Office of Lawyer Regulation v. Raymond M. Clark , 368 Wis. 2d 409 ( 2016 )

2016 WI 36
SUPREME COURT OF WISCONSIN
CASE NO.: 2014AP2366-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Raymond M. Clark, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Raymond M. Clark,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST CLARK
OPINION FILED: May 17, 2016
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2016 WI 36
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2014AP2366-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Raymond M. Clark, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
MAY 17, 2016
v.
Diane M. Fremgen
Clerk of Supreme Court
Raymond M. Clark,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review the report and recommendation
of Referee Hannah C. Dugan that the license of Raymond M. Clark
be suspended for 120 days for professional misconduct. The
referee also recommends that Attorney Clark pay the full costs
of the proceeding, which are $16,192.21 as of March 29, 2016,
and that he be required to take six continuing legal education
No. 2014AP2366-D
credits in trust account management, to be approved by the
Office of Lawyer Regulation (OLR).
¶2 After careful review of this matter, we adopt the
referee's findings of fact and conclusions of law. We agree
that a four-month suspension of Attorney Clark's license is an
appropriate sanction for his misconduct. We also agree that the
full costs of the proceeding should be assessed against Attorney
Clark, and we further agree that Attorney Clark should be
required to obtain six continuing legal education credits in
trust account management.
¶3 Attorney Clark was admitted to practice law in
Wisconsin in 1959. The most recent address furnished by
Attorney Clark to the State Bar of Wisconsin is in Menomonee
Falls, Wisconsin. Attorney Clark has no prior disciplinary
history.
¶4 On October 9, 2014, the OLR filed a complaint alleging
that Attorney Clark had engaged in ten counts of misconduct.
Attorney Clark filed an answer to the complaint on November 17,
2014. The referee was appointed on December 17, 2014.
¶5 An evidentiary hearing was held before the referee on
March 5, 2015. At the hearing, the parties presented a signed
stipulation, dated March 2, 2015. As part of the stipulation,
Attorney Clark admitted five counts of the complaint and entered
no contest pleas to four counts. During the course of the
evidentiary hearing, the OLR made a motion to dismiss count ten
of the complaint. In the stipulation, Attorney Clark agreed
that the referee may use the allegations of the complaint as an
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No. 2014AP2366-D
adequate factual basis in the record for a determination of
misconduct as set forth in counts one through nine of the
complaint.
¶6 Counts one through five of the OLR's complaint arose
out of Attorney Clark's representation of T.C. in Milwaukee
County divorce proceedings. The complaint alleged that in March
of 2008, the Milwaukee County circuit court entered findings of
fact, conclusions of law, and a final judgment in the divorce,
which incorporated by reference all of the terms of a Marital
Settlement Agreement (MSA) signed by T.C. and her husband, J.C.
The MSA listed the marital debts and stated that the parties
were equally liable for their payment. The MSA provided that
T.C.'s share of a retirement account would be forwarded to
Attorney Clark and that Attorney Clark "shall withhold said
monies in order to satisfy petitioner's [T.C's] financial
responsibilities per the Marital Settlement Agreement. After
petitioner's financial responsibilities have been satisfied in
full, petitioner shall receive the remaining balance."
¶7 In August 2008, Attorney Clark received T.C.'s share
of the retirement account, totaling $9,341.84. He deposited
that amount into his IOLTA trust account. Between August 13,
2008 and September 26, 2008, Attorney Clark disbursed various
checks from his trust account to himself, including $1,710 of
the funds on deposit for T.C. On September 26, 2008, Attorney
Clark made a cash withdrawal in the amount of $1,000 from the
funds in his trust account attributable to his representation of
T.C.
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No. 2014AP2366-D
¶8 Although Attorney Clark told T.C. that he was working
on negotiating several of the debts, as of January 26, 2009, he
had not paid any of the creditors T.C. was obligated to pay
pursuant to the MSA.
¶9 Between January 30, 2009 and March 5, 2009, Attorney
Clark disbursed another $1,850 of the retirement funds to
himself. He also disbursed $300 of the funds to his client. He
did not discuss the disbursements with opposing counsel, seek a
modification of the MSA, or seek the court's authorization for
the disbursements.
¶10 In May 2009, J.C.'s counsel filed a motion for an
order to show cause due to T.C.'s failure to timely pay her
portion of the marital debts. Attorney Clark filed a cross
motion asserting that J.C. had failed to comply with the law
concerning financial disclosures, disputing that J.C. had paid
his share of the debts, and asserting that J.C. had interfered
with IRS refunds. As of June 1, 2009, at least five debts to be
paid by T.C., totaling $833.15, remained unpaid, but by this
time Attorney Clark was holding insufficient funds in trust for
T.C. to pay those debts.
¶11 At a June 19, 2009 hearing, a Milwaukee County court
commissioner held that she had no authority other than to
enforce the MSA. The commissioner ordered T.C. to pay her share
of the marital debt and ordered that "any monies in trust [] be
used for outstanding bills forthwith." At the hearing, Attorney
Clark failed to advise the court that he had already disbursed
$4,360 of the retirement funds to himself and failed to advise
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No. 2014AP2366-D
that he had made other disbursements and that only $59.73 of the
retirement funds remained in his trust account.
¶12 On July 14, 2009, Attorney Clark disbursed $600 to
himself, exhausting the remaining retirement funds being held in
trust for T.C. and disbursing funds that belonged to T.C. or
others. On August 13, 2009, Attorney Clark disbursed $50 from
his trust account to T.C. By that date, Attorney Clark was no
longer holding any funds in his trust account attributable to
T.C. In February 2010, Attorney Clark deposited $1,846.05 in
his trust account and identified the deposit as "return of fees"
related to his representation of T.C.
¶13 The OLR's complaint alleged the following counts of
misconduct with respect to Attorney Clark's representation of
T.C.:
[Count One] By failing to take reasonable steps to
advance [T.C.'s] interests in having her marital debts
paid in a timely fashion, [Attorney] Clark failed to
act with reasonable diligence and promptness in
representing a client, in violation of SCR 20:1.3.1
[Count Two] By making a cash withdrawal from the
funds he held in trust relating to his representation
of [T.C.], [Attorney] Clark made a prohibited
transaction by making a disbursement of cash from his
trust account from funds held in trust for a client in
violation of SCR 20:1.5(e)(4)a.2
1
SCR 20:1.3 provides: "A lawyer shall act with reasonable
diligence and promptness in representing a client."
2
SCR 20:l.15(e)(4)a provides: "No disbursement of cash
shall be made from a trust account or from a deposit to a trust
account, and no check shall be made payable to "Cash."
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No. 2014AP2366-D
[Count Three] By failing to hold in trust the
$1,341.84 entrusted to him for the payment of [T.C.'s]
share of the marital debts as required under the
Marital Settlement Agreement and by disbursing funds
related to his representation of [T.C.] in excess of
the funds he held in trust related to her case,
[Attorney] Clark failed to hold in trust, separate
from his own property, the property of his client and
3rd parties held in [Attorney] Clark's possession in
connection with his representation of a client, in
violation of SCR 20:1.15(b)(1).3
[Count Four] By failing to hold $9,341.84 in trust
for the payment of [T.C.'s] share of the marital debts
as part of the Marital Settlement Agreement as ordered
by the court on March 14, 2008; and by failing to hold
the remaining $59.73 in trust for the payment of
[T.C.'s] share of the marital debts as ordered by the
court on June 19, 2009, [Attorney] Clark knowingly
disobeyed an obligation under the rules of a tribunal,
in violation of SCR 20:3.4(c).4
[Count Five] By disbursing to himself $4,960 of the
$9,341.84 entrusted to him for the payment of [T.C.'s]
share of the marital debts, without obtaining the
prior authorization of the court or opposing counsel
to do so, [Attorney] Clark engaged in professional
3
20:1.15(b)(1) provides:
A lawyer shall hold in trust, separate from the
lawyer's own property, that property of clients and
3rd parties that is in the lawyer's possession in
connection with a representation. All funds of clients
and 3rd parties paid to a lawyer or law firm in
connection with a representation shall be deposited in
one or more identifiable trust accounts.
4
SCR 20:3.4(c) provides: "A lawyer shall not: . . . .
knowingly disobey an obligation under the rules of a tribunal,
except for an open refusal based on an assertion that no valid
obligation exists."
6
No. 2014AP2366-D
misconduct involving dishonesty, fraud, deceit or
misrepresentation, in violation of SCR 20:8.4(c).5
¶14 Counts six through nine in the OLR's complaint arose
out of the OLR's investigation and audit of Attorney Clark's
trust account. Those counts alleged:
[Count Six] By engaging in a course of conduct to
protect or hide income and assets from the Wisconsin
Department of Revenue and/or the Internal Revenue
Service, including by depositing earned fees and funds
belonging to [Attorney] Clark and/or the Law Offices
of Raymond M. Clark in his client trust account,
[Attorney] Clark placed and retained funds in his
trust account that did not reasonably relate to
monthly service charges, in violation of SCR
20:1.15(b)(3).6
[Count Seven] By engaging in a course of conduct to
protect or hide income and assets from the Wisconsin
Department of Revenue and/or the Internal Revenue
Service, including by depositing earned fees and funds
belonging to [Attorney] Clark and/or the Law Offices
of Raymond M. Clark in his client trust account,
[Attorney] Clark placed and retained funds in his
trust account that did not reasonably relate to
monthly service charges, in violation of SCR
20:8.4(c).
[Count Eight] By taking cash withdrawals from his
client trust account, taking cash from his deposits to
his client trust account, and by issuing checks
payable to cash from his client trust account,
[Attorney] Clark made prohibited transactions from his
5
20:8.4(c) provides: "It is professional misconduct for a
lawyer to: . . . . engage in conduct involving dishonesty,
fraud, deceit or misrepresentation."
6
SCR 20:l:15(b)(3) provides: "No funds belonging to the
lawyer or law firm, except funds reasonably sufficient to pay
monthly account service charges, may be deposited or retained in
a trust account."
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No. 2014AP2366-D
client trust account and from deposits to his client
trust account, in violation of SCR 20:1.15(e)(4)a.
[Count Nine] By disbursing funds from his client
trust account in excess of the amount he was then
holding in trust for specified client matters,
[Attorney] Clark disbursed funds from an IOLTA account
and created a negative balance with respect to
individual clients or matters, in violation of SCR
20:1.15(f)(1)b.7
¶15 Count ten of the OLR's complaint alleged that by
making misrepresentations to the OLR about the purpose and
intent of his course of conduct that included depositing earned
fees and funds belonging to Attorney Clark and/or his law office
into his trust account, Attorney Clark wilfully failed to
provide relevant information, failed to answer questions fully,
or to furnish documents to OLR, in violation of SCR 22.03(6)8 and
SCR 20:8.4(h).9
¶16 The referee granted the OLR's motion to dismiss count
ten of the complaint. In her report and recommendation, the
7
SCR 20:1.15(f)(1)b provides, in part: . . . . A lawyer
shall not disburse funds from an IOLTA account or any pooled
trust account that would create a negative balance with respect
to any individual client or matter.
8
SCR 22.03(6) provides: "In the course of the
investigation, the respondent's wilful failure to provide
relevant information, to answer questions fully, or to furnish
documents and the respondent's misrepresentation in a disclosure
are misconduct, regardless of the merits of the matters asserted
in the grievance."
9
SCR 20:8.4(f) provides: "It is professional misconduct
for a lawyer to violate a statute, supreme court rule, supreme
court order or supreme court decision regulating the conduct of
lawyers."
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No. 2014AP2366-D
referee also concluded that, in spite of the fact that Attorney
Clark had entered a plea of no contest to count five, the OLR
had failed to meet its burden of proof with respect to count
five. The referee said that count five included obligations
that were not included in the divorce court's orders related to
T.C.'s family law case and the MSA. The referee said during the
evidentiary hearing, neither party could establish that the
court ordered deposits and disbursals of funds required that
Attorney Clark obtain the prior authorization of the court or
opposing counsel or that he be required to return to the
tribunal to obtain authorization to disburse the funds. For
these reasons, the referee concluded that OLR failed to meet its
burden of proof with respect to establishing that prior
authorization needed to be obtained as pled in count five. The
referee found that the OLR did meet its burden of proof with
respect to the other eight counts of misconduct alleged in the
complaint.
¶17 Turning to the appropriate level of discipline, the
referee noted that the complaint sought a 15-month suspension of
Attorney Clark's license. The referee noted that in the
stipulation, Attorney Clark did not contest and stipulated to
OLR's request for a 15-month suspension. Nevertheless, the
referee concluded that a 15-month suspension was too harsh a
sanction. The referee commented that count ten of the complaint,
which the OLR ultimately moved to dismiss, contained substantial
allegations constituting rule violations that, if proven, would
justify an enhanced sanction. The referee reasoned that if the
9
No. 2014AP2366-D
allegations in count ten were not proven, then a reduced
sanction warranted consideration.
¶18 The referee noted that Attorney Clark admitted or pled
no contest to multiple counts of misconduct. She noted that
during the evidentiary hearing, the OLR commented about Attorney
Clark's cordiality and his cooperation and remorse. The referee
also pointed out that Attorney Clark has no prior discipline and
has practiced law for 56 years.
¶19 In support of her conclusion that a 120-day suspension
was appropriate, the referee cited In re Disciplinary
Proceedings Against Smith, 2013 WI 98, 351 Wis. 2d 368, 841
N.W.2d 278 and In re Disciplinary Proceedings Against Thibodeau,
2007 WI 118, 305 Wis. 2d 121, 738 N.W.2d 558. Attorney
Thibodeau received a 60-day suspension for multiple counts of
misconduct that included holding personal funds in his trust
account in order to avoid the seizure of those funds by tax
authorities; failing to hold in trust, separate from his own
property, property of clients and third persons; and failing to
comply with recordkeeping requirements. The referee noted that,
like Attorney Clark, Attorney Thibodeau had not been disciplined
previously, had entered into a stipulation to resolve the
matter, and had practiced for a length of time. The referee said
unlike Attorney Thibodeau, Attorney Clark stipulated to two more
counts involving three more supreme court rule violations.
Attorney Clark also violated a court order and had almost twice
as many years of law practice experience as Attorney Thibodeau.
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No. 2014AP2366-D
¶20 Attorney Smith received a six-month suspension for 20
counts of misconduct that included failing to promptly deposit
client and third party funds into her trust account; failing to
promptly apply client and third party funds toward the payment
of agreed upon taxes owed by a client and third party; failing
to comply with court orders; and noncooperation with the OLR.
The referee said both Attorney Clark and Attorney Smith have the
aggravating factor of having practiced for a length of time.
The referee said unlike Attorney Smith, Attorney Clark
stipulated to 11 fewer counts of misconduct, cooperated with the
OLR and other authorities, and was not required to pay
restitution. Attorney Smith had previously been publicly
reprimanded.
¶21 The referee ultimately concluded that a 120-day
suspension of Attorney Clark's license to practice law in
Wisconsin was an appropriate sanction, considering past case
law, mitigating and aggravating circumstances, and the fact that
Attorney Clark entered into a stipulation. The referee also
recommended that Attorney Clark pay the full costs of the
proceeding and that he be required to undertake six continuing
legal education credits in trust account management, to be
approved by the OLR.
¶22 No appeal has been filed. A referee's findings of
fact are affirmed unless clearly erroneous. Conclusions of law
are reviewed de novo. 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 sees fit,
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No. 2014AP2366-D
regardless of the referee's recommendation. See In re
Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261
Wis. 2d 45, 660 N.W.2d 686.
¶23 There is no showing that any of the referee's findings
of fact are clearly erroneous, and we adopt them. We also agree
with the referee's conclusions of law that Attorney Clark
violated the supreme court rules set forth above.
¶24 Upon careful review of the matter, we agree with the
referee's recommendation for a four-month suspension of Attorney
Clark's license to practice law in Wisconsin. Attorney Clark
has no prior disciplinary history and has expressed remorse for
his actions. In addition to the Smith and Thibodeau cases cited
by the referee, it appears that a four-month suspension is
generally consistent with the sanction imposed in In re
Disciplinary Proceedings Against Krogman, 2015 WI 113, 365
Wis. 2d 628, 872 N.W.2d 657 (attorney's license suspended for
four months for misconduct including trust account violations)
and In re Disciplinary Proceedings Against Tobin, 2007 WI 50,
300 Wis. 2d 250, 730 N.W.2d 896 (attorney's license suspended
for four months for misconduct including trust account
violations and conversions). We also agree that Attorney Clark
should be required to undertake six continuing legal education
credits in trust account management and that he should pay the
full costs of the proceeding.
¶25 IT IS ORDERED that the license of Raymond M. Clark to
practice law in Wisconsin is suspended for a period of four
months, effective June 20, 2016.
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No. 2014AP2366-D
¶26 IT IS FURTHER ORDERED that Raymond M. Clark shall
undertake six continuing legal education credits in trust
account management, to be approved by the Office of Lawyer
Regulation.
¶27 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Raymond M. Clark shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$16,192.21. If the costs are not paid within the time
specified, and absent a showing to this court of his inability
to pay the costs within that time, the license of Raymond M.
Clark to practice law in Wisconsin shall remain suspended until
further order of the court.
¶28 IT IS FURTHER ORDERED that Raymond M. Clark shall
comply with the provisions of SCR 22.26 concerning the duties of
a person whose license to practice law in Wisconsin has been
suspended.
¶29 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See SCR
22.28(2).
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No. 2014AP2366-D
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