OLR v. James M. Schoenecker ( 2019 )

2019 WI 105
SUPREME COURT OF WISCONSIN
CASE NO.: 2011AP48-D & 2015AP275-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against James M. Schoenecker, Attorney at Law:
Office of Lawyer Regulation,
Complainant-Respondent,
v.
James M. Schoenecker,
Respondent-Appellant.
DISCIPLINARY PROCEEDINGS AGAINST SCHOENECKER
OPINION FILED: December 13, 2019
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2019 WI 105
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2011AP48-D, 2015AP275-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against James M. Schoenecker, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant-Respondent, DEC 13, 2019
v. Sheila T. Reiff
Clerk of Supreme Court
James M. Schoenecker,
Respondent-Appellant.
ATTORNEY Reinstatement proceeding. Reinstatement granted.
¶1 PER CURIAM. We review the report and recommendation
of Referee James J. Winiarski recommending that James M.
Schoenecker's license to practice law in Wisconsin be
reinstated. After careful review of the matter, we agree that
Attorney Schoenecker's license should be reinstated with certain
conditions recommended by the referee. We further agree with
the referee that, consistent with our general practice, Attorney
Schoenecker should be required to pay the full costs of this
reinstatement proceeding, which are $14,754.78 as of October 7,
2019.
No. 2011AP48-D, 2015AP275-D
¶2 Attorney Schoenecker was admitted to practice law in
Wisconsin in 2004. He is a graduate of Boston College and
Columbia University Law School. He practiced briefly in New
York, then practiced at Quarles and Brady in Milwaukee for a
time, and finally practiced at the Clair Law Offices, a small
law firm in Delevan.
¶3 In 2011, Attorney Schoenecker's license was suspended
for three years. See In re Disciplinary Proceedings Against
Schoenecker (Schoenecker I), 2011 WI 76, 336 Wis. 2d 253, 804
N.W.2d 686. Much of the misconduct in that case arose out of
Attorney Schoenecker's personal and professional relationship
with his former fiancée. In late 2007, Attorney Schoenecker and
his fiancée opened a joint checking account and the fiancée
obtained a home equity line of credit and loaned Attorney
Schoenecker $48,500. Attorney Schoenecker executed a promissory
note whereby he promised to repay the loan with interest. Two
days later, the fiancée learned Attorney Schoenecker had made
cash withdrawals from her checking account at a casino,
resulting in a $1,500 negative balance in her account. She
closed the joint checking account and ended her engagement to
Attorney Schoenecker.
¶4 Attorney Schoenecker repaid part of the loan balance.
At some point the former fiancée filed a collection action
against him. The parties reached a settlement, and Attorney
Schoenecker paid the former fiancée over $32,000 as part of a
full resolution of their financial issues.
2
No. 2011AP48-D, 2015AP275-D
¶5 In December 2008, Attorney Schoenecker used the former
fiancée's personal information to enter her business account
without her permission and made checks payable to himself. As a
result of these actions, he was charged in two separate criminal
proceedings, one in Walworth County where he pled guilty to one
felony count of identity theft and was placed on two years of
probation and ordered to make restitution and pay court costs,
and one in Waukesha County where he pled guilty to a misdemeanor
charge of Theft-Moveable Property. The Waukesha County circuit
court imposed and stayed a four-month jail sentence and placed
Attorney Schoenecker on probation for one year. In addition,
Attorney Schoenecker was required to pay restitution to the
former fiancée and pay court costs.
¶6 In 2008, Attorney Schoenecker became an associate at
the Clair Law Offices. He told the law firm he was representing
his former fiancée, so she was considered a firm client. He
sent invoices to the former fiancée in the fall of 2008 showing
that she owed over $13,000. A substantial number of the entries
on the invoices were fraudulent.
¶7 Attorney Schoenecker also set up his own separate law
firm on the side while he was working as an associate at the
Clair Law Offices. He did not inform the law firm of this fact.
In addition to the incidents involving the former fiancée and
the Clair Law Office, Attorney Schoenecker's 2011 suspension
also arose out of his making fraudulent statements in his own
personal bankruptcy proceeding.
3
No. 2011AP48-D, 2015AP275-D
¶8 In 2016, Attorney Schoenecker received an additional
one-year license suspension. See In re Disciplinary Proceedings
Against Schoenecker (Schoenecker II), 2016 WI 27, 368
Wis. 2d 57, 878 N.W.2d 163. The misconduct at issue in that
case arose out of Attorney Schoenecker's involvement in a
business partnership he entered into in 2012 with two other men.
The men established a limited liability company. One man gave
Attorney Schoenecker $25,000 in cash as his capital
contribution, and the other man contributed $20,000. Instead of
immediately depositing the $25,000 capital contribution into a
business account, Attorney Schoenecker deposited the bulk of
that money into his own personal checking account. He also used
company funds to pay personal credit card bills without
preapproval from his partners, and he withdrew funds from
company accounts in order to gamble at Potawatomi Casino in
Milwaukee.
¶9 Attorney Schoenecker filed his first petition for
reinstatement of his law license in early 2017. In 2018, this
court denied the petition, agreeing with the referee that
Attorney Schoenecker had failed to meet his burden of proof to
establish the requirements of reinstatement at that time. In re
Disciplinary Proceedings Against Schoenecker, 2018 WI 58, 381
Wis. 2d 644, 912 N.W.2d 847. This court stated that Attorney
Schoenecker could again file a petition for reinstatement six
months after the date of its decision.
¶10 In November 2018, Attorney Schoenecker filed a second
petition for reinstatement. A public hearing was held before
4
No. 2011AP48-D, 2015AP275-D
the referee on June 18 and 19, 2019. Numerous witnesses
testified at the hearing in favor of Attorney Schoenecker's
reinstatement petition.
¶11 One of the witnesses who testified on Attorney
Schoenecker's behalf was James Harrison, a clinical substance
abuse counselor, licensed professional counselor, international
certified gambling addiction counselor, and board-approved
clinical consultant. Mr. Harrison testified that he began
seeing Attorney Schoenecker in April of 2015. Mr. Harrison said
Attorney Schoenecker has gone above and beyond what many people
do in outpatient treatment and has voluntarily continued his
counseling sessions for over four years, whereas Mr. Harrison
normally sees clients for only two to four months in counseling
sessions. Mr. Harrison testified that Attorney Schoenecker's
willingness to continue the counseling sessions was indicative
of how seriously he takes his situation. As a result of this
dedication, Mr. Harrison opined that Attorney Schoenecker's risk
level to return to his previous behavior and actions has
diminished.
¶12 Mr. Harrison testified that Attorney Schoenecker has
come to the conclusion that gambling can no longer be part of
his life and he has been bet-free for over four years.
Mr. Harrison said:
It should be noted that Attorney Schoenecker has a
disease. A disease of gambling addition. It is a
disease that often results in good people making
inappropriate decisions and poor choices.
5
No. 2011AP48-D, 2015AP275-D
Not to be used as an excuse by any means for his
behavior, but certainly a contributing factor to what
he did. It is also a disease that can be brought
under control if treated immediately and continue to
be treated. Attorney Schoenecker is definitely an
example of this.
But with the continued support of his family, friends,
co-workers, and counseling, and by continuing with his
counseling sessions, Attorney Schoenecker can and will
make a positive difference in his life as well as the
lives of others.
Therefore, if he follows his treatment plan, continues
to make the changes that are necessary and needed in
his life, continues with his counseling sessions;
develops, utilizes, and maintains a positive support
system and network and acts and lives responsibly,
Attorney Schoenecker can and will make sure that he
will not put himself or others in this predicament
again.
¶13 While Mr. Harrison agreed that there is no guarantee
Attorney Schoenecker would not relapse, he stated the chances of
relapse were very minimal so long as Attorney Schoenecker
continues what he has been doing for the past four years. When
asked if had any opinion regarding whether anything outside of
the gambling addiction might explain Attorney Schoenecker's
conduct, Mr. Harrison said that lying and misconceptions were
part of a gambling addiction. He said, "it is a body rush.
They will do anything they can to obtain that, whether it's
lying, whether it's stealing, whether it's embezzling. So this
is part of the addiction."
¶14 Other witnesses, including friends of Attorney
Schoenecker, his sister, and father also testified that Attorney
Schoenecker has been humbled by his downfall, has become
6
No. 2011AP48-D, 2015AP275-D
compassionate toward others, and has gone out of his way to help
other people.
¶15 Attorney Schoenecker testified that if he were
reinstated he wanted to help others and might be interested in
working as a public defender given what he has learned going
through his own criminal proceedings.
¶16 The parties stipulated to the admission into evidence
of the transcript from the first reinstatement hearing, which
was held in July 2017. The transcript from that hearing
included testimony from Attorney Schoenecker's former fiancée,
one of Attorney Schoenecker's business partners, and an attorney
from the Clair Law Offices. All three of those individuals
testified in the first reinstatement hearing that, in their
opinion, Attorney Schoenecker does not have the moral character
to have his law license reinstated.
¶17 The referee in this reinstatement proceeding issued
his report and recommendation on September 18, 2019. Referee
Winiarski echoed the opinion of the referee from the first
reinstatement proceeding that "this is a most difficult
reinstatement case." The referee noted that the sheer number
and nature of Attorney Schoenecker's moral lapses, which led to
the two disciplinary proceedings, indicated that there was more
than a simple gambling addiction problem involved. However, the
referee noted that Attorney Schoenecker fully admits to his
misconduct, does not blame others for the misconduct, and
expresses a degree of disbelief that he committed the acts of
misconduct. The referee opined that, "such reflection on his
7
No. 2011AP48-D, 2015AP275-D
part is certainly an indication that he has gone through
considerable self-examination of his misconduct." The referee
noted that according to many of Attorney Schoenecker's
witnesses, he has expressed genuine remorse for his actions; he
has made restitution to his victims; and there was also
testimony regarding the spiritual reflections and actions he has
taken since the time of his misconduct.
¶18 The referee concluded that Attorney Schoenecker, "as a
result of his misconduct, experienced tumultuous changes in his
life and he is not likely to ever repeat such misconduct, given
the consequences."
¶19 The referee noted that this court has indicated that
the primary focus of a reinstatement hearing should be on the
petitioner's conduct between the start of the suspension and the
reinstatement. See In re Disciplinary Proceedings Against
Carroll, 2004 WI 19, ¶16, 269 Wis. 2d 172, 675 N.W.2d 792.
Accordingly, the referee recommends that Attorney Schoenecker's
license to practice law in Wisconsin be reinstated. The referee
further recommends that as a condition of reinstatement,
Attorney Schoenecker be required to continue monthly counseling
sessions with either his current counselor or a counselor with
similar credentials. The referee recommends the counseling
should address not only Attorney Schoenecker's gambling
addiction, but also any other possible causes for his previous
misconduct. The referee recommends that the counselor be
required to file semi-annual progress reports with the Office of
Lawyer Regulation (OLR) and that such counseling be required to
8
No. 2011AP48-D, 2015AP275-D
continue for a period of at least three years after
reinstatement. Finally, the referee recommends that Attorney
Schoenecker be responsible for all costs of the reinstatement
proceeding.
¶20 No appeal has been filed from the referee's report and
recommendation. Supreme Court Rule (SCR) 22.31(1) provides the
standard to be met for reinstatement. The petitioner 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 of the public interest;
and that he or she has complied with SCR 22.26 and the terms of
the suspension. In addition to these requirements, SCR 22.29(4)
states related requirements that the petition for reinstatement
"shall show." All of these additional requirements are
effectively incorporated into SCR 22.31(1).
¶21 This court will adopt a referee's findings of fact
unless they are clearly erroneous. Conclusions of law are
reviewed de novo. See In re Disciplinary Proceedings Against
Jennings, 2009 WI 26, ¶22, 316 Wis. 2d 6, 762 N.W.2d 648.
¶22 After careful review of this matter, we adopt the
referee's findings of fact and conclusions of law and agree with
the referee that Attorney Schoenecker has demonstrated he has
met the burden of proof imposed upon him by our Supreme Court
Rules. We agree with the referee that, in order to ensure, to
the extent possible, that Attorney Schoenecker will not relapse,
he should be required to continue monthly counseling either with
9
No. 2011AP48-D, 2015AP275-D
Mr. Harrison or a counselor with similar credentials for a
period of three years, with the counselor being required to file
semi-annual progress reports with the OLR. We also agree with
the referee that Attorney Schoenecker should be responsible for
the full costs of this reinstatement proceeding.
¶23 IT IS ORDERED that the petition for reinstatement of
the license of James M. Schoenecker to practice law in Wisconsin
is granted, effective the date of this order.
¶24 IT IS FURTHER ORDERED that, for a period of three
years from the date of this order, James M. Schoenecker shall be
required to continue monthly counseling, either with his current
counselor or a counselor with similar credentials. The
counseling should address not only James M. Schoenecker's
gambling addiction, but also other possible causes for his
previous misconduct. The counselor shall file semi-annual
progress reports with the Office of Lawyer Regulation.
¶25 IT IS FURTHER ORDERED that, within 60 days of the date
of this order, James M. Schoenecker shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$14,754.78 as of October 7, 2019.
10
No. 2011AP48-D, 2015AP275-D
1