Office of Lawyer Regulation v. James T. Runyon , 365 Wis. 2d 32 ( 2015 )

2015 WI 95SUPREME COURT OF WISCONSIN
CASE NO.: 2015AP578-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against James T. Runyon, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
James T. Runyon,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST RUNYON
OPINION FILED: October 8, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED: ABRAHAMSON, J., concurs. (Opinion filed.)
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2015 WI 95NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2015AP578-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against James T. Runyon, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
OCT 8, 2015
v.
Diane M. Fremgen
Clerk of Supreme Court
James T. Runyon,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review a stipulation filed pursuant
to Supreme Court Rule (SCR) 22.121 by the Office of Lawyer
1
SCR 22.12 provides:
(1) The director may file with the complaint a
stipulation of the director and the respondent to the
facts, conclusions of law regarding misconduct, and
discipline to be imposed. The supreme court may
consider the complaint and stipulation without the
appointment of a referee, in which case the supreme
court may approve the stipulation, reject the
(continued)
No. 2015AP578-D
Regulation (OLR) and Attorney James T. Runyon. In the
stipulation, Attorney Runyon admits that he engaged in
misconduct consisting primarily of a number of trust account
violations. The parties jointly request that this court impose
a 60-day suspension of Attorney Runyon's license to practice law
in Wisconsin as discipline for his admitted misconduct.
¶2 We approve the stipulation and suspend Attorney
Runyon's license to practice law in this state for a period of
60 days. Because this matter was resolved with a stipulation
stipulation, or direct the parties to consider
specific modifications to the stipulation.
(2) If the supreme court approves a stipulation,
it shall adopt the stipulated facts and conclusions of
law and impose the stipulated discipline.
(3) If the supreme court rejects a stipulation, a
referee shall be appointed and the matter shall
proceed as a complaint filed without a stipulation.
(3m) If the supreme court directs the parties to
consider specific modifications to the stipulation,
the parties may, within 20 days of the date of the
order, file a revised stipulation, in which case the
supreme court may approve the revised stipulation,
adopt the stipulated facts and conclusions of law, and
impose the stipulated discipline. If the parties do
not file a revised stipulation within 20 days of the
date of the order, a referee shall be appointed and
the matter shall proceed as a complaint filed without
a stipulation.
(4) A stipulation rejected by the supreme court
has no evidentiary value and is without prejudice to
the respondent's defense of the proceeding or the
prosecution of the complaint.
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No. 2015AP578-D
under SCR 22.12, we do not require Attorney Runyon to pay the
costs of this proceeding. There is no request for restitution.
¶3 Attorney Runyon was admitted to the practice of law in
Wisconsin in 1978. He practices law in the Tomahawk area. In
1984, Attorney Runyon's law license was suspended for one year
for conduct involving moral turpitude, dishonesty, fraud, or
deceit and for providing false testimony, violations of former
SCRs 11.01, 20.04(3) and (4), 22.28(4)(b), and 40.13. In re
Disciplinary Proceedings Against Runyon, 121 Wis. 2d 37,
357 N.W.2d 545 (1984). In 2006, Attorney Runyon received a
private reprimand for misconduct involving dishonesty, fraud,
deceit, or misrepresentation, in violation of SCR 20:8.4(c).
Private Reprimand No. 2006-11.
¶4 On March 23, 2015, the OLR filed a complaint alleging
six counts of misconduct relating to trust account violations
that occurred over a period of several months in 2013 and early
2014. On May 12, 2015, the parties executed a stipulation
pursuant to SCR 22.12.
¶5 Attorney Runyon maintained an IOLTA trust account at
First Merit Bank in Kaukauna, Wisconsin. Between September and
October 2013, a series of overdrafts occurred. At the OLR's
request, Attorney Runyon provided the OLR with his transaction
register, client ledger, and bank statements. Attorney Runyon's
transaction register consisted of handwritten check stubs, which
did not show a consistent, accurate running balance, did not
include the source and client matter for all deposits, and did
not include the purpose for all disbursements. Attorney Runyon
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No. 2015AP578-D
did not perform complete and accurate monthly account
reconciliations. For example, Attorney Runyon's handwritten
check stubs indicate that the balance in his trust account as of
June 27, 2013, should have been $134,924.09. However, bank
records show that Attorney Runyon's actual trust account balance
on June 27, 2013, was only $5,944.86.
¶6 Because the OLR was unable to determine the cause of
the overdrafts based solely upon records provided by Attorney
Runyon, the OLR obtained Attorney Runyon's bank statements,
checks, and deposit records for 2013 directly from the bank and
conducted an audit.
¶7 The OLR's reconstructed records indicate that Attorney
Runyon's trust account first became overdrawn (on the books, as
opposed to the bank balance) by a total of $16,651.33 at the end
of the day on September 16, 2013. On September 19, 2013, the
largest overdraft occurred, in the amount of $24,151.33.
¶8 On November 4, 2013, in the wake of these overdrafts,
Attorney Runyon opened a new trust account at River Valley Bank
and made an initial deposit of $20,000.
¶9 On November 12 and 14, 2013, River Valley Bank charged
Attorney Runyon miscellaneous fees associated with opening the
new account. Attorney Runyon did not account for such fees and
did not keep any firm funds designated to cover account fees and
charges in the trust account.
¶10 On December 2, 2013, Attorney Runyon closed the First
Merit Bank trust account, withdrew its remaining balance of
$8,072.60, and deposited it into his River Valley Bank trust
4
No. 2015AP578-D
account. The $8,072.62 belonged to Attorney Runyon either as
earned fees or as personal funds.
¶11 On December 31, 2013, there was an overdraft in the
amount of $1,518.75 on Attorney Runyon's River Valley Bank trust
account. A trust account check in the amount of $2,500 was
presented and returned unpaid.
¶12 In response to the December 31, 2013 overdraft,
Attorney Runyon provided copies of various records requested by
the OLR, including his transaction register, bank statements,
images of the canceled checks, deposit slips, and copies of the
client ledgers at issue. A number of the canceled checks did
not include the client matter and purpose of the check on the
memo line. In addition, a number of the original deposit slips
that were submitted to the bank by Attorney Runyon did not
include client information. Attorney Runyon stipulated to his
commission of the misconduct charged as follows:
¶13 By failing to hold in trust and account for at least
$19,053.61 and as much as $86,850.68 in client and third-party
funds between June 27, 2013, and October 1, 2013, Attorney
Runyon violated SCR 20:1.15(b)(1)2 (Count One).
2
SCR 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.
5
No. 2015AP578-D
¶14 By failing to hold in trust and account for at least
$19,053.61 and as much as $86,850.68 in client and third-party
funds between June 27, 2013, and October 1, 2013, and, on
numerous occasions, by converting funds from client matters in
order to cover checks he issued in other client matters for
which there was not sufficient funds on deposit in the trust
account, Attorney Runyon violated SCR 20:8.4(c)3 (Count Two).
¶15 By depositing eight checks into his trust account
totaling $18,550 that were drawn upon his business account,
Attorney Runyon violated SCR 20:1.15(b)(3)4 (Count Three).
¶16 By failing to maintain a transaction register that
accurately reflected the activity in his trust account and that
included the balance after each transaction, the source and
client matter for all deposits, and the purpose for all
disbursements, Attorney Runyon violated SCR 20:1.15(f)(l)a.5
3
SCR 20:8.4(c) provides that it is professional misconduct
for a lawyer to "engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
4
SCR 20:1.15(b)(3) provides that "[n]o 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."
5
SCR 20:1.15(f)(1)a. provides:
The transaction register shall contain a
chronological record of all account transactions, and
shall include all of the following:
1. the date, source, and amount of all deposits;
(continued)
6
No. 2015AP578-D
Further, by failing to maintain client ledgers that accurately
reflected the activity in his trust account, and by making
disbursements of funds from his trust account that created final
total negative balances of $53,772.73 in 14 client ledgers as of
October 1, 2013, and by allowing five client ledgers to become
overdrawn temporarily in July and August 2013 by a total amount
of $6,759.36, Attorney Runyon violated SCR 20:1.15(f)(l)b.6
(Count Four).
¶17 By depositing $8,072.60 of personal funds into his
River Valley Bank trust account on December 2, 2013, Attorney
Runyon violated SCR 20:1.15(b)(3) (Count Five).
2. the date, check or transaction number, payee
and amount of all disbursements, whether by check,
wire transfer, or other means;
3. the date and amount of every other deposit or
deduction of whatever nature;
4. the identity of the client for whom funds were
deposited or disbursed; and
5. the balance in the account after each
transaction.
6
SCR 20:1.15(f)(1)b. provides:
A subsidiary ledger shall be maintained for each
client or 3rd party for whom the lawyer receives trust
funds that are deposited in an IOLTA account or any
other pooled trust account. The lawyer shall record
each receipt and disbursement of a client's or 3rd
party's funds and the balance following each
transaction. 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.
7
No. 2015AP578-D
¶18 By failing to identify the client matter on his trust
account deposit slips submitted to the bank, Attorney Runyon
violated 20:1.15(f)(l)d.7 Further, by issuing checks from his
River Valley Bank trust account without including the client
matter and purpose on the memo lines of such checks, Attorney
Runyon violated 20:1.15(f)(l)e.l.8 Lastly, by failing to obtain,
and maintain with his trust account records, imaged checks or
copies of the canceled checks issued from his trust account,
Attorney Runyon violated 20:1.15(f)(l)e.2.9 (Count Six).
7
SCR 20:1.15(f)(1)d. provides:
Deposit slips shall identify the name of the
lawyer or law firm, and the name of the account. The
deposit slip shall identify the amount of each deposit
item, the client or matter associated with each
deposit item, and the date of the deposit. The lawyer
shall maintain a copy or duplicate of each deposit
slip. All deposits shall be made intact. No cash, or
other form of disbursement, shall be deducted from a
deposit. Deposits of wired funds shall be documented
in the account's monthly statement.
8
SCR 20:1.15(f)(1)e.1. provides:
Checks shall be pre-printed and pre-numbered.
The name and address of the lawyer or law firm, and
the name of the account shall be printed in the upper
left corner of the check. Trust account checks shall
include the words "Client Account," or "Trust
Account," or words of similar import in the account
name. Each check disbursed from the trust account
shall identify the client matter and the reason for
the disbursement on the memo line.
9
SCR 20:1.15(f)(1)e.2. provides that "[c]anceled checks
shall be obtained from the financial institution. Imaged checks
may be substituted for canceled checks."
8
No. 2015AP578-D
¶19 The stipulation clearly states that it was not the
result of plea bargaining. Attorney Runyon states that he fully
understands the allegations of misconduct against him and his
right to contest those allegations. He nonetheless admits his
misconduct and assents to the discipline sought by the OLR. He
further states that he fully understands the ramifications that
will follow if this court accepts the stipulation and imposes
the requested level of discipline. Attorney Runyon also
represents that he understands his right to consult with counsel
in this matter. Finally, he asserts that his entry into the
stipulation is made knowingly and voluntarily.
¶20 The only real issue here is whether the stipulated
level of discipline (a 60-day suspension) is an appropriate
level of discipline. Precedent in the area of failing to hold
funds in trust is clustered on two extremes. The most egregious
trust account misconduct, misappropriation, can merit revocation
or a lengthy suspension. Other cases, however, warrant a much
less severe level of discipline, such as a reprimand or short
suspension. Attorney Runyon's conduct lies closer to the lower
end of the two extremes.
¶21 Although it was improper for Attorney Runyon to
deposit personal funds into his trust account, his motive was to
make the trust account whole.
¶22 The OLR states that it considered several cases, as
well as aggravating factors—including Attorney Runyon's
disciplinary history—and mitigating factors, when analyzing what
level of discipline it would seek in this matter. See, e.g.,
9
No. 2015AP578-D
In re Disciplinary Proceeding Against Grogan, 2011 WI 7,
331 Wis. 2d 341, 795 N.W.2d 745 (imposing 60-day suspension on
attorney with previous reprimand who engaged in various trust
account violations, including commingling funds in the trust
account and paying for office rent, groceries, and prepaid cash
cards from the trust account); In re Disciplinary Proceedings
Against Molinaro, 2009 WI 61, 318 Wis. 2d 375, 769 N.W.2d 458(imposing 60-day suspension for trust account anomalies,
including inappropriate transfers of funds between personal,
trust, and business accounts).
¶23 The OLR deems suspension warranted in this case
because Attorney Runyon was, at the least, extremely reckless
with managing his trust account. In a four-month period,
Attorney Runyon's trust account was repeatedly out of balance.
Attorney Runyon knew or should have known that he did not have
sufficient funds in his trust account to cover many of the
disbursements he made to clients. Indeed, Attorney Runyon made
$18,550 in deposits of personal funds to the account between
June 29 and September 19, 2013, prior to the bank issuing its
first overdraft notice on September 20, 2013. After the
overdrafts occurred, Attorney Runyon then deposited additional
personal funds to make the account whole. So, while no clients
were ultimately harmed, that is due only to the fact that
Attorney Runyon had sufficient personal funds available to make
up for his overextension.
¶24 On review of the entire record, we accept the
stipulation and impose the jointly requested sanction of a 60-
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No. 2015AP578-D
day suspension of Attorney Runyon's license to practice law in
this state. No restitution was sought so we do not impose
restitution. Because this matter was resolved with the filing
of a stipulation under SCR 22.12 and without the appointment of
a referee, the OLR does not seek costs and we will not require
Attorney Runyon to pay any costs.
¶25 IT IS ORDERED that the license of James T. Runyon to
practice law in Wisconsin is suspended for a period of 60 days,
effective November 7, 2015.
¶26 IT IS FURTHER ORDERED that James T. Runyon 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.
¶27 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See
SCR 22.28(2).
11
No. 2015AP578-D.ssa
¶28 SHIRLEY S. ABRAHAMSON, J. (concurring). I write to
express concern that the per curiam does not sufficiently
justify the 60-day suspension the court approves in this
stipulated matter. Attorney Runyon and the OLR stipulated to
the violation of the trust accounting rules and to a 60-day
suspension.
¶29 Attorney Runyon has had two prior brushes with OLR.
In 1988, his license was suspended for one year. In 2006, he
received a private reprimand.
¶30 In contrast, Attorney Thomas Mulligan receives a
9-month suspension for violating trust accounting rules. OLR v.
Mulligan, 2015 WI 96, ___ Wis. 2d ___, ___ N.W.2d ___. Attorney
Mulligan contested the OLR complaint and proposed discipline.
Attorney Mulligan has had three prior brushes with OLR. In
1997, Attorney Mulligan received a private reprimand. In 2005,
Mulligan received a private reprimand. In 2009, he received a
public reprimand.
¶31 I have difficulty reconciling the significantly
different levels of discipline imposed in these two trust
accounting violation cases.
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No. 2015AP578-D.ssa
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