source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    In the Matter of Disciplinary Proceedings Against Richard Bolte, Attorney at Law: Office of Lawyer Regulation, Complainant-Respondent, v. Richard Bolte, Respondent-Appellant.
    Supreme Court

      No. 2003AP1184-D.

      Oral argument February 8, 2005.

      Decided July 19, 2005.

    2005 WI 132
    (Also reported in 699 N.W.2d 914.)

      For the respondent-appellant there were briefs by Franklyn M. Gimbel, Kathryn A. Keppel and Gimbel, Reilly, Guerin & Brown, Milwaukee, and oral argument by Franklyn M. Gimbel.

    For the complainant-respondent there was a brief by Paul W. Schwarzenbart and Lee, Kilkelly, Paulson & Younger, S.C., Madison, and oral argument by Paul W. Schwarzenbart.

   PER CURIAM.

¶ 1. Attorney Richard Bolte appeals from a referee's report and recommendation issued May 26, 2004, concluding that Attorney Bolte engaged in the unauthorized practice of law in violation of SCR 20:5.5(a) and transferred real estate with the intent to hinder, delay or defraud the rights of a judgment creditor in violation of SCR 20:8.4(c). The referee recommended the court suspend Attorney Bolte's license to practice law for a period of three months. We adopt the referee's findings of fact and conclusions of law, but conclude that a public reprimand is sufficient discipline for Attorney Bolte's misconduct in this matter.

¶ 2. Bolte was admitted to practice law in Wisconsin in 1961. His license to practice law in Wisconsin has remained in good standing and he has not been the subject of any prior discipline. Since 1989, he has elected to be on "inactive" status in Wisconsin, which means that he is not engaged in the active practice of law in Wisconsin. See SCR 10.03(3) (Membership).

¶ 3. The events giving rise to this proceeding occurred in Colorado, where Bolte was then residing. Bolte was not licensed to practice law in Colorado.

¶ 4. In 1994, a Colorado resident named Carol Koscove (Koscove) learned that Bolte was a lawyer and asked him for professional assistance with a potential dispute involving royalty payments due pursuant to the terms of an existing mineral lease on her property. Simply put, the lease gave Atlantic Richfield Company (ARCO) rights to extract, inter alia, carbon dioxide from her property. Koscove suspected she was not receiving proper compensation under the terms of the lease. She had approached several other individuals seeking help with this matter.

¶ 5. Bolte advised Koscove that while he was a lawyer, he was not licensed to practice in Colorado. He explained that he could not appear in court and that she would have to hire a lawyer to pursue any legal redress. The referee stated: "[i]t is clear from the evidence that it was Koscove who pursued Bolte's services and that Bolte was initially reluctant to become involved."

¶ 6. However, Bolte eventually agreed to look into the matter and the parties negotiated an agreement, executed on November 22, 1994, that provided Bolte would "investigate, examine, copy, analyze and interpret" documents pertaining to the ARCO lease and the royalty payments to which Koscove claimed she was entitled. The parties agreed that Bolte would be paid $5000 per month and he was provided with a computer and a car. Under the terms of the agreement Bolte was also to receive a percentage of monies recovered by Koscove from ARCO if Koscove's suspicions proved correct and she prevailed on any ensuing claim.

¶ 7. Bolte investigated the lease dispute. Upon completion of his investigation, he advised Koscove that he believed ARCO had indeed underpaid her and that she should hire a lawyer to pursue her claims. Koscove and Bolte met with Attorney George Mueller, an attorney experienced in oil and gas leases, on January 30, 1995. After negotiating the terms of a retainer agreement, Koscove formally retained Attorney Mueller on or about April 7, 1995. Throughout this time, Bolte continued to perform work under the agreement and collaborated with Mueller preparing the case for litigation.

¶ 8. In July 1995, ARCO filed a declaratory judgment action against Koscove and others regarding various oil and mineral leases in federal district court in Colorado. Attorney Mueller filed a counterclaim on Koscove's behalf, identifying Bolte on the pleading as "of counsel."

¶ 9. On November 7, 1995, Bolte executed an affidavit in support of a motion for pro hac vice status in the Koscove/ARCO matter. On January 5, 1996, the court entered an order permitting Bolte to appear pro hac vice in the Koscove/ARCO matter.

¶ 10. In March 1996, ARCO sent Koscove a check for $1,883,816.13 in partial settlement of Koscove's claims. On April 17, 1996, Koscove paid Bolte $388,013.23 in accordance with the terms of the agreement.

¶ 11. Koscove then retained another attorney through whom she advised Bolte that, unless he accepted the $388,013.23 as full and final payment under the agreement, she would file a lawsuit alleging he had engaged in the unauthorized practice of law. Bolte refused, maintaining that the terms of the agreement entitled him to a percentage of any additional recovery from ARCO.

¶ 12. On September 18,1996, Koscove filed a civil lawsuit against Bolte in El Paso County District Court, Koscove v. Bolte, No. 96 CV 2233, alleging that the agreement between the parties was unenforceable because Bolte's services to her constituted the unauthorized practice of law under a relevant state statute. Specifically, she sought a judgment pursuant to Colorado statute § 12-5-115, which provided that "[i]f any unlicensed person receives any money... as a fee or compensation for services rendered... by him as an attorney or counselor-at-law within this state, all money so received by him shall be considered as money received to the use of the person paying the same and may be recovered with costs of suit by an action for money had and received." The matter proceeded to trial.

¶ 13. On April 6, 1998, the El Paso County District Court concluded that Bolte had indeed violated the state statute, and entered judgment against Bolte in the amount of $388,013.23, plus interest and costs. On April 13, 1998, after these findings were entered but prior to the issuance of a writ of execution, Bolte transferred the title to certain real property he owned in Divide, Colorado, by recording a quit claim deed to Bredescel Financial, Inc., a Nevada corporation (Bredescel), as the grantee. The deed was transferred without consideration, and without advance notice to Bredescel, which was owned by an acquaintance of Bolte.

¶ 14. Meanwhile, Bolte appealed the civil judgment and the Colorado Court of Appeals affirmed. Koscove v. Bolte, 30 P.3d 784 (Colo. Ct. App. 2001). Bolte sought further review, but both the Colorado Supreme Court and the United States Supreme Court declined to review the matter. Bolte also unsuccessfully sought relief from the judgment in federal district court.

¶ 15. Meanwhile, Koscove proceeded to file a grievance against Bolte in Wisconsin.

¶ 16. On May 1, 2003, the Office of Lawyer Regulation (OLR) filed a complaint against Bolte, alleging he (1) performed legal services for Koscove in the State of Colorado, which constituted the unauthorized practice of law in violation of SCR 20:5.5(a) (Count I); (2) transferred real estate with the intent to hinder, delay or defraud Koscove's rights as a judgment creditor in violation of SCR 20:8.4(c) (Count II); and (3) made misrepresentations to a federal district court in Colorado in relation to his application for admission pro hac vice in violation of SCR 20:8.4(c) (Count III). The OLR sought a nine-month suspension of Attorney Bolte's license to practice law.

¶ 17. The parties stipulated to certain facts and a hearing was conducted on November 12, 2003. Post-hearing briefing was ordered, and the referee issued his report and recommendation on or about May 26, 2004.

¶ 18. The referee concluded that many, if not most, of the activities Bolte performed on Koscove's behalf were permissible investigative services, or were protected by virtue of his legitimate pro hac vice admission. However, the referee concluded that some of the activities Bolte performed did constitute the unauthorized practice of law. He concluded further that Bolte's conveyance of real property in the wake of the civil judgment was for the purpose of minimizing the judgment obtained by Koscove and in violation of SCR 20:8.4(c). However, he noted that Koscove was not damaged by the transfer because the property in question was fully mortgaged at the time. The referee recommended a three-month suspension of Bolte's license to practice law in Wisconsin. This appeal followed.

¶ 19. Bolte contends that the referee erred in concluding that he engaged in the unauthorized practice of law, and also erred in concluding that he violated SCR 20:8.4(c) by transferring the real estate to Bredescel. He states his issues for review as follows:

I. When a Wisconsin attorney provides investigative services in another state pursuant to a written agreement, is that attorney engaged in the unauthorized practice of law if the attorney is subsequently admitted to practice pro hac vice by the federal court of that state?
II. May a Wisconsin attorney be disciplined for transferring property with intent to defraud a judgment creditor when the property at issue was fully mortgaged and had no equity value?

¶ 20. It is well settled that we will affirm the referee's findings of fact unless they are clearly erroneous. We review conclusions of law de novo. In re Disciplinary Proceedings Against Eisenberg, 2004 WI 14, ¶ 5, 269 Wis. 2d 43, 675 N.W.2d 747.

¶ 21. The first issue we consider is whether certain activities Bolte engaged in prior to the time Kos-cove retained Attorney Mueller constituted the unauthorized practice of law. In Wisconsin, SCR 20:5.5(a) provides that "[a] lawyer shall not practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction." Therefore, the question whether Bolte engaged in the unauthorized practice of law must be analyzed under Colorado law.

¶ 22. Colorado's disciplinary rule 5.5(a) provides that "a lawyer shall not practice law in a jurisdiction where doing so violates the regulations of the legal profession in that jurisdiction." The Colorado rule is thus virtually identical to Wisconsin's rule. In addition, the Colorado Supreme Court has promulgated rules of practice governing the unauthorized practice of law, which are investigated and prosecuted by a court appointed committee. See C.R.C.E 228 to 240.1.

¶ 23. A Colorado court ruled that Bolte violated a Colorado civil statute prohibiting the unlicensed practice of law. However, Bolte argued and the referee agreed that the resulting judgment is of limited usefulness in this disciplinary proceeding because the burden of proof used in the Colorado civil case was lower than the "clear and convincing" evidence standard applicable to disciplinary matters in Wisconsin. Therefore, the OLR was required to independently prove that Bolte engaged in the unauthorized practice of law, by clear and convincing evidence.

¶ 24. A leading case in Colorado on the unauthorized practice of law is Denver Bar Association v. Public Utilities Commission, 391 P.2d 467 (Colo. 1964). There, the Colorado Supreme Court recognized that:

There is no wholly satisfactory definition as to what constitutes the practice of law; it is not easy to give an all-inclusive definition. We believe that generally one who acts in a representative capacity in protecting, enforcing, or defending the legal rights and duties of another and in counselling, advising and assisting him in connection with these rights and duties is engaged in the practice of law. Difficulty arises too in the application of the definition.

Id. at 471 (emphasis added); see also C.R.C.E 201.3.

¶ 25. The referee opined that: "many of the instances of the alleged unauthorized practice of law cited by OLR are actually a combination of permissible investigative activities by Bolte and the impermissible practice of law by Bolte." The referee specifically identified the following as examples of activities that he deemed to constitute the unauthorized practice of law:

On March 30, 1995, Bolte prepared what he called a "Brief," a document that appears to be a combination of permissible document review and impermissible legal analysis and advice.
On November 30,1994, Bolte prepared a memorandum. Again, most of the memorandum records the results of Bolte's investigation. However, Bolte then documents his legal analysis by applying the facts he learned to the law.
Sometime late in March 1995, Bolte and Koscove met with several witnesses. Bolte prepared a summary and notes of their meeting. The majority of the memorandum and notes simply record permissible investigative services rendered by Bolte. However, Bolte then indicates statutes of limitation issues were discussed. Laws passed by Congress were also discussed.
Bolte assisted Koscove in negotiating the terms and conditions of the retainer agreement with Mueller.
Bolte expressed his opinion to Koscove that she could pursue penalty interest or treble damages under Federal antitrust laws.
Bolte sent a letter to ARCO containing a list of questions, along with a copy of a power of attorney that Bolte prepared for Koscove.

¶ 26. A related question is whether Bolte's actions are nonetheless protected by the pro hac vice rule articulated in Spanos v. Skouras Theatres Corp., 364 F.2d 161, 169 (2d Cir. 1965) aff'g 235 F. Supp 1 (S.D.N.Y. 1964), cert. denied, 385 U.S. 987 (1966). Bolte contends that the holding in Spanos provides that his pro hac vice admission to the federal court encompasses any legal services "reasonably incident" to his activities before the federal court in this matter. In other words, he contends that it insulates an attorney from claims of unauthorized practice of law within the state in which the district court is located. Spanos v. Skouras Theatres Corp., 235 F. Supp 1, 13 (S.D.N.Y. 1964).

¶ 27. At the oral argument before this court there was discussion about the precise period of time the court should scrutinize in considering whether Bolte engaged in the unauthorized practice of law, and the extent to which Bolte’s pro hac vice admission to the federal court immunized his earlier activities related to the Koscove/ARCO matter.

¶ 28. Bolte executed the agreement with Koscove on or about November 22, 1994. Attorney Mueller was interviewed on or about January 30, 1995. He was not formally retained until on or about April 7, 1995, although it is undisputed that he performed legal services for Koscove while the retainer was being negotiated. ARCO filed suit against Koscove in July 1995. Bolte's application for pro hac vice admission was filed in November 1995 and Bolte was granted pro hac vice status by order dated January 5, 1996.

¶ 29. We have carefully considered Bolte's arguments, and the circumstances in which Bolte acted, and we must conclude that the record does contain clear and convincing evidence that Bolte engaged in the unauthorized practice of law with respect to certain of his activities.

¶ 30. For example, Bolte analyzed Koscove's lease with ARCO and expressed his opinion as to how it should be interpreted. Perhaps if Bolte were a geologist or mining engineer with relevant technical expertise, this action would not constitute the unauthorized practice of law. However, the record does not indicate that Bolte had such technical expertise. The value of his review lay in his legal analysis of the document. Similarly, Bolte expressed opinions about various legal theories for recovery of damages and discouraged Koscove from pursuing at least one theory. We conclude that these were direct legal services that constituted the unlicensed practice of law.

¶ 31. Similarly, in January 1995, Bolte sent a letter to ARCO containing a series of questions about the lease payments, together with a power of attorney authorizing him to communicate with ARCO on Koscove's behalf.

¶ 32. In the course of his investigation into the royalty payments due under the mineral leases in question Attorney Bolte evidently discovered and documented significant anomalies that were adverse to his client's financial interests. In addition to merely recounting facts he learned, he began to consider possible legal remedies that might be available to the client, and made recommendations concerning these legal theories and remedies.

¶ 33. We are not persuaded that Spanos immunizes all of Bolte's activities related to the ARCO/ Koscove matter. As the referee observed:

The State of Colorado obviously has an interest in protecting its citizens from the unauthorized practice of law. That interest cannot be defeated by a claim that a case "might" ultimately be filed in Federal Court or that local counsel "might" ultimately be retained.

We conclude, under the facts of this case, that Bolte's initial activities conducted on Koscove's behalf, investigating and evaluating the ARCO lease were not, as a matter of law, sufficiently linked to the federal court proceedings to be deemed "reasonably incident" to his subsequent activities before the federal court for purposes of Spanos.

¶ 34. The second issue on appeal involves whether the OLR demonstrated with clear and convincing evidence that Bolte's quit claim deed transfer of his Colorado real property violated SCR 20:8.4(c).

¶ 35. SCR 20:8.4(c) provides that it is "professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation." Bolte contends that he did not violate this rule because the property in question had no equity at the time of the conveyance. He asserts that under Colorado law, "[t]he fundamental element of a fraudulent conveyance is whether the debtor's estate is unjustly diminished and he cites Megabank Financial Corp. v. Alpha Gamma Rho Fraternity, 841 P.2d 318, 320 (Colo. Ct. App. 1992) in support of his argument. He maintains that the transfer was "the knee jerk reaction of a man who believed that the State of Colorado had wronged him, who wanted to leave the state and everything associated with it."

¶ 36. However, the OLR notes that under SCR 20:8.4 it "is unnecessary to either plead or prove the tort of misrepresentation in order to establish by clear and convincing evidence that an attorney has violated a rule of professional conduct, proscribing attorney conduct involving dishonesty, fraud, deceit or misrepresentation." See In re Disciplinary Proceedings Against Marks, 2003 WI 114, ¶ 50, 265 Wis. 2d 1, 665 N.W.2d 836 (citation omitted). The OLR points to (1) the timing of the transfer, a mere one week after judgment was entered against Bolte; (2) contemporaneous efforts to shield himself from the judgment including an effort to enjoin the court from entering final judgment; (3) the unilateral nature of the transfer, without the grantee's knowledge or consent; and (4) what the OLR deemed the "unlikely explanation" provided by Bolte.

¶ 37. While this evidence is largely circumstantial it is not insufficient. See, e.g., Peters v. State, 70 Wis. 2d 22, 33-34, 233 N.W.2d 420 (1975). We deem the referee's credibility determinations highly relevant here. The referee stated: "[w]hile Bolte may have had little or no equity in the property, that fact does not justify the fraudulent nature of the conveyance by Bolte, which was to defeat and minimize the judgment taken by Koscove." We agree that the OLR has demonstrated that Bolte's decision to transfer the Colorado property was made with intent to interfere with Koscove's ability to levy on the property in violation of SCR 20:8.4(c).

¶ 38. We turn to the question of the appropriate discipline for Attorney Bolte's violations of SCR 20:5.5(a) and SCR 20:8.4(c). The OLR maintained that a nine-month suspension of Bolte's license to practice law was appropriate. The referee recommended a suspension of three months.

¶ 39. While this is a case implicating the parameters of the unauthorized practice of law, it is an unusual one. We have no doubt that there are peculiar circumstances giving rise to this proceeding, which are not reflected in the record before us. What we have here is an undoubtedly skilled lawyer who was not lawfully entitled to render legal advice in Colorado because he was not licensed to practice law there. At no time did he misrepresent this status to his client. Indeed, he apparently took pains to try to define a permissible scope of activities and, when it became apparent that litigation was likely, promptly advised the client to retain a licensed attorney and assisted the client in finding appropriate counsel. He then collaborated with the licensed attorney to obtain pro hac vice admission to federal court in Colorado so he could lawfully assist with the litigation, which clearly inured to Koscove's financial benefit.

¶ 40. Ultimately, the assessment of Bolte's motives required a credibility determination, which is vested in the referee. Here, the referee observed: "Bolte was honest, sincere and hard working in all the services he rendered to Koscove under the Agreement. It was his efforts that played a major role in Koscove's successful result." He adds: "I find it difficult to believe that this conduct by Bolte would be repeated or that he poses a threat to the public. His conduct was isolated to this unique case. Appropriate discipline in this case should take these factors into account."

¶ 41. Mindful that protection of the public is the overriding concern in these matters, in this case, Kos-cove was never under any misunderstanding about Attorney Bolte's status as an unlicensed lawyer. Indeed, she was sufficiently aware of this fact that she used the threat — successfully—to divest him of earnings she had contractually agreed to pay for his services, after he assisted her in obtaining a multi-million dollar recovery.

¶ 42. Attorney Bolte does not reside in Wisconsin, has no prior disciplinary history, and has been on inactive status since 1989. He has been in good standing for some 44 years. There is no evidence the client suffered any harm as a result of Attorney Bolte's actions. Therefore, we conclude that a public reprimand is sufficient discipline for Bolte's misconduct in this matter. We accept the referee's recommendation that Bolte be directed to pay the costs of this disciplinary proceeding which presently total $23,345.64.

¶ 43. IT IS ORDERED that Richard Bolte is publicly reprimanded for professional misconduct.

¶ 44. IT IS FURTHER ORDERED that within 60 days of the date of this order Richard Bolte pay to the Office of Lawyer Regulation all the costs of this proceeding provided that if such 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 Richard Bolte to practice law in Wisconsin shall be suspended until further order of this court.

       SCR 20:5.5(a) provides: Unauthorized practice of law. "A lawyer shall not: (a) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction."

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

       This affidavit and Bolte's application for pro hac vice admission was the subject of one of the three disciplinary counts filed against Bolte. The Office of Lawyer Regulation (OLR) maintained that Bolte was less than forthright about his inactive status in Wisconsin when seeking pro hac vice admission. The referee disagreed and recommended the court dismiss this charge. The OLR did not appeal that recommendation so the issue of Bolte's pro hac vice admission is not before the court.

       As noted, the referee concluded that the OLR had failed to prove that Bolte engaged in conduct involving fraud, deceit or misrepresentation in relation to his pro hac vice application.

       The referee concluded that Bolte's activities following the retention of Attorney Mueller were protected by Spanos v. Skouras Theatres Corp., 364 F.2d 161, 169 (2d Cir. 1965), aff'g 235 F. Supp. 1 (S.D.N.Y. 1964), cert. denied, 385 U.S. 985 (1966). OLR does not challenge this conclusion.

       Rule 201.3 pertains to bar admission and classification of applicants and its definitions are limited to the rule. Still we deem it instructive that this rule defines the "practice of law" as follows:
      (2) For purposes of this rule, practice of law means:
      (a) The private practice of law as a sole practitioner or as a lawyer employee of or partner or shareholder in a law firm, professional corporation, legal clinic, legal services office, or similar entity; or
      (b) Employment as a lawyer for a corporation, partnership, trust, individual, or other entity with the primary duties of:

        (i) Furnishing legal counsel, drafting documents and pleadings, and interpreting and giving advice with respect to the law, and/or
      (ii) Preparing, trying or presenting cases before courts, executive departments, administrative bureaus or agencies; or
      (c) Employment as a lawyer in the law offices of the executive, legislative, or judicial departments of the United States, including the independent agencies thereof, or of any state, political subdivision of a state, territory, special district, or municipality of the United States, with the primary duties of
      (i) Furnishing legal counsel, drafting documents and pleadings, and interpreting and giving advice with respect to the law, and/or
      (ii) Preparing, trying or presenting cases before courts, executive departments, administrative bureaus or agencies; or
      (d) Employment as a judge, magistrate, hearing examiner, administrative law judge, law clerk, or similar official of the United States, including the independent agencies thereof, or of any state, territory or municipality of the United States with the duties of hearing and deciding cases and controversies in judicial or administrative proceedings, provided such employment is available only to a lawyer; or
      (e) Employment as a teacher of law at a law school approved by the American Bar Association throughout the applicant's employment; or
      (f) Any combination of subparagraphs (a)-(e) above.


text:
    In the Matter of Disciplinary Proceedings Against Arik J. Guenther, Attorney at Law: Office of Lawyer Regulation, Complainant-Respondent, v. Arik J. Guenther, Respondent-Appellant. In the Matter of Disciplinary Proceedings Against Arik J. Guenther, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Arik J. Guenther, Respondent.
    Supreme Court

      No. 2003AP1244-D & 2004AP1240-D.

      Submitted on briefs March 10, 2005.

    Decided July 19, 2005.

    2005 WI 133
    (Also reported in 700 N.W.2d 260.)

      For the respondent-appellant there was a brief by Arik J. Guenther and Guenther & Haza, Ltd., Camp-bellsport.
    For the complainant-respondent there was a brief by William J. Weigel and Office of Lawyer Regulation, Madison.
   PER CURIAM.

¶ 1. We review the findings of fact, conclusions of law, and recommendations of the referees for sanctions in these two related matters. Attorney Arik J. Guenther was found in both cases to have engaged in unprofessional conduct in the course of his practice of law in violation of the Rules of Professional Conduct.

¶ 2. The referee in Case No. 2003AP1244-D, Kim M. Peterson, recommended a six-month suspension of Attorney Guenther's license to practice law and trust account monitoring as a condition of reinstatement. The referee in Case No. 2004AP1240-D, David R. Friedman, recommended a 60-day suspension of Attorney Guenther's license to practice law, concurrent to the six-month suspension in the earlier case, and the payment of the costs of the Office of Lawyer Regulation (OLR).

¶ 3. Attorney Guenther has appealed in Case No. 2003AP1244-D pursuant to SCR 22.17(1) and (3). We review Case No. 2004AP1240-D pursuant to SCR 22.17(2).

¶ 4. We approve the findings and conclusions of Referee Peterson and determine that the seriousness of Attorney Guenther's misconduct warrants the imposition of the recommended six-month suspension. We also approve the findings and conclusions of Referee Friedman and determine that the seriousness of Attorney Guenther's misconduct in that case warrants the imposition of a two-month suspension. However, we do not follow the referee's recommendation that the suspension be concurrent to the six-month suspension in the earlier case and instead, impose it consecutive, for a total suspension of eight months.

¶ 5. Attorney Guenther was licensed to practice law in Wisconsin in 1981. In 1989, he was privately reprimanded for neglect, failing to communicate with a client, and failing to cooperate with the Board of Attorneys Professional Responsibility. In 2001, he was privately reprimanded for failing to prepare for a final divorce hearing, failing to consult and communicate with his client, failing to file a post-trial brief, and failing to adequately supervise his secretary. Finally, in 2002, he was privately reprimanded for neglect and conflict of interest.

¶ 6. The standard of review before this court is that the referee's findings of fact are affirmed unless clearly erroneous; but conclusions of law are reviewed on a de novo basis. See In re Disciplinary Proceedings Against Eisenberg, 2004 WI 14, ¶ 5, 269 Wis. 2d 43, 675 N.W.2d 747. The court may impose whatever sanction it deems appropriate regardless of the referee's recommendation. In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶ 44, 261 Wis. 2d 45, 660 N.W.2d 686.

CASE NO. 2003AP1244-D

¶ 7. Counts 1 and 2 arise out of Attorney Guenther's representation of the wife in a divorce and child custody matter and allege violations of SCR 20:1.4(a), failure to keep a client reasonably informed about the status of a matter, and SCR 20:8.4(c), engaging in misconduct involving dishonesty, deceit or misrepresentation.

¶ 8. The referee found that Attorney Guenther attended a hearing to amend a temporary custody order without his client being present or even being made aware of the hearing. At the hearing, the temporary order was significantly amended to the client's detriment. When the opposing party arrived at the client's house days later to pick up the parties' child, pursuant to the changes resulting from the amended order, the client was still unaware of the change, a dispute ensued, and the police were called. The client subsequently asked Attorney Guenther to file a motion to change the amended order. Attorney Guenther claimed he did so, but never actually did.

¶ 9. Attorney Guenther claims he should be excused from having appeared alone because he never had notice of the hearing and just happened to be at the courthouse on another matter when he found out about it.

¶ 10. Attorney Guenther further claims that his failure to notify his client of what happened was not "so unreasonable" under the circumstances. The hearing was held on a Tuesday afternoon, Thanksgiving intervened, and he eventually did talk to his client the following Monday, but after the incident with the opposing party.

¶ 11. Finally, Attorney Guenther claims that he never intentionally misled his client as to the filing of the motion. Rather, he claims this occurred at a time when the client was in the process of discharging him and no decision had actually ever been made on whether to file the motion.

¶ 12. Attorney Guenther asserts as a mitigating factor that although the events following the amended order were "very traumatic" for the client, in the subsequent two years the parties are still adhering to the amended order. He thereby implied that it could not have been that bad to begin with.

¶ 13. The same arguments that Attorney Guen-ther raises on appeal were raised to the referee and rejected. The referee commented in part:

Even if respondent could not reach G. by phone, a simple letter to G., sent on the day of the hearing, could have avoided the entire matter. While a delay of a few days over the holiday may not [be] important in the typical case, in some cases a delay of a couple days is extremely important. This is one of those cases. Respondent's failure to keep his client informed is not a minor violation, but caused his client extreme distress. I found G.'s emotional testimony on this point, more than two years after the event, very telling.... [H]e did in fact mislead G.. .. There does not appear to be any other credible explanation of respondent's statement that he filed the motion when in fact, he did not....

¶ 14. We find nothing in Attorney Guenther's arguments on appeal to conclude that the findings of fact of the referee on these two counts are clearly erroneous. We therefore adopt them as well as the conclusions of law that the supreme court rules were violated.

¶ 15. Counts 3 through 5 arise out of Attorney Guenther's representation of the husband in a divorce. They allege violations of SCR 20:1.15(b), failing to render a full accounting and promptly delivering funds to which the client is entitled; SCR 20:1.15(d), failure to treat the client's funds as trust property until there is an accounting and severance of the relationship; and SCR 22.03(6), failing to provide relevant information, to answer questions fully, or to furnish documents, all in the course of an OLR investigation.

¶ 16. After this divorce and distribution of assets, Attorney Guenther was holding funds in trust for his client. At the same time, the client owed attorney's fees, but Attorney Guenther had failed to provide an accounting of the exact amount owed. The referee found that there were numerous trust account discrepancies. These included unidentified funds both in, and paid from, the account; Attorney Guenther paying himself fees out of the account in excess of what he was owed; and checks written out of the wrong account, for example, Attorney Guenther's business account rather than trust account.

¶ 17. The referee noted that Attorney Guenther essentially did not contest these counts. She concluded that the evidence was clear that the allegations were accurate and that Attorney Guenther's trust accounts were "in a shambles."

¶ 18. Attorney Guenther has not challenged the referee's findings and conclusions regarding these three counts on appeal and, accordingly, we adopt them.

¶ 19. Counts 6 through 8 arise out of Attorney Guenther's response to the OLR investigation of Counts 3 through 5. They allege violations of SCR 20:1.15(e), failing to retain complete trust account records for at least six years; SCR 20:1.15(f), failing to submit trust account records for OLR's inspection, audit, use and evidence; and SCR 20:1.15(g), filing false certifications with the State Bar of Wisconsin that required records were being maintained.

¶ 20. The referee found that Attorney Guenther failed to respond to OLR investigatory requests on several occasions and even when he did respond provided incomplete records, claiming on at least one occasion that he had a "difficult time" locating much of his financial information.

¶ 21. The referee further found that on Attorney Guenther's 1997-2001 State Bar dues statements he falsely signed a certification stating that he had complied with the record-keeping requirements set forth in SCR 20:1.15(e).

¶ 22. The referee stated with respect to all of the counts in this case that involved Attorney Guenther's failure to fully cooperate with OLR:

I find that respondent was extraordinarily slow in responding to OLR's demands ... providing] responses in a "piecemeal" fashion, and ... the information was in a disarray, unclear and virtually impossible to decipher ... [with a] lack of any logical explanation for the various inconsistencies....

¶ 23. Attorney Guenther claims there was never any intent on his part to withhold anything from OLR. He points to the sudden departure of his secretary as the cause of his inability to locate many of his financial records.

¶ 24. As to the false certification regarding the financial records, Attorney Guenther similarly claims he did not intentionally violate the supreme court rules. He stresses that he has always admitted there were problems with his record-keeping system. He believes it is a mitigating factor that he has tried to correct those problems as soon as possible. He asserts that he is unfairly being sanctioned twice for basically the same thing, apparently referring to the fact that not only is he being punished because his records are in disarray, but he is also being punished for failing to acknowledge those problems via the certification.

¶ 25. We find no basis on which to overturn the referee's findings of fact and conclusions of law concerning these counts. An attorney cannot hide behind the loss of support staff to excuse faulty record keeping that obviously was deficient even before. Further, SCR 20:1.15(g) creates a separate offense for false certification, even though that may arise out of underlying trust account violations that also constitute misconduct under separate supreme court rules.

¶ 26. Counts 9 through 13 arise out of numerous trust account discrepancies involving a dozen clients. These counts allege violations of SCR 20:1.15(a), failing to hold the client's property in trust, separate from the lawyer's own property; SCR 22:03(6), failing to provide relevant information, to answer questions fully, or to furnish documents to the OLR; SCR 20:8.4(c), conduct involving dishonesty, fraud, deceit or misrepresentation; SCR 20:5.3(a), failing to make reasonable efforts to ensure that the law firm has in effect measures giving reasonable assurance that a nonlawyer's conduct is compatible with the professional obligations of the lawyer; and SCR 20:5.3(b), failing to assure thata nonlawyer's conduct was compatible wdth his professional obligations.

¶ 27. Attorney Guenther does not contest these counts, except to the extent that, as previously noted, he objects to any violation of SCR 22:03(6) on grounds that he did the best he could to provide OLR with the proper documentation. All of these violations involve discrepancies between amounts that Attorney Guen-ther was supposed to be holding in trust for his clients and what was or was not properly disbursed to them or third parties. This group of counts also involves Attorney Guenther's failure to adequately train and supervise the bookkeeping and accounting work done by his now missing secretary.

¶ 28. We again find no basis to conclude that the referee's findings of fact with respect to these counts are clearly erroneous and thus we adopt them as well as the accompanying conclusions of law.

¶ 29. Counts 14 and 15 arise out of Attorney Guenther's representation of a client in a civil action against her former employer out of which she received a judgment of approximately $10,600. The counts allege violations of SCR 20:1.15(a), failing to hold the property of clients/third-persons in trust, separate from the attorney's own property, and SCR 20:1.15(f), failing to produce trust account records for inspection, audit, use and evidence, as requested by OLR.

¶ 30. The referee found more trust account violations pertaining to this client's judgment. In general, Attorney Guenther failed to properly record the funds he received from the former employer, failed to properly document what was being forwarded to the client or credited to himself for outstanding fees and similar discrepancies. In addition, Attorney Guenther was unable to provide OLR with sufficient documentation regarding this entire series of events.

¶ 31. The referee concluded the evidence clearly demonstrated that Attorney Guenther failed to adequately account for the funds he received on behalf of his client.

¶ 32. Once again, Attorney Guenther does not challenge on appeal either of these two counts except to the extent that he has generally denied that he failed to cooperate with OLR.

¶ 33. We find no basis on which to overturn the referee's findings of fact and conclusions of law and therefore, adopt them.

¶ 34. With respect to the sanction in this case, the referee states:

Although I find that most of the conduct engaged in by the respondent was not the result of a malicious intent, but rather the result of extremely poor bookkeeping, the sheer volume of problematic records, along with the failure to fully and promptly respond to the OLR's demands for records, demonstrates a disturbing pattern of indifference, which has resulted in distress for several clients, and presents the likely possibility of future harm to clients as well.
[A 6-month] period of suspension is warranted, due to the severe nature of the misconduct. Moreover, respondent has not been particularly remorseful, and in fact, has argued that his conduct is really not particularly severe. ... Clearly, these [prior] reprimands have not resulted in an alteration of the respondent's behavior and therefore, a more severe sanction is warranted.

The referee submits that this case is comparable, if not more egregious, than In re Disciplinary Proceedings Against Zablocki, 219 Wis. 2d 313, 579 N.W.2d 233 (1998), where a six-month suspension was given for somewhat similar trust account violations even though the attorney had only been previously reprimanded once and had been practicing for only nine years.

¶ 35. The referee also recommends that as a condition of reinstatement, Attorney Guenther file two years of quarterly reports concerning his trust account record keeping. The referee has made no specific recommendation with respect to costs.

¶ 36. Attorney Guenther opposes a six-month suspension. He submits that he has "only" had private reprimands in the past. He also points to the referee's assessment that none of this conduct was malicious. He assures the court that he has put into place a "complete bookkeeping system" since these difficulties. Without expressly so stating, he apparently believes another reprimand is appropriate.

¶ 37. Attorney Guenther also objects to the OLR's requested costs of $12,713.60, although he does not take issue with any particular portion of the amount. He claims it is unfair to require that he pay all of it. He believes he has partially prevailed because the OLR originally sought a nine-month suspension. He also notes that he stipulated to portions of the case and that to which he did not stipulate was "rather simplistic in nature." He submits this case could have been prosecuted for much less than the submitted amount.

¶ 38. In response, the OLR does not appear to oppose the six-month suspension. It agrees that reinstatement should be conditioned on trust account monitoring. Finally, the OLR submits this was not a simple case to prosecute, noting the 39-page complaint and over 1300 pages of exhibits.

¶ 39. We conclude that the recommended suspension should be imposed. This is Attorney Guenther's fourth round of disciplinary problems. Although it is difficult to compare disciplinary cases because of the unique facts of each, this is similar to Zablocki in the sense that if a six-month suspension was warranted there, it certainly is warranted here as well.

¶ 40. It is also appropriate to assess the entire costs of $12,713.60 against Attorney Guenther. Whether he stipulated to some matters or not, he lost on all counts. Although the referee may have recommended a suspension shorter than that sought by the OLR, a six-month suspension is still a severe sanction and certainly does not constitute a victory for Attorney Guenther.

¶ 41. Finally, we agree that trust account monitoring should be a condition of reinstatement.

CASE NO. 2004AP1240-D

¶ 42. This case was submitted to the referee on stipulation of the parties. The matters alleged in Counts 1-2 and 4-5 of this case (Count 3 was withdrawn by the OLR) involve new information regarding the matters surrounding Counts 14 and 15 of the previous case that the OLR uncovered in the course of prosecuting that matter.

¶ 43. Counts 1 and 2 allege more violations of SCR 20:1.15(a) and (b). These again generally involve Attorney Guenther's failure to adequately account for funds received on behalf of his client, the disbursements ultimately made to her, and all trust account matters concerning the entire transaction.

¶ 44. The referee recommended that Count 1 be dismissed on grounds that it is generally based on the same facts as Count 14 in the earlier case. The referee further expresses "trouble" with Count 2, which he similarly believes is basically the same as the two counts (14 and 15) in the earlier case. As a result, he has not factored either of these two counts into his sanction recommendation.

¶ 45. Counts 4 and 5 allege additional violations of SCR 20:8.4(c) and SCR 22.03(6). They pertain to Attorney Guenther's misrepresentation to his client that he had completely paid her everything she was owed and his failure to fully cooperate with the OLR investigation surrounding the matter. These counts do not overlap those in the earlier case and based on the stipulation of the parties, the referee found against Attorney Guenther on both counts. However, the referee expressed uncertainty whether Attorney Guenther's failure to cooperate with the OLR was willful as opposed to merely reckless in nature.

¶ 46. The parties stipulated to a 60-day suspension in this case. However, they did not agree whether this additional time should be consecutive to, or merely concurrent with, the suspension imposed in the previous case.

¶ 47. The referee expressed concern with the extent to which the counts in this case overlap those in the previous case. He nonetheless was still "very concerned" with Attorney Guenther's inability to keep his financial house in order. The referee submitted that Counts 4 and 5 alone, notwithstanding the possible lack of willfulness, justified the 60-day suspension.

¶ 48. However, the referee has recommended that the suspension be concurrent to the one in the earlier case stating: "I believe he has gotten the message regarding trust accounts. If not, I doubt another 60 days at the end of 6 months will make a difference."

¶ 49. The referee also agrees that Attorney Guen-ther should be subject to trust account monitoring and has no objection to the stipulated costs of this case, $3,493.61, being assessed against Attorney Guenther.

¶ 50. We do not find the referee's findings of fact with respect to any of the four counts in this case to be clearly erroneous. Accordingly, we adopt them as well as the referee's conclusions of law with respect to these counts.

¶ 51. However, we do not accept the referee's recommendation that the stipulated 60-day suspension be served concurrently. Any period of suspension of an attorney's license to practice law in this state is a severe matter. An eight-month suspension is more severe than a six-month suspension and we expect that it will indeed "make a difference" in Attorney Guenther's future conduct, particularly in light of his substantial disciplinary history. Accordingly, we impose a two-month consecutive suspension along with payment of the costs and trust account monitoring.

¶ 52. In conclusion, we adopt the findings of fact and conclusions of law of the referees in these two cases. Attorney Guenther's misconduct represents a serious failure to comply with the Rules of Professional Conduct. We conclude that an eight-month suspension is appropriate discipline for this conduct.

¶ 53. IT IS ORDERED that the license of Attorney Arik J. Guenther to practice law in Wisconsin is suspended for a period of eight months, effective August 30, 2005.

¶ 54. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Guenther shall pay to the Office of Lawyer Regulation costs of $16,207.21.

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

¶ 56. IT IS FURTHER ORDERED that as a condition of reinstatement Attorney Guenther must file quarterly reports for a period of two years with the Office of Lawyer Regulation, pursuant to its requirement concerning his trust account record keeping.

       SCR 22.17 provides: Review; appeal.
      (1) Within 20 days after the filing of the referee's report, the director or the respondent may file with the supreme court an appeal from the referee's report.
      (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.
      (3) An appeal from the report of a referee is conducted under the rules governing civil appeals to the supreme court. The supreme court shall place the appeal on its first assignment of cases after the briefs are filed.

       SCR 20:1.4(a) provides: Communication, "(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: Misconduct. "It is professional misconduct for a lawyer to: (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation."

       SCR 20:1.15(b) provides: Safekeeping property.
      (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.

       SCR 20:1.15(d) provides: Safekeeping property.
      (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 22.03(6) provides: Investigation. "(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(e) provides in relevant part: Safekeeping property, "(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...."

       SCR 20:1.15(f) provides: Safekeeping property.

        (f) Upon request of the office of lawyer regulation, or upon direction of the Supreme Court, the records shall he submitted to the office for its inspection, audit, use, and evidence under such conditions to protect the privilege of clients as the court may provide. The records, or an audit thereof, shall be produced at any disciplinary proceeding involving the attorney wherever material. Failure to produce the records shall constitute unprofessional conduct and grounds for disciplinary action.

       SCR 20:1.15(g) provides in relevant part: Safekeeping property.
      (g) A member of the State Bar of Wisconsin shall file with the State Bar annually ... a certificate stating whether the member is engaged in the private practice of law in Wisconsin and, if so, the name of each bank, trust company, credit union or savings and loan association in which the member maintains a trust account, safe deposit box, or both, as required by this section. Each member shall explicitly certify therein that he or she has complied with each of the record-keeping requirements .... The failure of a member to file the certificate required by this section is grounds for automatic suspension of the member's membership in the State Bar .... The filing of a false certificate is unprofessional conduct and is grounds for disciplinary action....

       20:1.15(a) provides in relevant part: Safekeeping proper^'
      (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.... All funds of clients and third persons paid to a lawyer or law firm shall he deposited in one or more identifiable trust accounts.... The trust account shall he clearly designated as "Client's Account" or "Trust Account" or words of similar import. No funds belonging to the lawyer or law firm... may be deposited in such an account....

       SCR 20.5.3(a) provides: Responsibilities regarding non-lawyer assistants. "With respect to a nonlawyer employed or retained by or associated with a lawyer: (a) A partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer."

       SCR 20.5.3(b) provides: Responsibilities regarding non-lawyer assistants. "With respect to a nonlawyer employed or retained by or associated with a lawyer: (b) A lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer."


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

      No. 2004AP156-D.

      Decided July 19, 2005.

    2005 WI 131
    (Also reported in 699 N.W.2d 923.)
   PER CURIAM.

¶ 1. We review the referee's report and recommendation that Attorney Charles J. Hausmann's license to practice law in this state be suspended for one year for his professional misconduct as alleged in the complaint filed by the Office of Lawyer Regulation (OLR) in this court on January 15, 2004. That complaint alleged that Hausmann, who was admitted to practice law in this state on February 12, 1971, and has had no prior disciplinary history, committed two counts of professional misconduct by violating SCR 20:1.7(b) and SCR 20:8.4(b). Attorney James Winiarski was appointed as referee in this matter. Shortly before the scheduled public hearing, the parties filed a joint stipulation whereby Hausmann stipulated not only to the facts supporting the violations as alleged by the OLR in its complaint, but also that the facts established his violations of SCR 20:1.7(b) and SCR 20:8.4(b). The only issue in dispute before the referee concerned the appropriate sanction to be recommended for Hausmann's admitted violations of the two rules. The OLR urged the referee to recommend a two-year suspension of Hausmann's license; Hausmann, on the other hand, advocated a five-month suspension as being the appropriate sanction for his admitted misconduct. In his report, the referee recommended that this court impose a one-year suspension plus require Hausmann to pay the costs of this disciplinary proceeding now totaling $14,431.78.

¶ 2. Neither Hausmann nor the OLR have appealed and neither challenge the referee's recommendation regarding the sanction to be imposed; accordingly, this court's review proceeds pursuant to SCR 22.17C2).

¶ 3. After our review of the record in this matter, we adopt the referee's findings of fact and conclusions of law as stipulated to by the parties. We also accept the referee's recommendation and agree that a one-year suspension of Hausmann's license to practice law in this state is an appropriate sanction to be imposed for his admitted misconduct. We also determine that Haus-mann should pay all the costs of these disciplinary proceedings in the amount specified, $14,431.78.

¶ 4. Charles Hausmann practices law in Milwaukee primarily representing personal injury plaintiffs. His firm, Hausmann-McNally, S.C., is one of the largest personal injury firms in the area with most of its clients coming from Milwaukee. Attorney Hausmann is no longer as active in the actual representation of clients as he had been in the past; now as the self-described firm's "rainmaker," he spends a substantial amount of his time marketing the law firm to prospective clients.

¶ 5. The firm's personal injury clients are required to sign a retainer agreement which usually provides that the firm will be paid one-third of whatever total sum is collected on behalf of the client. In the retainer agreement, the client authorizes the firm to pay medical and other bills directly to the medical providers and hospitals; the money to pay those bills comes directly from the client's portion of any settlement payments received. After a retainer agreement had been signed, the firm frequently would refer clients to various medical providers in the Milwaukee area. Between October 1999 and June 2001, the firm referred approximately 200 clients to a chiropractor, Scott Rise, and his clinic, Milwaukee Spinal Injury Center. Sometime before these referrals started, Hausmann and Rise entered into an oral agreement by which Rise agreed to provide chiropractic care and treatment to the law firm's clients who did not have insurance; Rise also agreed that he would not insist upon immediate payment, would wait for payment until conclusion of the personal injury case, and would waive payment in the event the case yielded no recovery. In addition, Rise agreed that he would be willing to reduce his charges if necessary to settle a case to the client's satisfaction. It was also agreed that Rise would locate a chiropractic office in Milwaukee's central city, on a bus line, would treat all referrals with "dignity and respect," and would render quality care appropriate to the severity of the injury sustained.

¶ 6. Furthermore, in return for the referrals from Hausmann, Rise agreed to pay 20% of his fees for chiropractic services to third-party recipients as directed by Hausmann. Between October 1999 and June 2001, Hausmann named several recipients for these payments from Rise including (1) individuals who had provided miscellaneous personal services to Hausmann or his relatives; (2) a marketing firm providing services at Hausmann's direction; (3) business entities (or their agents) in which Hausmann held some interest; and (4) charities that Hausmann supported.

¶ 7. The financial arrangement between Haus-mann and Rise was not disclosed by Hausmann to any of the firm's clients who were treated at Rise's chiropractic office. Likewise, Hausmann had not disclosed the arrangement with Rise to his partners or firm, nor did he inform his clients who received chiropractic treatment from Rise's office, about any potential conflicts that could be generated by the financial arrangement Hausmann had with Rise. And, Hausmann did not obtain his clients' written consent to his representation despite this potential conflict of interest. See SCR 20:1.8.

¶ 8. Hausmann stipulated — and the referee found —that Hausmann handled the payment of his clients' medical bills at Rise's chiropractic center differently than the way Hausmann handled payments to other medical providers on behalf of clients. With respect to the other medical providers he had referred clients to for treatment, after Hausmann received a settlement on behalf of a client, Hausmann would usually send individual checks to each party listed on the settlement statement, including the medical providers who were owed for their services. In contrast, in the settlements involving clients who Hausmann had referred to and had been treated by Rise, Hausmann held those payments and settlement checks in a separate folder. Once a month, Hausmann would then meet with Rise personally and give Rise the checks. At Hausmann's direction, Rise would then draft checks payable to third persons as specified by Hausmann. These checks that Rise drafted at Hausmann's direction totaled approximately 20% of Rise's billings for Hausmann's clients. Between October 1999 and June 2001, Rise received approximately $350,000 in medical billings generated from Hausmann's clients. During that time, Rise, at Hausmann's direction, wrote 57 checks totaling $77,062.87 payable to third parties Hausmann had identified.

¶ 9. Based on this arrangement, in January 2002, a federal grand jury indicted Hausmann and Rise on charges of conspiracy to commit mail and wire fraud— depriving clients of the "intangible right to honest services" — in violation of Title 18, United States Code, §§ 371, 1341, 1343 and 1346.

¶ 10. Count 1 of the indictment alleged that Hausmann owed a fiduciary duty to the clients of his law firm; that the clients were owed the "intangible right to honest services"; and that Hausmann had engaged in a "kickback scheme" which was concealed from his clients in violation of Hausmann's fiduciary duty.

¶ 11. The second count of the indictment charged Hausmann with causing securities (i.e. the checks written by Rise at Hausmann's direction) to be transferred in interstate commerce in connection with fraud, in violation of Title 18, United States Code, §§ 2314 and 2.

¶ 12. On June 3, 2002, Hausmann entered a conditional plea of guilty to Count 1, the conspiracy charge; pursuant to the agreement, the second count of the indictment was dismissed. Hausmann also, in the plea bargain, preserved his ability to appeal the denial of his pretrial motion to dismiss. At the plea hearing in the federal district court, Hausmann admitted that he had a financial arrangement with Rise that called for Rise to write checks at Hausmann's direction; that the amount of the checks equaled approximately 20% of the medical bills collected by Rise's chiropractic center; that Haus-mann used the U.S. mails and interstate wire communications in furtherance of his arrangement with Rise; and that the financial arrangement was not disclosed to Hausmann's clients.

¶ 13. After accepting Hausmann's guilty plea, the federal district court sentenced him to two months imprisonment, 16 months of supervised release and 40 hours of community service. Hausmann was also fined $10,000 and he and Rise were ordered to pay restitution to the clients in the amount of $77,062.87, jointly and severally. Subsequently, Hausmann personally paid the restitution in full.

¶ 14. On their consolidated appeals, the federal court of appeals rejected the argument that the clients Hausmann had referred to Rise had not been "harmed" by the arrangement between Hausmann and Rise. The Seventh Circuit wrote:

Appellants contend that Rise's third-party payments were not kickbacks, but rather constituted the legitimate spending of income derived from use of fees to which Rise was legally entitled. They maintain that Hausmann's clients had no right to the settlement funds paid to Rise nor, consequently, to the allocation of twenty percent of those funds to expenditures designated by Hausmann. In this sense, reason Appellants, no harm resulted to Hausmann's clients, who were deprived of nothing to which they were entitled. This reasoning ignores the reality that Hausmann deprived his clients of their right to know the truth about his compensation: In addition to one third of any settlement proceeds he negotiated on their behalf, every dollar of Rise's effective twenty percent fee discount went to Hausmann's benefit. Insofar as Hausmann misrepresented this compensation, that discount should have inured to the benefit of his clients. It is of no consequence, despite Appellants' arguments to the contrary, that Rise's fees (absent his discount) were competitive, or that clients received the same net benefit as they would have absent the kickback scheme. The scheme itself converted Hausmann's representations to his clients into misrepresentations, and Haus-mann illegally profited at the expense of his clients, who were entitled to his honest services as well as their contractually bargained-for portion of Rise's discount.

United States v. Hausmann, 345 F.3d 952, 957 (7th Cir. 2003).

¶ 15. In his post-hearing brief submitted to the referee in this disciplinary proceeding, Hausmann again suggested that none of his clients had been harmed in any way by the arrangement Hausmann had with the chiropractor, and that any disclosure to the clients of a potential conflict of interest would have been a "mere formality." In its post-hearing brief submitted to the referee, the OLR disputed Hausmann's altruistic view of the arrangement he had with Rise. According to OLR's argument in that post-hearing brief, Hausmann was aware of the potential conflict of interest from the beginning of his arrangement with Rise; moreover, the OLR pointed out that this agreement was oral, that Hausmann did not disclose his 20% arrangement to his law partners or associates, and that the monthly exchange of checks between Hausmann and Rise occurred in "relative secrecy."

¶ 16. As noted, Hausmann stipulated before the referee that the facts as outlined in the OLR's complaint were sufficient to find violations of both SCR 20:1.7(b) (conflict of interest) and SCR 20:8.4(b) (commission of a criminal act reflecting adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer). Not only did Hausmann stipulate to the facts, but he also stipulated to the conclusions of law that he violated both of those supreme court rules. Therefore, according to Referee Winiarski, his discussion and report would focus on the appropriate discipline to be recommended for this admitted misconduct by Haus-mann.

¶ 17. The referee agreed with the OLR's analysis that the arrangement between Hausmann and Rise created an obvious conflict of interest for Hausmann in relation to the clients Hausmann referred to Rise for chiropractic services. Moreover, the referee criticized Hausmann for his "disturbing" positions, which failed to recognize the conflict of interest and the harm to his clients. According to the referee, although Hausmann had stipulated to the violation of the two supreme court rules, he failed to appreciate the substantial conflict of interest that arose from his relationship with Rise and did not appreciate the effect his actions had on his law firm and on the legal profession. Referee Winiarski wrote:

Hausmann had much to gain in his arrangement with Dr. Rise as it related to the development of a direct marketing brochure and program for chiropractors. Hausmann had the potential for considerable profits if the chiropractic direct marketing program had been successful. He thus benefited by the payments he directed Dr. Rise to make to various vendors and organizations involved in developing the chiropractic direct marketing program. Hausmann also benefited from the exposure he and his firm received when donations were made to various inner city charities to which he directed Dr. Rise to make payments from the chiropractic receipts. Hausmann did not refer clients to Dr. Rise "solely in the client's best interest" as he argued, but also because such referrals were beneficial to the personal injury practice conducted by the Haus-mann firm.

¶ 18. In its post-hearing brief, the OLR argued that the appropriate sanction for Hausmann's misconduct should be a two-year suspension of his license to practice law in this state. The OLR maintained that that sanction would be consistent with the discipline imposed in numerous prior cases such as In re Disciplinary Proceedings Against Stein, 170 Wis. 2d 112, 486 N.W.2d 526 (1992); In re Disciplinary Proceedings Against Shlimovitz, 2002 WI 103, 255 Wis. 2d 353, 647 N.W.2d 241; In re Disciplinary Proceedings Against Webster, 217 Wis. 2d 371, 577 N.W.2d 21 (1998); In re Disciplinary Proceedings Against Hunsick, 2001 WI 58, 243 Wis. 2d 631, 628 N.W.2d 341; and In re Disciplinary Proceedings Against Wolf, 2001 WI 4, 241 Wis. 2d 76, 621 N.W.2d 624. According to the OLR, Hausmann's misconduct in this case was comparable to the misconduct involved in those prior attorney disciplinary matters, and in each of those prior cases, the attorney involved had received a two-year suspension after a felony conviction.

¶ 19. The OLR also argued that in those cases where the attorney received a suspension of less than two years, see, e.g., In re Disciplinary Proceedings Against Frank, 206 Wis. 2d 233, 556 N.W.2d 717 (1996); In re Disciplinary Proceedings Against Runyon, 121 Wis. 2d 37, 357 N.W.2d 545 (1984); In re Disciplinary Proceedings Against Olson, 216 Wis. 2d 483, 574 N.W.2d 245 (1998); and In re Disciplinary Proceedings Against Meagher, 2003 WI 132, 266 Wis. 2d 18, 669 N.W.2d 733, the misconduct involved was far less serious than Hausmann's misconduct in this case. In addition, according to the OLR, none of those prior cases where the attorney received a shorter period of suspension involved a federal felony conviction for mail and wire fraud for engaging in a kickback scheme affecting over 200 clients.

¶ 20. Furthermore, the OLR identified several aggravating factors regarding Hausmann's misconduct which, the OLR maintained, outweighed such mitigating factors as Hausmann's lack of a prior disciplinary history and his longstanding commendable involvement in community affairs. According to the OLR those aggravating factors included Hausmann's dishonest or selfish motive, his pattern of misconduct (depriving over 200 clients of honest services and over $77,000 in personal injury settlement funds), his stipulated two count violation of supreme court rules, his refusal to acknowledge the wrongful nature of his misconduct, and his substantial experience in the practice of law. The OLR, therefore, urged the referee to recommend a two-year suspension of Hausmann's license to practice law.

¶ 21. Hausmann, on the other hand, in his post-hearing brief to the referee, urged the referee to recommend only a five-month suspension. Hausmann maintained that his misconduct was far less serious and was distinguishable from many of the cases cited by the OLR. He also emphasized that although his failure to advise his clients of the relationship he had with Rise deprived the clients of the right to question that relationship or make other arrangements for either their health care or legal representation, the arrangement did not deprive any of his clients of money they would have otherwise received. Hausmann also pointed out that he had personally paid the entire $77,000 in restitution to all the clients affected by what he conceded was an "ill-conceived plan." Again, Hausmann stressed that despite appearances, this was not a "kickback scheme"; rather, according to Hausmann, it was simply a method for Rise to pay for legitimate marketing services in his effort to expand his chiropractic clinic. Hausmann, in the post-hearing brief recognized that he should have disclosed his relationship with Rise even though that relationship had no tangible adverse effect on Hausmann's clients. He also conceded that that constituted a "deprivation of honest services"; according to Hausmann, that is why he pled guilty to the federal charge brought against him.

¶ 22. As noted, Referee Winiarski has recommended that this court should suspend Hausmann's license to practice law in this state for a period of one year based on Hausmann's admitted misconduct. In his report, the referee reasoned that although Hausmann has performed charitable work "far above anything I have ever seen before," and that until this case, Hausmann's character has been outstanding, the referee nevertheless emphasized that Hausmann displayed poor judgment and placed himself in the position of a conflict of interest. The referee discussed the various factors to be taken into account when considering the appropriate discipline to be imposed for professional misconduct as set out in In re Disciplinary Proceedings Against Carroll, 2001 WI 130, ¶ 40, 248 Wis. 2d 662, 636 N.W.2d 718. The referee viewed Hausmann's conduct to be far more serious than the conduct involved in those prior cases where a shorter suspension was imposed because here, Hausmann's misconduct was not a single act, but rather his misconduct affected 200 clients. The referee concluded that the appropriate sanction to be recommended for Hausmann's misconduct was a one-year suspension of his license to practice law in this state.

¶ 23. We have recognized in prior disciplinary cases involving an attorney's violation of SCR 20:8.4(b) based on an attorney's criminal conviction, that each case must be assessed on the basis of its own facts. There is no "standard" two-year suspension of an attorney's license to practice law following the attorney's criminal conviction. Rather, this court imposes the sanction it deems appropriate under the circumstances of each case regardless of the referee's recommendation. In re Disciplinary Proceedings Against Widule, 2003 WI 34, 261 Wis. 2d 45, 660 N.W.2d 686.

¶ 24. In this case, we agree with the referee's recommendation that Hausmann's license to practice law should be suspended for one year. That suspension, we believe, is commensurate with the serious nature of Hausmann's misconduct, yet at the same time acknowledges mitigating factors present in this case including Hausmann's lack of a prior disciplinary history and his long record for community service and involvement-. The lawyer regulation system in this state has been established to, among other things, "protect the public from misconduct by persons practicing law in Wisconsin." See preamble, SCR Chapter 21. We find Hausmann's professional misconduct to constitute serious infractions of the rules governing a lawyer's professional behavior and responsibility. We also recognize that requiring Hausmann to pay the costs of these proceedings totaling $14,431.78 on top of his $10,000 fine and the $77,000 restitution he has personally paid, means that Hausmann will ultimately have paid more than $100,000 for participating in what he aptly describes as an "ill-conceived plan."

¶ 25. IT IS ORDERED that the license of Attorney Charles J. Hausmann to practice law in Wisconsin is suspended for a period of one year, effective August 30, 2005.

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

¶ 27. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Charles J. Hausmann 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 an inability to pay the costs within that time, the license of Attorney Charles J. Hausmann to practice law in Wisconsin shall remain suspended until further order of the court.

       SCR 20:1.7(b) provides in pertinent part: Conflict of interest: general rule.
      (b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:
      (1) the lawyer reasonably believes the representation will not be adversely affected, and
      (2) the client consents in writing after consultation.. ..

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

       SCR 22.17(2) provides in pertinent part: Review; appeal.
      (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 hriefs in the matter.

       Pursuant to this arrangement, Rise paid $31,692 to a marketing firm with whom Hausmann had contracted to market services of lawyers and chiropractors as part of a planned "Accident Care Network." Rise also paid at least $2000 to a charity that Hausmann had named which was actually a payment for landscaping work performed at Hausmann's residence. In addition, Rise paid $14,900 to a full-time handyman who had provided services at Hausmann's direction to Hausmann's firm, Rise's office, Hausmann personally, a business jointly owned by Hausmann and his law partner in their individual capacities, and Hausmann's sister. Furthermore, as directed by Hausmann, Rise wrote a check for $850 to a company that refinished floors of an employee involved in Hausmann's marketing project. According to a subsequent FBI investigation and report, at least $2000 of the checks Rise wrote at Hausmann's direction, benefited Hausmann directly.

       SCR 20:1.8 provides in pertinent part: Conflict of interest: prohibited transactions, "(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:... (3) the client consents in writing thereto."

       Where "two or more persons conspire ... to commit any offense" under Title 18 of the United States Code "one or more of such persons [who commit] any act to effect the object of the conspiracy" may be held criminally liable therefore under 18 U.S.C. § 371. It is a violation of 18 U.S.C. §§ 1341, 1543, and 1346 to use the United States Postal Service, a private interstate courier, or an interstate wire communications service in order to implement a "scheme or artifice to defraud [by depriving] another of the intangible right of honest services." 18 U.S.C. § 1346 (2002).

       Rise was convicted in federal court following a jury trial on the conspiracy charge. Both he and Hausmann appealed and those appeals were consolidated. On September 22, 2003, the United States Court of Appeals for the Seventh Circuit affirmed both convictions. United States v. Hausmann, 345 F.3d 952 (7th Cir. 2003).


text:
    In the Matter of Disciplinary Proceedings Against James E. Pancratz, Attorney at Law: Office of Lawyer Regulation, Complainant, v. James E. Pancratz, Respondent.
    Supreme Court

      No. 2005AP1469-D.

      Decided August 29, 2005.

    2005 WI 135
    (Also reported in 702 N.W.2d 834.)
   The Court entered the following order on this date:

On June 2, 2005, the Office of Lawyer Regulation (OLR) filed a disciplinary complaint against Attorney James E. Pancratz asking this court to impose reciprocal discipline identical to that imposed on Attorney Pancratz by the Illinois Supreme Court. OLR and Attorney Pancratz subsequently executed a stipulation pursuant to SCR 22.12 pursuant to which Attorney Pancratz would receive identical discipline to that imposed in the Illinois disciplinary proceeding, namely a three-month suspension of his license to practice law, imposed retroactively.

SCR 22.22(3) provides that this court shall impose the identical discipline or license suspension unless the procedure in the other jurisdiction was so lacking in notice or opportunity to be heard as to constitute a due process violation; there was such an infirmity of proof establishing the misconduct that this court should not accept as final the misconduct finding; or the misconduct justifies substantially different discipline here. Neither OLR nor Attorney Pancratz contend, nor does this court find, that any of these three exceptions exist.

Accordingly, we accept the stipulation.

IT IS ORDERED that the license of James E. Pancratz to practice law in the State of Wisconsin be suspended for three months, retroactively, effective October 18, 2004;

IT IS FURTHER ORDERED that Attorney Pan-cratz shall comply, if he has not already done so, with the requirements of SCR 22.26 pertaining to activities following suspension.


author: SNYDER, J.

text:
    State of Wisconsin, Plaintiff-Respondent, v. William E. Draughon III, Defendant-Appellant.
    Court of Appeals

      No. 2004AP1637-CR.

      Submitted on briefs April 14, 2005.

      Decided June 22, 2005.

    2005 WI App 162
    (Also reported in 702 N.W.2d 412.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Steven L. Miller of Miller & Miller, River Falls.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of William C. Wolford, assistant attorney general, and Peggy A. Lautenschlager, attorney general.
    Before Anderson, PJ., Nettesheim and Snyder, JJ.

       Petition to review denied 10-14-05.

   SNYDER, J.

¶ 1. William E. Draughon III appeals from a judgment of conviction for sexual exploitation by a therapist, contrary to Wis. Stat. § 940.22(2) (2003-04), and an order denying his motion for post-conviction relief. He contends that the circuit court improperly instructed the jury and that his counsel was ineffective in failing to object to the improper instruction. We agree that the jury instruction addressing Draughon's status as a "therapist" under § 940.22(l)(i) was error. Accordingly, we reverse and remand the matter for a new trial. Draughon further contends that his counsel was ineffective in the presentation of his defense and that he is entitled to a new trial in the interest of justice. We do not reach these issues because we reverse on other grounds.

FACTS

¶ 2. In 1989, Draughon earned a bachelor of arts degree in evangelism from the World Evangelism Bible College in Louisiana. He was ordained as a pastor for the Assemblies of God church in 1993. He came to Wisconsin in 2000 and became the pastor of a church. Later that year Draughon befriended and began socializing with two members of the church, one of whom would later become the complainant in the State's case against him.

¶ 3. In June 2001, the two church members began premarital counseling with Draughon. Draughon performed their marriage ceremony that July. Later in 2001, concerns arose about the husband's use of church computers to access pornography. The couple agreed to talk to Draughon about the problem, and they began counseling sessions which lasted approximately eight to ten weeks. During this time, Draughon gave the husband a book to read with worksheets to be completed after each chapter. Draughon and the husband also became "accountability partners" in a program called Promise Keepers, a movement where men meet to help each other deal with temptations and to hold each other accountable for their actions.

¶ 4. The couple also sought Draughon's help because of financial difficulties. Draughon suggested that the wife work one day per week in the church office to help ease the financial burden. She began working Wednesday afternoons, attending counseling sessions later in the afternoon and then staying for the Wednesday evening Bible study. The husband's attendance at counseling became sporadic and stopped altogether sometime in January 2002.

¶ 5. The wife described a change in the nature of her relationship with Draughon beginning in late January. She reported that Draughon repeatedly said he loved her, asked to hug her, and sent her flowers. Soon after Draughon said he loved her, the wife discovered email messages that suggested her husband was having affairs with other women. On Draughon's advice, the wife confronted her husband about the email messages. The husband denied that they were true.

¶ 6. Draughon's relationship with the wife progressed. On February 9, 2002, Draughon and the wife had sexual contact in a room downstairs from the church office. This incident is the basis for the State's charge of sexual exploitation. Draughon admits that he had sexual contact with the complainant twice.

¶ 7. A jury found Draughon guilty, and the court sentenced him to a term of twelve years, with five years of confinement in prison followed by seven years of extended supervision. Draughon filed a motion for postconviction relief, and the circuit court denied his motion. Draughon appeals.

DISCUSSION

¶ 8. Draughon frames his primary appellate issue as that of ineffective assistance of counsel. His argument rests on his trial counsel's failure to object to a jury instruction and to present corroborative witnesses to bolster the defense. Draughon alternatively contends that the real controversy has not been fully tried and requests a new trial pursuant to Wis. Stat. § 752.35. We begin our analysis with the contested jury instruction because it is dispositive.

¶ 9. A trial court has broad discretion in deciding whether to give a particular jury instruction, and the court must exercise its discretion to "fully and fairly inform the jury of the rules of law applicable to the case and to assist the jury in making a reasonable analysis of the evidence." State v. Coleman, 206 Wis. 2d 199, 212, 556 N.W.2d 701 (1996) (citation omitted). However, we will independently review whether a jury instruction is appropriate under the specific facts of a given case. State v. Groth, 2002 WI App 299, ¶ 8, 258 Wis. 2d 889, 655 N.W.2d 163.

¶ 10. The State, by charging Draughon with sexual exploitation by a therapist, was required to prove that Draughon was or held himself out to be a therapist. See Wis. Stat. § 940.22(2). A therapist is a "physician, psychologist, social worker, marriage and family therapist, professional counselor, nurse, chemical dependency counselor, member of the clergy or other person, whether or not licensed or certified by the state, who performs or purports to perform psychotherapy." Sec. 940.22(l)(i). Draughon does not dispute that he is a member of the clergy but contends that the jury instruction improperly concluded that as a member of the clergy he was, ipso facto, a therapist. That, he argues, relieved the State of its burden to prove an element of the offense charged.

¶ 11. The circuit court based its jury instructions on Wis JI — Criminal 1248, and stated in relevant part:

Before you may find the defendant guilty of this offense, the State must prove by evidence which satisfies you beyond a reasonable doubt that the following three elements were present.
First, that the defendant was a therapist.
Second, that the defendant had sexual contact with [the victim].
Third, that the sexual contact occurred during an ongoing therapist-patient relationship.
The first element requires that the defendant was a therapist. Therapist means a person who performs psychotherapy. Psychotherapy means the use of learning, conditioning methods and emotional reactions in a professional relationship to assist persons to modify feelings, attitudes and behaviors which are intellectually, socially or emotionally maladjustive or ineffectual. It includes a member of the clergy.
If you are satisfied beyond a reasonable doubt that the defendant was a therapist, intentionally had sexual contact with [the victim], and that a therapist-patient relationship existed at the time of the sexual contact, you should find the defendant guilty. (Emphasis added.)

¶ 12. The jury instruction, in syllogistic fashion, presents two propositions: (1) therapists perform psychotherapy, and (2) therapists include members of the clergy. These propositions lead to the faulty conclusion that by definition, clergy members perform psychotherapy. A comment to Wis JI — Criminal 1248 provides, "The Committee concluded that the instruction would be more clear if it provided a general definition of the term ("a person providing psychotherapy services") and then provided for a statement, to be used where applicable, that one of the professions named in [Wis. Stat. § 940.22(1)(i)] is included in the definition." As demonstrated here, the instruction is problematic.

¶ 13. Jury instructions that have the effect of relieving the State of its burden of proving beyond a reasonable doubt every element of the offense charged are unconstitutional under the Fifth and Sixth Amendments. State v. Harvey, 2002 WI 93, ¶ 23, 254 Wis. 2d 442, 647 N.W.2d 189. The Fifth Amendment's due process guarantee protects "the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged." Id., ¶ 19 (citations omitted). The Sixth Amendment right of trial by jury in criminal cases includes the right to have the jury, rather than the judge, reach the requisite finding of guilt or innocence. See State v. Peete, 185 Wis. 2d 4, 19, 517 N.W.2d 149 (1994) ("Where the finder of fact is a jury, proof of all essential elements must be tendered to the jury.").

¶ 14. Upon rejecting Draughon's request for a new trial, the circuit court stated:

In my judgment, the instruction indicates that a member of the clergy is a "therapist" for purposes of this statute. In addition, the paragraph defining a therapist as a person who performs psychotherapy simply reiterates at the end that a member of the clergy is a therapist. Both parties argued and the jury was asked to decide whether the defendant was performing psychotherapy under the terms of the statute. In my judgment, there was sufficient evidence upon which the jury could conclude that [Draughon] did so.

We will generally defer to the circuit court's determination as to whether sufficient evidence supports a jury verdict, but that is not the issue before us. We are not reviewing whether the jury could have decided that Draughon practiced psychotherapy, but rather whether the jury had the opportunity to so decide. Here, the instruction given never directed the jury to make an independent, beyond-a-reasonahle-doubt decision as to whether Draughon performed or purported to perform psychotherapy. Because this finding was a required element of the charge, its omission is constitutional error. See Harvey, 254 Wis. 2d 442, ¶ 33.

¶ 15. The question remains whether Draughon's conviction can stand because the error was harmless. See id., ¶ 44. "A constitutional or other error is harmless if it is 'clear beyond a reasonable doubt that a rational jury would have found the defendant guilty absent the error.'" Id., ¶ 49 (citation omitted).

¶ 16. The State contends that there is "no reasonable likelihood that the jury understood the instruction to mean that a member of the clergy was a 'therapist' under the statute regardless of whether he or she performed psychotherapy." It argues that a challenged jury instruction must be viewed in the context of other instructions given, the allegations in the complaint, the opening statements and closing arguments, and the record. See Resnover v. Pearson, 965 F.2d 1453, 1463 (7th Cir. 1992). It observes that the instruction made it clear to the jury "that sexual exploitation by a therapist was not established simply by showing that a member of the clergy had sexual contact with a member of his or her congregation. Rather, there had to be a therapist¡patient relationship." Furthermore, the State points out that both parties referenced the importance of psychotherapy in their closing arguments: the State told the jury it had to determine that Draughon engaged in psychotherapy in order to be a therapist under the statute; Draughon argued that he was the victim's pastor but not a psychotherapist.

¶ 17. The State's argument does not diminish our concern about the impact of the error on the verdict. The issue of whether Draughon practiced or purported to practice psychotherapy was a key dispute between the parties. The contestability of an element goes to whether the instructional error was harmless. See Harvey, 254 Wis. 2d 442, ¶ 33 ("The incontestability of [a fact] goes to whether the error was harmless, not whether there was constitutional instructional error in the first place.").

¶ 18. Draughon conceded two key factors in the State's case: (1) that the sexual contact occurred, and (2) that he was a member of the clergy. His defense essentially rested on whether he practiced psychotherapy and therefore met the statutory definition of a therapist and, if so, whether the sexual contact occurred during a therapist/patient relationship. The improper instruction, therefore, particularly affected Draughon's ability to present his defense. A judgment should be reversed unless we can be sure that the error did not contribute to the conviction. See State v. Dyess, 124 Wis. 2d 525, 547, 370 N.W.2d 222 (1985). Our review of the record affords us no such assurance. Consequently, we cannot conclude the error was harmless.

¶ 19. While pattern jury instructions are not pre-cedential, they do carry persuasive authority for interpreting statutes. State v. Rardon, 185 Wis. 2d 701, 706, 518 N.W.2d 330 (Ct. App. 1994). An instruction must, however, be designed for the lay people on a jury; in other words, instructions must accurately and clearly state the law. Nommensen v. American Cont'l Ins. Co., 2001 WI 112, ¶ 55, 246 Wis. 2d 132, 629 N.W.2d 301. Here, the pattern jury instruction does not direct the jury to make a finding that a defendant practiced or purported to practice psychotherapy prior to concluding a defendant was a "therapist" under Wis. Stat. § 940.22(l)(i). We observe that the problem may be resolved by eliminating the statement, "It includes a member of the clergy [or other profession]." In the alternative, the problem may be resolved by revising the statement as follows: "It includes a member of the clergy [or other profession] who practices or purports to practice psychotherapy." We respectfully request that the Wisconsin Criminal Jury Instructions Committee revisit Wis JI — Criminal 1248, particularly the language at issue in this case.

¶ 20. Draughon raises additional issues on appeal; however, because we hold that he is entitled to a new trial, we need not address his remaining arguments.

CONCLUSION

¶ 21. We conclude that the circuit court's instruction to the jury relieved the State of its burden of proving beyond a reasonable doubt that Draughon was a therapist as defined by Wis. Stat. § 940.22(l)(i), and therefore the instruction was unconstitutional under the Fifth and Sixth Amendments. See Harvey, 254 Wis. 2d 442, ¶ 23. Further, we conclude that the error was not harmless because it is not clear beyond a reasonable doubt that the jury would have found Draughon guilty absent the error. Id., ¶ 49. We hold that Draughon is entitled to a new trial.

By the Court. — Judgment and order reversed and cause remanded with directions.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       We observe that Draughon did not object to the jury instruction when provided the opportunity by the circuit court. Draughon nonetheless raises his objection here under color of his ineffective assistance of counsel claim as well as his claim that the real controversy was not fully tried. Our review of a waived objection to a jury instruction is limited. See Steinberg v. Jensen, 204 Wis. 2d 115, 122 n.4, 553 N.W.2d 820 (Ct. App. 1996). It is within our statutory discretion to review an' allegedly deficient jury instruction when we are exercising our power to reverse the judgment under Wis. Stat. § 752.35. Steinberg, 204 Wis. 2d at 122 n.4. Section 752.35 states in relevant part:
      In an appeal to the court of appeals, if it appears from the record that the real controversy has not been fully tried, or that it is probable that justice has for any reason miscarried, the court may reverse the judgment... regardless of whether the proper motion or objection appears in the record.
      Also, a waived objection to a jury instruction can be "raised by way of an ineffective assistance of counsel claim." See State v. Hayes, 2004 WI 80, ¶ 114, 273 Wis. 2d 1, 681 N.W.2d 203 (Sykes, J., concurring). We therefore reach the merits of Draughon's arguments.