Office of Lawyer Regulation v. Michael R. Bauer

2020 WI 86SUPREME COURT OF WISCONSIN
CASE NO.: 2016AP1259-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Michael R. Bauer, Attorney at Law:
Office of Lawyer Regulation,
Complainant-Respondent,
v.
Michael R. Bauer,
Respondent-Appellant.
DISCIPLINARY PROCEEDINGS AGAINST BAUER
OPINION FILED: November 24, 2020
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
Per Curiam.
NOT PARTICIPATING:
KAROFSKY, J. did not participate.
ATTORNEYS:
2020 WI 86NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2016AP1259-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Michael R. Bauer, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant-Respondent, NOV 24, 2020
v. Sheila T. Reiff
Clerk of Supreme Court
Michael R. Bauer,
Respondent-Appellant.
ATTORNEY reinstatement proceeding. Reinstatement granted
upon conditions.
¶1 PER CURIAM. We review a report filed by Referee
James C. Boll recommending that the court reinstate the license
of Michael R. Bauer to practice law in Wisconsin with certain
conditions. No appeal has been filed from the referee's report
and recommendation. Accordingly, our review proceeds pursuant
to Supreme Court Rule (SCR) 22.33(3).1 Upon careful review of
1SCR 22.33(3) provides: "If no appeal is timely filed, the
supreme court shall review the referee's report, order
reinstatement, with or without conditions, deny reinstatement,
or order the parties to file briefs in the matter."
No. 2016AP1259-D
the matter we adopt the referee's findings and conclusions and
agree that Attorney Bauer's petition for reinstatement should be
granted upon the recommended conditions as described below. We
also direct that the costs of this current reinstatement
proceeding, totaling $4,093.40, be paid by Attorney Bauer.
¶2 Attorney Bauer was admitted to practice law in
Wisconsin in 1988. He practiced law in Madison. He also owned
a business, Sports Advisors, Inc., which related to his work as
an agent for several National Football League players. Before
the complaint giving rise to his current license suspension
Attorney Bauer had not previously been subject to professional
discipline.
¶3 On June 24, 2016, the Office of Lawyer Regulation
(OLR) filed a disciplinary complaint against Attorney Bauer
alleging 28 counts of professional misconduct. The complaint
alleged that between December 2013 and October 2014, Attorney
Bauer mishandled client funds held in trust, comingled personal
funds in his trust account, failed to keep proper trust account
records, exercised a lack of diligence, failed to properly
communicate with clients, failed to promptly refund unearned
fees and repeatedly failed to cooperate with the OLR's
investigations. Ultimately, following litigation, it was
determined that Attorney Bauer committed 22 counts of misconduct
and converted $376,818.63. In re Disciplinary Proceedings
Against Bauer, 2018 WI 49, 381 Wis. 2d 474, 912 N.W.2d 108.
Although the dollar amount is staggeringly high, it bears noting
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No. 2016AP1259-D
that it was undisputed that Attorney Bauer's clients received
all monies due to them.
¶4 On April 5, 2019, Attorney Bauer filed a petition
seeking the reinstatement of his Wisconsin law license. The OLR
conducted an investigation and initially opposed the petition.
The court appointed Referee Boll, who conducted an evidentiary
hearing on November 12, 2019, in Madison. Attorney Bauer
testified and presented several character witnesses who voiced
support for his reinstatement.
¶5 On December 12, 2019, the referee issued a report
concluding that Attorney Bauer had satisfied his burden of proof
and had met the requirements for reinstatement set forth in
SCR 22.31.2 The referee recommends reinstatement with certain
conditions, and the imposition of costs.
2 SCR 22.31(1) provides the petitioner has the burden
of demonstrating, by clear, satisfactory, and
convincing evidence, all of the following:
(a) That he or she has the moral character to
practice law in Wisconsin.
(b) That his or her resumption of the practice of
law will not be detrimental to the administration of
justice or subversive of the public interest.
(c) That his or her representations in the
petition, including the representations required by
SCR 22.29(4)(a) to (m) and 22.29(5), are
substantiated.
(d) That he or she has complied fully with the
terms of the order of suspension or revocation and
with the requirements of SCR 22.26.
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No. 2016AP1259-D
¶6 When we review a referee's report and recommendation,
we will adopt the referee's findings of fact unless they are
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.
¶7 During review, the court ascertained that Attorney
Bauer had commenced a voluntary Chapter 7 bankruptcy proceeding
in the United States Bankruptcy Court for the Western District
of Wisconsin. Michael R. Bauer and Kathleen R. LaRocque, 3-19-
13610-bhl. On January 23, 2020, Attorney Bauer's former law
partner, Attorney Daniel P. Bach, filed in that bankruptcy
proceeding a "complaint to determine dischargeability of a debt"
seeking an order excepting the debt owed to Attorney Bach from
discharge under 11 U.S.C. § 523(a)(2)(B), 11 U.S.C. § 523(a)(4)
and 11 U.S.C. § 523(a)(6), and for a judgment in the amount of
$678,900.87 "representing treble damages . . . on the
$226,300.29 paid by [Attorney Bach] due to Bauer's actions."
Attorney Bach's claim clearly related to this disciplinary
proceeding. Accordingly, on February 18, 2020, the court
ordered the parties to advise the court why the reinstatement
petition should not be held in abeyance pending resolution of
the bankruptcy proceeding.
¶8 On February 26, 2020, the OLR filed a statement
agreeing that the matter should be held. On March 3, 2020,
Attorney Bauer filed a two-page statement asking the court to
decide the reinstatement "based upon the facts found by the
Referee in its decision dated December 9, 2019." On May 19,
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No. 2016AP1259-D
2020 we held the reinstatement petition in abeyance pending
resolution of the bankruptcy proceeding. On September 15, 2020,
Attorney Bauer advised the court that the dispute involving
Attorney Bach had been resolved. The OLR confirmed this
statement in a report filed on October 1, 2020. The parties
agree the court may proceed with Attorney Bauer's reinstatement
petition.
¶9 Supreme Court Rule 22.31(1) sets forth the standards
to be met for reinstatement. The petitioner must show by clear,
satisfactory, and convincing evidence that he or she has the
moral character to practice law, that his or her resumption of
the practice of law will not be detrimental to the
administration of justice or subversive to the public interest,
and that he or she has complied with SCR 22.26 and the terms of
the order of suspension. In addition, SCR 22.31(1)(c)
incorporates the statements that a petition for reinstatement
must contain pursuant to SCR 22.29(4)(a)-(k) and (4m).3 Thus,
3 SCR 22.29(4)(a)-(k) and (4m) provides that a petition
for reinstatement shall show all of the following:
(a) The petitioner desires to have the
petitioner's license reinstated.
(b) The petitioner has not practiced law during
the period of suspension or revocation.
(c) The petitioner has complied fully with the
terms of the order of suspension or revocation and
will continue to comply with them until the
petitioner's license is reinstated.
(d) The petitioner has maintained competence and
learning in the law by attendance at identified
educational activities.
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No. 2016AP1259-D
the petitioning attorney must demonstrate that the required
representations in the reinstatement petition are substantiated.
¶10 The referee found that Attorney Bauer: desires to
have his license reinstated, 22.29(4)(a); has not practiced law
in Wisconsin during the period of his suspension,
SCR 22.29(4)(b); has complied fully with the terms of the order
of suspension or revocation and will continue to comp1y with
(e) The petitioner's conduct since the suspension
or revocation has been exemplary and above reproach.
(f) The petitioner has a proper understanding of
and attitude toward the standards that are imposed
upon members of the bar and will act in conformity
with the standards.
(g) The petitioner can safely be recommended to
the legal profession, the courts and the public as a
person fit to be consulted by others and to represent
them and otherwise act in matters of trust and
confidence and in general to aid in the administration
of justice as a member of the bar and as an officer of
the courts.
(h) The petitioner has fully complied with the
requirements set forth in SCR 22.26.
(j) The petitioner's proposed use of the license
if reinstated.
(k) A full description of all of the petitioner's
business activities during the period of suspension or
revocation.
(4m) The petitioner has made restitution to or
settled all claims of persons injured or harmed by
petitioner's misconduct, including reimbursement to
the Wisconsin lawyers' fund for client protection for
all payments made from that fund, or, if not, the
petitioner's explanation of the failure or inability
to do so.
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No. 2016AP1259-D
them unti1 his 1icense is reinstated, SCR 22.29(4)(c); and has
maintained competence and learning in the law by attending
identified educational activities, SCR 22.29(4)(d).4 The referee
further found that Attorney Bauer's conduct since the suspension
has been exemp1ary and above reproach, SCR 22.29(4)(e); he has a
proper understanding of and attitude toward the standards that
are imposed upon members of the bar and will act in conformity
with the standards, SCR 22.29(4)(f); and that he can safely be
recommended to the legal profession, the courts, and the public
as a person fit to be consulted by others and to represent them
and otherwise act in matters of trust and confidence and in
general to aid in the administration of justice as a member of
the bar and as an officer of the courts, SCR 22.29(4)(g). The
referee found that Attorney Bauer has fully complied with the
requirements set forth in SCR 22.26, SCR 22.29(4)(h); he has
explained the proposed use of his law license if reinstated,
SCR 22.29(4)(j);5 and he has offered a full description of all of
his business activities during the period of suspension,
4By memo dated May 6, 2019, the Board of Bar Examiners,
based on the information that has been submitted by the
petitioner, concluded the petitioner was currently in compliance
with the court's CLE and EPR requirements for reinstatement. In
addition, the petitioner voluntarily attended a seminar entitled
Trust Account Management on April 26, 2018, conducted by the
OLR.
5Attorney Bauer indicated that he will practice law in
Wisconsin and focus on consumer and immigration matters. He may
also seek training to mediate eminent domain disputes.
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No. 2016AP1259-D
satisfying SCR 22.29(4)(k).6 The referee specifically found that
Attorney Bauer has the moral character to practice law.
¶11 The referee observed that no restitution was ordered
in the underlying disciplinary proceedings and noted that no
claims were made to the Wisconsin Lawyers' Fund for Client
Protection against Attorney Bauer. Accordingly, the referee
determined that Attorney Bauer has satisfied SCR 22.29(4m). See
also ¶¶7-8 (addressing resolution of Attorney Bach's claims
against Attorney Bauer in the bankruptcy proceeding).
¶12 The referee addressed two particular concerns raised
by the OLR: his access to client trust accounts in light of his
financial condition, namely a high level of debt, and the
serious nature of Attorney Bauer's underlying misconduct. The
referee observed that debt alone is not a disqualifying factor
for reinstatement. However, where previous misconduct coupled
with strained personal finances creates an enhanced risk to the
public, high debt levels may be a valid concern. Here, the
referee noted that Attorney Bauer had filed for bankruptcy which
the referee accepted as evidence that Attorney Bauer had a
viable plan to address his personal finances. After the
referee's report was filed, the bankruptcy court discharged most
of Attorney Bauer's debts.
Attorney Bauer testified that he engaged in no income
6
producing business activities during the time period of his
suspension. He cared for his family and volunteered in the
community.
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No. 2016AP1259-D
¶13 In addition, the referee observed that Attorney Bauer
testified that he would not object to reasonable conditions
being placed on his reinstatement as it relates to his use of or
access to client trust funds. The recommended conditions are
designed, in part, to address these concerns.
¶14 The referee then considered the OLR's stated concern
about the seriousness of the underlying misconduct. The referee
acknowledged that Attorney Bauer's underlying misconduct was not
the result of an honest mistake or sloppy bookkeeping. It was
intentional and dishonest. Without discounting the seriousness
of the underlying misconduct, the referee noted that Attorney
Bauer has served the suspension imposed by this court and the
referee was persuaded that Attorney Bauer's resumption of the
practice of law will not be detrimental to the administration of
justice or subversive of the public interest.
¶15 We agree with the referee that Attorney Bauer has met
his burden of proof with respect to all elements needed to
justify his reinstatement. Moreover, his period of suspension
has been over six months longer than ordered by this court
because of the delays resulting from his underlying bankruptcy
proceeding.
¶16 As stated by the referee in the underlying proceeding,
for some reason, the "wheels came off" Attorney Bauer's trust
account management practices in 2014. The conversions occurred
between December 2013 and October 2014 and consisted of
"labyrinthine transfers" that "seemed to constantly be in the
process of 'robbing Peter to pay Paul' and, in some cases, to
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No. 2016AP1259-D
pay Michael Bauer." However, once confronted, Attorney Bauer
admitted guilt as to many of the allegations; no clients lost
funds; he fully cooperated with the OLR investigation; and he
expressed remorse for his misbehavior. He had no prior
discipline over what had been an otherwise distinguished 20-year
legal career.
¶17 The referee in this reinstatement proceeding observed
that Attorney Bauer has expressed regret for his conduct and
found that Attorney Bauer's testimony and the evidence adduced
through the testimony of his character witnesses demonstrated
that he has taken responsibility for his actions. He completed
the OLR's Trust Account Management Seminar in 2018. We accept
the referee's conclusion that Attorney Bauer's resumption of the
practice of law will not be detrimental to the administration of
justice or subversive of the public interest and that he has met
his burden of proof with respect to all elements needed to
justify his reinstatement.
¶18 We agree, however that it is appropriate to impose
certain conditions on Attorney Bauer's practice of law. We
require Attorney Bauer to provide quarterly trust account and
business accounting records to the OLR for a period of two years
after the date of his reinstatement. As the referee observed,
this requirement is consistent with conditions we have imposed
in other attorney reinstatement proceedings where we sought to
address concerns about trust account management. See, e.g., In
re Disciplinary Proceedings Against Malloy, 2019 WI 16, 385
Wis. 2d 554, 923 N.W.2d 876; In re Disciplinary Proceedings
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No. 2016AP1259-D
Against Mulligan, 2017 WI 50, 375 Wis. 2d 133, 895 N.W.2d 34;
and In re Disciplinary Proceedings Against Curtis, 2018 WI 13,
379 Wis. 2d 521, 907 N.W.2d 91.
¶19 IT IS ORDERED that the license of Michael R. Bauer to
practice law in Wisconsin is reinstated, effective the date of
this order.
¶20 IT IS FURTHER ORDERED that, as a condition of the
reinstatement of his license to practice law in Wisconsin,
Michael R. Bauer is required to provide quarterly trust account
and business accounting records to the Office of Lawyer
Regulation for a period of two years after the date of this
reinstatement.
¶21 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Michael R. Bauer shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$4,093.40 as of December 23, 2019, or enter into a payment
agreement plan with the Office of Lawyer Regulation for the full
payment of costs over a period of time.
¶22 IT IS FURTHER ORDERED that compliance with all of the
terms of this order remains a condition of Michael R. Bauer's
license to practice law in Wisconsin.
¶23 JILL J. KAROFSKY, J. did not participate.
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No. 2016AP1259-D
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