Office of Lawyer Regulation v. Jeffrey A. Reitz

2013 WI 27SUPREME COURT OF WISCONSIN
CASE NO.: 2010AP1576-D & 2011AP1764-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against
Jeffrey A. Reitz, Attorney at Law:
Office of Lawyer Regulation,
Complainant-Respondent,
v.
Jeffrey A. Reitz,
Respondent-Appellant.
DISCIPLINARY PROCEEDINGS AGAINST REITZ
OPINION FILED: March 29, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the respondent-appellant, there was a brief filed by
Jeffrey A. Reitz, pro se.
For the Office of Lawyer Regulation, there was a brief
filed by Julie M. Spoke, Office of Lawyer Regulation.
2013 WI 27NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
Nos. 2010AP1576-D & 2011AP1764-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Jeffrey A. Reitz, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant-Respondent,
MAR 29, 2013
v.
Diane M. Fremgen
Clerk of Supreme Court
Jeffrey A. Reitz,
Respondent-Appellant.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. Attorney Jeffrey A. Reitz appealed from
a referee's report concluding that he engaged in professional
misconduct and recommending that his license to practice law in
Wisconsin be suspended for 12 months. This case was originally
on the December 4, 2012 oral argument calendar. It was removed
from the calendar after it was discovered that Attorney Reitz
and the Office of Lawyer Regulation (OLR) were in agreement that
the referee erroneously included factual findings in her report
Nos. 2010AP1576-D & 2011AP1764-D
that arose out of counts of misconduct that had been previously
dismissed by the OLR. The parties were directed to file a
stipulation identifying the specific findings of fact in the
referee's report that related to dismissed counts and thus
should not be considered by this court in reaching its final
decision. The parties filed their stipulation on December 10,
2012, and identified 47 paragraphs in the referee's report that
they believe were erroneously included and should not be
considered. The parties also pointed out that paragraph two of
the referee's report should be corrected to reflect the fact
that Attorney Reitz was admitted to practice law in 1981 rather
than 2001.
¶2 We agree with the parties that the 47 paragraphs from
the referee's report identified in their stipulation related to
counts that were dismissed by the OLR and thus should not be
considered by the court in rendering its decision. We conclude
that the referee's remaining findings of fact are supported by
satisfactory and convincing evidence. We further determine that
the appropriate sanction to impose for Attorney Reitz's
misconduct is a ten-month suspension of his license to practice
law in Wisconsin. In addition, we conclude that the full costs
of the proceeding, which are $6,943.09 as of December 13, 2012,
should be assessed against Attorney Reitz. We further conclude
that, as part of the sanction for his misconduct, Attorney Reitz
should be required to distribute all funds in his trust accounts
to their rightful owners or, if those individuals cannot be
located, Attorney Reitz should be required to transmit those
2
Nos. 2010AP1576-D & 2011AP1764-D
funds to the state treasurer's office as unclaimed or
unidentifiable property.
¶3 Attorney Reitz was admitted to practice law in
Wisconsin in 1981 and practices in Milwaukee. He has been
disciplined on two prior occasions. In 2005, his license was
suspended for five months for multiple counts of failure to act
with reasonable diligence and promptness in representing a
client; having a client who was not represented by counsel sign
a release of Attorney Reitz's partner, prospectively limiting
the partner's liability for malpractice; knowingly assisting
another attorney in violating the rules of professional conduct;
two counts of failure to keep a client reasonably informed about
the status of a matter and failure to comply with reasonable
requests for information; engaging in conduct involving
dishonesty, deceit, fraud, or misrepresentation; failure to
explain a matter to the extent reasonably necessary to permit a
client to make informed decisions regarding the representation;
and failure to take steps reasonably practicable to protect a
client's interests upon termination of representation. In re
Disciplinary Proceedings Against Reitz, 2005 WI 39, 279
Wis. 2d 550, 694 N.W.2d 894.
¶4 In 2009, Attorney Reitz's license was suspended for 90
days based on a finding that he had engaged in 15 counts of
misconduct with regard to 15 separate clients. All of the
counts involved Attorney Reitz's failure to give a chiropractor
written notice that settlement proceeds had been received in
several cases and by failing to promptly deliver to the
3
Nos. 2010AP1576-D & 2011AP1764-D
chiropractor the amount he was entitled to receive in accordance
with documents signed by both the clients and Attorney Reitz's
law firm entitling the chiropractor to payment out of settlement
proceeds. In re Disciplinary Proceedings Against Reitz, 2009 WI
90, 320 Wis. 2d 460, 769 N.W.2d 566.
¶5 On June 28, 2010, the OLR filed a complaint against
Attorney Reitz alleging multiple counts of misconduct. An
amended complaint was filed on September 1, 2010. The amended
complaint alleged 30 counts of misconduct. A separate complaint
alleging five counts of misconduct was filed on August 2, 2011.
The two cases were consolidated and Kim M. Peterson was
appointed referee.
¶6 On March 30, 2012, the parties filed a stipulation
whereby Attorney Reitz pled no contest to all five counts
alleged in the August 2, 2011 complaint. He also pled no
contest to 17 counts alleged in the September 1, 2010 amended
complaint. The OLR agreed to dismiss the remaining 13 counts in
the amended complaint. The stipulation provided, "Reitz agrees
that the referee may use the allegations of the
[c]omplaint . . . and the [a]mended [c]omplaint . . . as an
adequate factual basis in the record for a determination of
misconduct as to each misconduct count to which Reitz has pled
no contest."
¶7 The stipulation also provided that the OLR director
and Attorney Reitz agreed that the appropriate level of
discipline to impose for Attorney Reitz's misconduct in the two
cases was a ten-month suspension of his license to practice law
4
Nos. 2010AP1576-D & 2011AP1764-D
in Wisconsin. The OLR director and Attorney Reitz also agreed
that an appropriate condition of discipline was that Attorney
Reitz be required, prior to petitioning for reinstatement, to
provide the OLR with documentation that all funds in his trust
account have been distributed to the rightful owners or, if
those individuals cannot be located, that the funds be escheated
to the state treasurer's office as unclaimed or unidentifiable
property. The parties jointly requested the referee to file a
report finding facts based on Attorney Reitz's no contest pleas,
and the parties requested the referee to recommend that Attorney
Reitz's license be suspended for ten months.
¶8 All five counts of misconduct alleged in the August
2011 complaint arose out of Attorney Reitz's representation of
J.B. and/or P.B. In July 2007 J.B. and P.B. hired Attorney
Reitz to represent J.B. in a personal injury case arising out of
a motorcycle accident that occurred in Illinois. In July 2009
this court ordered Attorney Reitz's license suspended for 90
days effective September 14, 2009. By letter dated August 4,
2009, the OLR reminded Attorney Reitz of his obligations under
SCR 22.26 stemming from his suspension, requiring him to notify
all clients in pending matters both of the suspension and of his
inability to act as their attorney after September 14, 2009.
Attorney Reitz did not notify either J.B. or P.B. that his
license was suspended.
¶9 On August 28, 2009, Attorney Reitz wrote to J.B.
asking his consent to have Attorney James E. Parrot "assist us"
with the case. The letter did not mention Attorney Reitz's
5
Nos. 2010AP1576-D & 2011AP1764-D
upcoming suspension. Attorney Reitz drafted a document titled
"Client Consent to Employment of Another Lawyer," which was
signed by J.B. on August 31, 2009. The agreement referred to
the Reitz law firm's role as "co-counsel" with Attorney Parrot
and said Reitz's firm "will retain responsibility for the
performance of legal services" and "will share evenly with
[A]ttorney James E. Parrot in the attorney's contingency fee."
On September 15, 2009, a day after Attorney Reitz's license
suspension began, Attorney Reitz sent J.B.'s file to Attorney
Parrot.
¶10 On October 9, 2009, the OLR received an affidavit from
Attorney Reitz in which he said he had notified, by certified
mail, all of his clients in pending matters. The list of
clients did not include either J.B. or P.B. On December 15,
2009, the OLR received a second affidavit from Attorney Reitz in
connection with his reinstatement request. In that affidavit
Attorney Reitz said he had complied with the provisions of
SCR 22.26 following the suspension of his license. He
acknowledged that notice had inadvertently not been sent to J.B.
¶11 In early 2008, P.B. spoke to Attorney Reitz about a
medical malpractice claim arising from possible radial nerve
damage she suffered on January 22, 2002. On January 22, 2003,
P.B. filed an action against a hospital in Illinois. She was
originally represented in that case by Attorney Michael Lavelle
of Chicago.
¶12 Attorney Reitz made a verbal agreement with P.B. to
handle her case. There was no written fee agreement. On
6
Nos. 2010AP1576-D & 2011AP1764-D
March 29, 2008, Attorney Reitz's employee wrote to Attorney
Lavelle to formally ask to assume representation of P.B. The
file was subsequently picked up from Attorney Lavelle's office.
¶13 From time to time Attorney Reitz would refer medical
malpractice cases to Attorney Bill Walker. Attorney Walker met
with Attorney Reitz's employee to discuss P.B.'s case.
¶14 P.B.'s case was voluntarily dismissed in April 2008
due to the ill health of Attorney Lavelle. Under Illinois law,
there was a one-year deadline to reopen the case. A May 9, 2008
letter from Attorney Reitz's office to Attorney Lavelle stated
that P.B.'s malpractice suit would be handled by Attorney
Walker. That same day Attorney Reitz's office sent a letter to
P.B. advising her the malpractice suit was being reviewed by
Attorney Walker.
¶15 Attorney Walker did review the malpractice suit but
declined to represent P.B. In mid-May 2008 Attorney Walker
advised Attorney Reitz of his opinion that there were a number
of substantial obstacles to the case, including insufficient
evidence of negligence. Attorney Walker returned the case file
to Attorney Reitz on May 22, 2008. Attorney Walker's office
informed P.B. that the file had been returned to Attorney Reitz.
¶16 Attorney Reitz did not personally share with P.B. the
negative evaluation of the medical malpractice claim by Attorney
Walker. P.B. made repeated, frequent calls to Attorney Reitz's
office asking about her malpractice suit. Attorney Reitz failed
to return the calls. Each time P.B. would call Attorney Reitz's
office, she was informed by a paralegal that Attorney Reitz was
7
Nos. 2010AP1576-D & 2011AP1764-D
aware of the April 8, 2009 deadline to reopen the case and that
he was handling the matter. Attorney Reitz allowed the April 8,
2009 deadline to pass without taking any action.
¶17 The OLR's August 2011 complaint alleged the following
counts of misconduct with respect to Attorney Reitz's handling
of J.B. and P.B.'s cases:
[COUNT ONE:] By failing to timely
notify [J.B.], a client in a pending matter,
of the suspension of his law license, Reitz
violated SCR 22.26(1)(a) and (b)1 and SCR
20:8.4(f).2
[COUNT TWO:] By filing an affidavit
with [the] OLR containing misrepresentations
concerning his compliance with the terms and
conditions of the suspension, Reitz violated
SCR 20:8.4(c).3
1
SCR 22.26(1)(a) and (b) states as follows:
(1) On or before the effective date of license
suspension or revocation, an attorney whose license is
suspended or revoked shall do all of the following:
(a) Notify by certified mail all clients being
represented in pending matters of the suspension or
revocation and of the attorney's consequent inability
to act as an attorney following the effective date of
the suspension or revocation.
(b) Advise the clients to seek legal advice of
their choice elsewhere.
2
SCR 20:8.4(f) provides that 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; . . . ."
3
SCR 20:8.4(c) says it is professional misconduct for a
lawyer to "engage in conduct involving dishonesty, fraud, deceit
or misrepresentation; . . . ."
8
Nos. 2010AP1576-D & 2011AP1764-D
[COUNT THREE:] By repeatedly failing to
return client [P.B.'s] telephone calls and
failing to provide requested information to
her concerning the status of his efforts to
reopen her medical malpractice claim or find
an attorney to represent her in the matter,
Reitz violated SCR 20:1.4(a)(3) and (4).4
[COUNT FOUR:] By failing to explain to
client [P.B.] the ramifications of another
attorney's negative assessment of the
client's medical malpractice claim and
failing to share that malpractice
specialist's written evaluation of the claim
with the client, Reitz violated SCR
20:1.4(b).5
[COUNT FIVE:] By failing to timely
notify his client that he was unilaterally
abandoning his efforts to reopen her medical
malpractice claim or to find another
attorney to handle her claim and failing to
return her medical malpractice claim file to
her, Reitz violated SCR 20:1.16(d).6
4
SCR 20:1.4(a)(3) and (4) states a lawyer shall "(3) keep
the client reasonably informed about the status of a matter;
[and] (4) promptly comply with reasonable requests by the client
for information; . . . ."
5
SCR 20:1.4(b) provides:
A lawyer shall explain a matter to the extent
reasonably necessary to permit the client to make
informed decisions regarding the representation.
6
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.
9
Nos. 2010AP1576-D & 2011AP1764-D
¶18 By virtue of the March 30, 2012 stipulation, Attorney
Reitz pled no contest to all five counts.
¶19 Eight of the counts of misconduct in the September 1,
2010 amended complaint, to which Attorney Reitz pled no contest,
involved untimely delivery of client trust account funds. In
1999, Attorney Reitz joined Michael Mandelman's law firm. The
firm practiced primarily in the area of personal injury and
criminal law. Prior to his association with Attorney Reitz,
Mandelman had client trust accounts at M&I and TCF banks. When
Attorney Reitz joined the firm in 1999, the firm used
Mandelman's M&I trust account as its active trust account.
Mandelman did not close the TCF trust account until December
2006. In December 2002 Mandelman and Attorney Reitz stopped
using the M&I trust account and opened a new trust account at
Tri City Bank. The M&I account remained dormant for at least
six years.
¶20 In May of 2005, while Attorney Reitz's license was
suspended, Mandelman stopped using the Tri City Bank trust
account and opened a new trust account at Pyramax Bank. The Tri
City account then remained dormant for more than three years.
Mandelman's license to practice law was suspended for nine
months effective June 21, 2006. Prior to that time a new trust
account was opened at Pyramax Bank in the name of Reitz, Parker
and Lawent, S.C. (RPL). In July and August of 2008, a majority
of undistributed client funds in Mandelman's Pyramax trust
account were transferred to the RPL trust account.
10
Nos. 2010AP1576-D & 2011AP1764-D
¶21 The OLR's September 1, 2010 amended complaint alleged
that Attorney Reitz failed to distribute trust account checks to
clients for periods ranging from one to more than seven years;
deposited monthly settlement payments in his client trust
account but failed to distribute the funds; failed to negotiate
with subrogated carriers; failed to take steps necessary to
resolve the division of ownership of trust account funds; failed
to pay a client money withheld from a 2002 personal injury
settlement until at least October 2008; and failed to distribute
or reissue 47 uncashed checks written on his client trust
account between 2000 and 2005; and, as of July 30, 2008, having
an additional 14 checks outstanding for periods of at least
three months and up to two years after Mandelman's suspension.
¶22 The OLR alleged, and by virtue of his March 30, 2012
stipulation Attorney Reitz agreed, that he violated SCRs
20:1.15(b) (in effect prior to July 1, 2004),7 20:1.15(d)(1)
(effective July 1, 2004),8 and 20:1.3.9
7
SCR 20:1.15(b) (in effect prior to July 1, 2004) stated as
follows:
Upon receiving funds or other property in which a
client or third person has an interest, a lawyer shall
promptly notify the client or third person in writing.
Except as stated in this rule or otherwise permitted
by law or by agreement with the client, a lawyer shall
promptly deliver to the client or third person any
funds or other property that the client or third
person is entitled to receive and, upon request by the
client or third person, shall render a full accounting
regarding such property.
8
SCR 20:1.15(d)(1) provides:
11
Nos. 2010AP1576-D & 2011AP1764-D
¶23 By virtue of his stipulation, Attorney Reitz also
admitted disbursing funds from his trust account that created
negative balances with respect to the subsidiary accounts for
two clients and with respect to a law firm subsidiary account
for bank charges. He also admitted distributing funds such that
there was a $9,000 shortage in funds that should have been held
for clients in the RPL trust account as of July 31, 2008.
Attorney Reitz admitted violating SCRs 20:1.15(e)(5)a.
(effective July 1, 2004),10 20:1.15(f)(1)b. (effective July 1,
2004 through December 31, 2009),11 and SCR 20:1.15(a) (effective
prior to July 1, 2004).12
Notice and disbursement. Upon receiving funds or
other property in which a client has an interest, or
in which the 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.
9
SCR 20:1.3 states "[a] lawyer shall act with reasonable
diligence and promptness in representing a client."
10
SCR 20:1.15(e)(5)a. provides:
Standard for trust account transactions. A lawyer
shall not disburse funds from any trust account unless
the deposit from which those funds will be disbursed
has cleared, and the funds are available for
disbursement.
11
SCR 20:1.15(f)(1)b. provides:
A subsidiary ledger shall be maintained for each
client or matter for which the lawyer receives trust
12
Nos. 2010AP1576-D & 2011AP1764-D
funds, and the lawyer shall record each receipt and
disbursement of that client's funds and the balance
following each transaction. A lawyer shall not
disburse funds from the trust account that would
create a negative balance with respect to any
individual client or matter.
12
SCR 20:1.15(a) (effective prior to July 1, 2004) provided
as follows: Safekeeping property.
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. Funds held in connection with a
representation or in a fiduciary capacity include
funds held as trustee, agent, guardian, personal
representative of an estate, or otherwise. All funds
of clients and third persons paid to a lawyer or law
firm shall be deposited in one or more identifiable
trust accounts as provided in paragraph (c). The
trust account shall be maintained in a bank, savings
bank, trust company, credit union, savings and loan
association or other investment institution authorized
to do business and located in Wisconsin. The trust
account shall be clearly designated as "Client's
Account" or "Trust Account" or words of similar
import. No funds belonging to the lawyer or law firm,
except funds reasonably sufficient to pay or avoid
imposition of account service charges, may be
deposited in such an account. Unless the client
otherwise directs in writing, securities in bearer
form shall be kept by the attorney in a safe deposit
box in a bank, savings bank, trust company, credit
union, savings and loan association or other
investment institution authorized to do business and
located in Wisconsin. The safe deposit box shall be
clearly designated as "Client's Account" or "Trust
Account" or words of similar import. Other property
of a client or third person shall be identified as
such and appropriately safeguarded. If a lawyer also
licensed in another state is entrusted with funds or
property in connection with an out-of-state
representation, this provision shall not supersede the
trust account rules of the other state.
13
Nos. 2010AP1576-D & 2011AP1764-D
¶24 Attorney Reitz also admitted, by virtue of his
stipulation, that by failing to create and retain complete trust
account records for the RPL trust account, he violated
SCR 20:1.15(e)(6).13 He further admitted that by failing to
provide RPL trust account records requested by the OLR and
providing only incomplete and inaccurate records, he violated
SCR 20:1.15(e)(7),14 20:8.4(h),15 and 22.03(6).16 He also
13
SCR 20:1.15(e)(6) provides:
Record retention. A lawyer shall maintain complete
records of trust account funds and other trust
property and shall preserve those records for at least
6 years after the date of termination of the
representation.
14
SCR 20:1.15(e)(7) provides:
Production of records. All trust account records
have public aspects related to a lawyer's fitness to
practice. Upon request of the office of lawyer
regulation, or upon direction of the supreme court,
the records shall be submitted to the office of lawyer
regulation for its inspection, audit, use, and
evidence under any conditions to protect the privilege
of clients that the court may provide. The records,
or an audit of the records, shall be produced at any
disciplinary proceeding involving the lawyer, whenever
material. Failure to produce the records constitutes
unprofessional conduct and grounds for disciplinary
action.
15
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); . . . ."
16
SCR 22.03(6) provides:
In the course of the investigation, the
respondent's wilful failure to provide relevant
14
Nos. 2010AP1576-D & 2011AP1764-D
admitted that by falsely certifying on his fiscal year 2007
State Bar of Wisconsin dues statement that he had filed
overdraft reporting agreements with the OLR, and by falsely
certifying on his fiscal year 2008 State Bar of Wisconsin dues
statement that he had complied with the trust account
recordkeeping requirements for the listed accounts, he violated
SCR 20:1.15(i)(4).17
¶25 Attorney Reitz further admitted that by depositing
earned legal fees for clients into his client trust account and
distributing those fees through the trust account instead of
through the law firm's business account, he violated
SCR 20:1.15(a) (effective prior to July 1, 2004), and
SCR 20:1.15(b)(3) (effective July 1, 2004).18 He also admitted
that by depositing checks to his client trust account that were
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.
17
SCR 20:1.15(i)(4) provides:
Suspension for non-compliance. The failure of a
state bar member to file the certificate is grounds
for automatic suspension of the member's membership in
the state bar in the same manner provided in SCR
10.03(6) for nonpayment of dues. The filing of a
false certificate is unprofessional conduct and is
grounds for disciplinary action.
18
SCR 20:1.15(b)(3) provides:
Lawyer funds. No 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.
15
Nos. 2010AP1576-D & 2011AP1764-D
payable to Attorney Mandelman, written on checks from an account
from a California law firm that were allegedly in payment of law
firm fees, he violated SCR 20:1.15(a) (effective prior to
July 1, 2004), and SCR 20:1.15(b)(3) (effective July 1, 2004).
¶26 Attorney Reitz further admitted that by failing to
file tax returns and pay tax on income earned by the RPL law
firm he violated the standard of professional conduct
established in cases, including In re Disciplinary Proceedings
Against Owens, 172 Wis. 2d 54, 56, 492 N.W.2d 157 (1992),
contrary to SCRs 20:8.4(f) and 20:8.4(c).
¶27 In addition, Attorney Reitz admitted that by failing
to file an action on behalf of a client prior to the expiration
of the statute of limitations, he violated SCR 20:1.3. The
client subsequently obtained a money judgment against Attorney
Reitz for $101,190.17. He admitted to another violation of
SCR 20:1.3 by failing to either obtain and present a settlement
offer to a minor child's parents, place the matter in
litigation, or advise the clients he did not believe the case
was worth pursuing and that they should pursue another attorney
if they wished to proceed. Although a $5,000 offer to settle
the claim had been tendered, Attorney Reitz never presented the
offer to the minor's parents.
¶28 On June 15, 2012, the referee found that the parties'
stipulation set forth an adequate factual basis for a
determination of misconduct for each of the counts to which
Attorney Reitz had pled no contest. The referee concluded that
a 12-month suspension, rather than the ten months proposed by
16
Nos. 2010AP1576-D & 2011AP1764-D
the parties, was an appropriate sanction for Attorney Reitz's
misconduct. The referee said the misconduct was serious and the
trust account records maintained by Attorney Reitz were in a
serious state of disarray. The referee said that due to the
poor recordkeeping, Attorney Reitz's law firm overpaid itself
fees from one trust account, resulting in a negative trust
account balance. The referee also said Attorney Reitz's client
trust accounts were used as a personal checkbook for the law
firm's attorneys, with payments being made from the trust
accounts to both Attorney Reitz and his partner on numerous
occasions.
¶29 The referee said despite the fact that Attorney Reitz
has been disciplined on two other occasions, he has continued to
fail to comply with supreme court rules. The referee found it
especially disturbing that while Attorney Reitz was being
investigated by the OLR for trust account violations he was
still committing additional misconduct. The referee concluded
that the severity of the misconduct, the need to protect the
public, and the need to impress upon Attorney Reitz the
seriousness of his misconduct demonstrates that a 12-month
suspension is appropriate. The referee also recommended that as
a condition of reinstatement Attorney Reitz be required to
provide the OLR with sufficient documentation to demonstrate
that all funds in his trust accounts were distributed to the
rightful owner, and the referee suggests that if Attorney
Reitz's license is reinstated, the OLR should monitor his trust
account activity for at least two years.
17
Nos. 2010AP1576-D & 2011AP1764-D
¶30 Attorney Reitz appealed raising two issues: (1) are
many of the factual findings of the referee unsupported by the
record and improperly relied upon in forming a basis for her
recommendations; and (2) are the recommendations for sanction of
the referee appropriate under the facts and findings of this
case.
¶31 Attorney Reitz's appeal did not challenge the
referee's findings of fact relating to those counts of
misconduct to which he pled no contest. He argued, however,
that many of the referee findings of fact related to the 13
counts of misconduct which were dismissed by the OLR. As to the
appropriate sanction, Attorney Reitz argued that the ten-month
suspension recommended by the parties, rather than the 12-month
suspension recommended by the referee, was an appropriate level
of discipline.
¶32 The OLR agreed that many of the referee's findings of
fact related to misconduct counts that were dismissed. The OLR
also agreed that a ten-month suspension was appropriate. In
response to a court order, on December 10, 2012, the parties
filed a stipulation identifying the findings of fact in the
referee's report that relate to counts that were dismissed.
¶33 A referee's findings of fact will not be set aside
unless clearly erroneous. Conclusions of law are reviewed de
novo. See In re Disciplinary Proceedings Against Eisenberg,
2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747. This court is
free to impose whatever discipline it deems appropriate,
regardless of the referee's recommendation. See In re
18
Nos. 2010AP1576-D & 2011AP1764-D
Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261
Wis. 2d 45, 660 N.W.2d 686.
¶34 After careful review of the entire record, we agree
with the parties that the referee's findings of fact identified
in their December 10, 2012 stipulation related to counts of
misconduct that were dismissed. As a result we deem those
findings of fact clearly erroneous and will not consider them in
reaching our decision in this case. We adopt the referee's
remaining findings of fact and further determine that those
findings support the legal conclusion that Attorney Reitz
engaged in all of the counts of professional misconduct set
forth in the parties' stipulation.
¶35 We now turn to the appropriate level of discipline to
impose for Attorney Reitz's professional misconduct. The
majority of the misconduct counts in this case involve trust
account violations. Trust account violations are serious. The
comment to SCR 20:1.15 provides, "A lawyer must hold the
property of others with the care required of a professional
fiduciary." Attorney Reitz has admitted that he failed to
create and retain complete trust account records and that he
provided only incomplete and inaccurate records to the OLR in
the course of its investigation. In a recent case involving
trust account violations, we found instructive the South
Carolina Supreme Court's holding in Matter of Miles, 335
S.C. 242, 516 S.E.2d 661 (1999): "When disciplinary counsel
presents clear and convincing evidence of trust account
violations or other inadequate recordkeeping, a lawyer's records
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must be sufficiently detailed to overcome the allegations." Id.
at 663. See In re Disciplinary Proceedings Against Weigel, 2012
WI 124, ¶47, 345 Wis. 2d 7, 823 N.W.2d 798.
¶36 Attorney Weigel's trust account violations resulted in
the revocation of his license to practice law in Wisconsin. By
Attorney Weigel's own admission, his law firm's trust account
ran a deficit of between $100,000 and $1,000,000 for over 13
years. We stated, "A six- or seven-figure deficit in an account
that holds client funds is an ethical failure of epic
proportions" and "it would be difficult to imagine a more
aggravated pattern of misconduct. . . ." As a result, we
concluded that any sanction less than revocation would undermine
the public's confidence in the honesty and integrity of the bar.
Id., ¶52. Although Attorney Reitz's misconduct, in the
management of his trust accounts and otherwise, is serious, it
does not reach the "epic proportions" of the Weigel case and
thus warrants a lesser sanction.
¶37 The OLR cited a number of cases in support of its
recommendation that a ten-month license suspension would be an
appropriate level of discipline. The OLR notes that in In re
Disciplinary Proceedings Against Van Groll, 2005 WI 140, 286
Wis. 2d 41, 704 N.W.2d 905, the attorney's license was suspended
for one year for nine counts of misconduct arising out of his
handling of client trust funds, failing to provide full and
truthful information during the OLR's investigation, filing
false State Bar of Wisconsin certifications, and failing to file
income tax returns for five years. In the OLR's opinion,
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Nos. 2010AP1576-D & 2011AP1764-D
Attorney Reitz's misconduct is less serious than Attorney Van
Groll's.
¶38 The OLR also notes that in In re Disciplinary
Proceedings Against Scanlan, 2006 WI 38, 290 Wis. 2d 30, 712
N.W.2d 877, the attorney's license was suspended for six months
for misconduct arising out of nine grievance matters consisting
of practicing law while suspended, failing to deposit advanced
fees in a trust account, failing to return an unearned fee, and
failing to timely respond to the OLR's investigation.
¶39 The OLR also believes that Attorney Reitz's conduct is
similar to that at issue in In re Disciplinary Proceedings
Against Schuster, 2006 WI 21, 289 Wis. 2d 23, 710 N.W.2d 458, in
which the attorney's license was suspended for nine months for
various trust account issues and making misrepresentations to
the OLR. The OLR says Attorney Reitz's misconduct is aggravated
by the fact that he committed more violations than did Attorneys
Scanlan or Schuster, and he also has a more serious disciplinary
history. In mitigation of Attorney Reitz's misconduct, the OLR
notes that Attorney Reitz has the absence of a dishonest or
selfish motive and has cooperated with the OLR during the course
of this disciplinary proceeding.
¶40 Upon careful consideration, we conclude that a ten-
month suspension of Attorney Reitz's license to practice law in
Wisconsin is an appropriate sanction. A ten-month suspension is
generally consistent with the level of discipline imposed in
prior cases and adheres to the court's general practice of
imposing progressive discipline. We agree with the referee that
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Nos. 2010AP1576-D & 2011AP1764-D
Attorney Reitz should be required to pay the full costs of the
proceeding. We also deem it appropriate to require him to
disburse all funds in his trust accounts to their rightful
owners; if the rightful owners cannot be located, to transfer
the funds to the state treasurer's office as unclaimed or
unidentifiable property. Although the parties and the referee
recommended that these disbursements should be made as a
condition of Attorney Reitz's reinstatement, we find it
appropriate to order the payments made as part of the sanction
as well as a condition of reinstatement. We also agree with the
referee that, upon his resumption of the practice of law
Attorney Reitz's trust account should be subject to monitoring
by the OLR for a period of two years.
¶41 IT IS ORDERED that the license of Jeffrey A. Reitz to
practice law in Wisconsin is suspended for a period of ten
months effective May 3, 2013.
¶42 IT IS FURTHER ORDERED that Jeffrey A. Reitz shall
distribute all funds in his trust accounts to their rightful
owners. If the rightful owners cannot be located, Jeffrey A.
Reitz shall transfer those funds to the state treasurer's office
as unclaimed or unidentifiable property. Jeffrey A. Reitz shall
provide documentation to the OLR that all funds in his trust
accounts have been so distributed.
¶43 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Jeffrey A. Reitz shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$6,943.09.
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Nos. 2010AP1576-D & 2011AP1764-D
¶44 IT IS FURTHER ORDERED that Jeffrey A. Reitz shall
comply with the provisions of SCR 22.26 concerning the duties of
an attorney whose license to practice law has been suspended.
¶45 IT IS FURTHER ORDERED that, upon his resumption of the
practice of law, Jeffrey A. Reitz's trust account shall be
subject to monitoring by the OLR for a period of two years.
¶46 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See SCR
22.29(4)(c).
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Nos. 2010AP1576-D & 2011AP1764-D
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