Office of Lawyer Regulation v. David A. Goluba , 347 Wis. 2d 1 ( 2013 )

2013 WI 32SUPREME COURT OF WISCONSIN
CASE NO.: 2010AP1348-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against David A. Goluba, Attorney at Law:
Office of Lawyer Regulation,
Complainant-Appellant,
v.
David A. Goluba,
Respondent-Respondent.
DISCIPLINARY PROCEEDINGS AGAINST GOLUBA
OPINION FILED: April 17, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the Office of Lawyer Regulation, there were briefs by
Sheryl St. Ores, assistant litigation counsel.
For the respondent-respondent, there was a brief filed by
David A. Goluba, pro se.
2013 WI 32NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2010AP1348-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against David A. Goluba, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant-Appellant,
APR 17, 2013
v.
Diane M. Fremgen
Clerk of Supreme Court
David A. Goluba,
Respondent-Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. The Office of Lawyer Regulation (OLR)
appeals the report of James W. Mohr, Jr., referee, recommending
that Attorney David A. Goluba's license to practice law in
Wisconsin be suspended for six months and that he be ordered to
pay restitution to three aggrieved parties including the
Wisconsin Lawyers' Fund for Client Protection (the Fund). The
OLR alleged seven counts of misconduct and sought revocation of
Attorney Goluba's license to practice law, along with
No. 2010AP1348-D
restitution. The OLR contends the referee erred with respect to
his finding that Attorney Goluba did not have ongoing knowledge
of the misappropriation of certain client funds and erred in
concluding that the OLR failed to establish that Attorney Goluba
committed misconduct in violation of SCR 20:8.4(c). The OLR
also appeals the recommended sanction, asserting that revocation
is appropriate. The OLR seeks assessment of the full costs of
this proceeding.
¶2 We adopt the referee's findings of fact and his
conclusions of law, with the exception of one conclusion
relating to Count 1, as will be discussed herein. We conclude
that the referee's reasoning with respect to discipline is
persuasive, and we agree that a six-month suspension of Attorney
Goluba's license to practice law in Wisconsin is appropriate
discipline for his misconduct. We agree with the referee's
recommendations regarding restitution. Attorney Goluba shall
reimburse the Fund in the amount of $30,000 plus legal interest,
shall pay restitution to The Salvation Army in the amount of
$2,655 for its legal fees incurred in connection with this
matter, and shall pay $145 to client S.R. We further conclude
that it is appropriate to reduce the costs of this disciplinary
proceeding.
¶3 Attorney Goluba was admitted to practice law in
Wisconsin in 1984. He has no prior disciplinary history. He is
a solo practitioner in Ripon, Wisconsin. His wife, Janice, has
long served as his legal secretary.
2
No. 2010AP1348-D
¶4 The complaint stems from two separate client matters:
the Estate of W.S. and the matter of S.R. On August 18, 2008,
Attorney Goluba's license was suspended for failure to cooperate
with the OLR investigations into the alleged misconduct.
Attorney Goluba's law license was also administratively
suspended on June 17, 2009, for noncompliance with Continuing
Legal Education (CLE) reporting requirements and again on
March 11, 2011, for nonpayment of State Bar dues. His license
remains suspended.
¶5 Attorney Goluba came to the OLR's attention in
February 2007 when the Honorable Dee R. Dyer, Outagamie County
circuit court, wrote a letter asking the OLR to investigate
Attorney Goluba's handling of the Estate of W.S. because of a
missing bequest owed The Salvation Army. Subsequently, R.L.,
the personal representative of the Estate (who is also the
mother of Janice Goluba and Attorney Goluba's mother-in-law)
filed a grievance in same matter.
¶6 On June 2, 2010, the OLR filed a seven-count complaint
against Attorney Goluba seeking revocation. He filed an answer
on June 21, 2010, proceeding pro se. Referee Mohr was appointed
on July 19, 2010. Evidentiary proceedings encompassed ten days
and were conducted between August 31, 2011, and November 1,
2011. The referee issued a thorough report and recommendation
on February 11, 2012. The OLR appeals.
¶7 A referee's findings of fact are to be affirmed unless
they are clearly erroneous. In re Disciplinary Proceedings
Against Inglimo, 2007 WI 126, ¶5, 305 Wis. 2d 71, 740
3
No. 2010AP1348-D
N.W.2d 125. A referee's conclusions of law are reviewed de
novo. Id.
¶8 The allegations, findings, and conclusions regarding
the matter of S.R. are uncontested on appeal, so we address them
first. S.R. was personal representative of her husband's
estate. She hired Attorney Goluba to help her with the probate.
S.R. delivered to Attorney Goluba titles to three vehicles that
were in her husband's name, asking Attorney Goluba to have them
retitled in her name. Attorney Goluba contends he did the work
and mailed all the paperwork, together with S.R.'s check for the
title transfer fees, to the Department of Motor Vehicles (DMV)
in Madison. S.R. never received the titles.
¶9 S.R. made repeated telephone calls to the Goluba Law
Office asking about the titles. Attorney Goluba testified that
the DMV advised his office that any title applications would be
processed in the order they were received; he thought they were
still being processed by the DMV. Both Golubas testified they
gave that information to S.R.
¶10 After almost 18 months of waiting, S.R. went to the
DMV in Madison and changed the names on the titles herself.
Attorney Goluba claims that when S.R. stopped calling him, he
assumed that she finally had received the titles back from the
DMV.
¶11 The OLR alleged and the referee agreed that Attorney
Goluba committed three counts of misconduct in connection with
this matter. By failing to follow up on the missing titles,
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No. 2010AP1348-D
Attorney Goluba violated SCR 20:1.31 (Count 4). By failing to
return telephone calls to S.R., Attorney Goluba violated
SCR 20:1.4(a)(4)2 (Count 5). Referee Mohr, however, recommended
the court dismiss Count 6 which alleged that, by failing to
return S.R.'s original title documents and fees, Attorney Goluba
violated SCR 20:1.16(d).3 The referee concluded that the OLR had
failed to prove this violation. Attorney Goluba could not
return the original titles to S.R. because he no longer retained
them; the referee found that he did send them to the DMV. The
referee agreed that by failing to timely respond to the OLR's
investigation of this grievance, Attorney Goluba violated
SCR 22.03(2),4 enforceable via SCR 20:8.4(h)5 (Count 7).
1
SCR 20:1.3 states that a "lawyer shall act with reasonable
diligence and promptness in representing a client."
2
SCR 20:1.4(a)(4) provides that a lawyer shall "promptly
comply with reasonable requests by the client for
information; . . . ."
3
SCR 20:1.16(d) states:
Upon termination of representation, a lawyer
shall take steps to the extent reasonably practicable
to protect a client's interests, such as giving
reasonable notice to the client, allowing time for
employment of other counsel, surrendering papers and
property to which the client is entitled and refunding
any advance payment of fee or expense that has not
been earned or incurred. The lawyer may retain papers
relating to the client to the extent permitted by
other law.
4
SCR 22.03(2) states as follows:
Upon commencing an investigation, the director
shall notify the respondent of the matter being
investigated unless in the opinion of the director the
investigation of the matter requires otherwise. The
5
No. 2010AP1348-D
¶12 The OLR does not dispute these findings or conclusions
on appeal. We conclude that the record supports the facts as
found by the referee, and we adopt his findings and conclusions
of law relating to S.R. The referee recommended the court
direct Attorney Goluba to pay restitution of $145 to client S.R.
for the legal fees he charged her. The OLR concurs with the
recommended restitution, and we accept this recommendation as
well.
¶13 The second client matter is significantly more
complicated and was litigated extensively in the proceedings
before the referee.
¶14 On January 11, 2004, W.S. died. W.S. left a will
naming R.L. as his personal representative. R.L. is the mother
of Janice Goluba, Attorney Goluba's wife. Janice Goluba had
been Attorney Goluba's legal secretary since 1984. Attorney
Goluba had previously done legal work for R.L. and did R.L.'s
respondent shall fully and fairly disclose all facts
and circumstances pertaining to the alleged misconduct
within 20 days after being served by ordinary mail a
request for a written response. The director may
allow additional time to respond. Following receipt
of the response, the director may conduct further
investigation and may compel the respondent to answer
questions, furnish documents, and present any
information deemed relevant to the investigation.
5
SCR 20:8.4(h) states 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); . . . ."
6
No. 2010AP1348-D
taxes every year. Attorney Goluba never charged R.L. legal fees
for this work. He only collected out-of-pocket expenses.
¶15 R.L. retained Attorney Goluba as her attorney to
handle the probate of the W.S. Estate. The will listed 13
beneficiaries, including R.L. At Attorney Goluba's suggestion,
R.L. deposited $424,156.69 of the estate's funds into Attorney
Goluba's trust account on May 25, 2004, reportedly to facilitate
payment of the bequests. The OLR deems this highly significant,
noting this was the first time Attorney Goluba recommended R.L.
deposit monies directly into his trust account.
¶16 All the checks to beneficiaries, cover letters to
beneficiaries, and beneficiary receipts were prepared. The
checks were signed by Janice Goluba, and the letters were signed
by Attorney Goluba. All of the letters and checks were mailed
on or about May 29, 2004, with one exception.
¶17 W.S. left The Salvation Army a bequest of $30,000.
Janice Goluba prepared and signed a check to The Salvation Army
in the amount of $30,000. It was never sent. Instead, the
$30,000 was misappropriated and withdrawn from Attorney Goluba's
trust account.
¶18 Between May and October 2004, in a variety of checks
each made payable to Attorney Goluba, the money was withdrawn in
odd amounts of a few thousand dollars, until all $30,000 was
used up. The money was used to pay expenses of the Goluba
household. The Golubas were extremely short of cash that year,
in part because of the economy and in part because Attorney
Goluba had significant health problems that year.
7
No. 2010AP1348-D
¶19 In March 2005 The Salvation Army began calling and
writing Attorney Goluba wanting to know when it would receive
its $30,000 bequest. After receiving no response, The Salvation
Army hired Attorney Charles Maris in December 2005, who
contacted Attorney Goluba. At one point, Attorney Goluba's
office sent Attorney Maris a copy of a letter of transmittal
with a copy of a check for $30,000 made payable to The Salvation
Army. However, only a copy of the front of the check was
enclosed, not the back of the check.
¶20 Attorney Maris requested a copy of the back of the
check. When he did not receive it, he eventually entered an
appearance in the probate matter and a hearing was conducted
before Judge Dyer in Outagamie County circuit court on
January 19, 2007.
¶21 Judge Dyer asked Attorney Goluba for proof that The
Salvation Army had been paid. Attorney Goluba represented to
the court that The Salvation Army had been paid and stated he
had a copy of the cancelled check. Judge Dyer ordered Attorney
Goluba to produce a copy of both sides of the cancelled check
within seven days and to furnish a copy to opposing counsel.
¶22 Attorney Goluba could not produce a copy of the back
side of the check. Attorney Goluba asserted this was the first
time he realized there was a significant problem with The
Salvation Army bequest. He realized his wife had
misappropriated the funds. Janice Goluba has not denied this
and repeatedly invoked her Fifth Amendment rights during her
testimony at the evidentiary hearing, even after being advised
8
No. 2010AP1348-D
the referee could draw adverse inferences from her refusal to
testify. The OLR maintains Attorney Goluba knew all along that
the funds had been misappropriated.
¶23 In any event, approximately two weeks after the
probate court hearing, the Golubas went together to R.L.'s home.
The parties' versions of what transpired that evening are very
different.
¶24 The OLR alleges that Attorney Goluba deceived and
intimidated R.L. into writing him a check for $30,000 to cover
the misappropriation. The OLR alleges that Attorney Goluba
falsely told R.L. that she was personally responsible for this
money because she was the personal representative for the
estate. The OLR contends that, out of fear, R.L. wrote the
check to Attorney Goluba's trust account.
¶25 Attorney Goluba admits that he and his wife visited
R.L.'s home, but denies any misrepresentation. He says that
R.L. voluntarily offered to write the $30,000 check in order to
protect her daughter, Janice Goluba. Attorney Goluba used the
check to pay The Salvation Army. In March of 2007, Attorney
Goluba closed his law office.
¶26 Attorney Goluba then failed to respond to or otherwise
cooperate with the OLR's investigation into the ensuing
grievances. In discovery, Attorney Goluba claimed that most of
his financial records from this time were lost or destroyed.6
6
Attorney Goluba did not state that he intentionally
destroyed relevant documents. He claimed the OLR did not
request certain documents and that older documents were shredded
and some documents were missing.
9
No. 2010AP1348-D
The OLR subpoenaed the bank records and laboriously
reconstructed Attorney Goluba's trust and business account
transactions. R.L. later sought and received reimbursement from
the Fund in the amount of $30,000.
¶27 The OLR alleged three counts of misconduct relating to
this matter. Count 1 alleged that by failing to hold in trust,
and converting to his own purposes, $30,000 belonging to the
W.S. Estate, Attorney Goluba violated SCR 20:1.15(b)(1)7 and
SCR 20:8.4(c).8 Count 2 alleged that Attorney Goluba violated
SCR 20:8.4(c) when he allegedly misrepresented to R.L., the
7
Some of the misconduct alleged in Count 1 occurred prior
to July 1, 2004. Therefore, there was a violation of former
20:1.15(a) as well as the current rule. Former SCR 20:1.15(a)
applied to misconduct committed prior to July 1, 2004, and
stated, in pertinent part, as follows:
A lawyer shall hold in trust, separate from the
lawyer's own property, that property of clients and
third persons that is in the lawyer's possession in
connection with a representation or when acting in a
fiduciary capacity. . . . All funds of clients and
third persons paid to a lawyer or law firm shall be
deposited in one or more identifiable trust
accounts . . . ."
Current SCR 20:1.15(b)(1) (effective July 1, 2004) states:
Separate account. 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.
8
SCR 20:8.4(c) provides it is professional misconduct for a
lawyer to "engage in conduct involving dishonesty, fraud, deceit
or misrepresentation; . . . ."
10
No. 2010AP1348-D
personal representative, that she was responsible for paying the
$30,000, thereby inducing her to write a check to his trust
account so that he could reimburse The Salvation Army. Count 3
alleged that Attorney Goluba failed to cooperate with the OLR's
investigation, thereby violating SCRs 22:03(2) and 22.03(6),9
enforceable via SCR 20:8.4(h).
¶28 Prior to the evidentiary hearing, Referee Mohr granted
summary judgment to the OLR on Count 3 (W.S. Estate) and Count 7
(S.R.), concluding that Attorney Goluba had failed to cooperate
with the OLR in both matters. Neither party appeals this
conclusion.
¶29 Evidentiary proceedings were conducted on the
remaining counts between August 31, 2011, and November 1, 2011.
The referee issued his report and recommendation on February 11,
2012.
¶30 The referee's report is thorough and well written.
The referee carefully explains that he considered the voluminous
documentary evidence. He explains that he insisted on having
R.L. testify in person. He explains further that while there
were differences between the language in her grievance and her
9
SCR 22.03(6) states:
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.
11
No. 2010AP1348-D
subsequent testimony, he believed R.L.'s testimony at the
hearing.
¶31 The referee emphasizes that the evidentiary hearing
lasted ten days and produced thousands of pages of exhibits and
over 2,000 pages of transcript. The referee implies that this
was excessive, but does not explicitly make a finding to that
effect. The OLR staunchly defends the need for "meticulous"
recreation of the financial records and testimony about the
Golubas' financial transactions.
¶32 The referee emphasizes that he listened carefully to
all of the testimony, read many of the exhibits, re-read the
transcript and his notes of the hearing, and reviewed all of the
briefs submitted by the parties.
¶33 Ultimately, the referee found that Attorney Goluba
discovered The Salvation Army had not been paid after the
January 19, 2007 hearing before Judge Dyer, and realized, for
the first time, that Janice Goluba had misappropriated the
$30,000 bequest to The Salvation Army.
¶34 The referee was not persuaded by the OLR's theory that
Attorney Goluba then preyed on R.L. The referee noted that the
OLR had implied R.L. was "confused, fragile, of weak mind and of
even weaker health." The referee states he "found just the
contrary":
I found [R.L.] to be charming, intelligent and
with a remarkably good memory. She was 87 years old
when she testified and, like a lot of people that age,
she wasn't as spry as she used to be. She felt less
competent than the actual impression she gave. A lot
of people, attorney[s], children, grandchildren, and
12
No. 2010AP1348-D
others have worked with and talked to her, but when
she was testifying, by herself at the hearing, I found
her remarkably lucid, intelligent, confident, and with
a good recall of events. Although her complaint and
affidavits were somewhat contrary to the testimony she
gave, I derived almost all of my conclusions from her
live testimony. I was then able to view and judge her
credibility the best.
The referee "found no evidence . . . that [Attorney] Goluba
preyed upon [R.L.]."
¶35 The referee acknowledges that the OLR produced a
detailed spreadsheet of each check that went in and out of
Attorney Goluba's business and trust accounts. This spreadsheet
shows that in 2004 the business account was constantly overdrawn
and was kept alive only with the misappropriated funds.
¶36 The referee notes, however, that Attorney Goluba does
not dispute any of this. Attorney Goluba does not dispute that
The Salvation Army never received its check or that the money
was misappropriated from his trust account. He also agrees that
most, if not all, of the money was used to pay personal expenses
of the Goluba household. Indeed, the referee noted that "[a]s
far as I can tell, he has admitted this from the beginning."
¶37 However, the referee explicitly found that Attorney
Goluba was not aware of the ongoing misappropriation of funds.
The referee reached this finding based on record evidence and
testimony of the people involved. He found that "it [was]
absolutely clear who ran the details and the business of the
Goluba Law Office. It was Janice Goluba. [Attorney Goluba]
trusted her implicitly and gave her responsibility to handle
most of the affairs of the office." The referee found and the
13
No. 2010AP1348-D
record supports his finding that Attorney Goluba experienced
health problems unrelated to this case and was not able to
function as efficiently as he had in the past. As a result,
Janice Goluba assumed extensive responsibility for the office
including keeping Attorney Goluba's calendar, making his
appointments, drafting his letters, making his phone calls,
picking up the mail, taking messages, handling all the billing
and receipts, and making all of the payments. The referee
stated, "In short, other than practicing law, she did everything
else in the Goluba Law Office. [Attorney Goluba] trusted her
implicitly and, to the best of his knowledge, she had never
breached that trust."
¶38 The referee also made findings relating to the
relationship between the Golubas and R.L., finding that "[o]ver
the years [R.L.] gave substantial sums of money to her
son . . . and also to her daughter, Janice [Goluba]."
¶39 The referee explicitly asked the question whether
Attorney Goluba knew Janice Goluba had taken the $30,000 bequest
and, based on the evidence from the hearing, found that he did
not.
¶40 The referee rejected the OLR's theory that Attorney
Goluba deceived and intimidated R.L. into producing the
additional $30,000 used to reimburse The Salvation Army. The
referee acknowledged R.L. stated that happened in both her
grievance and in an affidavit signed by her, but the referee
noted that she did not prepare either document; they were
prepared by an attorney who represented R.L. during a period of
14
No. 2010AP1348-D
time she was estranged from the Golubas. The referee
specifically stated:
When I had the opportunity to see and hear [R.L.] in
person, observe her demeanor, her recollection and
credibility, there is hardly any doubt in my mind that
[R.L.] was not intimidated, misled or frightened. I
believe she was concerned for her daughter, as she had
been many times in the past, and she simply asked what
she could do to help out her daughter. She testified
quite forthrightly that she wrote the check
voluntarily, not because she was threatened or misled,
but because she wanted to help her daughter. David
Goluba accepted the check, put it in his Trust
Account, and paid off The Salvation Army.
Thus, with respect to Count 2 the referee stated, "I do not find
that [Attorney] Goluba engaged in any intimidation or
misrepresentation with respect to [R.L.], and I do not believe
OLR has proven that by clear, satisfactory and convincing
evidence."
¶41 After detailing his factual findings the referee
concluded that the OLR had proved by clear, satisfactory, and
convincing evidence, that Attorney Goluba violated
SCR 20:1.15(b)(1) for his failure to hold in trust $30,000 from
the W.S. Estate which was properly the property of The Salvation
Army (Count 1).
¶42 The referee concluded that the OLR failed to prove, by
evidence which is clear, satisfactory, and convincing, that
Attorney Goluba engaged in misrepresentations or intimidation
toward R.L. concerning her responsibility for paying the
$30,000, and therefore had not proven that Attorney Goluba
violated SCR 20:8.4(c) (Count 2).
15
No. 2010AP1348-D
¶43 The referee also concluded that the OLR proved by
clear, satisfactory, and convincing evidence that Attorney
Goluba made at least two statements to the probate court of
Outagamie County, Wisconsin, which were misrepresentations and
thereby constituted a violation of SCR 20:8.4(c) (Counts 1 and
2).
¶44 The OLR appeals several aspects of the referee's
report and specifically disputes the appropriate discipline and
urges imposition of full costs.
¶45 With respect to the allegations in Count 1, the
referee concluded that Attorney Goluba violated
SCR 20:1.15(b)(1) by failing to hold property in trust, stating
"indisputably, [since] the $30,000.00 was not held in trust and
the Rule requires a lawyer to do so, there is a violation of
this Rule." The facts of record support this conclusion, and we
adopt it.
¶46 Count 1 also alleges that Attorney Goluba engaged in
misrepresentation in violation of SCR 20:8.4(c).
¶47 The referee found that Attorney Goluba engaged in
misrepresentation by filing a final account with the probate
court representing that The Salvation Army had been paid
$30,000, and by stating to the court on January 19, 2007, that
The Salvation Army had been paid and that he had a cancelled
check. The referee thus concluded that Attorney Goluba violated
SCR 20:8.4(c) ("I find that Attorney Goluba, by filing a Final
Account with the Probate Court, representing that The Salvation
Army had been paid $30,000.00; and by stating to the Court on
16
No. 2010AP1348-D
January 19, 2007 that The Salvation Army had been paid and that
he had a cancelled check, engaged in misrepresentations and
therefore violated that Rule.")
¶48 This conclusion depends on the definition of
misrepresentation used by the referee. The referee states that
the terms "dishonesty, fraud, deceit or misrepresentation
. . . are not generally defined." The referee then uses a
definition of misrepresentation from First Nat'l Bank & Trust
Co. of Racine v. Notte, 97 Wis. 2d 207, 293 N.W.2d 530 (1980).
That case involved a claim of fraudulent representation by a
lender in a contract negotiation. The court, considering
whether a contract can be voided for mutual mistake of fact,
stated "[a] misrepresentation is an assertion that does not
accord with facts as they exist." Id. at 222. The Notte court
then stated that liability may be imposed even when a
misrepresentation was innocent, i.e., the person lacked actual
knowledge they were making a factual misrepresentation.
However, the definition of misrepresentation stated in Notte
does not apply to lawyer disciplinary cases.
¶49 The Wisconsin Rules of Professional Conduct for
Attorneys, SCR Chapter 20, defines "misrepresentation" as
follows:
"Misrepresentation" denotes communication of an
untruth, either knowingly or with reckless disregard,
whether by statement or omission, which if accepted
would lead another to believe a condition exists that
does not actually exist.
SCR 20:1.0(h).
17
No. 2010AP1348-D
¶50 Misrepresentation under the Wisconsin ethics rules
requires communication of an untruth, either knowingly or with
reckless disregard for truth. Whether the communication was
made knowingly or with reckless disregard for the truth may be
inferred from circumstances. See SCR 20:1.0(g) (a person's
knowledge may be inferred from circumstance).
¶51 Here, the referee decisively found that Janice Goluba
misappropriated the funds10 and that Attorney Goluba lacked
knowledge of the misappropriation of funds until after the court
hearing. The referee's report contains the following factual
findings made in connection with this issue:
• "From May, 2004 through October, 2004 Janice Goluba
withdrew money from the Trust Account to pay
personal and family expenses. David Goluba was
unaware of these withdrawals at the time they were
made" (emphasis added).
• "Janice Goluba did not put in the appropriate
files, and did not give to her husband, much if not
all of the correspondence from The Salvation Army
or their attorney pertaining to the [W.S.] Estate.
Likewise Mrs. Goluba did not advise Attorney Goluba
of telephone calls received from Maris or The
Salvation Army, concerning The Salvation Army's
bequest from the [W.S.] Estate" (emphasis added).
• "Attorney Maris again wrote to Goluba on
October 13, 2006, asking again for a copy of the
back of the check. Attorney Goluba did not see and
did not respond to that letter" (emphasis added).
In narrative the referee stated:
• "When one reads the transcript of that hearing, one
is left with the clear impression that Goluba
10
The referee states that "it is concluded that Janice
Goluba unlawfully misappropriated the $30,000.00."
18
No. 2010AP1348-D
believed he had a cancelled check. He claims when
he went to look through the records, [he] could
find nothing. He then confronted his wife, and
learned for the first time, he says, that she had
misappropriated the $30,000.00. Quite honestly,
that has the ring of truth to it" (emphasis added).
• "In fact, there is no evidence anywhere in the
record that Goluba actually knew the
misappropriations were taking place until
immediately after the conference with Judge Dyer on
January 19, 2007" (emphasis added).
• "It seems quite clear to me, based upon all of the
testimony I heard, that Goluba's wife undertook the
misappropriation; hid pertinent information about
the [W.S.] file from Goluba, including all requests
for information from The Salvation Army; and never
advised Goluba of what documentation was needed to
close the probate file."
• "I don't believe he would have boldly told Judge
Dyer that he had a copy of a cancelled check, nor
would he have filed a Final Account with the
Probate Court certifying that The Salvation Army
had been paid, without honestly believing those two
statements were true" (emphasis added).
¶52 The OLR does not address the definition of
misrepresentation used by the referee. The OLR focuses its
argument on its assertion that the record evidence demonstrates
that Attorney Goluba knew of the misappropriation such that the
referee's factual findings to the contrary are clearly
erroneous.
¶53 The OLR argues, vehemently, that the "record proves
Goluba knew of the misappropriation of $30,000 of [W.S.] Estate
funds which Goluba had deposited to his trust account." The OLR
points to the following facts of record to support this
assertion:
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No. 2010AP1348-D
• Attorney Goluba requested R.L. place $424,156.69 into
his trust account.
• Attorney Goluba claims to have lost, misplaced, or
can't find essentially all of his trust account records and
business records for a time period from 2002 to February 2,
2007.
• There was no cancelled check paid to The Salvation
Army from May 2004 until February 2007.
• In less than five months, Attorney Goluba had an
influx of $30,000 into his personal bank account.
• Attorney Goluba signed some of the trust checks at the
time of conversion.
• Attorney Goluba admits he knew during 2004 that he was
having a bad year financially, with insufficient cash flow to
support himself, his family, and his home.
• Janice Goluba repeatedly invoked the Fifth Amendment
as to theft of the $30,000 of trust funds.
• Attorney Goluba testified that he prepared the federal
and state tax returns for the business and federal and state
joint income tax returns. A review of the 2001-2007 returns
shows that Attorney Goluba would have had to review all records
of income and expense, including bank statements for both the
business and the personal joint income, to prepare an accurate
tax return.
¶54 In making these arguments, the OLR also defends its
decision to create a "meticulous" and "full record" by
"tracing . . . Goluba's use of his trust account." And, the
20
No. 2010AP1348-D
record does contain "copious data" and "[s]ummaries as to
contacts between the probate division, the judge, the banks to
Goluba, [The] Salvation Army, Attorney Maris, and others."
¶55 We readily acknowledge that circumstantial evidence
may support a finding of misrepresentation. See, e.g., In re
Disciplinary Proceedings Against Marks, 2003 WI 114, 265
Wis. 2d 1, 665 N.W.2d 836. Here, however, the referee
considered the extensive documentary and testimonial evidence
and found that Attorney Goluba did not know his wife had
misappropriated the money. In making this finding, the referee
referenced and considered the documentary evidence; it cannot be
said that the referee did not consider the voluminous record
prepared by the OLR.
¶56 The OLR focuses on the referee's statement that
Attorney Goluba did not sign any of the checks drawing
misappropriated monies from the trust account, contending this
is clearly erroneous. The OLR points out that the record
indicates he did, indeed, endorse some of these checks.11
11
The referee stated that "[a]lthough each of the
misappropriated checks from the Trust Account was written in his
name, none of the endorsements on the checks appear to bear his
signature." The OLR notes that Attorney Goluba admitted in his
deposition that his signature was on trust account checks dated
in 2004, with misappropriated trust funds occurring at the time
he endorsed checks during 2004. Specifically, it appears he
endorsed check no. 1702 for $3,500; check no. 1724 for
$4,454.86; check no. 1003, Estate of W.S. signed by R.L. in the
amount of $4,300; possibly a cashier's check for approximately
$2,900; and check no. 1827, which appeared to be for $1,300
although Attorney Goluba testified it was not his signature on
that check.
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No. 2010AP1348-D
¶57 The referee noted, however, that the checks had been
subpoenaed from the bank and were "poor" photocopies at best.
The referee notes that Attorney Goluba testified he did not
think it was actually his signature on these checks. The
referee did not explicitly find that Janice Goluba signed her
husband's name, but states, "[i]t would appear that the checks
were written by his wife, made payable to Goluba, and then
endorsed by his wife."
¶58 Even if the referee's finding that Attorney Goluba did
not endorse some of these checks is error, it does not make the
referee's finding regarding Attorney Goluba's knowledge of the
misappropriation clearly erroneous. Considering the proper
standard of misrepresentation applicable in disciplinary cases,
together with the referee's clear factual findings, we accept
the referee's factual findings, but reject the conclusion that
Attorney Goluba violated SCR 20:8.4(c) as alleged in Count 1
because the referee found Attorney Goluba lacked actual
knowledge of the misappropriation when he made the
representations at issue to the court.
¶59 Thus, we agree with the referee's conclusions that
Attorney Goluba violated SCR 20:1.15(b)(1) as alleged in Count
1; Count 2 should be dismissed because the OLR failed to
demonstrate Attorney Goluba violated SCR 20:8.4(c) regarding his
interactions with R.L.; Attorney Goluba violated SCRs 22.03(2)
and 22.03(6), enforceable via SCR 20:8.4(h), by failing to
cooperate in the investigation of the W.S. Estate matter, as
alleged in Count 3; Attorney Goluba violated SCR 20:1.3 when he
22
No. 2010AP1348-D
engaged in practice reflecting a lack of diligence in the S.R.
matter as alleged in Count 4; Attorney Goluba violated SCR
20:1.4(a)(4) when he failed to communicate in the S.R. matter as
alleged in Count 5; the allegation in Count 6 should be
dismissed because the OLR did not prove that Attorney Goluba
failed to return client property in the S.R. matter; and
Attorney Goluba violated SCR 22.03(2), enforceable via SCR
20:8.4(h), when he failed to cooperate in the OLR's
investigation regarding the S.R. matter as alleged in Count 7.
We also dismiss the misrepresentation claim alleged in Count 1.
¶60 We consider the appropriate discipline for Attorney
Goluba's misconduct. The referee recommended restitution as
follows: $145 to client S.R. for fees incurred when Attorney
Goluba failed to complete the transfer of her vehicle titles;
$30,000 to reimburse the Fund for monies paid to R.L.; and
$2,655 in legal fees incurred by The Salvation Army to recover
their bequest. No party has objected to these recommendations,
they seem wholly reasonable, and we accept them.
¶61 The referee also recommends that Attorney Goluba,
prior to reinstatement, take a trust account management seminar
within one year, successfully complete its requirements, and
furnish quarterly reports to the OLR of activities in his trust
account for a period of two years after resuming practice,
including furnishing any and all trust, fiduciary and/or
business account records requested by the OLR. No party has
objected to these recommendations, they seem wholly reasonable,
and we accept them.
23
No. 2010AP1348-D
¶62 We reject the OLR's request for revocation. Attorney
Goluba has, indeed, committed serious misconduct that warrants
suspension of his license. However, the referee decisively
rejected the OLR's assertion that Attorney Goluba had ongoing
knowledge of the misappropriation of funds or that he
manipulated R.L. into writing him a check to cover that
misappropriation. Upon learning of the misappropriation,
Attorney Goluba promptly took steps to ensure The Salvation Army
was paid. His mother-in-law, R.L., has disavowed any claim that
she was manipulated into paying Attorney Goluba. Accordingly,
the most serious ethical charges against Attorney Goluba fail.
¶63 We have considered the decisions cited by the OLR
concerning trust account misappropriation by attorneys. See,
e.g., In re Disciplinary Proceedings Against Gedlen, 2007 WI
121, 305 Wis. 2d 34, 739 N.W.2d 274; In re Disciplinary
Proceedings Against Sheehan, 2007 WI 3, 298 Wis. 2d 317, 725
N.W.2d 627; In re Disciplinary Proceedings Against Ham, 2006 WI
30, 289 Wis. 2d 359, 711 N.W.2d 649; and In re Disciplinary
Proceedings Against O'Byrne, 2002 WI 123, 257 Wis. 2d 8, 653
N.W.2d 111.
¶64 As the referee observed, however, in these cases the
attorneys knowingly committed the misappropriation. We respect,
as we must, the referee's reasoned decision to rely on his
credibility determinations over the record evidence submitted by
the OLR.
¶65 We consider the cases cited by the referee more
helpful in ascertaining the appropriate discipline. See, e.g.,
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No. 2010AP1348-D
In re Disciplinary Proceedings Against Brandt, 2009 WI 43, 317
Wis. 2d 266, 766 N.W.2d 194 (imposing public reprimand on
attorney whose legal secretary embezzled money from several of
the attorney's accounts, including his trust account, noting the
attorney admitted that he failed to make reasonable efforts to
ensure that his secretary's conduct was compatible with the
obligations of attorneys as required by SCR 20:5.3); In re
Disciplinary Proceedings Against Guenther, 2005 WI 133, 285
Wis. 2d 587, 700 N.W.2d 260 (imposing six-month suspension on
attorney who violated trust account rules because of his failure
to keep appropriate trust account records); In re Disciplinary
Proceedings Against Usow, 214 Wis. 2d 596, 571 N.W.2d 162 (1997)
(imposing a six-month suspension on an attorney charged with
misrepresentation and trust account violations that were found
to be committed without intent and due to a failure to properly
supervise his office staff).
¶66 Attorney Goluba's failure to pay attention to his
trust account and financial situation was serious. He failed to
adequately supervise his office and his lack of oversight
facilitated a misappropriation of $30,000 from a charitable
organization. We agree with the referee that a six-month
suspension is appropriate discipline, and we note that a
suspension of this length will require him to undergo a formal
reinstatement proceeding before he will be eligible to practice
law again.
¶67 We turn next to the issue of costs. The OLR seeks
full costs which total $45,676.36 as of July 9, 2012. Attorney
25
No. 2010AP1348-D
Goluba filed a timely objection requesting a reduction in the
costs.
¶68 Assessment of costs in OLR matters is governed by
SCR 22.24(1m). Our general policy is that upon a finding of
misconduct it is appropriate to impose all costs, including the
expenses of counsel for the OLR, upon the respondent. In cases
involving extraordinary circumstances the court may, in the
exercise of its discretion, reduce the amount of costs upon a
respondent. SCR 22.24(1m). In making this determination we
consider the submissions of the parties and all of the following
factors:
(a) The number of counts charged, contested, and
proven.
(b) The nature of the misconduct.
(c) The level of discipline sought by the
parties and recommended by the referee.
(d) The respondent's cooperation with the
disciplinary process.
(e) Prior discipline, if any.
(f) Other relevant circumstances.
SCR 22.24(1m)(a)-(f).
¶69 We conclude, after careful consideration, that there
are aspects of this litigation that warrant reduction of costs.
The complaint alleged seven counts of misconduct (encompassing
eight potential rule violations) and sought revocation of
Attorney Goluba's license to practice law. The referee
ultimately concluded, and we agree, that Attorney Goluba
26
No. 2010AP1348-D
committed five of the eight charged ethical violations resulting
in a six-month suspension.
¶70 The referee explicitly noted that the misconduct
pertaining to S.R. warranted a reprimand. Attorney Goluba was
exonerated on the most serious allegations involving fraud,
deceit, or misrepresentation. Attorney Goluba has practiced law
for over 20 years with no prior disciplinary history. See
SCR 22.24(1m)(c).
¶71 Admittedly, Attorney Goluba failed to cooperate with
the OLR early in the investigation; however, it appears he was
cooperative during the proceedings before the referee.
¶72 Our review of the costs incurred in this proceeding
indicates that most of the costs are counsel, referee, and court
reporter fees reflecting the length of the evidentiary
proceeding, including production of voluminous banking records.
Attorney Goluba argues that most of these costs were incurred in
the OLR's unsuccessful attempt to prove he had ongoing knowledge
and involvement in the misappropriation of funds. He questions
the fairness of this when he admitted the misappropriation
occurred from the beginning and was ultimately exonerated by the
referee on the question of his knowing involvement in the
misappropriation.
¶73 On balance we agree with Attorney Goluba. Although we
do not reduce costs based solely on the fact that a lawyer
prevailed on certain charges, here, the OLR opted to engage in a
thorough, time-consuming, and ultimately very expensive endeavor
to convince the referee of Attorney Goluba's ongoing knowledge
27
No. 2010AP1348-D
of and involvement with the misappropriation of client funds.
This effort was unsuccessful. The referee found:
[T]here is absolutely no evidence that Goluba ordered
the misappropriation of funds. There is only
inferential evidence (and certainly not evidence that
rises to the standard of clear, satisfactory and
convincing) that Goluba knew the conduct was going on
and ratified it . . . . [T]here is no evidence that
Goluba knew of the misappropriation at a time when its
consequences could be avoided or mitigated but failed
to take reasonable remedial action.
Indeed, the referee found that "there is no evidence anywhere in
the record that Goluba actually knew the misappropriations were
taking place until immediately after the conference with Judge
Dyer on January 19, 2007."
¶74 In view of this outcome, we decline to impose the
entire costs of this expensive effort on Attorney Goluba, a solo
practitioner with no prior discipline. On consideration of the
facts and the record, we impose one-half of the costs of this
proceeding. Our determination is not the result of the
application of a precise mathematical formula, but is based on
our thorough consideration of the record, the manner in which
this case developed, and the factors set forth in SCR 22.24(1m).
We note, further, that Attorney Goluba's allegations of
financial hardship are an appropriate consideration for
establishment of a payment plan with the OLR.
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No. 2010AP1348-D
¶75 IT IS ORDERED that the license of David A. Goluba to
practice law in Wisconsin is suspended for a period of six
months, effective the date of this order.12
¶76 IT IS FURTHER ORDERED that, if he has not already done
so, Attorney David A. Goluba shall comply with the requirements
of SCR 22.26 concerning the duties of a person whose license to
practice law in Wisconsin has been suspended.
¶77 IT IS FURTHER ORDERED that prior to seeking
reinstatement of his license to practice law, David A. Goluba
shall take a trust account management seminar, successfully
complete its requirements, and furnish quarterly reports to the
Office of Lawyer Regulation of activities in his trust account
for a period of two years after resuming practice, including
furnishing any and all trust, fiduciary and/or business account
records requested by the Office of Lawyer Regulation.
¶78 IT IS FURTHER ORDERED that within 60 days of the date
of this order David A. Goluba shall pay restitution as follows:
(1) $30,000 plus legal interest to the Wisconsin Lawyers' Fund
for Client Protection; (2) $2,655 to The Salvation Army; and (3)
$145 to client S.R.
12
Attorney Goluba is reminded that his license to practice
law remains administratively suspended. Before Attorney Goluba
may practice law in Wisconsin, he must provide evidence to this
court that he has satisfied his obligations relating to trust
account certification and bar dues, assessments, and fees, or
demonstrated that he has obtained a waiver from the State Bar of
Wisconsin. See SCR 22.28(1).
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No. 2010AP1348-D
¶79 IT IS FURTHER ORDERED that within 60 days of the date
of this order, David A. Goluba shall pay to the Office of Lawyer
Regulation one-half of the costs of this proceeding, which total
$45,676.36 as of July 9, 2012.
¶80 IT IS FURTHER ORDERED that the restitution specified
above is to be completed prior to paying costs to the Office of
Lawyer Regulation.
¶81 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See
SCR 22.29(4)(c).
30
No. 2010AP1348-D
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