Office of Lawyer Regulation v. Michael G. Trewin , 358 Wis. 2d 310 ( 2014 )

2014 WI 111
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP1949-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against
Michael G. Trewin, Attorney at Law:
Office of Lawyer Regulation,
Complainant-Respondent,
v.
Michael G. Trewin,
Respondent-Appellant.
DISCIPLINARY PROCEEDINGS AGAINST TREWIN
OPINION FILED: October 7, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: April 9, 2014
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the respondent-appellant, there were briefs and oral
argument by Michael G. Trewin, New London.
For the complainant-respondent, there was a brief and oral
argument by Julie M. Spoke of the Office of Lawyer Regulation.
2014 WI 111
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP1949-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Michael G. Trewin, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant-Respondent,
OCT 7, 2014
v.
Diane M. Fremgen
Clerk of Supreme Court
Michael G. Trewin,
Respondent-Appellant.
ATTORNEY disciplinary proceeding. Attorney's license
revoked.
¶1 PER CURIAM. Attorney Michael G. Trewin has appealed
from the report of the referee, Reserve Judge Robert E. Kinney,
which concluded that Attorney Trewin had committed ethical
violations as alleged in 14 counts of the Office of Lawyer
Regulation's (OLR) complaint and recommended the revocation of
Attorney Trewin's license to practice law in Wisconsin. The
referee also recommended that Attorney Trewin be ordered to pay
No. 2012AP1949-D
the full costs of this proceeding, which were $33,145.83 as of
April 24, 2014.
¶2 Having heard oral argument and having fully reviewed
this matter, we determine that the referee was correct in
concluding, after a three-day evidentiary hearing, that Attorney
Trewin had committed 14 counts of professional misconduct. Many
of those counts of misconduct fall into the same pattern of
using knowledge of clients' financial weaknesses to take
advantage of those clients in business transactions with them.
We therefore determine that Attorney Trewin's license to
practice law in this state must be revoked. Given the disarray
in Attorney Trewin's records, we are unable to impose specific
restitution amounts in this disciplinary proceeding, although we
note that two sets of clients have pursued civil actions against
Attorney Trewin. Finally, we require Attorney Trewin to pay the
full costs of this proceeding.
¶3 Attorney Trewin was admitted to the practice of law in
Wisconsin in June 1985. He has maintained a law practice in New
London. He has historically focused his practice on bankruptcy
and debt reorganization.
¶4 Attorney Trewin has been the subject of professional
discipline on two prior occasions. In 2004 this court suspended
Attorney Trewin's law license for a period of five months. In
re Disciplinary Proceedings Against Trewin, 2004 WI 116,
275 Wis. 2d 116, 684 N.W.2d 121 (Trewin I). The misconduct that
led to that suspension included (1) entering into loan
transactions with at least seven clients without obtaining
2
No. 2012AP1949-D
written, informed conflict waivers, in violation of
SCR 20:1.8(a); (2) entering into such loan transactions without
having advised his clients of the potential adverse
consequences, in violation of SCR 20:1.7(b); (3) having engaged
in conduct involving dishonesty or misrepresentation by
assigning his interest in a loan to his brother-in-law in order
to avoid disclosing that he was the real party in interest, in
violation of SCR 20:8.4(c); (4) failing to file timely income
tax returns, in violation of prior case law and SCR 20:8.4(f);
and (5) having deposited a client check into his business
account rather than his client trust account, in violation of
SCR 20:l.15(a). In our Trewin I decision, we quoted the
referee's comment that the frequency and magnitude of Attorney
Trewin's loan and business transactions with his clients were
such common occurrences that they made it "look as though he was
more of a banker than a lawyer." 275 Wis. 2d 116, ¶40.
¶5 In 2006 Attorney Trewin received a public reprimand
with his consent. The misconduct underlying that reprimand
consisted of failing to list all of his pending matters in the
affidavit he was required to file with the OLR following his
2004 disciplinary suspension, failing to notify courts and
opposing counsel of his disciplinary suspension, and engaging in
a conflict of interest by representing two clients in a
bankruptcy proceeding when that representation was directly
adverse to the interests of another client. Public Reprimand of
Michael G. Trewin, No. 2006-6.
3
No. 2012AP1949-D
¶6 The present disciplinary proceeding relates to
Attorney Trewin's relationships and business transactions with
three married couples: (1) R.V.S. and B.V.S. (collectively, Mr.
and Mrs. V.S. or the V.S.s); (2) D.H. and M.H. (collectively,
Mr. and Mrs. H. or the H.s); and (3) Francis and Karen Groshek
(collectively, the Grosheks).1 The referee in this matter issued
a thorough 58-page report with detailed findings of fact and
conclusions of law regarding Attorney Trewin's actions
concerning each of the three sets of clients. We will not
repeat all of those factual findings in this opinion. It is
sufficient here to summarize the pattern that Attorney Trewin
generally followed in dealing with the three couples whose
grievances led to this disciplinary proceeding and to set forth
the rule violations that arose from that conduct.
¶7 The referee found that Attorney Trewin had attorney-
client relationships with all three couples during the relevant
1
This court's general practice is to use the initials of
clients in attorney disciplinary opinions to protect their
privacy to some extent since they did not ask to be the alleged
victims of attorney misconduct. We use the Grosheks' full names
in this opinion because they were already named parties in a
civil action they pursued against Attorney Trewin, which
ultimately resulted in a published decision and order from this
court. Groshek v. Trewin, 2010 WI 51, 325 Wis. 2d 250,
784 N.W.2d 163. The OLR and Attorney Trewin stipulated that the
referee could use the record of that litigation as the factual
record for the counts relating to the Grosheks in this
disciplinary proceeding. Since citation to this court's
decision in that civil case would disclose their names in any
event, there is no reason to use the Grosheks' initials rather
than their names in this opinion.
4
No. 2012AP1949-D
time periods. The attorney-client relationships with Mr. and
Mrs. V.S. and with Mr. and Mrs. H. were long-standing ones,
stretching back to points before the filing of the complaint in
Trewin I. Indeed, the referee found that Attorney Trewin's
attorney-client relationship with Mr. and Mrs. H. extended back
to 1991. The referee made clear in his report, however, that he
was not considering any specific facts that pre-dated the filing
of the complaint in Trewin I.
¶8 The referee found that each of the three couples was
financially unsophisticated, which caused them to rely on
Attorney Trewin's recommendations. He stated that Attorney
Trewin had followed a similar pattern of conduct with respect to
each client couple.
¶9 Each couple initially retained Attorney Trewin when
they were facing legal problems regarding their debts, either in
the context of a foreclosure proceeding or a possible
bankruptcy. Because of each couple's financial problems, they
had difficulty obtaining loans in traditional credit markets—
i.e., from banks, credit unions, etc.
¶10 Attorney Trewin usually loaned the couples money,
often at relatively high interest rates (12-14%), starting with
fairly small amounts and increasing the amount of the loans over
time as the couples needed additional funds. The referee
further found that because Attorney Trewin was not constrained
by standard banking regulations, the clients did not receive
many of the pieces of information and the warnings that they
would have received when borrowing from traditional lenders.
5
No. 2012AP1949-D
Moreover, there were many errors in the documentation of the
loans and the tracking of payments.
¶11 In some instances, either there were no signed
promissory notes and conflict waivers, or Attorney Trewin lost
those documents since he was unable to produce them during this
disciplinary proceeding. In at least one other instance, the
date on the conflict waiver was months apart from the date of
the purportedly corresponding promissory note. Also, when
Attorney Trewin was able to produce a signed document purporting
to be a conflict waiver, the description of the transaction in
the conflict waiver was, at times, not even consistent with the
loan terms set forth in the promissory note. Further, the
referee specifically found that the conflict waivers did not
disclose all of the true facts regarding the transactions, did
not provide any meaningful explanation of the disadvantages of
entering into these transactions with the clients' lawyer, and
did not include a discussion of the alternatives available to
the clients.
¶12 Attorney Trewin's haphazard manner of handling these
transactions left the clients confused about which loans were
outstanding, what payments they had made toward which loans, and
the balances of their loans. For example, both Mr. and
Mrs. V.S. and Mr. and Mrs. H. repeatedly asked Attorney Trewin
for an accounting, but he did not provide them with one. When
counsel for the OLR asked Attorney Trewin at the evidentiary
hearing whether he had ever produced an accounting to Mr. and
Mrs. V.S., he responded that he did not know. He claimed that
6
No. 2012AP1949-D
he had a spreadsheet on his computer that showed a running tally
or documentation of the loans to Mr. and Mrs. V.S. Attorney
Trewin then referenced an exhibit, which he claimed was a
printed version of this spreadsheet. The referee, however,
found that the exhibit "is replete with omissions and
unexplained entries, and is essentially undecipherable, even by
[Attorney Trewin]." When Attorney Trewin was asked at another
point during the evidentiary hearing how much money he had
loaned Mr. and Mrs. V.S., he did not provide an answer but
promised he would provide the information to the referee the
following day after putting all of their payments into a
spreadsheet. No further documentation on this subject was
provided by Attorney Trewin during the proceedings before the
referee. Since Attorney Trewin was not subject to regulations
imposed on commercial lenders, these practices and errors were
not corrected over rather lengthy periods.
¶13 The referee found that the clients usually did not
negotiate with Attorney Trewin regarding their business
transactions because they viewed him as their attorney. They
relied on his expertise and judgment, and believed that he was
acting in good faith and looking out for their best interests.
¶14 When the clients fell behind on their loan payments,
Attorney Trewin's practice was not to telephone the clients, to
deliver a notice of delinquency, or to sue the clients for
7
No. 2012AP1949-D
eviction or a money judgment.2 The referee found that Attorney
Trewin operated in this manner because he intentionally and
consistently wanted to avoid judicial scrutiny of his conduct.
Instead of attempting to enforce the terms of the existing notes
and mortgages, Attorney Trewin's preferred course of action was
to create another loan to those clients. Often the new loan was
a mixture of existing indebtedness and new money. When prior
loans were paid off or replaced by a new loan, Attorney Trewin
did not return the promissory notes for the prior loans.
¶15 Ultimately, when the couples had difficulties making
their payments to Attorney Trewin or to another creditor, he
would persuade the couple to transfer their property over to
him, with the promise that he would lease the property back to
them and they could reacquire the property if they were current
on their payments to him and could also pay a specified amount
to him for their property. The couples, however, were not in a
financial condition where they could ever regain ownership of
their property. Nonetheless, because of Attorney Trewin's
actions, some couples continued to hold the mistaken belief that
they really did retain ownership or control of the property even
after they had transferred ownership of it to Attorney Trewin.
In the end, Attorney Trewin ended up with the title to the
clients' real property.
2
Even when Mr. and Mrs. V.H. and Mr. and Mrs. H. stopped
making payments to Attorney Trewin years before this
disciplinary proceeding, the referee noted that Attorney Trewin
had never sued them.
8
No. 2012AP1949-D
¶16 The referee was particularly moved by one of the
exhibits in the Groshek case. The exhibit contained excerpts
from three letters that Attorney Trewin wrote to three different
recipients within a span of ten days around the time he was
entering into an agreement to buy the Grosheks' property in
August 2004, just prior to his law license being suspended. In
the first letter, which was sent to the bank from which he was
seeking financing for the transaction, Attorney Trewin said that
he had negotiated a purchase price for the Grosheks' property
that was below the appraised value of the land and well below
what he believed was the fair market value of the land. He
further indicated that he intended to sell 40 acres of the land
for an amount that was twice the appraised value to some
neighbors of the Grosheks immediately after buying the land from
the Grosheks. Finally, he stated that his intention for the
rest of the land was to subdivide most of it into large lots and
to rent a small portion, including the existing farmhouse, to
the Grosheks. When Attorney Trewin wrote to the Grosheks just
three days later, however, he stated that he would be willing to
buy their land for enough money to pay off their existing bank
loans, sell approximately 40 acres to the neighbors, and then
give them a lease on all the rest of the land with an option to
repurchase it. There was no mention of the sale price being
well below fair market value or of subdividing most of the land
into lots that would be sold to third parties. Finally, in the
third letter, Attorney Trewin told the Grosheks' current lender
that he would be willing to pay that bank for either an
9
No. 2012AP1949-D
assignment of their judgment against the Grosheks or a complete
release of the bank's claims. He also claimed (1) that the
commitment letter from his own bank referred to the transaction
as a purchase of the Grosheks' real property by Attorney Trewin
because that was simply his lender's practice and (2) that he
really intended to sell the real estate back to the Grosheks.
Thus, Attorney Trewin gave three different versions of what
would happen in the transaction to three different parties
involved in the transaction, depending on what he thought they
wanted to hear.
¶17 With respect to two of the client couples, Attorney
Trewin contacted them after learning that they had filed
grievances against him with the OLR. Mr. V.S. testified that
during a couple of telephone calls, Attorney Trewin stated that
he was suicidal and asked Mr. V.S. to sign a "waiver," which
Mr. V.S. understood to mean that he would not pursue his
grievance against Attorney Trewin. Mr. H. described Attorney
Trewin's demeanor during a post-grievance telephone call with
him as "ugly." Mr. and Mrs. V.S. refused to sign any "waiver"
of the grievance, but Mr. and Mrs. H. did sign a document
drafted by Attorney Trewin, which stated that they agreed that
"the amount owed under the note is $109,643.25" and that they
had an option to purchase their former real property for
$50,000.00. Mr. and Mrs. H. signed the document, even though
they did not know whether it was accurate, because they felt
sorry for Attorney Trewin.
10
No. 2012AP1949-D
¶18 Attorney Trewin also failed to provide documents and
information requested by the OLR during its grievance
investigation concerning Mr. and Mrs. H. This occurred both
when the OLR wrote letters to Attorney Trewin asking for certain
information and when a member of a district committee tried to
meet with Attorney Trewin. Attorney Trewin cancelled the
meeting, claiming that he was sick. When the district committee
member subsequently wrote to Attorney Trewin asking for
documentation of his various transactions with Mr. and Mrs. H.,
Attorney Trewin asked for an extension of time to respond to the
request, but he never followed through with providing the
requested documents during the investigation.
¶19 The referee concluded that the OLR had proven four
counts of misconduct arising out of Attorney Trewin's actions
with respect to Mr. and Mrs. V.S. On Count One, the referee
concluded that Attorney Trewin had failed to fully disclose the
terms of the various transactions with Mr. and Mrs. V.S. in a
manner that they could reasonably understand, in violation of
former SCR 20:1.8(a).3 On Count Two, the referee found that
3
Former SCR 20:1.8(a), in effect prior to July 1, 2007,
provides:
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:
(1) the transaction and terms on which the lawyer
acquires the interest are fair and reasonable to the
client and are fully disclosed and transmitted in
(continued)
11
No. 2012AP1949-D
Attorney Trewin's ongoing representation of Mr. and Mrs. V.S.
while he had adverse personal interests as a result of his
business transactions with them, without obtaining proper
waivers, constituted an improper conflict of interest under both
former SCR 20:1.7(b)4 and current SCR 20:1.7(a)(2).5 On Count
writing in a manner that can be reasonably understood
by the client;
(2) the client is given a reasonable opportunity
to seek the advice of independent legal counsel in the
transaction; and
(3) the client consents in writing thereto.
4
Former SCR 1.7(b), in effect prior to July 1, 2007,
provides:
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. When representation of multiple clients
in a single matter is undertaken, the consultation
shall include explanation of the implications of the
common representation and the advantages and risks
involved.
5
SCR 1.7(a)(2) provides:
(a) Except as provided in par. (b), a lawyer
shall not represent a client if the representation
involves a concurrent conflict of interest. A
concurrent conflict of interest exists if:
. . . .
(continued)
12
No. 2012AP1949-D
Three, the referee determined that by having Mr. and Mrs. V.S.
sign over the deed to their real property when he believed there
had been no meeting of the minds, Attorney Trewin had engaged in
conduct involving dishonesty, fraud, deceit, or
misrepresentation, in violation of SCR 20:8.4(c).6 On Count
Four, the referee concluded that Attorney Trewin's attempt to
persuade Mr. and Mrs. V.S. to cease cooperating with the OLR's
investigation had violated SCRs 22.03(6)7 and 21.15(4),8 which
are enforceable via SCR 20:8.4(h).9
(2) there is a significant risk that the
representation of one or more clients will be
materially limited by the lawyer's responsibilities to
another client, a former client or a third person or
by a personal interest of the lawyer.
6
SCR 8.4(c) provides that it is professional misconduct for
a lawyer to "engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
7
SCR 22.03(6) provides that "[i]n 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."
8
SCR 21.15(4) provides that "[e]very attorney shall
cooperate with the office of lawyer regulation in the
investigation, prosecution and disposition of grievances,
complaints filed with or by the director, and petitions for
reinstatement. An attorney's wilful failure to cooperate with
the office of lawyer regulation constitutes violation of the
rules of professional conduct for attorneys."
9
SCR 20:8.4(h) provides that it is professional misconduct
for a lawyer to "fail to cooperate in the investigation of a
grievance filed with the office of lawyer regulation as required
by SCR 21.15(4), SCR 22.001(9)(b), SCR 22.03(2), SCR 22.03(6),
or SCR 22.04(1)."
13
No. 2012AP1949-D
¶20 The referee further concluded that the OLR had proven
professional misconduct by Attorney Trewin on eight of the nine
counts in the complaint that related to Mr. and Mrs. H.10 Five
of those eight counts concern Attorney Trewin's multiple
business transactions with Mr. and Mrs. H. On Count Five, the
referee determined that Attorney Trewin had violated
SCR 20:1.8(a) by disbursing funds to himself as both creditor
and attorney from a May 2003 transaction without fully
disclosing his adverse interests and without obtaining a written
consent for the conflict and the transaction. On Count Six, the
referee found that Attorney Trewin had violated both former and
current SCR 20:1.8(b)11 by using in subsequent loan transactions
with Mr. and Mrs. H. information regarding their finances that
he had gained from representing them as their lawyer. On Count
Seven, the referee concluded that Attorney Trewin had violated
SCR 20:1.7(a)(2) by continuing to represent Mr. and Mrs. H. when
10
The referee determined that the OLR had failed to meet
its burden of proving misconduct by clear, satisfactory, and
convincing evidence on Count Ten. That count alleged that
Attorney Trewin had violated SCR 20:8.4(c) by providing false
information to the OLR during its initial evaluation of the
grievance filed by Mr. and Mrs. H.
11
Former SCR 20:1.8(b), in effect prior to July 1, 2007,
provides that "[a] lawyer shall not use information relating to
representation of a client to the disadvantage of the client
unless the client consents after consultation."
Current SCR 20:1.8(b) provides that "[a] lawyer shall not
use information relating to representation of a client to the
disadvantage of the client unless the client gives informed
consent, except as permitted or required by these rules."
14
No. 2012AP1949-D
he had a personal interest in their finances and property, by
"representing" them in a sale of real property to third parties
when he had not obtained a written conflict waiver of his
personal interests, by paying himself $83,000 in "anticipated
taxes" out of the proceeds of a real estate transaction when he
never paid those taxes, and by assigning a value to their option
to repurchase their land when he had never obtained a prior
written agreement with them concerning such a value. On Count
Eight, the referee determined that Attorney Trewin had engaged
in conduct involving dishonesty, fraud, deceit, or
misrepresentation, in violation of SCR 20:8.4(c), including
(1) having Mr. and Mrs. H. deed their farm to him when he knew
that many of the terms of the sale were incomplete and the
transaction was invalid under the Statute of Frauds, (2) paying
them far less than the value of the property, and (3) reselling
the property at a profit for himself. On Count Nine, the
referee found that Attorney Trewin had also violated
SCR 20:8.4(c) when he had claimed that the deed of the H.s' land
was exempt from the real estate transfer tax and had not paid
any such tax to the government, but had still collected the
amount of the tax from Mr. and Mrs. H. and had subsequently
refused to return it.
¶21 The final three counts regarding Mr. and Mrs. H.
involve Attorney Trewin's misconduct after they filed a
grievance with the OLR. On Count Eleven, the referee concluded
that Attorney Trewin had violated SCRs 22.03(6) and 21.15(4),
which are enforceable via SCR 20:8.4(h), when he had attempted
15
No. 2012AP1949-D
to persuade Mr. and Mrs. H. to withdraw their grievance or cease
cooperating with the OLR's investigation. On Count Twelve, the
referee determined that Attorney Trewin's failure to provide
information requested by the district committee had violated
SCR 22.04(1).12 On Count Thirteen, the referee found that
Attorney Trewin had again violated SCR 22.03(6), enforced via
SCR 20:8.4(h), when he had failed to provide information and
documents requested by the OLR in a timely manner.
¶22 The OLR's complaint alleged only two counts related to
Attorney Trewin's conduct concerning the Grosheks. On Count
Fourteen, the referee concluded that Attorney Trewin had
violated former SCR 20:1.8(a) by engaging in multiple business
transactions with the Grosheks and acquiring their property when
(1) the terms of the transactions were not fair and reasonable
to the Grosheks, (2) Attorney Trewin had failed to fully and
clearly disclose the terms of the proposed transactions to the
Grosheks in writing and in a manner they could reasonably
understand, and (3) Attorney Trewin had failed to obtain the
Grosheks' voluntary written consent to each transaction after
consultation. On Count Fifteen, the referee found that by
engaging in a course of conduct that involved dishonesty, fraud,
12
SCR 22.04(1) provides that "[t]he director may refer a
matter to a district committee for assistance in the
investigation. A respondent has the duty to cooperate specified
in SCR 21.15(4) and 22.03(2) in respect to the district
committee. The committee may subpoena and compel the production
of documents specified in SCR 22.03(8) and 22.42."
16
No. 2012AP1949-D
deceit, or misrepresentation in order to serve his own interests
rather than the interests of his clients, Attorney Trewin had
again violated SCR 20:8.4(c).
¶23 With respect to the proper level of discipline, the
referee stated that he had considered Attorney Trewin's prior
disciplinary history, his pattern of misconduct in this
proceeding, prior precedent, this court's discussions of the
concept of progressive discipline, and both aggravating and
mitigating factors. The result of the referee's analysis was a
conclusion that Attorney Trewin was unfit to practice law in
this state and a recommendation that his license should be
revoked.
¶24 The referee believed that, in light of the fact that
this court has described restitution as the payment of money,
see SCR 21.16(2m), monetary restitution would not be appropriate
here. The referee agreed with the OLR that monetary restitution
is not readily ascertainable in this matter "[d]ue to the mess
that [Attorney Trewin] has created."
¶25 Under our longstanding standards for reviewing referee
reports in attorney disciplinary proceedings, we will affirm the
referee's findings of fact unless they are found to be clearly
erroneous, but we review the referee's conclusions of law on a
de novo basis. In re Disciplinary Proceedings Against Inglimo,
2007 WI 126, ¶5, 305 Wis. 2d 71, 740 N.W.2d 125. We determine
the appropriate level of discipline to impose given the
particular facts of each case, independent of the referee's
recommendation, but benefiting from it. In re Disciplinary
17
No. 2012AP1949-D
Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45,
660 N.W.2d 686.
¶26 Attorney Trewin challenges most of the referee's
conclusions of misconduct in his appeal. Although he claims
that he is challenging the referee's conclusions of law, many of
Attorney Trewin's appellate arguments are focused on criticizing
the way in which the referee viewed the facts of this case.
¶27 For example, Attorney Trewin contends that the referee
erred on Counts One, Five, and Fourteen in determining that he
had violated SCR 20:1.8(a), which prohibits a lawyer from
entering into business transactions with clients except in
certain specified circumstances. Attorney Trewin contends that
the "basic facts" regarding these alleged violations have been
undisputed throughout this proceeding. He then proceeds,
however, to describe the facts as he believes them to be rather
than as found by the referee. Specifically, he asserts, based
on his own testimony, that he put the terms of every transaction
into writing, gave that writing to the clients, and then advised
the clients through a separate conflict of interest document
that they had a right to seek independent counsel. He further
asserts that both R.V.S. and D.H. also testified that conflict
waivers were signed for every transaction.
¶28 The referee specifically discounted the oral testimony
in this respect. He agreed with Attorney Trewin that both
R.V.S. and D.H. gave muddled, contradictory, and unreliable
testimony on many issues, including what documents they had
signed. Although Attorney Trewin claimed that he always had
18
No. 2012AP1949-D
clients sign conflict waivers (or consents), the referee noted
that his testimony was also contradictory and that he
acknowledged that he could not find conflict waivers for some
transactions and that he was not sure they were prepared for
other transactions.
¶29 Moreover, the referee correctly noted that
SCR 20:1.8(a) requires written notices providing certain
information to the client and then a written consent to the
transaction that is signed by the client. The referee concluded
that Attorney Trewin's self-serving testimony that his practice
after 2002 was always to provide written conflict waivers was
not enough to demonstrate that he had complied with the
requirements of SCR 20:1.8(a) on a substantial number of
transactions.
¶30 In addition, merely claiming that the clients always
signed conflict waivers does not establish what was in those
conflict waivers or that the contents of those waivers provided
all of the required information. The referee specifically
concluded that even for the conflict waivers produced by
Attorney Trewin, they did not contain an adequate explanation of
the risks of entering into the business transactions with
Attorney Trewin while continuing to be represented by him.
¶31 We find no basis to overturn the referee's findings of
fact regarding the conflict waivers, or lack thereof. We also
agree with the referee's analysis that Attorney Trewin failed to
adequately consult with his clients about the risks attendant to
the transactions and the conflicts of interest and to prepare a
19
No. 2012AP1949-D
sufficient writing containing the information required by
SCR 20:1.8(a).
¶32 Attorney Trewin also argues that the referee erred in
finding violations of former and current SCR 20:1.8(b) in Count
Six. He focuses on the referee's reference to the fact that he
did not provide to the clients the normal safeguards that are
provided by commercial lending institutions to their customers.
Attorney Trewin further claims that he did, in fact, explain the
transactions to D.H. in a way he could understand. The referee,
however, found that there was no record of Attorney Trewin
orally discussing with D.H. certain matters related to a
transaction. The referee also found D.H. to be credible when he
testified that he was baffled by the transaction.
¶33 We again find no basis to overturn any of the
referee's factual findings with respect to Attorney Trewin's
transactions with Mr. and Mrs. H. Attorney Trewin's argument
focusing on the lack of banking safeguards misses the point of
the violation found by the referee. The crux of the violation
of SCR 20:1.8(b) was that Attorney Trewin used the information
he had gained from his representation of Mr. and Mrs. H. to
their disadvantage by engaging in a series of transactions that
ultimately led to Attorney Trewin owning their property. We
conclude that Attorney Trewin did violate both former and
current SCR 20:1.8(b).
¶34 Attorney Trewin also challenges the referee's
conclusions that he violated SCR 20:8.4(c) on Counts Three,
Eight, Nine, and Fifteen. His arguments in this regard again
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No. 2012AP1949-D
rely in large part on his view of the facts surrounding various
transactions with each of the three client couples. Attorney
Trewin's arguments do not rise to the level of demonstrating
clear error in the referee's view of the relevant facts.
¶35 Attorney Trewin acknowledges that he claimed an
exemption from the transfer tax and did not pay any such tax to
the applicable government entity, but he still collected the
amount of the tax from Mr. and Mrs. H. He also acknowledges
that he did not return the money when he was confronted with
this discrepancy. He attempts to excuse his act of collecting
money to which he was not entitled and then refusing to return
it by claiming that he was ultimately entitled to offset that
amount against the amount Mr. and Mrs. H. owed him. He
conveniently omits from his argument, however, that there was no
finding of fact that he did offset the amount he improperly
collected against their indebtedness or that he notified Mr. and
Mrs. H. of such an offset. His after-the-fact excuse does not
convince us that the referee erred in concluding that this
conduct violated SCR 20:8.4(c).
¶36 Attorney Trewin also contends that the referee erred
in concluding that he had violated SCR 20:8.4(c) when he had
Mr. and Mrs. H. deed over their land to him despite the
transaction failing to satisfy the Statute of Frauds and when
the value of their property exceeded what Attorney Trewin was
paying them for it. We need not conduct a detailed analysis of
the Statute of Frauds. Attorney Trewin acknowledges that he
testified to a value of the land that was in excess of what he
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No. 2012AP1949-D
paid his clients for it. He contends that the referee erred in
relying on this testimony because he did not say what someone
would have needed to do to the land to raise it to that value.
His attempt to claim that his valuation testimony was
conditioned in some undisclosed manner is unavailing. We
conclude that there was sufficient evidence to conclude that
Attorney Trewin engaged in dishonesty, deceit, fraud, or
misrepresentation when he purchased the property of Mr. and
Mrs. H.
¶37 His challenge to the violation found on Count Three
also is based on his view of what the evidence showed. The
referee determined that Attorney Trewin had violated
SCR 20:8.4(c) by having Mr. and Mrs. V.S. deed a piece of their
land to him when there had been no meeting of the minds on the
overall transaction. Attorney Trewin claims that the referee
should have found a meeting of the minds because Mr. and
Mrs. V.S. subsequently paid rent to him for that land, which was
consistent with his view that they had signed a "life lease" as
part of the transaction. He ignores the referee's findings that
Mr. and Mrs. V.S. denied ever signing a "life lease" and that no
such document was ever produced or introduced into evidence.
Relying on one piece of evidence while ignoring other findings
of fact does not convince us that the referee erred in either
his findings of fact or his conclusion of law on this count. We
agree with the referee's conclusion of a violation of
SCR 20:8.4(c).
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No. 2012AP1949-D
¶38 With respect to the finding of a violation of
SCR 20:8.4(c) on Count Fifteen regarding his purchase of the
Grosheks' property, Attorney Trewin again relies on his version
of what occurred. He ignores the transaction documents he had
the Grosheks sign just before his license suspension was to take
effect in August 2004 and claims that they were represented by
separate counsel when the only valid transaction took place
later in the fall. He disregards, however, the finding of the
circuit court in the civil action that the other attorney
retained by the Grosheks acted merely as a scrivener. Moreover,
there is no dispute that Attorney Trewin did have the Grosheks
sign sale documents in August at a time when he was
characterizing the transaction to them in a manner that was
contradictory to what he was telling other people and that he
never made them aware at that time of the various stories he was
telling to others. Whether or not the transaction was
ultimately modified at a later date, there is no doubt that
Attorney Trewin's conduct prior to his suspension violated
SCR 20:8.4(c).
¶39 Attorney Trewin also challenges the referee's
conclusions that he interfered with the OLR's investigation by
attempting to persuade Mr. and Mrs. V.S. and Mr. and Mrs. H. to
withdraw their grievances and cease cooperating with the OLR.
The referee found, however, based on the testimony of R.V.S.,
that Attorney Trewin wanted him to sign a "waiver" that he would
not pursue a grievance against Attorney Trewin. The referee
likewise found that Attorney Trewin persuaded Mr. and Mrs. H. to
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No. 2012AP1949-D
sign a document stating their agreement to an amount owed to
Attorney Trewin even though they did not know whether that
amount was accurate or inaccurate. These findings are
sufficient to support the conclusion of improper interference
with an ongoing grievance investigation.
¶40 We do not find it necessary to address every claim and
argument by Attorney Trewin in this opinion. To the extent we
have not addressed arguments here, it is sufficient to say that
we have considered them and have rejected them.
¶41 We now turn to the issue of the proper level of
discipline. We conclude that the revocation of Attorney
Trewin's license to practice law in this state is appropriate
and required. Attorney Trewin was already put on notice of the
perils of engaging in transactions with clients in the Trewin I
disciplinary proceeding. He nonetheless continued to engage in
such transactions without meeting the very strict requirements
that protect clients from overreaching by more sophisticated
attorneys. Moreover, he used the knowledge he had gained from
handling the clients' legal matters to structure those
transactions in a manner that ensured he would benefit and the
clients would not. Those transactions ultimately resulted in
Attorney Trewin acquiring the clients' property and enriching
himself at their expense. It is clear that the public needs to
be protected from this type of conduct and that, as the referee
commented, Attorney Trewin is unfit to engage in the practice of
law in this state.
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No. 2012AP1949-D
¶42 We do not include a restitution award in our order.
As noted by the OLR and the referee, there is not a basis in the
record of this proceeding to readily ascertain what amount of
money should be paid to the three client couples to make them
whole.
¶43 Finally, we impose the full costs of this proceeding
on Attorney Trewin. Attorney Trewin has been found to have
engaged in multiple counts of misconduct. He clearly has
litigated this matter aggressively, which has necessitated the
expenses incurred by the OLR and the referee. Consequently, we
find no basis to depart from our general policy of imposing the
full costs on an attorney who has been found guilty of
misconduct. See SCR 22.24(1m).
¶44 IT IS ORDERED that the license of Michael G. Trewin to
practice law in Wisconsin is revoked, effective November 7,
2014.
¶45 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Michael G. Trewin shall pay to the Office of
Lawyer Regulation the costs of this proceeding.
¶46 IT IS FURTHER ORDERED that Michael G. Trewin shall
comply with the requirements of SCR 22.26 pertaining to the
duties of a person whose license to practice law in Wisconsin
has been revoked.
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No. 2012AP1949-D
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