar Bank Milwaukee, 2002 WI App 123, 254 Wis. 2d 732, 647 N.W.2d 379, affirming the judgment of the Circuit Court for Ozau-kee County, Walter J. Swietlik, Judge. The circuit court granted summary judgment to one of the defendants, Firstar Bank Milwaukee, dismissing Eric M. Schmitz's claims against Firstar Bank. The court of appeals affirmed the judgment of the circuit court. We reverse the decision of the court of appeals.

¶ 2. Eric M. Schmitz, the plaintiff-payee, sued Firstar Bank Milwaukee for negligence and conversion for depositing two checks (in the amounts of $58,599.19 and $6,173.21), issued by Putnam Investments and payable to his order, into the account of Georgetown Financial Corporation. The first check, in the larger amount, did not have the plaintiff-payee's endorsement. The second check, in the smaller amount, had an endorsement bearing the plaintiff-payee's name that the plaintiff-payee alleges is a forged signature. Each check had "for deposit only" and Georgetown Financial stamped on the back. The plaintiff-payee claimed monetary damages equal to the face value of the two Putnam checks.

¶ 3. The plaintiff-payee moved for partial summary judgment against Firstar Bank with respect to the larger check. The plaintiff-payee argued that because Georgetown Financial did not have authority to endorse the check, Firstar Bank was liable as a matter of law for making payment on this check, which was presented by Georgetown Financial without his actual or purported signature.

¶ 4. Firstar Bank then moved for summary judgment as to both checks, contending that two limited powers of attorney executed by the plaintiff-payee gave Georgetown Financial authority to endorse and receive payment on the two Putnam checks at issue in this case.

¶ 5. The circuit court granted Firstar Bank's motion for summary judgment. The circuit court held that the two limited powers of attorney authorized Georgetown Financial to endorse and deposit the two checks, thereby rendering unnecessary any consideration of the reasonableness of Firstar Bank's conduct. The court of appeals affirmed the judgment of the circuit court granting summary judgment to Firstar Bank.

¶ 6. We review a circuit court order granting summary judgment by applying the same methodology as that used by the circuit court. Summary judgment will be entered when a court is satisfied that the pleadings, depositions, answers to interrogatories, admissions, and affidavits show that no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Thus, an appellate court will reverse a summary judgment if the record reveals that material facts are in dispute or if the circuit court misapplied the law.

¶ 7. The ultimate issue in this case is whether Firstar Bank is liable to the plaintiff-payee for conversion for depositing the two checks, one without the plaintiff-payee's endorsement and one with a forged endorsement of the plaintiff-payee, into Georgetown Financial's account. The only issue properly before this court, however, is whether the two limited powers of attorney authorize Georgetown Financial to endorse the two Putnam checks on behalf of the plaintiff-payee.

¶ 8. We hold that the limited powers of attorney in the present case did not authorize Georgetown Financial to endorse the two Putnam checks made payable to the order of the plaintiff-payee. Accordingly, the court of appeals' decision affirming summary judgment in favor of Firstar Bank is reversed. The cause is remanded to the circuit court for further proceedings on whether Firstar Bank is liable for the value of either or both checks in light of our conclusion that Georgetown Financial did not have the authority to endorse the checks on behalf of the plaintiff-payee.

H-H

¶ 9. The following facts are derived from the complaint and other documents in the record. Georgetown Financial was a Wisconsin company that provided investment, insurance, and financial services. James O'Hearn was the sole owner and chief executive officer of Georgetown Financial and the plaintiff-payee was one of his clients.

¶ 10. In 1992, the plaintiff-payee executed two "Limited Power of Attorney" forms with Georgetown Financial. Both forms contained typewritten, boilerplate text and included a blank space for the client to insert his or her name, a blank space for the client to identify a "company name," a series of blank lines in which the client could list "policy names and numbers," and lines for the client's signature, the date, and a witness's signature.

¶ 11. The first limited power of attorney was signed by the plaintiff-payee on July 10, 1992. The typewritten boilerplate text provided Georgetown Financial with the authority to "accomplish the surrender" of certain life insurance policies "identified below" and "negotiations of their cash values." It further provided that "Power of Attorney also applies to stocks, bonds and other securities." "American Funds" was written in by hand under "company name" and four different account names and numbers were similarly written in by hand on the lines under "policy name and number." Three of the accounts have been identified as securities accounts; the fourth was an insurance policy.

¶ 12. The second limited power of attorney was signed in August 1992. The typewritten text of the form was identical to the first, except that the last line was expanded to read, "Power of Attorney also applies to stocks, bonds, CD's, annuities, savings accounts, and other securities." "The American Funds" was typed in on the line under "company name," and only the number "57263159," identifying one document, was typed in under "policy name and number." This number was identical to a number written next to one of the securities accounts on the July limited power of attorney. None of the accounts listed on either of the powers of attorney was identified as a Putnam Investment account.

¶ 13. In July 1994, O'Hearn's securities license was revoked by the State of Wisconsin. The plaintiff-payee was not aware that O'Hearn had lost his license, and the plaintiff-payee continued as a client of Georgetown Financial.

¶ 14. In May 1995, Georgetown Financial opened an investment account for the plaintiff-payee with Putnam Investments. The account application was for an individual account and the plaintiff-payee was identified as the owner of the account. The mailing address listed on the application was "Eric M. Schmitz c/o Georgetown Financial Corp., 10134 N. Port Washington Rd., Mequon, WI, 53092." The application also stated that the registered investment advisor for the account was "C Lynn O'Hearn" of the investment firm "Ogilvie & Taylor." Telephone redemptions were authorized allowing Putnam to act upon instructions received from the plaintiff-payee or "any person claiming to act as [his] representative" who could provide specific information.

¶ 15. Mutual funds were sold from the Putnam account by telephone redemption in July 1996 and March 1998. On each occasion, Putnam issued a check and mailed it to the plaintiff-payee, in care of Georgetown Financial, as designated in the account application. The first check, dated July 12, 1996, was in the amount of $58,599.19. It was issued as follows:

Pay to the order of:
Erie M. Schmitz
c/o Georgetown Financial
10134 North Port Washington Road
Mequon, Wisconsin 53092

The second check, dated March 5, 1998, was in the amount of $6,173.21. It was issued in an identical manner.

¶ 16. O'Hearn presented both checks to Firstar Bank for deposit into a Georgetown Financial account. The larger check, presented on July 19, 1996, did not include an endorsement by or on behalf of the plaintiff-payee. The smaller check included an endorsement bearing the name of the plaintiff-payee that was alleged in the complaint to be a forged signature. Both checks were stamped with a Georgetown Financial deposit stamp and marked "for deposit only."

¶ 17. Firstar Bank deposited the face value of both checks into a Georgetown Financial account. At the time, Firstar Bank was unaware of the existence of either of the limited powers of attorney and admits that it did not rely on the limited powers of attorney when it deposited the two Putnam checks into the Georgetown Financial account.

¶ 18. The plaintiff-payee never received the funds deposited into the Georgetown Financial account. O'Hearn has been convicted of criminal fraud, and Georgetown Financial has ceased to operate.

I — ! H-t

¶ 19. The question presented by this case is whether Georgetown Financial had authority to endorse and deposit the two Putnam checks to its own account. The answer to this question turns on an interpretation of the two limited powers of attorney.

¶ 20. According to the plaintiff-payee, the circuit court and court of appeals misconstrued the language of the two limited powers of attorney when they failed to read the last sentence relating to investments narrowly, limited by the particular grant of authority regarding insurance policies in the first sentence. Moreover, asserts the plaintiff-payee, even if the powers of attorney did grant Georgetown Financial authority to endorse the two Putnam checks, the limited powers of attorney ceased to operate as a matter of law when O'Hearn, the chief executive officer of Georgetown Financial, lost his securities license and began to act against the plaintiff-payee's interest.

¶ 21. Firstar Bank responds that the circuit court and court of appeals properly construed the limited powers of attorney. It argues that the final sentence of the limited powers of attorney, providing that power of attorney "also applies" to securities and other investments, expressly granted Georgetown Financial broad authority to act on the plaintiff-payee's behalf with respect to the plaintiff-payee's financial affairs and included the power to do everything necessary to buy and sell any security or investment as fully as if done by the plaintiff-payee himself. Firstar Bank asserts that Georgetown Financial was thus authorized to endorse the two Putnam checks at issue in this case on behalf of the plaintiff-payee.

¶ 22. Agency agreements are generally subject to the same rules of interpretation as other contracts. Like the interpretation of a contract, the interpretation of a power of attorney ordinarily presents a question of law that this court determines independently of the circuit court and court of appeals but with the benefit of their analyses.

¶ 23. Both the circuit court and the court of appeals construed the limited powers of attorney at issue in the present case to grant authority to Georgetown Financial to endorse the two Putnam checks. According to the court of appeals, the limited powers of attorney authorized Georgetown Financial to liquidate specific life insurance policies, but the final sentence in each power of attorney granted power of attorney over the plaintiff-payee's other investments and accounts without any limitations on scope.

¶ 24. We conclude that the expansive interpretation given the limited powers of attorney by the circuit court and court of appeals is not supported by the language of the documents. Rather, the language and structure of the limited powers of attorney support a narrow construction of the authority granted to Georgetown Financial. A narrow construction would not include the authority to endorse and deposit the two Putnam checks.

¶ 25. With the éxception of the single final sentence in each power of attorney applying Georgetown Financial's power of attorney to a variety of types of financial accounts or investments in addition to insurance policies, every other aspect of each limited power of attorney is narrowly crafted. The documents are styled "limited" powers of attorney. The identical first sentence of each power of attorney — the line providing the greatest detail — authorizes Georgetown Financial to act in regard to life insurance policies "identified below." The printed text of both powers of attorney is followed by space for inserting the company name and the policy name and number.

¶ 26. Thus, in order to read the final sentence of the limited powers of attorney broadly enough to encompass any other investments and accounts of the plaintiff-payee, the final sentence has to be wrestled free from its context. Indeed, that is precisely what the circuit court and court of appeals did. The court of appeals explained: "[T]he limited powers of attorney in this case went on to separately grant Georgetown Financial the power of attorney with respect to 'stocks, bonds, CD's, annuities, savings accounts, and other securities.' This additional grant of authority was not limited in scope."

¶ 27. The more natural reading of the two limited powers of attorney is to keep the final sentence within the narrow confines of the rest of the document. That is, in context, the final sentence serves to modify the first sentence, explaining simply that the listed items "identified below" may also include securities and other financial accounts in addition to insurance policies. Only the insurance policies and investments listed in the limited powers of attorney are therefore covered by the document.

¶ 28. Our reading of the limited powers of attorney is supported by several factors. First, the very title of the documents, "Limited Power of Attorney," points to a narrow reading of the powers granted. Second, the general rule of interpretation is that powers of attorney are to be strictly construed and interpreted to grant only those powers that are clearly delineated or specified. The limited powers of attorney in the present case do not explicitly authorize Georgetown Financial to endorse checks payable to the plaintiff-payee arising from a Putnam investment account.

¶ 29. Third, the limited power of attorney form requires that the life insurance policies to be included within the grant of authority be listed in the document. The requirement that the insurance policies be listed extends to requiring that the other investments included in the final sentence be listed. Indeed the plaintiff-payee listed not only life insurance policies but specific securities. Requiring a listing of insurance policies and investments indicates that Georgetown Financial has authority only over assets listed on the powers of attorney. It simply does not make sense to say that a document that requires a list of individual policy names and numbers and then applies the power of attorney to other investments grants broad authority over all investment accounts, whether listed or not.

¶ 30. In short, the clear implication is that both of these limited powers of attorney grant Georgetown Financial authority over only those insurance policies and other investments (stocks, bonds, CDs, annuities, savings accounts, and other securities) specifically listed on the limited powers of attorney. Since neither limited power of attorney in the record lists a Putnam account, it is equally clear that Georgetown Financial did not have the authority to endorse either of the checks at issue in this case on behalf of the plaintiff-payee.

HH HH HH

¶ 31. Having determined that Georgetown Financial did not have the authority to endorse the two Putnam checks, the remaining issue in this case is whether Firstar Bank is liable to the plaintiff-payee for the value of the two Putnam checks it deposited into a Georgetown Financial account, one without the plaintiff-payee's endorsement and the other with a forged endorsement of the plaintiff-payee. We do not reach a decision on Firstar Bank's liability here, however, as the parties have not adequately briefed and argued the issues.

¶ 32. The plaintiff-payee's underlying claims against Firstar Bank in the present action are for conversion and negligence. Conversion is committed when a person takes the property of another, without the consent of the owner, in such a way that it seriously interferes with the. right of the owner to control the property.

¶ 33. The plaintiff-payee's brief in this court asserted that Firstar Bank was never a holder or owner of the larger Putnam check but merely a transferee, and as a transferee, it has no greater rights to the check than Georgetown Financial. Firstar Bank did not brief the conversion issue in this court. Firstar Bank addressed only the issue of whether the limited powers of attorney authorized Georgetown Financial to endorse the Putnam checks.

¶ 34. Firstar Bank did argue before the circuit court, however, in its response in opposition to the plaintiffs motion for summary judgment, that if the plaintiff-payee prevailed on his argument that Georgetown Financial did not have the authority under the limited powers of attorney to endorse the checks in the present case, the question whether Firstar acted in good faith or in accordance with reasonable commercial standards under Wis. Stat. § 403.419(3) (1993-94) was a question of fact that would need to be tried. Wisconsin Stat. § 403.419(3) (1993-94) provides that a depositary bank will not be liable for conversion of a negotiable instrument if it has acted "in good faith and in accordance with the reasonable commercial standards" applicable to the respective business, here banking.

¶ 35. While it appears clear that accepting a check when the payee's endorsement is missing is not in accordance with the reasonable commercial standards of banking and that the acceptance by a depositary bank of such a check for deposit is commercially unreasonable as a matter of law, there is far less case law addressing who constitutes the payee when a check is made out to an individual in the care of an investment company. Accordingly, we remand the issue of liability on the larger Putnam check to the circuit court for further proceedings.

¶ 36. A determination of liability on the smaller Putnam check is similarly inappropriate for summary judgment given the posture of the case. In short, neither party briefed or argued whether it was appropriate to grant summary judgment on this claim if Georgetown was determined not to have authority to endorse and deposit the Putnam checks.

¶ 37. The plaintiff-payee has not moved for summary judgment on the $6,173.21 check (with the forged signature), asserting that a trial is required because liability depends on whether Firstar Bank was negligent, a question of fact. Firstar Bank moved for summary judgment on the claim regarding the smaller check but argued only that Georgetown Financial had authority under the powers of attorney to endorse and deposit the check. Firstar Bank offers no defense to support the conclusion that it was not liable for making payment on the smaller check once it has been determined that Georgetown Financial did not have authority to endorse the Putnam checks. "To make a prima facie case for summary judgment, a moving defendant must show a defense which would defeat the plaintiff-payee. If the defendant does not make out a prima facie case for summary judgment we need go no further."

¶ 38. We therefore remand the issue of Firstar Bank's liability on the smaller check to the circuit court as well.

IV

¶ 39. For the foregoing reasons, we hold that the language of the limited powers of attorney, properly construed, did not grant Georgetown Financial the authority to endorse the two checks at issue in this case. The circuit court's decision granting summary judgment to Firstar Bank is therefore reversed. The cause is remanded to the circuit court for further proceedings consistent with this opinion.

By the Court. — The decision of the court of appeals is reversed and the cause is remanded.

¶ 40. WILLIAM A. BABLITCH and JON E WILCOX, JJ., did not participate.

       The plaintiff-payee's complaint names other entities as defendants, but only Firstar Bank is involved in the present review.

        Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980).

       Wis. Stat. § 802.08(2) (1999-2000).

        Jankee v. Clark County, 2000 WI 64, ¶ 48, 235 Wis. 2d 700, 612 N.W.2d 297.

       The limited power of attorney was also signed by Katreena Schmitz, who is apparently the wife of the plaintiff-payee.

       The full text of the July 1992 limited power of attorney is as follows:
      I, Eric M. Schmitz, as owner of the life insurance policies identified below, do hereby designate Georgetown Financial Corporation as my attorney to act in my name, place and stead to do everything that is required, as fully as if done by me personally, to register and obtain acknowledgement of the Assignment of Life Insurance Policy form(s), and accomplish the surrender of the life insurance polic(ies) identified below and negotiation of their cash values, and including any other requested information. Answers to questions may be provided by telephone or fax [number omitted here]. Power of Attorney also applies to stocks, bonds and other securities.
      Company Name Policy Name and Number

       Restatement (Second) of Agency § 32, at 114 (1958). See, e.g., Estate of Smith v. United States, 979 F.Supp. 279, 282 (D. Vt. 1997); Burlington No. & Santa Fe Ry. Co. v. Burlington Res. Oil & Gas Co., 590 N.W.2d 433, 437, 439 (N.D. 1999).

        RTE Corp. v. Maryland Cas. Co., 74 Wis. 2d 614, 621, 247 N.W.2d 171 (1976).

        Schmitz v. Firstar Bank Milwaukee, 2002 WI App 123, ¶ 16, 254 Wis. 2d 732, 647 N.W.2d 379 (emphasis added).

        See, e.g,, Fort Dearborn Life Ins. Co. v. Holcomb, 736 N.E.2d 578, 589 (Ill. App. 2000) ("No matter how the power is characterized, a 'catchall' provision will not operate to expand powers expressly limited in other portions of the same instrument.").

        Praefke v. Am. Enter. Life Ins. Co., 2002 WI App 235, ¶ 9, 257 Wis. 2d 637, 655 N.W.2d 456; First Nat'l Bank of Omro v. Winnebago County Agr. & Horticultural Ass'n, 141 Wis. 476, 480, 124 N.W.2d 656 (1910); see also Texas Soil Recycling, Inc. v. Intercargo Ins. Co., 273 F.3d 644, 651 (5th Cir. 2001) (applying Texas law); O'Neal v. United States, 258 F.3d 1265, 1275 (11th Cir. 2001) (applying Alabama law).

       Firstar Bank suggested at oral argument that an additional power of attorney was likely signed giving Georgetown Financial authority over the Putnam accounts, even though it was not discovered and is not in the record. Firstar Bank asserted that discovery was complicated in this case because of the federal government's investigation of O'Hearn on criminal fraud charges. Firstar Bank pointed to the Putnam account application as evidence that the plaintiff-payee had an ongoing relationship with Georgetown Financial and argued that the plaintiff-payee would have given Georgetown Financial authority, in the same manner as he previously did with the discovered powers of attorney, over the Putnam account.
      Firstar Bank's suggestion does nothing to bolster its position in this case. First, to imply that another power of attorney might exist specifically listing the Putnam account supports the plaintiff-payee's claim that the limited powers of attorney currently in the record only extend to those accounts explicitly identified on the power of attorney. Second, a motion for summary judgment will not be granted on the basis of pure conjecture.

        Prod. Credit Ass'n v. Nowatzski, 90 Wis. 2d 344, 353, 280 N.W.2d 118 (1979).

        See Wis. Stat. §§ 403.201, 403.202, 403.301 (1993-94)-.

       The plaintiff-payee's amended complaint asserted a claim for conversion under Wis. Stat. § 403.420 (199.6-97). Firstar Bank responded in its memorandum response in opposition to the plaintiffs motion for summary judgment before the circuit court that the plaintiff-payee's claim for conversion with regard to the larger check is actually governed by Wis. Stat. § 403.419(3) (1993-94). Section 403.419(3) stated the law on conversion of negotiable instruments applicable in Wisconsin in July 1996. Effective August 1, 1996, Wisconsin adopted revised Article III of the Uniform Commercial Code and the law on conversion of negotiable instruments was renumbered § 403.420. Thus, it appears that the first, larger check would be governed by § 403.419(3) (1993-94) while the second, smaller check is governed by § 403.420 (1996-97).
      Wisconsin Stat. § 403.419(3) (1993-94) reads:
      (3) Subject to the provisions of chs. 401 to 411 concerning restrictive endorsements a representative, including a depositary or collecting bank, who has in good faith and in accordance with the reasonable commercial standards applicable to the business of such representative dealt with an instrument or its proceeds on behalf of one who was not the true owner is not liable in conversion or otherwise to the true owner beyond the amount of any proceeds remaining in his or her hands.

        See, e.g., Mid-Atl. Tennis Courts, Inc. v. Citizens Bank & Trust Co. of Maryland, 658 F. Supp. 140, 142-43 (D. Md. 1987); Great Am. Ins. Co. v. Am. State Bank, 385 N.W.2d 460, 463 (N.D. 1986); see also 6A Ronald A. Anderson, Uniform Commercial Code § 3-419:72, at 95 (1998); William D. Hawkland & Laty Lawrence, 4 Uniform Commercial Code Series § 3-419:5, at Art. 3-912-16 (1999).

        But see Geraldo v. First Dominican Mut. Life Ins. Co., 2002 WL 31002770, ¶ 41 (Ohio App. 2002) (unpublished opinion).

        Kraemer Bros. v. U.S. Fire Ins. Co., 89 Wis. 2d 555, 566-67, 278 N.W.2d 857 (1979).


author: PER CURIAM.

text:
    State of Wisconsin, Plaintiff-Appellant, v. Jeremy T. Greer, Defendant-Respondent.
    Supreme Court

      No. 01-2591-CR.

      Oral argument January 21, 2003.

    Decided March 25, 2003.

    2003 WI 20
    (Also reported in 658 N.W.2d 795.)

      For the plaintiff-appellant there were briefs and oral argument by David J. Becker, assistant attorney general, with whom on the brief was James E. Doyle, attorney general.
    For the defendant-respondent there was a brief and oral argument by Donna L. Hintze, assistant state public defender.
   PER CURIAM.

¶ 1. The court is equally divided on whether to affirm or reverse the judgment of the circuit court for Milwaukee County. Chief Justice Shirley S. Abrahamson, Justice Ann Walsh Bradley, and Justice David T. Prosser would affirm. Justice William A. Bablitch, Justice N. Patrick Crooks, and Justice Diane S. Sykes would reverse. Justice Jon P Wilcox did not participate.

¶ 2. When a certification or bypass results in a tie vote by this court, the better course of action is to vacate our decision to accept certification or bypass and remand the cause to the court of appeals. State v. Watson, 209 Wis. 2d 281, 562 N.W.2d 151 (1997) (remanding to court of appeals on a tie vote on certification); State v. Richard Knutson, Inc., 191 Wis. 2d 395, 396-97, 528 N.W.2d 430 (1995).

¶ 3. Accordingly, we vacate our order granting certification and remand to the court of appeals.

By the Court. — The order granting certification is vacated and the cause is remanded to the court of appeals.


text:
    In the Matter of Disciplinary Proceedings Against Edward G. Harris, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Edward G. Harris, Respondent.
    Supreme Court

      No. 02-0464-D.

      Decided March 28, 2003.

    2003 WI 22
    (Also reported in 658 N.W.2d 451.)
   PER CURIAM.

¶ 1. We review the referee's recommendation that the license of Attorney Edward G. Harris to practice law in Wisconsin be suspended for two years for professional misconduct in connection with repeated instances of unauthorized practice of law in violation of SCR 22.26(2). In addition to license suspension, the referee recommended that Harris be required to pay the costs of this proceeding and that any reinstatement of his license to practice law be conditioned upon Harris satisfying certain civil judgments that were lodged against a former client and against Harris, himself, as a result of Harris's misconduct.

¶ 2. We agree that Harris's professional misconduct was serious. We are persuaded that a two-year suspension of his license to practice law in Wisconsin is appropriate discipline for his misconduct, and we adopt the referee's recommendation in this regard. In addition, we direct Harris to satisfy the civil judgments, lodged against his aggrieved client, Robert M. Trotter, and against himself, as set forth herein. Finally, we order Harris to pay the costs of this proceeding.

¶ 3. Attorney Harris was admitted to the practice of law in Wisconsin in 1986. He has no prior disciplinary history. However, his license to practice law in Wisconsin has been under suspension since 1997 for failure to complete Continuing Legal Education (CLE) requirements.

¶ 4. On February 18, 2002, the Office of Lawyer Regulation (OLR) filed a complaint against Harris alleging that Harris engaged in the unauthorized practice of law from the date of his suspension "until at least February 8, 2001." The OLR further alleged certain misconduct committed by Harris related to his representation of three clients.

¶ 5. Harris admitted some of the allegations and denied others. However, he failed to respond to requests for admissions and other discovery requests. Despite proper notice, he also failed to appear at a hearing on a "Motion to Adjudicate" filed by the OLR in response to Harris's discovery violations. Ultimately, Harris also declined to appear at the hearing on the merits of the disciplinary matter, advising the referee that he did not contest any of the OLR's allegations and would not challenge the request to suspend his license for two years.

¶ 6. Consequently, the evidentiary hearing on the merits of this disciplinary matter proceeded without Harris. The OLR introduced witnesses and exhibits and provided argument in support of its request for a two-year suspension. Based on the pleadings, Harris's admissions, and the evidence submitted at the hearing, the referee made findings of fact, which are summarized herein.

¶ 7. Beginning in October 1996 the Board of Bar Examiners (BBE) advised Harris that he needed to report his compliance with CLE attendance requirements. Harris never responded to the BBE and failed to establish his compliance with CLE attendance requirements. Accordingly, he was suspended, effective June 3, 1997. It is undisputed that he was aware of the order of suspension.

¶ 8. Nonetheless, the evidence indicated and the referee found that Harris continued to practice law after the effective date of his suspension.

¶ 9. From June 4, 1997, until February 8, 2001, Harris continued to practice law at the firm of Piano, Harris & Tishberg in Milwaukee, Wisconsin. Harris continued to handle at least 60 cases in Wisconsin courts after the effective date of his suspension.

¶ 10. On September 26, 1997, Harris advised the BBE staff that he had received a letter from a judge regarding his suspension. He asserted that he had already filed a written report with the BBE establishing his compliance with CLE requirements. In fact, no such report was ever received by the BBE.

¶ 11. In October 1999 opposing counsel in a matter informed Harris that he had learned of Harris's suspension and that he would need to discuss the matter with the court. Harris told the presiding judge that he believed his suspension was a mistake and that he would resolve it. However, Harris did not attempt to resolve the matter with the BBE.

¶ 12. In December 2000 the OLR wrote Harris asking him to respond to an allegation that he had been practicing law after the date of his suspension. Harris did not respond to this letter.

¶ 13. In January 2001 the OLR mailed a second letter to Harris via certified mail, again asking him to respond to the allegation that he had practiced law while under suspension. Harris did not answer this letter, either.

¶ 14. Based on the foregoing findings, the referee concluded that Harris engaged in the unauthorized practice of law in violation of SCR 22.26(2).

¶ 15. The referee also made findings regarding the OLR's allegation that Harris committed misconduct in the course of his representation of three separate clients, over and above the finding that he engaged in the unauthorized practice of law.

¶ 16. In August 1997 Howard McMahon, an attorney (McMahon), referred his cousin, Shawna Miller, and her husband, Jeremy (the Millers), to Harris to commence a "lemon law" action against Saturn of Eau Claire. McMahon mailed Harris all of the documents relevant to the Millers' claim. He asked Harris to review the materials and to give him an opinion regarding the Millers' claim. Although his law license had been suspended, Harris agreed to represent the Millers and subsequently did so.

¶ 17. One of the documents that McMahon sent to Harris was a form to request arbitration through the Better Business Bureau Auto Line. Harris told McMahon and Jeremy Miller that he had filed for arbitration with the Better Business Bureau Auto Line. He further indicated that the arbitration process was subject to lengthy delay and that it would take some time for the Millers to obtain a hearing date. In fact, Harris never filed such a claim.

¶ 18. In early 1998 Jeremy stopped making the lease payments because he was continuing to experience problems with his vehicle. General Motors brought a small claims action against the Millers in the Circuit Court of Dane County, Case No. 98-SC-2790. Harris entered an appearance on behalf of the Millers and filed an answer to General Motors' complaint.

¶ 19. After the General Motors' lawsuit against the Millers had been filed, Harris explained to the Millers and McMahon that he believed this new lawsuit provided an ideal means of bypassing the arbitration provisions of the lemon law statute. Harris further informed them that he would file a counterclaim for the lemon law violations in this Dane County action and thereby move the dispute to circuit court. In fact, Harris did not file any such counterclaim.

¶ 20. In April 1998 the Millers paid the money owed to General Motors, and the Dane County Circuit Court dismissed General Motors' lawsuit.

¶ 21. On July 2, 1998, Harris signed a summons and complaint he had drafted on behalf of the Millers, provided them with copies, and informed them he would file these papers in court. The caption on these documents listed the case number as 98-SC-2790, the same case number as the General Motors' small claims action against the Millers in Dane County, but the caption stated "Milwaukee County." Harris never filed these documents.

¶ 22. Harris then told the Millers and McMahon he would file a motion for summary judgment and had Jeremy Miller sign an affidavit. The caption on the affidavit listed the case number as 98-SC-2790, the same case number as the General Motors' small claims action against the Millers in Dane County, but the caption again stated "Milwaukee County." Harris failed to file the affidavit and filed no motion for summary judgment.

¶ 23. Harris then wrongly informed the Millers and McMahon that he had filed a motion for summary judgment and that it would be heard in Milwaukee County on December 20, 1999. Jeremy Miller advised Harris that he would attend the hearing. Shortly before the hearing, Harris informed Jeremy Miller that he had negotiated a settlement and that Jeremy Miller need not appear in court on December 20, 1999. No such settlement was reached.

¶ 24. In February 2000 Jeremy Miller asked McMahon to check on the status of the settlement because Harris was not returning his telephone calls. Harris informed McMahon that the opposing attorney was not returning his telephone calls, and that he would have to make another motion for summary judgment to enforce the settlement. Subsequently, Harris advised McMahon and the Millers that the renewed motion for summary judgment was scheduled for hearing on May 8, 2000. No such motion was ever filed.

¶ 25. In April 2000 McMahon attempted to find the Millers' case using "CCAP" (a court operated computer database that provides public access to circuit court records), but could not locate any record of the Millers' case. McMahon called Harris to obtain an explanation. Harris told McMahon that there must have been a mistake and he would take care of the matter.

¶ 26. In April 2000 McMahon wrote to Harris and asked him to send copies of all papers and pleadings that were filed in the Millers' case. Harris never sent anything to McMahon and never replied to McMahon's letter.

¶ 27. During the period in which he was representing the Millers, Harris failed to return countless phone calls made to him by Jeremy Miller, who was unsuccessfully attempting to obtain information about court proceedings and events that Harris had falsely claimed were happening.

¶ 28. In summary, despite his representations to the Millers and McMahon, Harris never filed any claims or counterclaims against General Motors, never filed any motions for summary judgment, and never finalized a settlement with General Motors. He never filed any claim or motion in any tribunal on the Millers' behalf.

¶ 29. The referee also made findings regarding the allegation that Harris committed misconduct with respect to another client, Robert M. Trotter (Trotter). In June 1995 Trotter retained Harris to represent him on a claim stemming from an injury that Trotter suffered while working for Paramount Landscape (Paramount) in May 1995.

¶ 30. Initially Harris filed a claim with Heritage Mutual Insurance Company (Heritage), Paramount's workers' compensation insurance carrier. Heritage took the position that Trotter was not an employee of Paramount at the time of the incident and therefore was not entitled to workers' compensation benefits. In 1997 Harris filed an application for workers' compensation benefits on behalf of Trotter with the Wisconsin Department pf Workforce Development.

¶ 31. On June 3, 1997, Harris's law license was suspended. Harris never advised Trotter of his suspension and continued to represent him.

¶ 32. Because Heritage continued to deny that Trotter was an employee, on June 6, 1997, Harris filed a negligence claim against Paramount, Anthony Pegg (Pegg), the owner of Paramount, and Heritage in Waukesha County Circuit Court. Trotter also claimed in that action that Mr. Pegg had assaulted him by threatening to harm him if he attempted to file a lawsuit or an insurance claim.

¶ 33. In July 1997 counsel for Paramount and Pegg deposed Trotter in the civil case. Subsequently, in September 1997, they filed a motion for summary judgment in circuit court. The motion sought either dismissal of the pending civil action or stay of the civil action pending resolution of the workers' compensation claim.

¶ 34. Harris never advised Trotter of this motion for summary judgment and never filed any response to the motion for summary judgment. Harris also failed to appear at the hearing on the motion for summary judgment.

¶ 35. The circuit court granted the motion for summary judgment, dismissing Trotter's claim. Harris never advised Trotter that the court had granted the defendants' motion for summary judgment and had dismissed the case.

¶ 36. Paramount and Pegg then moved for an award of costs against Trotter and Harris on grounds of frivolousness. In December 1997 the court held a hearing on this motion. Harris did not appear at the hearing and never advised Trotter of it. The court awarded Paramount and Pegg attorneys' fees and costs to be assessed equally between Harris and Trotter. Harris never told Trotter of the award rendered against them.

¶ 37. In March 1998 Paramount and Pegg's counsel wrote to Harris asking him whether he and his client would voluntarily pay the judgment entered against them. Harris never responded to this letter and never told Trotter about it.

¶ 38. Meanwhile, Trotter's workers' compensation case remained pending and was scheduled for a hearing on April 2, 1998. Harris advised the Department of Workforce Development that Trotter and Heritage had reached a compromise. On April 4, 1998, Attorney Richard Mueller, who represented Heritage in the workers' compensation action, sent Harris a draft compromise agreement. The compromise provided that the defendants would agree to vacate the judgment against Trotter and Harris in Waukesha County Circuit Court in exchange for Trotter releasing the defendants from any liability under the Workers' Compensation Act. Attorney Mueller signed the compromise agreement and asked that Harris and Trotter sign the document as well.

¶ 39. Harris never informed Trotter of the compromise agreement proposed by Heritage Insurance. He did not reply to several letters from Attorney Mueller seeking a response concerning the compromise.

¶ 40. On October 27,1998, the administrative law judge wrote to Harris and Attorney Mueller to inform them that he had not received the compromise agreement. He asked counsel to advise him if the matter had been compromised. The next day Harris telephoned Attorney Mueller about the compromise agreement and informed him that it had been signed by Harris and Trotter and returned. Trotter had not signed the agreement. Indeed, Trotter knew nothing about it. Attorney Mueller then sent Harris a letter dated October 29, 1998, in which he advised Harris that he had never received the signed compromise agreement. He provided Harris with a second copy of the agreement. He asked Harris to have it executed and either returned to him, or forwarded to the administrative law judge. It was not.

¶ 41. On May 10, 1999, the administrative law judge dismissed Trotter's claim, without prejudice. Notice of the dismissal was sent to Harris's office. Harris never advised Trotter that his workers' compensation claim had been dismissed.

¶ 42. Ultimately, proceeding pro se and later with the assistance of another attorney, Trotter began and eventually compromised a second workers' compensation claim.

¶ 43. In the Waukesha County action a judgment in the amount of $2716.74 was entered against Trotter, as was a separate judgment against Harris in the same amount. This judgment against Trotter remained outstanding as of the date of the hearing before the referee in this matter.

¶ 44. In the course of his representation of Trotter, Harris repeatedly failed to return calls or answer inquiries from Trotter and from attorneys Trotter later retained.

¶ 45. Finally, the referee made findings with respect to the allegations against Harris involving a third client.

¶ 46. In April 2000 Harris's license to practice law had been suspended for nearly three years. Nonetheless, Harris undertook the representation of Makbul Sajan in Sajan's effort to obtain a special use permit from the City of Milwaukee Board of Zoning Appeals to open a gas station at a certain location. Harris and Sajan met with the alderman of the potentially affected district, exchanged information, and discussed an upcoming meeting. Harris continued to represent Sajan in this matter until at least September 21, 2000, when Sajan's application for a special use permit was denied.

¶ 47. Based on the foregoing findings of fact the referee concluded that the OLR had established by clear and convincing evidence that:

1. By practicing law on and after June 4,1997, while his license to do so was suspended, Harris repeatedly engaged in the unauthorized practice of law and thereby repeatedly violated SCR 22.26(2). He did so specifically in his representation of Jeremy and Shawna [Miller], of [Robert] Trotter, and of [Makbul] Sajan, as set forth in particular above, and of other clients as well.
2. By failing to file any claims on behalf of Jeremy and Shawna [Miller] and by failing to respond to motions filed, and inquiries made, by those adverse to the Millers, Harris failed to act with reasonable diligence in representing them and thereby violated SCR 20:1.3.
3. By failing to respond to numerous communications and requests for information from the Millers and their agents and by repeatedly giving them false information when he gave them any information at all, Harris failed to comply promptly with reasonable requests for information and failed to keep the Millers informed of the status of various matters. He thereby violated SCR 20:1.4(a).
4. By falsely advising the Millers and their agents that he had filed claims and motions on their behalf and that he had reached a settlement of their claims and by repeatedly misrepresenting the existence and status of court proceedings, Harris engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation and thereby violated SCR 20:8.4(c).
5. By failing to respond to claims, motions, and offers of compromise made against and to a client, Robert M. Trotter, Harris failed to act with reasonable diligence and thereby violated SCR 20:1.3.
6. By failing to provide Trotter with even the most rudimentary information about cases in which Trotter's interests were at stake and by failing to respond to numerous inquiries from Trotter and his agents, Harris failed to keep Trotter reasonably informed about the status of pending matters and failed to comply promptly with Trotter's reasonable requests for information. He thereby violated SCR 20:1.4(a).
7. By these same acts and omissions and in particular by failing to advise Trotter of a judgment against Trotter and of a proposed compromise agreement, Harris failed to explain matters to Trotter to the extent necessary to enable Trotter to make informed decisions about the matters involved in Harris's representation and thereby violated SCR 20:1.4(b).

Report and Recommendation of Referee Michael Ash at 14-16 (footnotes added).

¶ 48. The referee recommended that Attorney Harris's license to practice law be suspended for not less than two years. The referee recommended further that Harris be required to pay the costs of this proceeding and that any reinstatement of his license to practice law be conditioned upon:

. . . his satisfying the judgments lodged against Robert M. Trotter in the amount of Two Thousand, six hundred seventeen dollars and seventy-four cents ($2,617.74) and against himself in the same amount; and that, in the event Trotter pays any money in satisfaction of such judgments, Harris reimburse Trotter in full for all such amounts paid, including interest at the legal rate from the date or dates of any such payment or payments by Trotter.

Id. at 16.

¶ 49. Harris engaged in serious misconduct. As the referee observed in his thorough and well-reasoned report: "It is hard to exaggerate how badly Harris abused [his clients'] trust and how reprehensible his conduct was toward these clients." Id. The referee considered whether more severe discipline than a two-year suspension might be warranted. Ultimately, the referee decided against recommending more severe discipline, explaining:

. . . the OLR has recommended a two-year suspension and has cited cases indicating that something less than revocation might be more closely in accord with this Court's past practice." See Disciplinary Proceedings Against Weber, 161 Wis. 2d 414, 468 N.W.2d 12 (1991) (three-year suspension); Disciplinary Proceedings Against Lipske, 155 Wis. 2d 470, 455 N.W.2d 880 (1990) (two-year suspension); and Disciplinary Proceedings Against McNeil, 150 Wis. 2d 581, 441 N.W.2d 748 (1989) (one-year suspension). Finally, in the proceeding before me, Harris interposed no spurious defenses and did not needlessly prolong the inquiry; instead he simply laid down his cards and folded.

Id. at 18-19.

¶ 50. We are of the opinion that the referee carefully considered all the aspects of this matter in reaching his final conclusions and recommendations. Accordingly, we adopt the referee's findings and recommendations in this matter, except that we direct Harris to pay the judgment against Mr. Trotter forthwith. Any reinstatement of Harris's license to practice law shall be further conditioned upon his satisfaction of the civil judgment against himself.

¶ 51. IT IS ORDERED that the license of Edward G. Harris to practice law in Wisconsin is suspended for a period of two years, effective the date of this order.

¶ 52. IT IS FURTHER ORDERED that Edward G. Harris comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been suspended.

¶ 53. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Edward G. Harris shall satisfy the judgment lodged against Robert M. Trotter in the amount of $2617.74. In the event Mr. Trotter pays or has paid any money in satisfaction of this judgment, Attorney Harris shall reimburse Mr. Trotter in full for all such amounts paid, including interest at the legal rate from the date or dates of any such payment or payments by Mr. Trotter. If the judgment is not satisfied within the time specified, and absent a showing to this court of his inability to satisfy the judgment within that time, the license of Attorney Edward G. Harris to practice law in Wisconsin shall remain suspended until further order of the court.

¶ 54. IT IS FURTHER ORDERED that any reinstatement of Attorney Edward G. Harris's license to practice law in Wisconsin shall be conditioned upon his satisfying the judgment lodged against Harris, himself, in the amount of $2617.74.

¶ 55. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Edward G. Harris shall pay to the Office of Lawyer Regulation the costs of this proceeding in the amount of $6979.26. 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 Edward G. Harris to practice law in Wisconsin shall remain suspended until further order of the court.

       SCR 22.26(2) provides:
      (2) An attorney whose license to practice law is suspended or revoked or who is suspended from the practice of law may not engage in this state in the practice of law or in any law work activity customarily done by law students, law clerks, or other paralegal personnel, except that the attorney may engage in law related work in this state for a commercial employer itself not engaged in the practice of law.

       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 20:8.4(c) provides: "It is professional misconduct for a lawyer to: (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation."

       SCR 20:1.4(b) provides: "(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation."


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

      No. 02-2950-D.

      Decided April 10, 2003.

    2003 WI 23
    (Also reported in 659 N.W.2d 26.)
   PER CURIAM.

¶ 1. We review the referee's recommendation that Attorney Judith A. Pinchar's license to practice law in Wisconsin be revoked due to professional misconduct involving improper use of Attorney Pinchar's trust account. The referee also recommended that Attorney Pinchar be required to pay the costs of the proceeding.

¶ 2. We adopt the referee's findings of fact and conclusions of law and agree that the seriousness of Attorney Pinchar's professional misconduct warrants the revocation of her license to practice law in Wisconsin.

¶ 3. Attorney Pinchar was admitted to practice law in Wisconsin in 1982 and practiced in the Milwaukee area. In 1999 she consented to a private reprimand for misconduct consisting of failing either to settle a client's claim or file suit before the statute of limitations ran, failing to respond to the client's attempts to contact her, failing to inform the client that the statute of limitations had passed, and failing to respond to inquiries from Board of Attorneys Professional Responsibility staff investigating the matter.

¶ 4. In November of 2000 this court imposed a 60-day suspension of Attorney Pinchar's license to practice law for failing to cooperate with the investigation of three grievances; failing to take proper steps to protect her client's interest; failing to keep a client reasonably informed about the status of a matter; engaging in dishonesty, fraud, deceit or misrepresentation; and, practicing law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction. In re Disciplinary Proceedings Against Pinchar, 2000 WI 122, 239 Wis. 2d 269, 618 N.W.2d 869. On August 27, 2001, Attorney Pinchar's license was temporarily suspended for her willful failure to respond or cooperate with an Office of Lawyer Regulation (OLR) grievance investigation. Attorney Pinchar's license remains suspended.

¶ 5. On November 5, 2002, the OLR filed a complaint alleging that Attorney Pinchar engaged in misconduct with respect to three former clients. The first client hired Attorney Pinchar in August of 2000 to represent him in a post-divorce matter. The client gave Attorney Pinchar a check in the amount of $6326.22 for arrearages owed to the client's ex-wife. Attorney Pin-char deposited the check into her trust account on September 21, 2000. There was a balance of $3.72 in Attorney Pinchar's trust account at that time.

¶ 6. Attorney Pinchar represented to the client's ex-wife that the $6326.22 in her trust account was to fulfill all remaining amounts owed by the client and that the amount included $2239 for attorney's fees. The client's ex-wife retained an attorney to represent her in the matter. The ex-wife's attorney calculated the amount of the arrearages to be $11,845.20. On November 1, 2000, Attorney Pinchar disbursed a $1708.53 check to herself from the funds held in trust for her client, identifying the payment as attorney's fees.

¶ 7. On November 15, 2000, Attorney Pinchar deposited into her trust account an $8820.75 settlement check relating to a second client. Attorney Pinchar disbursed $7112.22 of the settlement, including a $1228.77 disbursement to Attorney Pinchar for attorney's fees. After those disbursements $1708.53 remained in the trust account from the settlement which, consequently, replaced the $1708.53 converted on November 1, 2000, from the funds held in trust for the first client.

¶ 8. On November 29, 2000, Ameritech electronically withdrew $708 from Attorney Pinchar's trust account. The source of that payment was the funds held in trust for the first client. On December 20, 2000, Attorney Pinchar disbursed a $500 check to herself from the funds held in trust for the first client, identifying the payment as additional attorney's fees owed by the first client. On December 22, 2000, Attorney Pin-char disbursed a $1000 check to herself from the funds held in trust for the first client, without identifying the reason for the payment.

¶ 9. On May 25, 2001, Attorney Pinchar disbursed a $600 check to herself from the funds held in trust for the first client, without identifying the reason for the payment. On June 27, 2001, Attorney Pinchar disbursed a $787.50 check to the attorney for the first client's ex-wife from the funds held in trust for the first client. This check was for the first client's contribution toward his ex-wife's attorney fees.

¶ 10. On July 7,2001, Attorney Pinchar disbursed $350 to another client, identifying the payment as a refund of a retainer fee. This refund was made from the funds held in trust for the first client. On July 16, 2001, Attorney Pinchar cashed a $100 trust account check drawn on the funds held in trust for the first client. The check was made payable to "Judith Berkowski." Judith Berkowski is Attorney Pinchar's name by marriage. On July 18, 2001, Attorney Pinchar disbursed a $440 check from the funds held in trust for the first client to the rental agent for Attorney Pinchar's office space.

¶ 11. As of July 18, 2001, Attorney Pinchar had converted $3,698 from the first client's funds. This amount did not include the $1708.53 fee payment, which Attorney Pinchar converted and later replaced. On August 14, 2001, Attorney Pinchar deposited to the trust account a $3700 check payable to her from a relative. This deposit covered the $3698 converted from the first client's funds.

¶ 12. On August 14, 2001, Attorney Pinchar disbursed a $5539.12 check to the first client's ex-wife as a partial payment of arrearages. Without the loan from Attorney Pinchar's relative deposited into the trust account that same day, there would have been insufficient funds in the trust account to cover this disbursement. Following the disbursement there were no more funds in the trust account belonging to the first client.

¶ 13. On November 29, 2001, after her law license had been suspended, Attorney Pinchar disbursed a $1618.95 trust account check to the attorney for the first client's ex-wife in settlement of the first client's arrearages. At the time the check was written there were no funds in the account belonging to the first client.

¶ 14. On December 3, 2001, Attorney Pinchar deposited into her trust account a $50 check from the first client along with $158 from two other clients in payment of past due attorney fees. On December 4, 2001, Attorney Pinchar deposited into her trust account an $890 retainer fee and a $500 retainer fee from two different clients. Even after the deposit of those funds into the trust account the check written to the attorney for the first client's ex-wife resulted in an overdraft.

¶ 15. The OLR's complaint also alleged that Attorney Pinchar engaged in misconduct with respect to her defense of a second client who hired her to defend lawsuits filed against him by the Town of Richfield and a former tenant. In December 2001 Attorney Pinchar informed the second client she would need $3000 to continue to cover costs associated with the Town of Richfield lawsuit. On December 4, 2001, over three months after Attorney Pinchar's license had been suspended, the second client gave Attorney Pinchar a check for $890 toward the requested retainer. The entire $890 was converted when Attorney Pinchar made the $1618.95 payment to the attorney for the first client's ex-wife.

¶ 16. The OLR's complaint also alleged that Attorney Pinchar engaged in misconduct with respect to a third client who retained her to defend him in a lawsuit related to the sale of a defective product. On November 30, 2001, Attorney Pinchar disbursed a trust account check in the amount of $300 to the attorney for the plaintiff in the lawsuit. The check was to satisfy costs associated with a motion to compel discovery. At the time the check was disbursed there were no funds in the trust account relating to the third client's matter and the balance in the trust account was $10.32. The check was presented for payment on December 5, 2001, and resulted in an overdraft.

¶ 17. Pursuant to the overdraft notification requirements of SCR 20:1.15(j), Attorney Pinchar's bank reported the two overdrafts on her trust account to the OLR. On January 2, 2002, the OLR staff wrote to Attorney Pinchar at her office address requesting an explanation for the overdrafts and the trust account activity four months after Attorney Pinchar's suspension. Attorney Pinchar was also asked to produce various trust account records. Attorney Pinchar failed to respond. On February 4, 2002, a second letter was sent to Attorney Pinchar via both first-class mail and certified mail. The certified letter was returned as unclaimed. The first-class letter was not returned to the OLR by the post office. Attorney Pinchar failed to respond to the second letter.

¶ 18. Attorney Pinchar was personally served with an authenticated copy of the OLR's order to answer and complaint. She failed to file an answer to the complaint. Attorney Lance S. Grady was appointed referee. The OLR movéd for default judgment. Attorney Pinchar was given notice of the date and time of a telephone conference during which the motion for default judgment would be heard. Attempts to contact Attorney Pinchar by telephone, both at her office and home telephone numbers, were unsuccessful. The referee granted the OLR's motion for default judgment.

¶ 19. The referee filed his findings of fact, conclusions of law, and recommendation on January 13, 2003. The referee concluded that by failing to hold in trust $3698 from the first client for arrearages owed to his ex-spouse and by converting those funds for her own purposes, Attorney Pinchar failed to hold the property of clients or third persons in trust, in violation of SCR 20:1.15(a). The referee also found that by converting the first client's funds to her own use, by requesting and receiving a fee to handle the second client's case after her license to practice law was suspended, and by issuing a check to adverse counsel when there were no funds in the account related to the third client's case, Attorney Pinchar engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of SCR 20:8.4(c).

¶ 20. The referee also found that by depositing into her trust account a personal loan, cash to pay rent, and earned fees, Attorney Pinchar commingled personal cash and earned fees in her trust account, in violation of SCR 20:1.15(a). Finally, the referee concluded that by failing to respond to the OLR's grievance letters, Attorney Pinchar failed to provide relevant information during an investigation, in violation of SCR 22.03(6).

¶ 21. The referee recommended that Attorney Pinchar's Wisconsin law license be revoked and that she be ordered to pay the costs of the disciplinary proceeding.

¶ 22. We adopt the findings of fact and conclusions of law as set forth in the referee's report and recommendation. Attorney Pinchar's misconduct with respect to the handling of her trust account and her failure to cooperate with the OLR's investigation are very serious failings warranting the revocation of her license to practice law.

¶ 23. IT IS ORDERED that the license of Attorney Judith A. Pinchar to practice law in Wisconsin is revoked, effective the date of this order.

¶ 24. IT IS FURTHER ORDERED that Attorney Judith A. Pinchar comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been revoked.

¶ 25. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Judith A. Pinchar pay to the Office of Lawyer Regulation the costs of this proceeding.

       Effective October 1, 2000, Wisconsin's attorney disciplinary process underwent a substantial restructuring. The name of the body responsible for investigating and prosecuting cases involving attorney misconduct was changed from the Board of Attorneys Professional Responsibility to the Office of Lawyer Regulation.

       SCR 20:1.15(j) provides:
      (j) In the event any properly payable instrument is presented against a lawyer trust account containing insufficient funds, whether or not the instrument is honored, the financial institution or investment institution shall, simultaneously with the customary overdraft notice to the depositor or investor, report the overdraft to the office of lawyer regulation.

       SCR 20:1.15(a) provides:
      (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 he deposited in one or more identifiable trust accounts as provided in paragraph (c). The trust account shall he 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.

       SCR 20:8.4(c) provides: "It is professional misconduct for a lawyer to: (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation."

       SCR 22.03(6) provides: "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."