Office of Lawyer Regulation v. Janet L. Heins

2017 WI 93SUPREME COURT OF WISCONSIN
CASE NO.: 2016AP2454-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Janet L. Heins, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Janet L. Heins,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST HEINS
OPINION FILED: October 19, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2017 WI 93NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2016AP2454-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Janet L. Heins, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant, OCT 19, 2017
v. Diane M. Fremgen
Clerk of Supreme Court
Janet L. Heins,
Respondent.
ATTORNEY disciplinary proceeding. Attorney publicly
reprimanded.
¶1 PER CURIAM. We review a report filed by Referee
James W. Mohr, Jr., concluding, based on a stipulation filed by
the Office of Lawyer Regulation (OLR) and Attorney Janet L.
Heins, that Attorney Heins committed six counts of professional
misconduct as alleged in the OLR's complaint. The referee
agrees with the parties that a public reprimand is appropriate
discipline for Attorney Heins' misconduct. The referee
recommends, consistent with the stipulation, that we require
Attorney Heins to submit the attorney fee dispute with her
No. 2016AP2454-D
former client, J.R., to binding arbitration, that we direct her
to abide by any ensuing arbitration order, and that she be
assessed the full costs of the proceeding, which are $2,378.02
as of July 24, 2017.
¶2 After careful review, we accept the referee's factual
findings, conclusions of law, and recommendation. We commend
the referee for his report, which helpfully sets forth the
framework for consideration of the parties' stipulation,
establishes the factual basis for his legal conclusions, and
provides a reasoned analysis and authority supporting his
recommendation to accept the stipulated discipline.
¶3 We agree that a public reprimand is appropriate here,
and we agree that Attorney Heins should be required to submit
her fee dispute with J.R. to binding arbitration, to comply with
any resulting arbitration award, and that she shall bear the
full costs of this proceeding. The OLR does not seek
restitution and, based on this record, restitution is not
warranted at this time.
¶4 Attorney Heins was admitted to practice law in
Wisconsin in 1991. She resides and practices law in Mequon.
She has no prior discipline.1
1
On April 19, 2016, this court, in response to a motion
from the OLR, issued an order directing Attorney Heins to show
cause, in writing, why her license should not be suspended for
willful failure to cooperate with the OLR's investigation into
one of the matters at issue here. On May 4, 2016, the OLR
received a response from Attorney Heins and withdrew its motion.
2
No. 2016AP2454-D
¶5 On December 15, 2016, the OLR filed a six-count
complaint against Attorney Heins alleging misconduct involving
three client matters. The OLR initially sought a 60-day license
suspension and an order requiring Attorney Heins to submit a fee
dispute with a client to binding arbitration. Attorney Heins,
by counsel, filed an Answer characterizing the OLR's allegations
as a failure "to fully meet a handful of technical
requirements."
¶6 Referee Mohr was appointed. At an ensuing scheduling
conference, the referee scheduled a two-day evidentiary hearing
to commence June 19, 2017.
¶7 On June 14, 2017, the OLR and Attorney Heins executed
and filed a stipulation. In the stipulation, Attorney Heins
states that she:
[A]dmits the allegations contained in that Complaint
and agrees that OLR can prove the allegations of six
(6) counts of misconduct and that the referee may use
the factual allegations in the Complaint as an
adequate factual basis in the record for a
determination of misconduct as to each of those
counts.
¶8 The stipulation further provides that the parties
agree that a public reprimand is the appropriate level of
discipline for Attorney Heins' misconduct and that she should be
ordered to submit her fee dispute with J.R. to binding
arbitration before the State Bar Fee Arbitration Program and
comply with any arbitration award, subject to any rights and
remedies provided for by the Program's rules.
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No. 2016AP2454-D
¶9 In the stipulation, Attorney Heins further avers that
the stipulation did not result from plea bargaining; she fully
understands the misconduct allegations; she fully understands
her right to contest the matter; she fully understands the
ramifications of her entry into the stipulation; she fully
understands her right to consult with counsel, states that she
has in fact consulted with counsel; and states that her entry
into the stipulation is made knowingly and voluntarily.
¶10 The referee noted that this stipulation was filed
after all discovery was completed, shortly before the hearing.
The referee observed that the effect of the stipulation was
essentially an admission to all of the material allegations of
the complaint. The referee construed the stipulation as a
withdrawal of all defenses to the complaint and a plea of no
contest. Proceeding consistent with SCR 22.14(2),2 the referee
ascertained whether there was an adequate factual basis for each
allegation, then made a determination of misconduct with respect
to each allegation.
2
SCR 22.14(2) provides:
The respondent may by answer plead no contest to
allegations of misconduct in the complaint. The
referee shall make a determination of misconduct in
respect to each allegation to which no contest is
pleaded and for which the referee finds an adequate
factual basis in the record. In a subsequent
disciplinary or reinstatement proceeding, it shall be
conclusively presumed that the respondent engaged in
the misconduct determined on the basis of a no contest
plea.
4
No. 2016AP2454-D
¶11 The first two counts of the complaint involve Attorney
Heins' representation of J.R. The complaint alleged and the
parties stipulated that Attorney Heins represented J.R. in an
employment matter. On February 16, 2012, they entered into a
written fee agreement providing that $25,000 in advance fees
paid by J.R. would be placed in Attorney Heins' business
account. The written agreement further provided that Attorney
Heins would provide an accounting of the fees earned. The
agreement provided that if there was any dispute about fees, she
would give notice to J.R. and, if the dispute was not resolved,
she would submit the dispute to binding arbitration through the
State Bar Fee Arbitration Program.
¶12 By December 2014, all but $645.23 of the $25,000 in
advance fees had been billed. J.R. made a second advance
payment of fees in the amount of $3,000.
¶13 In January 2015, Attorney Heins sought to withdraw as
counsel for J.R., citing health issues. On February 12, 2015,
she sent J.R a "Final Statement" of fees. Attorney Heins
indicated that a refund in the amount of $1,411.53 was due and
she paid that amount to him. The statement did not contain the
notices required by former SCR 20:1.15(b)(4m)b.3
3
Effective July 1, 2016, substantial changes were made to
Supreme Court Rule 20:1.15, the "trust account rule." See S.
Ct. Order 14-07, (issued Apr. 4, 2016, eff. July 1, 2016).
Because the conduct underlying this case arose prior to July 1,
2016, unless otherwise indicated, all references to the supreme
court rules will be to those in effect prior to July 1, 2016.
Former SCR 20:1.15(b)(4m)b. provided:
(continued)
5
No. 2016AP2454-D
¶14 Ten days later, on February 22, 2015, J.R. notified
Attorney Heins that he disputed the fees charged and asked for a
"significant refund" of the total $28,000 he had paid.
¶15 On February 24, 2015, Attorney Heins indicated she
would not be making an additional refund. On March 2, 2015,
J.R. again disputed the fees. In the summer of 2015, J.R.
submitted the fee dispute with Attorney Heins to the State Bar
Fee Arbitration Program.
A lawyer who accepts advanced payments of fees
may deposit the funds in the lawyer's business
account, provided that review of the lawyer's fee by a
court of competent jurisdiction is available in the
proceeding to which the fee relates, or provided that
the lawyer complies with each of the following
requirements:
b. Upon termination of the representation, the
lawyer shall deliver to the client in writing all of
the following:
1. a final accounting, or an accounting from the
date of the lawyer's most recent statement to the end
of the representation, regarding the client's advanced
fee payment with a refund of any unearned advanced
fees;
2. notice that, if the client disputes the amount
of the fee and wants that dispute to be submitted to
finding arbitration, the client must provide written
notice of the dispute to the lawyer within 30 days of
the mailing of the accounting; and
3. notice that, if the lawyer is unable to
resolve the dispute to the satisfaction of the client
within 30 days after receiving notice of the dispute
from the client, the lawyer shall submit the dispute
to binding arbitration.
6
No. 2016AP2454-D
¶16 Attorney Heins did not respond to any correspondence
sent to her by the State Bar Fee Arbitration Program and failed
to submit to arbitration.
¶17 Count One of the complaint alleged that, by failing to
provide to J.R., at the termination of her representation of
him, all notices required by former SCR 20:1.15(b)(4m)b.,
Attorney Heins violated that rule.
¶18 Count Two alleged that, by failing to submit the fee
dispute with J.R. to arbitration, Attorney Heins violated former
SCR 20:1.15(b)(4m)c.,4 which provided that upon timely receipt of
written notice of a dispute from the client, the lawyer shall
attempt to resolve that dispute with the client, and if the
dispute is not resolved, the lawyer shall submit the dispute to
binding arbitration with the State Bar Fee Arbitration Program
or a similar local bar association program.
¶19 The referee found that, based upon Attorney Heins'
admission that her final statement to J.R. of February 12, 2015,
"did not contain the notices required by former
SCR 20:l.15(b)(4m)b.2. and 3." and based upon the absence of any
4
Former SCR 20:1.15(b)(4m)c. provided:
Upon timely receipt of written notice of a
dispute from the client, the lawyer shall attempt to
resolve that dispute with the client, and if the
dispute is not resolved, the lawyer shall submit the
dispute to binding arbitration with the State Bar Fee
Arbitration Program or a similar local bar association
program within 30 days of the lawyer's receipt of the
written notice of dispute from the client.
7
No. 2016AP2454-D
information in the record that a court of competent jurisdiction
approved Attorney Heins' fee, the referee found there was an
adequate factual basis in the record to support the misconduct
alleged in Count One.
¶20 The referee found that, based upon Attorney Heins'
admission that she did not respond to or participate in the
State Bar Fee Arbitration Program, there was an adequate factual
basis in the record to support the misconduct alleged in Count
Two.
¶21 Counts Three through Five of the complaint involved
Attorney Heins' representation of M.I. in connection with an
employment matter. In early November 2015, M.I. opted to
settle; settlement funds were deposited into Attorney Heins'
trust account on November 3, 2015. M.I. was entitled to $3,750
of the funds.
¶22 By early December 2015, M.I. had not received his
portion of the settlement. Over the next month, M.I. exchanged
several emails with Attorney Heins regarding the funds.
¶23 On January 19, 2016, Attorney Heins drafted a check
from her client trust account to M.I. for the funds. The check
was twice rejected for insufficient funds, resulting in fees
charged to M.I. by his own bank.
¶24 On March 1, 2016, Attorney Heins drafted a second
check which included the bank charges M.I. had incurred, plus
his portion of the fees. That check was honored.
¶25 The OLR examined Attorney Heins' bank records and
determined that between November 3, 2015, and January 31, 2016,
8
No. 2016AP2454-D
the balance in her trust account was below the amount that was
owed to M.I.
¶26 Between February 2016 and April 2016, the OLR sent
Attorney Heins a series of letters seeking her response to
allegations regarding M.I., and advising Attorney Heins of her
duty to cooperate with the OLR's investigation under
SCR 21.15(4) and SCR 22.03(6). Attorney Heins did not submit a
complete or timely response. Eventually, on April 19, 2016,
this court issued an order directing Attorney Heins to show
cause why her license should not be suspended for willful
failure to cooperate with the investigation. On May 4, 2016,
the OLR received, via fax from Attorney Heins, a response to the
OLR's letter of March 25, 2016. The OLR then withdrew its
motion.
¶27 Count Three alleged that by failing to hold in trust
funds belonging to M.I., Attorney Heins violated
SCR 20:1.15(b)(l).5
¶28 The referee found that, based upon the undisputed
evidence that there were, at various times, insufficient funds
in Attorney Heins' trust account to pay M.I. what was owed him,
5
SCR 20:1.15(b)(l) 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 of more identifiable trust accounts.
9
No. 2016AP2454-D
there was an adequate factual basis in the record to support the
claim of misconduct in Count Three.
¶29 Count Four alleged that by failing to promptly deliver
to M.I. the settlement funds belonging to him, Attorney Heins
violated former SCR 20:1.15(d)(1).6
¶30 The referee found that based upon the undisputed
factual admissions in the record that Attorney Heins had
received settlement funds on November 3, 2015, but did not pay
them to M.I. until on or after March 1, 2016, Attorney Heins did
not "promptly deliver to the client" the settlement funds that
the client was entitled to receive and that therefore there was
an adequate factual basis in the record to support the
misconduct alleged in Count Four.
¶31 Count Five alleged that by failing to timely respond
to the OLR's investigative letters of February 17 and February
22, 2016, Attorney Heins violated SCR 22.03(2), enforceable by
SCR 20:8.4(h), and, by willfully failing to timely provide the
trust account records requested in the OLR's letters of
6
Former SCR 20:1.15(d)(1) provided:
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.
10
No. 2016AP2454-D
February 17 and March 25, 2016, Attorney Heins violated
SCR 22.03(2) and (6),7 enforceable by SCR 20:8.4(h).8
¶32 The referee found that based upon the undisputed facts
in the record that Attorney Heins refused on several occasions
to furnish information requested by the OLR in correspondence,
and only supplied the complete information after the OLR was
required to file a Motion and Order to Show Cause, there was an
adequate factual basis in the record to support the misconduct
alleged in Count Five.
7
SCR 22.03(2) and (6) provide:
(2) Upon commencing an investigation, the
director shall notify the respondent of the matter
being investigated unless in the opinion of the
director the investigation of the matter requires
otherwise. The respondent shall fully and fairly
disclose all facts and circumstances pertaining to the
alleged misconduct within 20 days after being served
by ordinary mail request for a written response. The
director may allow additional time to respond.
Following receipt of the response, the director may
conduct further investigation and may compel the
respondent to answer questions, furnish documents, and
present any information deemed relevant to the
investigation.
(6) In the course of the investigation, the
respondent's wilful failure to provide relevant
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.
8
SCR 20:8.4(h) provides: "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(6), or
SCR 22.04(1)."
11
No. 2016AP2454-D
¶33 Count Six of the complaint alleged that on
September 10, 2015, another of Attorney Heins' clients, M.J.,
presented for payment a check from Attorney Heins' trust account
in the amount of $600, representing his portion of a settlement.
The check was returned for insufficient funds. On that date
Attorney Heins had a zero balance in her trust account.
¶34 The following day, Attorney Heins made deposits
totaling $600 into her trust account. M.J. again presented the
check on September 16, 2015. This time, the check cleared the
bank.
¶35 Count Six alleged that by failing to hold in trust
funds belonging to M.J., Attorney Heins violated
SCR 20:l.15(b)(1). The referee found that, based upon the
undisputed evidence in the record, that the $600, which was owed
to M.J., was not in Attorney Heins' trust account when the check
was first presented for payment, there was an adequate factual
basis in the record to support misconduct as alleged in Count
Six.
¶36 Accordingly, based upon the stipulation filed on June
14, 2017, and for the reasons set forth above, the referee
found, as proven fact, each and every factual allegation in the
OLR's complaint. Further, the referee concluded that the record
was sufficient to support his determination that Attorney Heins
violated the supreme court rules as alleged in the OLR's
complaint.
12
No. 2016AP2454-D
¶37 No appeal from the referee's report was filed so our
review proceeds under SCR 22.17(2).9 In conducting our review,
we uphold a referee's findings of fact unless they are shown to
be clearly erroneous, and we review the referee's conclusions of
law de novo. See In re Disciplinary Proceedings Against
Carroll, 2001 WI 130, ¶29, 248 Wis. 2d 662, 636 N.W.2d 718; In
re Disciplinary Proceedings Against Sosnay, 209 Wis. 2d 241,
243, 562 N.W.2d 137 (1997). We determine the appropriate level
of discipline to be imposed under the circumstances, independent
of the referee's recommendation. See In re Disciplinary
Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660
N.W.2d 686.
¶38 There is no showing that any of the referee's findings
of fact, which are derived from the parties' stipulation, are
clearly erroneous. Accordingly, we adopt them. We also agree
with the referee's conclusions of law that Attorney Heins
violated the supreme court rules set forth above.
¶39 The referee then considered the appropriate discipline
for Attorney Heins' misconduct. The parties jointly requested
the referee recommend a public reprimand and that Attorney Heins
9
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.
13
No. 2016AP2454-D
be ordered to submit her fee dispute with J.R. to binding
arbitration before the State Bar Fee Arbitration Program and
comply with any arbitration award, subject to any rights or
remedies provided for by the Program's rules.
¶40 The referee conducted an independent assessment of
whether the stipulated discipline was appropriate. The referee
set forth the relevant factors to be considered when
ascertaining the appropriate sanction for misconduct, including
the seriousness, nature, and extent of misconduct, the level of
discipline needed to protect the public and the legal system
from repetition of the misconduct, the need to impress on the
attorney the seriousness of the misconduct, and the need to
deter others from committing similar acts. In re Disciplinary
Proceedings Against Hammis, 2011 WI 3, 331 Wis. 2d 19, 793
N.W.2d 884.
¶41 The referee observed that there was no evidence of
prior disciplinary proceedings against Attorney Heins. The
referee noted that this proceeding involves misconduct in three
separate client matters, including failure to abide by
agreements with a client, failure to obey supreme court rules
concerning fee disputes, several trust account violations,
including being "out of trust" on numerous occasions, and
failure to cooperate with the OLR's investigation. The referee
deemed these "serious allegations of misconduct extending over
several years." The referee deemed particularly troublesome
Attorney Heins' refusal to follow through on both her written
14
No. 2016AP2454-D
agreement and supreme court rule requiring participation in the
State Bar Fee Arbitration Program.
¶42 The referee observed that on previous occasions, this
court has imposed public reprimands in similar cases. In re
Disciplinary Proceedings Against Halverson, 225 Wis. 2d 215, 591
N.W.2d 821 (1999) (public reprimand imposed on attorney with no
prior discipline who failed to supply requested information to
clients, failed to refund fees, and failed to cooperate with
OLR); In re Disciplinary Proceedings Against Grapsas, 174
Wis. 2d 816, 498 N.W.2d 400 (1993) (imposing public reprimand on
attorney with no prior discipline who failed to cooperate with
OLR, failed to refund fees to a client, and failed to respond to
requests for information from the client); In re Disciplinary
Proceedings Against Adent, 2016 WI 19, 367 Wis. 2d 372, 877
N.W.2d 364 (accepting stipulation and imposing public reprimand
on attorney for trust account violations).
¶43 On balance, the referee determined that a public
reprimand is appropriate discipline here and that the court
should order Attorney Heins to submit her fee dispute with J.R.
to binding arbitration before the State Bar Fee Arbitration
Program, and to fully and promptly comply with that proceeding
as well as with any arbitration award or other orders that may
be made in connection with those proceedings. The referee added
that if Attorney Heins fails to comply, the OLR should be
authorized to request the court re-open this matter to consider
additional discipline. Finally, the referee recommends we
15
No. 2016AP2454-D
impose the full costs of this proceeding on Attorney Heins. We
agree with the referee's analysis.
¶44 IT IS ORDERED that Janet L. Heins is publicly
reprimanded.
¶45 IT IS FURTHER ORDERED that Janet L. Heins shall, if
she has not already done so, promptly submit her fee dispute
with J.R. to binding arbitration before the State Bar Fee
Arbitration Program, and shall fully and promptly comply with
that proceeding as well as with any arbitration award or other
orders that may be made in connection with those proceedings.
¶46 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Janet L. Heins shall pay to the Office of Lawyer
Regulation the costs of this proceeding, which are $2,378.02 as
of July 24, 2017.
¶47 IT IS FURTHER ORDERED that the Director of the Office
of Lawyer Regulation shall advise the court if there has not
been full compliance with all conditions of this order. If
Janet L. Heins fails to comply with our directive to submit her
fee dispute to binding arbitration, the Office of Lawyer
Regulation may request the court re-open this matter to consider
imposition of additional sanctions.
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No. 2016AP2454-D
1