Office of Lawyer Regulation v. John Hotvedt , 2021 WI 49 ( 2021 )

2021 WI 49SUPREME COURT OF WISCONSIN
CASE NO.: 2016AP48-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against John Hotvedt, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
John Hotvedt,
Respondent.
ATTORNEY HOTVEDT REINSTATEMENT PROCEEDINGS
Reported at 372 Wis. 2d 68,888 N.W.2d 393PDC No:2016 WI 93 - Published
OPINION FILED: June 4, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
Per Curiam.
NOT PARTICIPATING:
ATTORNEYS:
2021 WI 49NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2016AP48-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against John Hotvedt, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant, JUN 4, 2021
v. Sheila T. Reiff
Clerk of Supreme Court
John Hotvedt,
Respondent.
ATTORNEY reinstatement proceeding. Reinstatement granted.
¶1 PER CURIAM. We review a report filed by Referee Kim M.
Peterson, recommending this court reinstate John Hotvedt's license
to practice law in Wisconsin. After careful review of the matter,
we agree that Attorney Hotvedt's license should be reinstated. We
also conclude that Attorney Hotvedt should be required to pay the
full costs of this reinstatement proceeding, which are $4,867.82
as of May 5, 2021.
¶2 Attorney Hotvedt was admitted to the practice of law in
Wisconsin on May 21, 2001. He currently resides in Burlington,
No. 2016AP48-D
Wisconsin and is employed as a Vice-President for the Bear Real
Estate Group (BREG) in Kenosha.
¶3 On November 18, 2016, this court suspended Attorney
Hotvedt's Wisconsin law license for 18 months, effective December
30, 2016, and ordered Attorney Hotvedt to pay the costs of the
disciplinary proceeding. In Re Disciplinary Proceedings Against
Hotvedt, 2016 WI 93, ¶17, 372 Wis. 2d 68, 888 N.W.2d 393. In that
matter, the referee recommended the disciplinary suspension after
Attorney Hotvedt stipulated to the facts alleged in the
disciplinary complaint filed by the Office of Lawyer Regulation
(OLR), and agreed with the OLR that an 18-month suspension of his
law license was merited.
¶4 Specifically, Attorney Hotvedt stipulated that he
committed five counts of professional misconduct related to
actions he took while associated with his former law firm as well
as actions during his withdrawal from that firm. Attorney Hotvedt
converted to his own use client funds belonging to the firm in
excess of $173,000, in violation of Supreme Court Rule
(SCR) 20:8.4(c); wrote off client fees owed to the firm, in
violation of SCR 20:8.4(c); established a consulting firm to
convert client fees while still employed by his firm, in violation
of SCR 20:8.4(c); breached his fiduciary duty to his firm by
misrepresenting to his firm that he would not bill or otherwise
recover client fees from firm clients, converting client funds
owed to his law firm, writing off client billings, and establishing
a consulting firm for the purpose of converting client fees owed
to the firm, all in violation of SCR 20:8.4(f); and failed to
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disclose to the OLR during its investigation the full extent of
funds he converted from his firm and otherwise making
misrepresentations to the OLR during its investigation, in
violation of SCRs 20:8.4(h), 22.03(2) and (6). See Hotvedt, 2016
WI 93, ¶11.
¶5 Attorney Hotvedt filed a petition for reinstatement of
his license to practice law on November 12, 2019. After an
investigation, the OLR initially opposed Attorney Hotvedt's
reinstatement because it appeared that Attorney Hotvedt had
continued to practice law despite his law license suspension. See
SCR 22.29(4)(b). The OLR observed that, during his license
suspension, Attorney Hotvedt worked for BREG, a former firm client
for which he worked prior to his suspension, and his duties
appeared to include law-related work.
¶6 Admittedly, SCR 22.26(2) permits a suspended attorney to
engage in "law related work" if the lawyer's efforts are engaged
"for a commercial employer itself not engaged in the practice of
law." Id. In other words, while suspended lawyers cannot practice
law and cannot perform law student, law clerk, or other paralegal
personnel work for entities engaged in the practice of law, they
can perform law student, law clerk, or other paralegal personnel
work for commercial employers who are not engaged in the practice
of law. Id.
¶7 The OLR acknowledged that BREG "is obviously not a law
firm; it is a commercial employer in the real estate industry."
However, it initially appeared that Attorney Hotvedt's employment
with BREG exceeded the limited scope allowed by SCR 22.26(2). His
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No. 2016AP48-D
work as an employee of BREG appeared "largely indistinguishable
from his work as their outside counsel." So, the OLR expressed
concern that Attorney Hotvedt's work for BREG constituted "the
improper practice of law during his period of suspension." If
true, this concern would implicate several other reinstatement
criteria, so the OLR questioned whether Attorney Hotvedt could
satisfactorily fulfill other reinstatement criteria, as well.
¶8 The referee conducted a public evidentiary hearing on
Attorney Hotvedt's reinstatement petition on December 15, 2020.
The question of his work during his license suspension was
thoroughly explored. Both parties filed post-hearing briefs.
After the hearing, the OLR withdrew its objection to Attorney
Hotvedt's reinstatement.
¶9 On January 21, 2021, the referee filed a report
recommending that this court grant Attorney Hotvedt's
reinstatement petition. Critical to the referee's recommendation
is the referee's conclusion that Attorney Hotvedt did not
impermissibly practice law during his license suspension.
¶10 Neither party has appealed from the referee's
recommendation, so the court considers this matter pursuant to
SCR 22.33(3).1 On review, we accept a referee's findings of fact
unless they are clearly erroneous. We review a referee's legal
conclusions, including whether the attorney has satisfied the
SCR 22.33(3) provides: "If no appeal is timely filed, the
1
supreme court shall review the referee's report, order
reinstatement, with or without conditions, deny reinstatement, or
order the parties to file briefs in the matter."
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No. 2016AP48-D
criteria for reinstatement, on a de novo basis. See In re
Disciplinary Proceedings Against Jennings, 2011 WI 45, ¶39, 334
Wis. 2d 335, 801 N.W.2d 304; In re Disciplinary Proceedings
Against Gral, 2010 WI 14, ¶22, 323 Wis. 2d 280, 779 N.W.2d 168.
¶11 Supreme Court Rule 22.29(4)2 provides that a petition
for reinstatement must show all of the following:
(a) The petitioner desires to have the petitioner's
license reinstated.
(b) The petitioner has not practiced law during the
period of suspension or revocation.
(c) The petitioner has complied fully with the terms of
the order of suspension or revocation and will continue
to comply with them until the petitioner's license is
reinstated.
(d) The petitioner has maintained competence and
learning in the law by attendance at identified
educational activities.
(e) The petitioner's conduct since the suspension or
revocation has been exemplary and above reproach.
(f) The petitioner has a proper understanding of and
attitude toward the standards that are imposed upon
members of the bar and will act in conformity with the
standards.
(g) The petitioner can safely be recommended to the
legal profession, the courts and the public as a person
fit to be consulted by others and to represent them and
otherwise act in matters of trust and confidence and in
2 Effective January 1, 2021, substantial changes were made to
the rules pertaining to lawyer disciplinary procedures, including
the reinstatement rules, SCR 22.29 through 22.33. See S. Ct. Order
19-06, 19-07, 19-08, 19-09, 19-10, 19-11, and 19-12, 2020 WI
62 (issued June 30, 2020, eff. Jan. 1, 2021). Because this
reinstatement proceeding commenced prior to January 1, 2021,
unless otherwise indicated, all references to the supreme court
rules will be to those in effect prior to January 1, 2021.
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No. 2016AP48-D
general to aid in the administration of justice as a
member of the bar and as an officer of the courts.
(h) The petitioner has fully complied with the
requirements set forth in SCR 22.26.
(j) The petitioner's proposed use of the license if
reinstated.
(k) A full description of all of the petitioner's
business activities during the period of suspension or
revocation.
¶12 In addition, SCR 22.29(4m) requires the petitioner to
show that he or she has made restitution to or settled all claims
of persons injured or harmed by the petitioner's misconduct,
including reimbursement to the Wisconsin Lawyers' Fund for Client
Protection for all payments made from that fund, or explained the
failure or inability to do so. Supreme Court Rule 22.31(1)(c)
provides that an attorney seeking reinstatement has the burden of
demonstrating all of the above requirements by clear,
satisfactory, and convincing evidence.
¶13 Supreme Court Rule 22.31(1) also provides that an
attorney seeking reinstatement must show by clear, satisfactory,
and convincing evidence that he or she has the moral character to
practice law; that his or her resumption of the practice of law
will not be detrimental to the administration of justice or
subversive to the public interest; and that he or she has complied
with SCR 22.26 and the terms of the underlying disciplinary order.
See SCR 22.31(1)(a), (b), and (d).
¶14 The referee's report focuses on what the referee viewed
as the most significant challenge facing Attorney Hotvedt's
reinstatement: whether he failed to satisfy SCR 22.29(4)(b)
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No. 2016AP48-D
because he practiced law during his license suspension. The
relevant rule provides:
An attorney whose license to practice law is suspended
or revoked or who is suspended from the practice of law
may not engage in this state in the practice of law or
in any law work activity customarily done by law
students, law clerks, or other paralegal personnel,
except that the attorney may engage in law related work
in this state for a commercial employer itself not
engaged in the practice of law.
SCR 22.26(2)(Emphasis added.)
¶15 As the referee explained, "[t]here has been some
question about whether Mr. Hotvedt practiced law during his
suspension, while working at Bear Real Estate Group." The referee
examined SCR 22.26(2), noting when working for a commercial
employer, "law related work" has been defined as work of a type
done by non-lawyers. The referee considered In re Disciplinary
Proceedings Against Hyndman, 2002 WI 6, 249 Wis. 2d 650, 638
N.W.2d 293, a case concluding that a lawyer who represented his
commercial employer in small claims court and made appearances at
creditors' meetings in federal bankruptcy proceedings while under
revocation was working within the permitted scope of SCR 22.26(2).
The referee definitively concluded that given the specifics of
Attorney Hotvedt's employment he "has not engaged in the practice
of law." The referee explains:
First, Bear Real Estate Group is a commercial employer
that is not itself engaged in the practice of law. Mr.
Hotvedt was not involved in work that would normally be
performed by a lawyer. In fact, both Mr. Mills and Mr.
Hotvedt testified that Bear hired outside counsel for
its legal work and spent a considerable amount of money
on outside lawyers. (Tr. 24:19-27:11).
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No. 2016AP48-D
Moreover, work that could be considered "law related"
was work that is routinely performed by non-lawyers.
(Tr. 22:2-24:14). For example, Mr. Mills testified that
Mr. Hotvedt sometimes drafted various real estate
documents or contracts, but that work was the same type
of work that other non-lawyer employees at the company
also performed. (Tr. 23:1-24:6). Mr. Hotvedt testified
similarly, that there were other employees, who were not
lawyers, performed the same type of law related work
that he did, like drafting contracts, dealing with
commercial leases, engaging in real estate transactions,
and similar work. (Tr. 85:22-87:12).
Finally, Mr. Hotvedt took many steps to ensure that he
did not engage in the practice of law while at Bear,
such as hiring counsel to help him determine what he
could and could not do while working at Bear. Also,
after hearing the testimony presented the OLR has
withdrawn any objection to Mr. Hotvedt's reinstatement.
¶16 We agree with the referee's conclusion that Attorney
Hotvedt's activities on behalf of his employer while he was under
suspension did not constitute the practice of law within the
proscription of SCR 22.26(2), such that he has established
SCR 22.29(4)(b). The testimony at the public hearing indicates
that Attorney Hotvedt consulted with counsel in deciding which
tasks to undertake, and that he did not hold himself out as lawyer.
A review of the testimony and statements in the post-hearing briefs
support the referee's finding and conclusion. As the OLR observed,
Attorney Hotvedt "took a conservative, measured approach to what
work he did for [BREG]." Accordingly, we accept the referee's
findings and conclusions as they pertain to Attorney Hotvedt's
satisfactory compliance with SCR 22.29(4)(b).
¶17 Our task, however, is not merely to review, de novo, the
referee's conclusion that Attorney Hotvedt satisfied the
reinstatement requirements of SCR 22.29(4)(b). Rather, we must
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No. 2016AP48-D
consider more broadly whether Attorney Hotvedt met his burden with
respect to all the applicable reinstatement criteria. In this,
our review is hindered by a very cursory report, which lacks
detailed factual findings and conclusions regarding the various
other reinstatement criteria. The referee simply lists bare bones
findings and conclusions, without analysis, and announces that
reinstatement is appropriate. However, by parsing through the
record before us we are able to discern that Attorney Hotvedt has
satisfactorily met the reinstatement criteria delineated above,
thereby avoiding the costly delay that a remand for further
proceedings would entail.
¶18 Several of the reinstatement criteria are not disputed.
Attorney Hotvedt's reinstatement petition states that he desires
to have his license reinstated, SCR 22.29(a). See also Referee
Finding 2. The record indicates that Attorney Hotvedt has
maintained competence and learning in the law by attendance at
identified educational activities, SCR 22.29(d).3 Attorney
Hotvedt's reinstatement petition indicates that, if reinstated, he
intends to continue his employment with BREG, thereby satisfying
SCR 22.29(4)(j). The reinstatement petition recounted Attorney
Hotvedt's business activities during his period of suspension, SCR
22.29(4)(k), a factor that was thoroughly explored as it is
3 In his reinstatement petition Attorney Hotvedt itemized the
continuing legal education classes he has completed. Pet. at 5.
By memorandum dated August 12, 2020, the Board of Bar Examiners
confirmed that Attorney Hotvedt had attended sufficient seminars
and is in compliance with the court's CLE and EPR requirements.
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No. 2016AP48-D
ancillary to the question of whether he practiced law during his
license suspension. See also Referee Findings 9-10.4 The record
supports the referee's finding that Attorney Hotvedt has made
restitution to or settled all claims of persons injured or harmed
by his misconduct, or explained the failure or inability to do so,
SCR 22.29(4m); see also Referee Finding 11.5
¶19 Determining whether Attorney Hotvedt established the
remaining criteria requires some inferences on our part, but we
deem them permissible inferences based on the available facts of
record. For example, the referee found that Attorney Hotvedt
complied with the terms of the order of revocation and will
continue to comply with them until his license is reinstated, as
required by SCR 22.29(4)(c). See Referee Finding 4. Similarly,
the referee determined that Attorney Hotvedt has complied with
SCR 22.29(4)(h). See Referee Finding 5. Presumably, these
determinations derive from the referee's reasoned conclusion that
Attorney Hotvedt did not engage in unauthorized practice of law,
so we accept them.
¶20 The basis for the referee's remaining conclusions is
less clear. The referee determined, without explanation, that
Attorney Hotvedt's conduct since the suspension has been exemplary
4 If reinstated, Attorney Hotvedt intends to use his license
to practice law as an adjunct to his activities for his current
employer, BREG.
5 The record indicates that Attorney Hotvedt has acknowledged
that his misconduct resulted in financial loss to his former law
firm, and avers that he had resolved that loss before his license
suspension, by a mutual settlement and release.
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No. 2016AP48-D
and above reproach, as required by SCR 22.29(4)(e), see Referee
Finding 6; that he has a proper understanding of and attitude
towards the standards that are imposed upon members of the bar and
will act in conformity with the standards as required by
SCR 22.29(4)(f), see Referee Finding 7; and that he can be safely
recommended to the legal profession, the courts and the public as
a person fit to be consulted by others and to represent them and
otherwise act in matters of trust and confidence and in general to
aid in the administration of justice as a member of the bar and as
an officer of the courts, SCR 22.29(4)(g), see Referee Finding 8.
The referee did not explicitly find or conclude that Attorney
Hotvedt has the moral character to practice law, as required by
SCR 22.31(1)(a), although the referee's assessment that he has
satisfied this factor is implicit in her other findings and
conclusions and given the evidence in the record.6
¶21 In concluding these factors are indeed satisfied, we are
guided by positive character references submitted by Attorney
Hotvedt;7 by statements made by witnesses regarding his character
During the evidentiary hearing, counsel questioned Mr.
6
Stephen R. Mills, Attorney Hotvedt's employer, and Attorney Todd
A. Terry, his colleague, as to whether they believe that Attorney
Hotvedt has the moral character to practice law. Both
unequivocally opined that he does.
Attorney J. Michael McTernan commented favorably on Attorney
7
Hotvedt's "high moral character." Attorney Thomas M. Santarelli
stated that he believes Attorney Hotvedt is "honest" and "ethical"
and states he has never observed him "compromise moral character
for anything." Attorney Katherine R. Rist states that she believes
Attorney Hotvedt "has sound character and fitness to practice law."
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No. 2016AP48-D
during the evidentiary hearing;8 by statements in Attorney
Hotvedt's response to the OLR reinstatement questionnaire
acknowledging that his previous misconduct was wrong and
expressing remorse; by statements Attorney Hotvedt made during the
evidentiary hearing;9 by the OLR's statements confirming that it
uncovered, "no direct objective evidence that Attorney Hotvedt's
resumption of the practice of law would be detrimental to the
administration of justice or subversive of the public interest";
and, finally, the OLR's post-hearing brief, confirming that it
does not oppose his reinstatement. Therefore, on balance, we are
persuaded that Attorney Hotvedt is entitled to reinstatement of
his license to practice law in Wisconsin.
¶22 With respect to the costs of this reinstatement
proceeding, it is our general practice to assess the full costs of
the proceeding against the petitioning attorney. See
SCR 22.24(1m). The OLR's statement of costs indicates that the
costs of this proceeding, as of May 5, 2021, were $4,867.82.
Attorney Hotvedt has not filed an objection to the OLR's statement
of costs, and we find no basis to depart from our general policy
8Mr. Stephen R. Mills, Attorney Hotvedt's employer, and
Attorney Todd D. Terry both testified favorably as to Attorney
Hotvedt's conduct since his suspension, his moral character, and
as to whether Attorney Hotvedt can be safely recommended to the
legal profession, the courts, and the public as a person fit to be
consulted and to act in matters of trust and confidence.
9Attorney Hotvedt testified about his volunteer efforts in
the community and testified that he has worked very hard to re-
establish his character and that he intends to "continue to do
everything in my power to be . . . a good lawyer . . . and
somebody that the [State] bar can be proud of despite my mistakes."
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No. 2016AP48-D
in this matter. Accordingly, we impose the full costs of the
reinstatement proceeding on Attorney Hotvedt.
¶23 IT IS ORDERED that the license of John Hotvedt to
practice law in Wisconsin is reinstated, effective the date of
this order.
¶24 IT IS FURTHER ORDERED that within 60 days of the date of
this order, John Hotvedt shall pay to the Office of Lawyer
Regulation the costs of this proceeding, which are $4,867.82 as of
May 5, 2021, or enter into a payment agreement plan with the Office
of Lawyer Regulation for the full payment of costs over a period
of time.
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No. 2016AP48-D
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