Office of Lawyer Regulation v. Terry L. Constant ( 2022 )

2022 WI 78SUPREME COURT OF WISCONSIN
CASE NO.: 2021AP33-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Terry L. Constant, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Terry L. Constant,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST CONSTANT
OPINION FILED: November 23, 2022
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
Per curiam. ZIEGLER, C.J., filed a concurring opinion in which
REBECCA GRASSL BRADLEY, HAGEDORN, and KAROFSKY, JJ., joined.
NOT PARTICIPATING:
ATTORNEYS:
2022 WI 78NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2021AP33-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Terry L. Constant, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
NOV 23, 2022
v.
Sheila T. Reiff
Clerk of Supreme Court
Terry L. Constant,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
revoked.
¶1 PER CURIAM. We review Referee Charles H. Barr's
report recommending that the court declare Attorney Terry L.
Constant in default and revoke his license to practice law in
Wisconsin for 13 counts of professional misconduct. The referee
also recommends that Attorney Constant make restitution to the
Wisconsin Lawyers' Fund for Client protection (the Fund) and to
certain clients and that Attorney Constant pay the full costs
associated with this proceeding.
No. 2021AP33-D
¶2 No appeal has been filed so we review the referee's
report pursuant to Supreme Court Rule (SCR) 22.17(2).1 After
careful review of the matter, we agree with the referee that,
based on Attorney Constant's failure to answer the Office of
Lawyer Regulation's (OLR) complaint or otherwise appear in the
proceeding, Attorney Constant is in default. We conclude that
revocation of Attorney Constant's license is an appropriate
sanction for his professional misconduct. We agree that
Attorney Constant should be required to make restitution to the
Fund and certain clients. And finally, we conclude that he
should be assessed the full costs of this proceeding, which
total $4,135.06 as of June 20, 2022.
¶3 Attorney Constant was admitted to practice law in
Wisconsin in 1968. His professional disciplinary history
consists of a six-month suspension of his license to practice
law in 2020. In re Disciplinary Proceedings Against Constant,
2020 WI 4, 390 Wis. 2d 1, 937 N.W.2d 599 (Constant I). That
case involved nine counts of misconduct involving numerous trust
1 SCR 22.17(2) provides:
If no appeal is filed timely, the supreme court
shall review the referee's report; adopt, reject or
modify the referee's findings and conclusions or
remand the matter to the referee for additional
findings; and determine and impose appropriate
discipline. The court, on its own motion, may order
the parties to file briefs in the matter.
2
No. 2021AP33-D
account violations, conversion, co-mingling of funds, and
mishandling a personal injury settlement. Id., ¶24.2
¶4 On January 7, 2021, the OLR filed a complaint against
Attorney Constant alleging 13 counts of attorney misconduct
relating to three clients, S.C., M.R., and S.R., between 2014
and 2020, along with an order to answer. Referee Charles H.
Barr was appointed on March 22, 2021. On March 1, 2021,
Attorney Constant filed a verified Petition to Voluntarily
Surrender a Wisconsin License, in which he stated that he
"cannot successfully defend" against the grievances pending
against him and that he wished to surrender his license
"permanently."3
¶5 The OLR made multiple failed attempts at personal
service at Attorney Constant's Kenosha address on file with the
State Bar of Wisconsin (State Bar). On March 9, 2021, the OLR
While not referenced in the complaint or the referee's
2
report, we take judicial notice that the State Bar's records
indicate that Attorney Constant's law license currently is
administratively suspended for failure to pay mandatory bar dues
and for failure to file required trust account certification.
Additionally, Attorney Constant did not petition for
reinstatement following his six-month suspension by this court
in Constant I.
SCR 10.03(7)(a) allows an attorney to file a petition to
3
surrender his or her license to practice law with the State Bar
and this court. However, voluntary surrender of a law license
is not appropriate in response to a pending disciplinary matter.
In re Voluntary Resignation of Robinson, 2010 WI 37, 323
Wis. 2d 727, 729, 782 N.W.2d 98. To the extent that Attorney
Constant intended to file a petition for consensual license
revocation under SCR 22.19, he did not follow the proper
procedure for doing so. See SCR 22.19(3)-(4).
3
No. 2021AP33-D
sent the complaint by certified mail to that address, and
tracking information indicated that it was delivered in
Henderson, Nevada. The referee ultimately concluded that
substitute service was accomplished on March 16, 2021, and
Attorney Constant's answer was due April 5, 2021. Attorney
Constant did not file an answer.
¶6 Attorney Constant failed to appear for a telephonic
scheduling conference on April 22, 2021, at which time the OLR
informed the referee that Attorney Constant's wife indicated a
health issue prevented his attendance. Attorney Constant failed
to appear for a subsequent scheduling conference, and the OLR
again informed the referee that Attorney Constant's wife stated
medical issues prevented his participation. The referee ordered
Attorney Constant to execute medical releases so the OLR could
determine if he had a medical incapacity that made defense of
the proceeding impossible. See SCR 22.16(4)(a). Attorney
Constant returned medical releases to the OLR. The OLR obtained
some of Attorney Constant's medical records but ultimately
advised the referee that the OLR could not reach a conclusion on
whether Attorney Constant had a medical incapacity.
¶7 The OLR indicated its intent to file a motion for
default and invited Attorney Constant to provide further
information to support any claim of medical incapacity.
Attorney Constant did not respond and did not assert a medical
incapacity defense.
¶8 The OLR filed a motion for default on February 21,
2022, along with an affidavit showing proof of substitute
4
No. 2021AP33-D
service. On March 1, 2022, the referee issued an order
concluding that "justice is best served by providing Respondent
an additional and final opportunity to assert his incapacity
claim as a matter of record in response to the motion for
default." He therefore ordered that Attorney Constant had 30
days to file a response to the motion for default, "in which he
may allege incapacity and any other reason why the motion should
not be granted." No response was filed.
¶9 Following a hearing, the referee issued an order
recommending that this court find Attorney Constant in default
and that the factual allegations in the complaint be accepted as
true. The order also concluded Attorney Constant had been
properly served, recited several facts indicating that Attorney
Constant had actual notice of the proceeding, and noted that he
had been copied on notices of all hearings, orders, and
correspondence. The referee also ordered the OLR to submit a
brief as to the appropriate level of discipline and allowed
Attorney Constant to do the same.
¶10 The OLR filed a brief advocating that that the referee
recommend that this court should revoke Attorney Constant's
license to practice law and that he be ordered to pay
restitution. Attorney Constant did not file a response.
¶11 On May 31, 2022, the referee issued a report and
recommendation with findings of fact and conclusions of law as
to default and the underlying misconduct allegations. As to
default, the referee found that the OLR unsuccessfully attempted
personal service on Attorney Constant at his State Bar address
5
No. 2021AP33-D
in Kenosha on five different dates and thereafter mailed a
certified copy of the complaint, which was ultimately delivered
to an address in Henderson, Nevada. Attorney Constant filed a
signed and notarized petition to voluntarily surrender his law
license, in which he indicated his residence was a P.O. Box in
Henderson, Nevada. Attorney Constant left a voicemail with the
OLR's counsel early in the proceeding "in which Attorney
Constant referred to service on him of documents in the
proceeding." Attorney Constant's wife had multiple
communications with counsel for the OLR acknowledging awareness
of the proceeding and she provided a residential address in
Henderson, Nevada, to the OLR. All of the referee's written
communications with the OLR's counsel, as well as all notices
and orders, were copied to Attorney Constant at the e-mail
address on file for him with the State Bar, and none of them
bounced back. The March 1, 2022 order allowing Attorney
Constant to oppose the motion for default and assert a medical
incapacity defense was mailed to the Henderson, Nevada address
that Attorney Constant's wife provided, in addition to being
mailed to the address in Kenosha and e-mailed. Counsel for the
OLR also e-mailed a copy of the order to Attorney Constant's
wife in response to an e-mail from her. The referee found that
these facts constituted "substantial indicia of Attorney
Constant's awareness of this proceeding throughout its
pendency."
¶12 Based on these findings, the referee concluded that
Attorney Constant was properly served with the complaint, failed
6
No. 2021AP33-D
to timely file an answer or otherwise appear in the proceeding,
and therefore was in default. The referee further concluded
that neither Attorney Constant nor anyone on his behalf claimed
as a matter of record that he possessed a medical incapacity
that made defense of the proceeding impossible. The referee
further concluded that it was "implausible" that Attorney
Constant could not have done so if he intended to pursue such a
claim based on his filing of a petition to surrender his law
license during the same time period. Accordingly, the referee
recommended that this court find Attorney Constant in default.
¶13 Having concluded that Attorney Constant was in default
for failing to answer, the referee adopted and accepted the
salient factual allegations of the complaint. Those allegations
are summarized as follows.
¶14 In 2011, S.C. hired Attorney Constant to represent her
in a personal injury action after a January 2011 car accident
(first accident). Attorney Constant settled the case and
provided no further services relating to the matter after April
15, 2015, but retained $3,756.86 in his trust account. However,
by April 10, 2016, his trust account held only $34.21 pertaining
to the first accident.
¶15 On April 15, 2015, S.C. was involved in another car
accident and hired Attorney Constant to represent her (second
accident). Attorney Constant was entitled to one-third of any
recovery, plus reimbursements of costs.
¶16 On January 31, 2018, Attorney Constant received a
partial insurance payment for S.C.'s medical payments (medpay)
7
No. 2021AP33-D
claim in the second accident in the amount of $1,205.89.
Attorney Constant deposited the check into his trust account on
February 7, 2018, and disbursed $401.96 (one-third) of that
amount to himself. The same day, he issued another check from
the trust account to himself for $800, which indicated it was
for legal fees relating to the first accident. The following
day, he wrote another trust account check payable to himself for
$700, again indicating it was for legal fees relating to the
first accident. These withdrawals extinguished S.C.'s balance
in Attorney Constant's trust account. In the next two months,
Attorney Constant disbursed seven more checks from his trust
account to himself, totaling $4,900, which he indicated were for
legal fees from S.C.'s first accident.
¶17 On April 10, 2018, Attorney Constant deposited an
insurance settlement check for $50,000 for S.C.'s second
accident. He orally notified S.C. of the check, but told her he
could not disburse any settlement funds to her until all claims
had been settled and her medical bills were paid. Over the next
16 months, Attorney Constant repeated these representations to
S.C.
¶18 On or about the same day that Attorney Constant
received the $50,000 settlement check, he disbursed $200 to
himself, indicating it was for legal fees relating to the first
accident. He also wrote two additional checks to himself
disbursing one-third of the settlement ($16,666.66) from the
second accident. Over the next six months, Attorney Constant
disbursed 41 checks to himself from his trust account totaling
8
No. 2021AP33-D
$33,200, purportedly as legal fees relating to S.C.'s first
accident. As a result, Attorney Constant held only $271.25 from
the $50,000 settlement check in trust. He later wrote another
check to himself for $1,000, purportedly for fees relating to
the first accident and matters unrelated to S.C.
¶19 Between December 12, 2018 and February 12, 2019,
Attorney Constant received 42 medpay checks totaling $32,462.43
relating to S.C.'s second accident. Attorney Constant orally
told S.C. he had received some medpay checks, but he did not
notify her in writing of his receipt of each and again
represented that he could not disburse any funds to S.C. until
all medpay claims were satisfied. Attorney Constant paid only
$122.27 in medpay claims and disbursed the remainder to himself,
purportedly as fees for other matters.
¶20 On August 2, 2019, Attorney Constant received another
insurance check for $17,500 relating to the second accident.
Before depositing this amount, Attorney Constant should have
been holding $53,356.64 in trust for S.C., but had a balance of
only $1,762.70. Attorney Constant deposited the $17,500 check,
which he later disbursed to S.C. at the same time he gave her a
promissory note for $47,557.30 for the remainder of the
settlement.4 At that time, S.C. had outstanding medical bills
from the second accident, but Attorney Constant made no further
4 The OLR's brief regarding sanctions indicates that after
the complaint was filed, "the Wisconsin Lawyers' Fund for Client
Protection (Fund) fully paid a claim filed by [S.C.]"
9
No. 2021AP33-D
payments to S.C. or on her behalf, and he failed to make any
payments on the promissory note.
¶21 As a result of these allegations, the OLR claimed
Attorney Constant engaged in four counts of attorney misconduct.
The OLR alleged that Attorney Constant: violated SCR
20:1.15(d)(1)5 by failing to give written notice of funds (Count
1); violated SCR 20:1.15(b)(1)6 by failing to hold and safeguard
settlement funds (Count 2); violated SCR 20:1.37 by failing to
act with reasonable diligence to pay S.C.'s medical providers
5Effective July 1, 2016, substantial changes were made to
Supreme Court Rule 20:1.15, the "trust account rule." See S.
Ct. Order 14-07, 2016 WI 21 (issued Apr. 4, 2016, eff. July 1,
2016). Former SCR 20:1.15(d)(1) was renumbered as SCR
20:1.15(e)(1). The text of the rule was not changed and
provides:
Upon receiving funds or other property in which a
client has an interest, or in which a lawyer has
received notice that a 3rd party has an interest
identified by a lien, court order, judgment, or
contract, the lawyer shall promptly notify the client
or 3rd party in writing. Except as stated in this rule
or otherwise permitted by law or by agreement with the
client, the lawyer shall promptly deliver to the
client or 3rd party any funds or other property that
the client or 3rd party is entitled to receive.
6 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.
7SCR 20:1.3 provides: "A lawyer shall act with reasonable
diligence and promptness in representing a client."
10
No. 2021AP33-D
(Count 3); and violated SCR 20:8.4(c)8 by converting client trust
funds (Count 4).
¶22 In a different matter, on August 17, 2016, M.R. and
S.R. were in a car accident and hired Attorney Constant to
represent them. Under their agreement, Attorney Constant would
be entitled to one-third of their recovery as a legal fee. The
statute of limitations on M.R.'s and S.R.'s claims expired on
August 17, 2019.
¶23 In April 2017, Attorney Constant received and
deposited an insurance check settling M.R.'s claims against one
insurer for $6,850. Attorney Constant later disbursed $2,975.97
to M.R., paid $1,365 to satisfy a medical lien, and disbursed
$2,488.35 to himself. Despite still holding $20.68 in trust for
M.R., Attorney Constant told M.R. that he had disbursed the
entirety of the settlement.
¶24 In February 2018, Attorney Constant received $9,161.60
from an insurer in partial payment of S.R.'s medpay claims and
deposited the same into his trust account. He did not notify
S.R. of this payment, but paid some of her medical expenses,
disbursed $2,980 to her, and paid $3,053.56 to himself for his
one-third fee. By November 2018, Attorney Constant's trust
account held only $544.83 relating to S.R., and he told her he
could not disburse the remaining medpay funds due to outstanding
liens. However, between February 2019 and August 2019, Attorney
SCR 20:8.4(c) provides:
8 "It is professional misconduct
for a lawyer to engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
11
No. 2021AP33-D
Constant disbursed an additional $19,250 in trust funds to
himself purportedly for fees relating to S.R.
¶25 In early August 2019, an insurer offered to settle
S.R.'s claims for $4,348.40; Attorney Constant forwarded the
offer to S.R. S.R. never authorized the settlement, but
Attorney Constant agreed to settle her claims for $4,400.
Attorney Constant received the funds, deposited them into his
trust account, but did not notify S.R. Attorney Constant
disbursed $300 of the settlement funds to himself, and never
disbursed any to S.R.
¶26 Attorney Constant never provided S.R. or M.R. with an
accounting of the funds he received or paid out on their behalf.
In September 2019, Attorney Constant prepared to close his law
office, but did not inform S.R. or M.R., arrange for successor
counsel, or otherwise communicate with them. When Attorney
Constant closed his office on or about September 30, 2019, he
had not resolved all of S.R.'s outstanding liens or disbursed
the remainder of her settlement funds. In November 2019, S.R.
and M.R. discovered that the statute of limitations on their
claims had expired and attempted to contact Attorney Constant by
phone and e-mail, but his phone was disconnected and he did not
respond to their e-mails. Attorney Constant also did not
respond to further inquiries in January 2020 about the status of
S.R.'s claims and settlement.
¶27 On January 28, 2020, in Constant I, this court
suspended Attorney Constant's license to practice law in
Wisconsin for six months, effective March 10, 2020.
12
No. 2021AP33-D
Nonetheless, in February and March 2020, Attorney Constant
attempted to negotiate one of S.R.'s outstanding medical bills
and attempted to negotiate a settlement with S.R's and M.R.'s
former landlord. On April 15, 2020, Attorney Constant sent a
proposed settlement to the landlord along with a check drawn
from his trust account for $500. In April and May 2020, S.R.
and M.R. repeatedly asked Attorney Constant to pay the remainder
of S.R.'s settlement funds. He did not do so.
¶28 Based on these allegations, the OLR claimed that
Attorney Constant engaged in nine counts of misconduct. The OLR
claimed that Attorney Constant: violated SCR 20:1.15(d)(1) by
failing to provide prompt notice of receipt of settlement funds
and deliver them to S.R. (Count 5); violated SCR 20:1.4(a)(3)9 by
failing to provide S.R. and M.R. with information necessary to
understand their settlements and the status of their claims
(Count 6); violated SCR 20:1.2(a)10 by failing to obtain S.R.'s
9 SCR 20:1.4(a)(3) provides: "A lawyer shall keep the
client reasonably informed about the status of the matter."
10 SCR 20:1.2(a) provides:
Subject to pars. (c) and (d), a lawyer shall
abide by a client's decisions concerning the
objectives of representation and, as required by SCR
20:1.4, shall consult with the client as to the means
by which they are to be pursued. A lawyer may take
such action on behalf of the client as is impliedly
authorized to carry out the representation. A lawyer
shall abide by a client's decision whether to settle a
matter. In a criminal case or any proceeding that
could result in deprivation of liberty, the lawyer
shall abide by the client's decision, after
consultation with the lawyer, as to a plea to be
13
No. 2021AP33-D
authorization to settle her claims before accepting a settlement
(Count 7); violated SCR 20:1.15(b)(1) by failing to safeguard
settlement funds belonging to S.R., M.R., and third parties
(Count 8); violated SCR 20:8.4(c) by converting settlement funds
for his own use (Count 9); violated SCR 20:8.4(c) by
misrepresenting that numerous disbursements from his trust
account were related to his representation of S.R. (Count 10);
violated SCR 20:1.4(a)(4)11 by failing to respond to S.R.'s and
M.R.'s requests for information (Count 11); violated SCR
20:1.16(d)12 by failing to inform S.R. and M.R. that he closed
his law office and had terminated his representation or
otherwise intended to take no further action on their behalf
(Count 12); and violated SCR 22.26(2),13 enforceable via SCR
entered, whether to waive jury trial and whether the
client will testify.
SCR 20:1.4(a)(4) provides:
11 "A lawyer shall promptly
comply with reasonable requests by the client for information."
12 SCR 20:1.16(d) provides:
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.
13 SCR 22.26(2) 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
14
No. 2021AP33-D
20:8.4(f),14 by practicing law in Wisconsin at a time when his
license was suspended (Count 13).
¶29 The referee concluded that Attorney Constant violated
each provision as alleged. The referee then addressed the
proper sanction for Attorney Constant's violations, "focus[ing]
principally on the conduct that directly and most tangibly
injured his clients——namely, his conversion to his own use of
funds that he had a duty to hold in trust for distribution to
those clients or for their benefit."
¶30 The referee noted that the OLR advocated for
revocation of Attorney Constant's license based on principles of
progressive discipline articulated in ABA Standards for Imposing
Lawyer Sanctions, this court's decision in Constant I, and
various prior disciplinary cases. The OLR noted that in
Constant I, this court suspended Attorney Constant's license to
practice law for six months based on nine counts of misconduct
involving systemic trust account problems, conversion, and
mishandling an injury settlement. The referee concluded that a
comparison of the conduct in the two cases "unquestionably
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 20:8.4(f) provides:
14 "It is professional misconduct
for a lawyer to violate a statute, supreme court rule, supreme
court order or supreme court decision regulating the conduct of
lawyers."
15
No. 2021AP33-D
establishes a pattern of similar misconduct with regard to funds
held, or that should have been held, in trust for the benefit of
clients" and that the facts underlying the violations in
Constant I "poignantly illustrate that the trust account
misconduct involved in this case was a continuation of a pattern
of misconduct" from the prior case. The referee concluded that
progressive discipline was appropriate even though most of the
conduct in the present case occurred before this court's
decision in Constant I. He concluded that this case called for
a sanction that was "substantially more severe" because all of
the clients and lienholders in Constant I were eventually paid
whereas here, Attorney Constant's clients and lienholders lost
"over $53,000 in the aggregate."
¶31 In assessing the severity of the sanction, the referee
noted the general rule under ABA Standards § 4.11 that
disbarment is appropriate when an attorney knowingly converts
client property and causes injury to a client, but stated a
"more particularized analysis is required" because in Constant
I, this court imposed less severe punishment for the same type
of conduct. That said, the referee agreed with the OLR that the
facts of this case involved "multiple aggravating factors under
ABA Standards §§ 9.22(a)—(d) and (g)—(k)," including "prior
disciplinary history, dishonest or selfish motive, a pattern of
misconduct, multiple offenses, refusal to acknowledge the
wrongful nature of the conduct, vulnerability of the victims,
substantial experience in the practice of law, and indifference
to paying restitution." However, the referee stated that some
16
No. 2021AP33-D
of these factors "deserve caveats" because most of the
misconduct here occurred before imposition of discipline in
Constant I and because while Attorney Constant's failure to
participate "is deemed a refusal to acknowledge the wrongful
nature of his conduct," it "should be viewed less harshly than
that of an attorney who defends himself unjustifiably." And the
referee further concluded that Attorney Constant's "ill-fated
petition to surrender his law license" could be "construed,
albeit generously, as an acknowledgment of wrongful conduct."
Out of those factors, the referee concluded that the most
important aggravating factor was Attorney Constant's "apparent
indifference to paying restitution."
¶32 As to mitigating factors, the referee concluded that
Attorney Constant failed to raise a triable issue of fact as to
whether his health issues caused his misconduct. However, the
referee acknowledged Attorney Constant's legal career spanned
over half a century and that in Constant I, this court noted
that he "brought credit to the legal profession by his many
positive community involvements." The referee concluded that in
the prior case, "this Court accorded substantial weight to this
mitigating factor" given the imposition of only a six-month
suspension.
¶33 The referee then looked to prior disciplinary cases
cited by the OLR——including In re Disciplinary Proceedings
Against Runyon, 2020 WI 74, 393 Wis. 2d 612, 948 N.W.2d 62; In
re Disciplinary Proceedings Against Grogan, 2014 WI 39, 354
Wis. 2d 659, 847 N.W.2d 817; and In re Disciplinary Proceedings
17
No. 2021AP33-D
Against Krombach, 2005 WI 170, 286 Wis. 2d 589, 707 N.W.2d 146——
and concluded that none of them "definitively assist with the
choice between a lengthy suspension or revocation" in this case.
Surveying several other decisions, the referee concluded that
"[i]n other instances of an attorney's conversion of a
significant amount of money that was or should have been held in
trust for clients, this Court has typically imposed revocation
in the absence of substantial mitigating facts." The referee
stated that such mitigating facts include "restitution of all or
almost all of the converted funds, other indicia of remorse and
acceptance of responsibility, and unusually severe adverse
conditions that affected the attorney and were not of his or her
own making."
¶34 The referee concluded that no mitigating factors were
present in this case and that "[t]he decisive fact in [the]
analysis is the lack of evidence that Attorney Constant has so
much as lifted a finger to reimburse the victims of his
misconduct, or at the very least to explain why he cannot do
so." The referee further explained that Attorney Constant's
long legal career and contributions to the community were
"insufficient to counterbalance his complete indifference to
restitution."
¶35 The referee concluded that revocation was "necessary
to fulfill at least two of the four primary goals of attorney
discipline: to address the seriousness of the misconduct, and
to deter other attorneys from engaging in similar misconduct."
And while the OLR had advised that the Fund reimbursed S.C.'s
18
No. 2021AP33-D
loss of $47,557.30, that "did not lessen the seriousness of
Attorney Constant's conversion. It merely transfers the loss
from S.C. to all members of the Wisconsin Bar."
¶36 Accordingly, the referee recommended that this court
revoke Attorney Constant's license to practice law in Wisconsin
and further recommended that the court order Attorney Constant
to pay restitution in the amount of $47,557.30 to the Fund,
$5,757.87 to S.R., and $225.70 to M.R. Finally, the referee
recommended that Attorney Constant be assessed the full costs of
this proceeding, which were determined to be $4,135.06, and that
costs be paid after Attorney Constant paid restitution.
¶37 We review the referee's findings of fact under the
clearly erroneous standard and review conclusions of law de
novo. Runyon, 393 Wis. 2d 612, ¶11. We determine the
appropriate level of discipline independent of the referee's
recommendation. Id.¶38 We first address the issue of default. Having
reviewed the record, we see no reason to disturb the referee's
factual findings that Attorney Constant was properly served with
the complaint via substitute service and that he did not timely
file an answer. The record shows that the OLR made several
unsuccessful attempts at personal service at the address listed
on file for him with the State Bar. The OLR then accomplished
substitute service on Attorney Constant by mailing a certified
copy of the complaint to that address which was then forwarded
and delivered to Henderson, Nevada. See SCR 22.13(1) (if
personal service cannot be accomplished then substitute service
19
No. 2021AP33-D
may be effectuated by "sending by certified mail an
authenticated copy of the complaint and order to answer to the
most recent address furnished by the respondent to the state
bar"). Attorney Constant did not file an answer within the time
prescribed by the rules and indeed filed no answer at all. See
SCR 22.14(1) ("The respondent shall file an answer with the
supreme court and serve a copy on the office of lawyer
regulation within 20 days after service of the complaint").
¶39 While nothing in our supreme court rules or the rules
of civil procedure require proof of actual notice before a
default for failing to answer can be declared,15 given the
severity of the recommended sanction in this case, we further
agree that the record supports the referee's determination that
Attorney Constant had actual knowledge of this proceeding before
the referee declared a default. After the complaint was filed,
but before service was accomplished, Attorney Constant filed a
Petition to Voluntarily Surrender a Wisconsin Law License,
listing a P.O. Box address in Henderson, Nevada, and indicating
that he had "grievances pending against me, which I cannot
successfully defend." This filing demonstrates Attorney
Constant's actual knowledge of the disciplinary proceeding.
See SCR 22.15(1) (permitting referee to consider a motion
15
for default following the scheduling conference); SCR 22.16(1)
(stating that a referee has the powers of a judge trying a civil
action and that the rules of civil procedure and evidence shall
be followed); Wis. Stat. § 806.02(1), (3) (default judgment may
be entered after time for joining issue has expired upon proof
of service).
20
No. 2021AP33-D
¶40 Additionally, the referee mailed copies of all
pleadings, motions, orders, and correspondence to Attorney
Constant's address on file with the State Bar and sent copies of
the same to the e-mail address Attorney Constant maintained on
file with the State Bar. Attorney Constant also returned signed
medical release authorizations to the OLR, as ordered by the
referee.
¶41 Finally, after the OLR filed its motion for default,
the referee entered an order giving Attorney Constant additional
time to file a response and assert any defenses he wished to
make. The referee indicated that this order, in addition to
being sent in the manner described above, was also mailed to a
residential address in Henderson, Nevada, that was provided to
the OLR by Attorney Constant's wife. See Wis. Stat. § 801.14(1)
("No service need be made on parties in default for failure to
appear.").
¶42 Therefore, the record demonstrates that the OLR made
proper substitute service of the complaint on Attorney Constant,
that he had actual awareness of the proceeding, that he was
provided with notice of the motion for default, and that he
chose not to join issue or otherwise respond to the allegations
21
No. 2021AP33-D
against him in this proceeding.16 We agree with the referee that
Attorney Constant is in default for failing to timely answer and
join issue. In re Disciplinary Proceedings Against Kelly, 2012
WI 55, ¶19, 341 Wis. 2d 104, 814 N.W.2d 844 ("A defendant's or
respondent's failure to join issue is the usual situation where
a default may be declared").
¶43 Because Attorney Constant is in default for failure to
timely answer, the allegations in the complaint are accepted as
true for purposes of this proceeding. Id., ¶25. The referee
therefore properly relied upon the allegations in the complaint
as clear, satisfactory, and convincing evidence that Attorney
Constant committed all 13 counts of misconduct as alleged in the
complaint. Runyon, 393 Wis. 2d 612, ¶12.
¶44 We next address the issue of the proper level of
discipline in this case. We agree with the referee that given
the nature of the conduct involved in the 13 charged counts of
misconduct, as well as Attorney Constant's prior disciplinary
record, that the appropriate discipline in this case is to
revoke Attorney Constant's license to practice law in Wisconsin,
16While the referee raised the issue of a possible medical
incapacity defense in this case, see SCR, 22.16(4)(a), the
record shows that after reviewing some of Attorney Constant's
medical records, the OLR was unable to make a determination on
the issue and that the referee gave Attorney Constant the
opportunity to assert a incapacity defense in response to the
OLR's motion for default. As no medical incapacity claim was
ever made in this proceeding, we do not discuss the matter
further.
22
No. 2021AP33-D
require him to pay restitution to his former clients and the
Fund, and impose the full costs of this proceeding.
¶45 In determining the appropriate sanction, we consider
the following factors: "the seriousness, nature and extent of
the misconduct; the level of discipline needed to protect the
public; the need to impress upon the attorney the seriousness of
the misconduct; and the need to deter other attorneys from
similar misconduct." In re Disciplinary Proceedings Against
Zenor, 2021 WI 77, ¶10, 399 Wis. 2d 326, 964 N.W.2d 775.
Generally, attorney discipline is progressive in nature absent
extenuating circumstances. In re Disciplinary Proceedings
Against Dade, 2017 WI 51, ¶9, 375 Wis. 2d 140, 895 N.W.2d 37.
¶46 We agree with the referee that progressive discipline
is appropriate in this case given Attorney Constant's prior
disciplinary history and sanctions imposed in Constant I. In
that proceeding we suspended Attorney Constant's license to
practice law for six months as a result of nine counts of
misconduct involving an array of trust account violations
including failing to maintain trust account records, failing to
provide written notice of receipt of settlement proceedings in
trust, failing to promptly disburse settlement proceeds,
converting trust funds for business and personal use, making
improper electronic transfers from client trust accounts, making
disbursements from a client trust account before funds were
deposited that were attributable to the matter, and depositing
personal funds into his trust account. Constant I, 390
Wis. 2d 1, ¶24. The referee in that case characterized the
23
No. 2021AP33-D
misconduct as "serious" and said these were "major violations."
Id., ¶27. We imposed a more severe sanction than recommended by
the referee in that case because Attorney Constant was not
remorseful for his conduct and "consistently maintained he did
nothing wrong." Id., ¶45.17 We decided that a six-month
suspension was appropriate because requiring Attorney Constant
to petition for reinstatement would "provide assurance that he
can be safely recommended to the profession, the courts, and the
public as a person who is fit and capable to practice law in
this state." Id.
¶47 The referee concluded that the misconduct in this case
was a continuation of a pattern of trust account violations in
Constant I. We agree. But the conduct in the present case is
much more severe. Whereas Attorney Constant ultimately made
restitution to the client whose trust funds he converted in the
previous matter, id., ¶46, in the present case, he pocketed over
$53,000 in trust funds belonging to his clients or lienholders.
And while Attorney Constant attempted to (unsuccessfully)
justify his misconduct in the prior case as a simple matter of
poor bookkeeping practices, no such claim can be made in the
present case. The record demonstrates multiple instances where
Attorney Constant converted large sums of client trust funds for
The court imposed a six-month suspension requiring a
17
petition for reinstatement whereas the referee recommended only
a five-month suspension. In re Disciplinary Proceedings Against
Constant, 2020 WI 4, ¶¶1–2, 390 Wis. 2d 1, 937 N.W.2d 599.
Justice Hagedorn dissented and would have adopted the referee's
recommended five-month suspension. Id., ¶53.
24
No. 2021AP33-D
his own personal use, misrepresented the status of settlement
payments to clients, and fraudulently attempted to characterize
disbursements as relating to closed or unrelated legal matters.
In short, the record here demonstrates repeated instances of
outright theft of client trust funds and misrepresentations in
an attempt to justify it.
¶48 While the referee focused almost exclusively on the
Attorney Constant's conversion of trust funds, we note that the
misconduct here is more serious than in Constant I in other
respects. For instance, Attorney Constant settled a portion of
S.R.'s claim without her approval. He closed his law practice
while S.R.'s and M.R.'s claims were unresolved and after the
statute of limitations had run on some of the claims, and
refused to communicate with them about their case——effectively
abandoning them and their unresolved claims. Moreover, despite
the suspension of his license following Constant I, he continued
to practice law by attempting to negotiate and resolve minor
aspects of S.R.'s and M.R.'s claims. In so doing, Attorney
Constant exhibited indifference to his professional
responsibilities to his clients and also a clear disregard of
the authority of this court.
¶49 We agree with the referee that the nature, extent, and
severity of misconduct involved here "calls for a sanction
substantially more severe" than the six-month suspension we
meted out in Constant I. The referee discussed several prior
disciplinary cases where this court concluded that revocation of
an attorney's license was a proper sanction for repeated
25
No. 2021AP33-D
occurrences of conversion of client trust funds. While the
referee found distinguishing facts in several of these cases,
and while we agree that no two cases are the same and each must
be decided on its own particular facts, we conclude that many of
the cases the referee discussed demonstrate that revocation is
the appropriate sanction in the present matter.
¶50 For instance, in Grogan, 354 Wis. 2d 659, we revoked
the license of an attorney with prior disciplinary history for
misappropriating the funds of several clients, lack of
diligence, for engaging in dishonest and fraudulent practices in
multiple matters, and for failing to cooperate with the OLR's
investigation into his misconduct. In Runyon, 393 Wis. 2d 612,
¶23, we revoked the license of an attorney with several prior
disciplinary matters who committed 23 counts of misconduct
involving four separate clients, including conversion of large
sums of trust funds based on "a clear pattern of misconduct by
Attorney Runyon and disregard for his obligations as an attorney
in this State." While there are some factual differences
between these two cases and Attorney Constant's current
misconduct, we nevertheless conclude that the facts of the
present case demonstrate a similar pattern of misconduct and
disregard for Attorney Constant's obligations as an attorney in
this state.
¶51 The referee found In re Disciplinary Proceedings
Against Hinnawi, 202 Wis. 2d 113, 549 N.W.2d 245 (1996) most
analogous. In that case, this court concluded that revocation
was proper where the attorney timely failed to perform his
26
No. 2021AP33-D
duties as representative of an estate, charged it an
unreasonable fee, failed to keep funds in his client trust
accounts, made numerous misrepresentations to the OLR's
predecessor agency during its investigation, practiced law while
suspended from practice, and did not respond to client
inquiries. The referee also discussed Krombach, 286
Wis. 2d 589, ¶63, where this court revoked an attorney's license
for converting large sums of a client's money for personal use,
altered documents in an attempt to hide his theft, took
advantage of a vulnerable client, and failed to accept
responsibility for his wrongful actions. In so doing, we stated
that "[a]lthough each case turns on its specific facts, in many
instances we have revoked the licenses of attorneys that have
converted client funds to their own personal use." Id., ¶63.
Again, while neither Hinnawi nor Krombach involve the exact same
set of facts as the present case, the nature and seriousness of
the misconduct in those cases is analogous to Attorney
Constant's multiple instances of misconduct, and the sanction
imposed in those cases demonstrate that revocation is warranted
in the present case.
¶52 Accordingly, after a careful review of the record and
similar disciplinary cases, we agree with the referee that
revocation of Attorney Constant's license to practice law in
Wisconsin is appropriate in this case. The misconduct here
involves repeated instances of Attorney Constant converting
large sums of client trust funds for his personal use, failing
to advise his clients of the status of their cases and
27
No. 2021AP33-D
settlement proceedings, multiple acts of dishonesty in
attempting to falsely characterize disbursements, abandoning and
failing to communicate with his clients, an act of settling a
claim without his client's permission, and practicing law while
his license was suspended for engaging in similar conduct in the
past. Attorney Constant has not acknowledged the wrongful
nature of his actions, shown any remorse, or attempted to make
restitution. Nor is there any evidence of other mitigating
factors that could explain Attorney Constant's actions. Cf. In
re Disciplinary Proceedings Against Nunnery, 2009 WI 89, ¶82,
320 Wis. 2d 422, 769 N.W.2d 858 (revocation not appropriate in
case of conversion of client funds, misrepresentations, and
other misconduct when attorney "indicated his remorse, accepted
responsibility . . . made significant restitution" and where
attorney was "faced with significant stressors involving his
health, his family, as well as his law practice.") Revocation
is necessary given the seriousness of Attorney Constant's
misconduct, the harm caused to his clients, his prior
disciplinary history, and the need to deter attorneys from
engaging in similar misconduct and protect the public.18
¶53 We agree with the referee that Attorney Constant
should pay restitution to his clients. However, given that the
Although three justices join the concurrence authored by
18
Chief Justice Ziegler, that fact does not effect a change to our
current rule governing license revocation. See SCR 22.29(2).
28
No. 2021AP33-D
Fund has already reimbursed S.C.,19 we order that the amounts
owed to S.R. and M.R. be given priority before restitution is
made to the Fund. Finally, we follow our normal practice of
imposing the full costs associated with this matter. See SCR
22.24(1m).
¶54 IT IS ORDERED that the license of Terry L.r Constant
to practice law in Wisconsin is revoked, effective the date of
this order.
¶55 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Terry L. Constant shall pay restitution as
follows: $5,757.87 to S.R.; $225.70 to M.R.; and $47,557.30 to
the Wisconsin Lawyers' Fund for Client Protection for the claims
of S.C., after full restitution has been made to S.R. and M.R.
¶56 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Terry L. Constant shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$4,135.06 as of June 20, 2022.
¶57 IT IS FURTHER ORDERED that payment of restitution is
to be completed prior to paying costs to the Office of Lawyer
Regulation.
¶58 IT IS FURTHER ORDERED that all pleadings and documents
filed by the parties in this matter that have been marked sealed
As noted, the OLR informed the referee in a pleading that
19
the Fund paid the full amount of S.C.'s claim for $47,557.30.
While there is no documentation of that payment in the record,
we will accept the OLR's representation that such payment was
made.
29
No. 2021AP33-D
or confidential shall remain so until further order of the
court.
¶59 IT IS FURTHER ORDERED that Terry L. Constant shall
comply, if he has not already done so, with the requirements of
SCR 22.26 pertaining to the duties of a person whose license to
practice law in Wisconsin has been revoked.
¶60 IT IS FURTHER ORDERED that the administrative
suspension of Terry L. Constant's license to practice law in
Wisconsin, due to his failure to pay mandatory bar dues and for
failure to file Office of Lawyer Regulation trust account
certification, will remain in effect until each reason for the
administrative suspension has been rectified pursuant to SCR
22.28(1).
30
No. 2021AP33-D.akz
¶61 ANNETTE KINGSLAND ZIEGLER, C.J. (concurring). I
concur in the court's order revoking Attorney Constant's license
to practice law in Wisconsin. I write separately to point out
that in Wisconsin the "revocation" of an attorney's law license
is not truly revocation because the attorney may petition for
reinstatement after a period of five years. See SCR 22.29(2).
I believe that when it comes to lawyer discipline, courts should
say what they mean and mean what they say. We should not be
creating false perceptions to both the public and to the lawyer
seeking to practice law again. See In re Disciplinary
Proceedings Against Moodie, 2020 WI 39, 391 Wis. 2d 196, 942
N.W.2d 302 (Ziegler, J., dissenting). And, as I stated in my
dissent to this court's order denying Rule Petition 19-10, In
the Matter of Amending Supreme Court Rules Pertaining to
Permanent Revocation of a License to Practice Law in Attorney
Disciplinary Proceedings, I believe there may be rare and
unusual cases that would warrant the permanent revocation of an
attorney's license to practice law. See S. Ct. Order 19-10
(issued Dec. 18, 2019) (Ziegler, J., dissenting).
¶62 I am authorized to state that Justices REBECCA GRASSL
BRADLEY, BRIAN HAGEDORN, and JILL J. KAROFSKY join this
concurrence.
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No. 2021AP33-D.akz
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