Office of Lawyer Regulation v. Michael W. Steinhafel

2013 WI 93
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP1826-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Michael W. Steinhafel, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Michael W. Steinhafel,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST STEINHAFEL
OPINION FILED: November 26, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING: ZIEGLER, J., did not participate.
ATTORNEYS:
2013 WI 93
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP1826-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Michael W. Steinhafel, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
NOV 26, 2013
v.
Diane M. Fremgen
Clerk of Supreme Court
Michael W. Steinhafel,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. On June 26, 2013, Referee Richard C.
Ninneman issued a report recommending that Attorney Michael W.
Steinhafel be declared in default, concluding that Attorney
Steinhafel engaged in multiple counts of professional
misconduct, and recommending that his license to practice law in
Wisconsin be suspended for four months.
¶2 We conclude that the referee's findings of fact are
supported by satisfactory and convincing evidence. Due to
No. 2012AP1826-D
Attorney Steinhafel's repeated failure to appear for or
participate in a deposition, rescheduled deposition, and status
conferences, we declare him to be in default. We further
conclude that the seriousness of his misconduct warrants the
suspension of his license to practice law in Wisconsin for a
period of four months. We also agree with the referee that the
full costs of the proceeding, which are $2,638.99 as of July 16,
2013, should be assessed against Attorney Steinhafel.
¶3 Attorney Steinhafel was admitted to practice law in
Wisconsin in 1989. He practiced in Milwaukee. During the
course of the proceedings, Attorney Steinhafel stated he has not
practiced law in years and has no intention of practicing law
again.
¶4 On August 16, 2012, the Office of Lawyer Regulation
(OLR) issued a complaint against Attorney Steinhafel alleging
seven counts of misconduct. Four of the misconduct counts arose
out of Attorney Steinhafel's representation of S.R. in a
Milwaukee County divorce proceeding. While the divorce was
pending, S.R. wanted to sell one of her two income properties.
In order for the sale to take place, her husband, C.R., had to
execute two affidavits waiving his interests in the property.
In exchange for signing the affidavits, an agreement was reached
between Attorney Steinhafel and C.R.'s attorney, Dana Gimbel,
that any proceeds from the sale would be held in trust by
Attorney Steinhafel pending a determination of the parties'
respective interests.
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No. 2012AP1826-D
¶5 The sale of S.R.'s income property closed in September
2006. Contrary to the agreement regarding disposition of the
sale proceeds, the entire amount of the sale was directly
distributed to S.R. and none of the funds were ever placed in
trust.
¶6 In November of 2007, while the divorce was still
pending, S.R. wanted to sell a second income property. An
agreement similar to the one regarding the sale of the first
property was made between Attorney Steinhafel and Attorney
Gimbel. On November 30, 2007, the proceeds of the sale of
S.R.'s second income property were deposited into the trust
account of the Schroeder Group Law Firm, the firm that employed
Attorney Steinhafel at the time. On December 21, 2007, contrary
to the agreement entered into between Attorney Steinhafel and
Attorney Gimbel, the entire amount of the sale proceeds was
distributed to S.R.
¶7 At the divorce hearing, Attorney Gimbel informed the
court the parties had reached a stipulation, and that part of
the stipulation was that the proceeds from the sale of the two
properties were being held in Attorney Steinhafel's trust
account. Attorney Steinhafel was present at the trial, but did
not inform the court or Attorney Gimbel that the funds were not
in fact in his trust account and had already been distributed to
S.R.
¶8 The OLR's complaint alleged the following counts of
misconduct with respect to Attorney Steinhafel's representation
of S.R.:
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No. 2012AP1826-D
COUNT ONE. By failing to provide notice of the
receipt of sale proceeds to adverse counsel,
[Attorney] Steinhafel violated SCR 20:1.15(d)(1).1
COUNT TWO. By failing to hold the sale proceeds
in trust, [Attorney] Steinhafel violated
SCR 20:1.15(d)(3).2
COUNT THREE. By disbursing the sale proceeds to
his client in direct contradiction of an agreement he
made with adverse counsel, [Attorney] Steinhafel
violated SCR 20:8.4(c).3
COUNT FOUR. By continuing to misrepresent to
adverse counsel in court that he was holding sale
1
SCR 20:1.15(d)(1) states:
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.
2
SCR 20:1.15(d)(3) provides:
Disputes regarding trust property. When the
lawyer and another person or the client and another
person claim ownership interest in trust property
identified by a lien, court order, judgment, or
contract, the lawyer shall hold that property in trust
until there is an accounting and severance of the
interests. If a dispute arises regarding the division
of the property, the lawyer shall hold the disputed
portion in trust until the dispute is resolved.
Disputes between the lawyer and a client are subject
to the provisions of sub. (g)(2).
3
SCR 20:8.4(c) states it is professional misconduct for a
lawyer to "engage in conduct involving dishonesty, fraud, deceit
or misrepresentation . . . ."
4
No. 2012AP1826-D
proceeds in trust, [Attorney] Steinhafel violated
SCR 20:8.4(c).
¶9 The OLR's complaint also alleged that in November of
2006, D.C. hired Attorney Steinhafel to represent him in a small
claims action. D.C. said he signed a fee agreement and paid
Attorney Steinhafel an advance fee of $1,500.
¶10 D.C. filed a grievance with the OLR on March 2, 2011,
saying that Attorney Steinhafel had failed to diligently pursue
his case, failed to communicate with him, and failed to respond
to his request for a refund of the advanced fee and the return
of his documents. Attorney Steinhafel sent a response to the
OLR saying he had tried to locate D.C.'s file at his former law
firm, but was unable to do so, and that he had lost contact with
D.C. after he left the law firm where he was affiliated in
October 2007 and did not take the file with him to his new law
firm. Attorney Steinhafel further told OLR that after he became
aware of D.C.'s request for a refund of fees, he promptly sent a
check representing a refund of all fees. The OLR's complaint
alleged the following count of misconduct with respect to
Attorney Steinhafel's representation of D.C.:
COUNT FIVE. By failing to provide his client
with notice of his move from one law firm to another,
by failing to inform his client of his apparent
termination of his representation and by failing to
provide his client with a refund of the unearned
portion of the advance fee more than five years after
payment, [Attorney] Steinhafel violated of [sic]
SCR 20:1.16(d).4
4
SCR 20:1.16(d) provides as follows:
Upon termination of representation, a lawyer
shall take steps to the extent reasonably practicable
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No. 2012AP1826-D
¶11 The OLR's complaint also alleged that on October 29,
2009, Attorney Steinhafel was the subject of a traffic stop
which led to a felony charge against him of operating while
under the influence of an intoxicant, third offense, with a
minor child in the vehicle, and misdemeanor charges of operating
with a prohibited blood alcohol concentration, third offense,
and operating a motor vehicle after revocation. On July 19,
2010, Attorney Steinhafel pled guilty to the felony charge. The
remaining charges were dismissed and read-in at sentencing.
¶12 Attorney Steinhafel did not provide written notice of
his conviction to the OLR within five days of the finding of
guilt. Attorney Steinhafel's counsel in the OWI case did inform
the OLR of Attorney Steinhafel's guilty plea and sentencing in a
letter to the OLR dated September 23, 2010.
¶13 The OLR's complaint alleged the following counts of
misconduct with respect to the felony conviction:
COUNT SIX. By engaging in conduct leading to a
felony criminal traffic conviction, [Attorney]
5
Steinhafel violated SCR 20:8.4(b).
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.
5
SCR 20:8.4(b) states it is professional misconduct for a
lawyer to "commit a criminal act that reflects adversely on the
lawyer's honesty, trustworthiness or fitness as a lawyer in
other respects; . . . ."
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No. 2012AP1826-D
COUNT SEVEN. By failing to provide written
notice of his finding of guilt in a criminal case
within five days, [Attorney] Steinhafel violated
SCR 21:15(5).6
¶14 On November 8, 2012, Attorney Jon E. Fredrickson filed
a notice of appearance and an answer to the complaint on behalf
of Attorney Steinhafel. In March 2013 Attorney Frederickson
moved to withdraw as counsel for Attorney Steinhafel. The
referee granted that motion.
¶15 Attorney Steinhafel failed to appear for a scheduled
deposition on April 24, 2013. He again failed to appear for a
rescheduled deposition on May 14, 2013. The OLR filed a motion
for sanctions which was to be heard on May 13, 2013. That date
was changed to a telephone scheduling/status conference.
Attorney Steinhafel failed to be available by telephone on
May 13. After Attorney Steinhafel failed to appear for his
rescheduled deposition on May 14, 2013, the OLR filed a second
motion for sanctions which was scheduled to be heard on June 6,
2013. Following another telephone conference between the OLR's
retained counsel, Attorney Steinhafel, and the referee, the
6
SCR 21.15(5) provides:
An attorney found guilty or convicted of any
crime on or after July 1, 2002, shall notify in
writing the office of lawyer regulation and the clerk
of the Supreme Court within 5 days after the finding
or conviction, whichever first occurs. The notice
shall include the identity of the attorney, the date
of finding or conviction, the offenses, and the
jurisdiction. An attorney's failure to notify the
office of lawyer regulation and clerk of the supreme
court of being found guilty or his or her conviction
is misconduct.
7
No. 2012AP1826-D
June 6 hearing was changed to another telephone status
conference. Attorney Steinhafel again failed to make
arrangements to participate in the June 6 telephone conference.
In an order dated June 6, 2013, the referee set the OLR's second
motion for sanctions to be heard on June 19, 2013. Attorney
Steinhafel failed to appear in person, but did call in and
participate by telephone.
¶16 At the June 19, 2013 hearing, the referee granted the
OLR's motion for sanctions, struck Attorney Steinhafel's answer
to the complaint, and recommended that a default judgment be
entered. The referee found the OLR proved all of the
allegations in its complaint by clear, satisfactory, and
convincing evidence. The referee recommended that Attorney
Steinhafel's license to practice law be suspended for four
months, as requested in the OLR's complaint, and that all costs
of the proceeding be assessed against Attorney Steinhafel.
Attorney Steinhafel has not filed an appeal from the referee's
report and recommendation.
¶17 In light of Attorney Steinhafel's repeated failure to
appear for scheduled depositions, status conferences, and
hearings, we deem it appropriate to strike his answer to the
OLR's complaint and declare him in default.
¶18 A referee's findings of fact are affirmed 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. The court may impose
whatever sanction it sees fit regardless of the referee's
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No. 2012AP1826-D
recommendation. See In re Disciplinary Proceedings Against
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.
¶19 There is no showing that any referee's findings of
fact are clearly erroneous. Accordingly, we adopt them. We
also agree with the referee's conclusions of law that Attorney
Steinhafel violated the various rules of professional conduct as
alleged in the OLR's complaint. We agree with the referee that
a four-month suspension of Attorney Steinhafel's license to
practice law in Wisconsin is an appropriate sanction for his
misconduct. Because this case presents no extraordinary
circumstances, we further determine that Attorney Steinhafel
should be required to pay the full costs of this matter. See
SCR 22.24(1m) (supreme court's general policy upon a finding of
misconduct is to impose all costs upon the respondent attorney).
We note the OLR is not seeking restitution.
¶20 IT IS ORDERED that the license of Michael W.
Steinhafel to practice law in Wisconsin is suspended for a
period of four months, effective January 6, 2014.
¶21 IT IS FURTHER ORDERED that Michael W. Steinhafel shall
comply with the provisions of SCR 22.26 concerning the duties of
a person whose license to practice law in Wisconsin has been
suspended.
¶22 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Michael W. Steinhafel shall pay to the Office of
Lawyer Regulation the costs of this proceeding.
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No. 2012AP1826-D
¶23 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See
SCR 22.28(2).
¶24 ANNETTE KINGSLAND ZIEGLER, J., did not participate.
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No. 2012AP1826-D
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