Vol. 85, No. 3, March 2012
Public reprimand of Todd W. Bennett
The Office of Lawyer Regulation (OLR) and Todd W. Bennett, Portage, entered into an agreement for imposition of a public reprimand, pursuant to SCR 22.09(1). A supreme court-appointed referee approved the agreement and issued the public reprimand on Dec. 20, 2011. The reprimand is based on Bennett’s conduct in two client matters.
In the first matter, a couple hired Bennett to file a lawsuit against the person from whom they had bought their home. The lawsuit demanded a financial judgment. The court granted summary judgment to the defendant and dismissed the lawsuit.
Bennett filed a new lawsuit against the seller and raised three claims relating to the seller having made misrepresentations to the buyers. Opposing counsel warned Bennett that bringing the second lawsuit was likely frivolous and that the claims were barred. Bennett, however, told his clients that opposing counsel’s position lacked merit.
The defendant filed an answer and also moved for summary judgment, and the court issued a scheduling order that included a deadline for Bennett to file a response brief. Bennett did not file a brief or contest the motion for summary judgment nor did he inform his clients of the summary judgment motion or the scheduling order. The court issued a judgment in favor of the defendant for attorney fees and costs.
The clients filed a grievance against Bennett with the OLR. Bennett failed to respond to several questions raised by OLR staff and a district committee investigator.
Bennett violated SCR 20:1.1, which requires competent representation, when he filed the second lawsuit that resulted in the same outcome of dismissal on summary judgment, with imposition of costs, and after opposing counsel had warned Bennett that bringing the second lawsuit was likely frivolous.
Bennett failed to act with reasonable diligence, in violation of SCR 20:1.3, by failing to respond to the defendant’s summary judgment motion in the second lawsuit and failing to request from the court an extension to file his response to the summary judgment motion after receiving a copy of a letter from opposing counsel to the court, enclosing a proposed bill of costs.
Bennett violated SCR 20:1.4(a)(3) by failing to inform his clients that the defendant had filed the summary judgment motion in the second lawsuit and that the court had issued a scheduling order with a deadline to file a response brief.
Bennett violated SCR 22.03(6) by failing to address questions and requests for information in two letters from OLR staff, and he violated SCR 22.04(1) by failing to answer a letter from the district committee’s investigator.
In the second matter, a man hired Bennett to represent him in a civil case and in two criminal cases. Bennett billed the civil case separately from the criminal cases. Bennett’s attorney fees and costs in the civil case totaled more than $2,100. Bennett received an advanced fee of $1,500 from the client and applied it to the fees and expenses in the civil case, leaving a balance due of more than $600. Although Bennett’s fees and costs totaled more than $1,000 in the civil matter, Bennett failed to provide a written communication regarding the purpose and effect of the advanced fee to the client, as required by SCR 20:1.5(b)(2).
Bennett had no prior discipline.
Public reprimand of Rod J. Koenen
The OLR and Rod J. Koenen, Waterford, entered into an agreement for imposition of a public reprimand, pursuant to SCR 22.09(1). A supreme court-appointed referee approved the agreement and issued the public reprimand on Dec. 27, 2011, in accordance with SCR 22.09(3). The public reprimand stemmed from a single matter investigated by the OLR.
In February 2008, a woman hired Koenen to represent her in a divorce. There was no written fee agreement, and Koenen deposited the client’s two unearned advanced-fee payments directly into his business bank account.
On March 13, 2009, Koenen contacted the client informing her that she needed to appear in court in a few hours, alone, because he had to appear in another court. The client told Koenen the court event was no longer listed on the Wisconsin Circuit Court Access website, and he responded that she must appear. Shortly thereafter, the client appeared in court and was informed she was not scheduled to appear.
By failing to ascertain and relay correct information to the client as to whether a proceeding in the matter was actually scheduled and whether the client’s attendance was required, Koenen violated SCR 20:1.4(a)(3).
By failing to have a written fee agreement for his representation of the client, Koenen violated SCR 20:1.5(b)(1) and (b)(2). By depositing the client’s unearned advanced-fee payments directly into his business bank account, without providing the client the written notice required by SCR 20:1.15(b)(4m), and without otherwise acting in a manner indicating an intention to use the alternative fee-placement measures stated in SCR 20:1.15(b)(4m), Koenen violated SCR 20:1.15(b)(4).
By failing to timely file a written response to the client’s grievance and only filing a response after the supreme court had issued an order temporarily suspending his law license for failing to cooperate in an OLR investigation, Koenen violated SCR 22.03(2) and (6), enforced via SCR 20:8.4(h).
By failing to timely respond to a further OLR letter requesting information and only responding to the OLR letter after the supreme court, for a second time, had issued an order temporarily suspending his law license for failing to cooperate in an OLR investigation, Koenen violated SCR 22.03(6), enforced via SCR 20:8.4(h).
Koenen had no prior discipline.
Public reprimand of John R. Dade
The OLR and John R. Dade, Whitewater, entered into an agreement for imposition of a public reprimand, pursuant to SCR 22.09(1). A supreme court-appointed referee approved the agreement and issued the public reprimand on Jan. 3, 2012, in accordance with SCR 22.09(3). The public reprimand stemmed from a single matter investigated by the OLR.
In correspondence dated July 5, 2008, more than 10 years after his conviction and unsuccessful appeal, a man serving a prison sentence in excess of 90 years asked Dade to review his case to evaluate possible avenues of relief. Dade agreed to undertake the review. The client informed Dade that the client’s mother would deliver to Dade a box of case materials. On Nov. 14, 2008, Dade wrote to the client confirming his receipt of the case materials in August 2008.
On Feb. 19, 2010, the client filed a grievance with the OLR alleging that Dade failed to respond to his letters, failed to provide him with an opinion regarding his options for postconviction relief, and failed to return his box of case materials.
On July 21, 2010, the supreme court issued an order temporarily suspending Dade’s law license because of his willful failure to cooperate in the OLR investigation of the client’s grievance.
Dade finally responded to the client’s grievance in correspondence to the OLR dated Dec. 10, 2010. Dade admitted that he had no direct communication with the client from Nov. 18, 2008, until sometime subsequent to the OLR’s letter to him dated March 30, 2010. Dade further admitted the client wrote letters to him dated Feb. 11, 2009, and Oct. 15, 2009, directing him to return to the client’s mother the documents he had previously received, and that he failed to respond to the client’s letters as of the date of the OLR’s letter to him dated March 30, 2010. On or about Nov. 11, 2010, Dade sent an undated opinion letter to the client, assessing the client’s postconviction relief options. Dade also shipped the client’s case materials to the client’s mother on Nov. 10, 2010. On Dec. 29, 2010, the supreme court issued an order reinstating Dade’s law license.
By failing to provide any legal opinion or analysis to the client regarding postconviction relief options for more than two years, Dade violated SCR 20:1.3. By failing to communicate with the client and failing to respond to the client’s letters, Dade violated SCR 20:1.4(a)(3) and (4).
By failing to deliver the client’s case materials to the client’s mother, as the client requested, for at least 20 months, Dade violated SCR 20:1.16(d).
By failing to timely file a written response to the client’s grievance and only filing a response after the supreme court had issued an order temporarily suspending his law license for failing to cooperate in the OLR investigation, Dade violated SCR 22.03(2) and (6), enforced via SCR 20:8.4(h).
In 1991, Dade received a private reprimand for failing to act with reasonable diligence, failing to communicate with a client, and failing to cooperate in the OLR investigation. In 2007, Dade received a public reprimand for failing to provide competent representation, failing to act with reasonable diligence, and failing to communicate with a client. In 2007, Dade received a 60-day suspension for failing to act with reasonable diligence, failing to cooperate in the OLR investigation, and failing to hold in trust the property of others.
Public reprimand of Charles J. Labanowsky III
The OLR and Charles J. Labanowsky III, Kenosha, entered into an agreement for imposition of a public reprimand, pursuant to SCR 22.09(1). A supreme court-appointed referee approved the agreement and issued the public reprimand on Dec. 20, 2011, in accordance with SCR 22.09(3). The public reprimand stemmed from two separate incidents.
The first incident occurred at a grocery store in Kenosha in April 2009. Store personnel observed Labanowsky attempting to leave the store with merchandise that he had not purchased. Labanowsky was charged with and later found guilty of misdemeanor retail theft, in violation of Wis. Stat. section 943.50(1m)(d) and (4)(a). State v. Labanowsky, No. 09CM684 (Wis. Cir. Ct. Kenosha County). Labanowsky was sentenced to one year of probation.
The second incident occurred in May 2009 at a home improvement store in Kenosha. Two store security employees, watching surveillance closed-circuit television, observed Labanowsky place merchandise in his pocket. They apprehended Labanowsky as he was leaving the store without having paid for the merchandise. Labanowsky was charged with misdemeanor retail theft, in violation of Wis. Stat. section 943.50(1m)(d) and (4)(a). State v. Labanowsky, No. 09CM817 (Wis. Cir. Ct. Kenosha County). This charge was later dismissed and read in as part of the other case
By engaging in conduct leading to a criminal conviction on one count of misdemeanor theft and by engaging in conduct leading to the read-in criminal misdemeanor charge, Labanowsky violated SCR 20:8.4(b).
Labanowsky’s disciplinary history includes a prior public reprimand in March 2009 for violations of SCR 20:8.4(b) after being convicted in four separate circuit court cases of the following: misdemeanor second-offense operating with a prohibited alcohol concentration of .08 or more; misdemeanor bail jumping; misdemeanor third-offense operating while under the influence (OWI); and misdemeanor fourth-offense OWI.
Public reprimand of John Anthony Ward
The OLR and John Anthony Ward, Kenosha, entered into an agreement for imposition of a public reprimand, pursuant to SCR 22.09(1). A supreme court-appointed referee approved the agreement and issued the public reprimand on Jan. 6, 2012, in accordance with SCR 22.09(3).
In March 2004, a man hired Ward regarding a postdivorce matter. The client gave Ward $290 as an advance for costs, which was deposited into Ward’s trust account. The representation concluded in January 2005, but Ward failed to refund $255, representing unexpended costs, until October 2007, when the client filed a grievance with the OLR. By failing to return the unexpended amount to the client either at the conclusion of the representation or when Ward sent the final bill in October 2005, Ward violated SCR 20:1.15(d)(1) (effective July 1, 2004), which requires prompt delivery of any funds that a client is entitled to receive, and SCR 20:1.16(d) (effective before July 1, 2007), which required the surrender of property to which the client is entitled when the representation terminates.
In another matter, a man hired Ward in July 2008 to represent him regarding visitation and custody issues and paid a $3,500 advanced fee. The fee agreement allowed the advance to be deposited to Ward’s business account under the requirements of SCR 20:1.15(b)(4m). When the representation concluded, Ward sent an invoice that described $425 in unearned fees as a “minimum charge adjustment for minimum charge for completed case.” By failing to refund the unearned $425, Ward violated SCR 20:1.16(d), which requires a lawyer to refund any advanced payment of fees or expenses that has not been earned when the representation terminates.
In November 2007, a man hired Ward to represent him regarding a potential criminal charge and a related employment matter. The client signed an hourly fee agreement and paid a $5,000 fee that was identified as being “nonrefundable.” Ward did not deposit that fee into his trust account and did not comply with the requirements of SCR 20:1.15(b)(4m). Shortly thereafter, at which point Ward’s hours justified a fee of about $700, the employer declined to pursue work-related charges. Criminal charges were never filed. Two years later, the client filed a grievance with the OLR, alleging that Ward had failed to return unearned fees despite the client’s requests in November 2007 and July 2008. Ward had performed additional services for the client in 2009 and deducted fees for those services from the $5,000. Four days after being notified of the grievance, Ward provided the client with an itemization of services along with information relating to the SCR 20:1.15(b)(4m) alternative to holding advanced fees in trust. Ward’s itemization indicated that there was a balance of $1,925 that could not be attributed to any particular services. Approximately one month later, the client agreed to and received a $2,500 refund. By depositing the $5,000 advanced fee to his business account, Ward violated SCR 20:1.15(b)(4), which requires lawyers to hold unearned fees in trust until they are earned unless the lawyer complies with the requirements of SCR 20:1.15(b)(4m).
The OLR initiated a separate review of Ward’s trust account management and recordkeeping. Over the past decade, Ward had three separate IOLTA trust accounts and kept records using accrual-basis accounting principles. His computer-generated records would therefore reflect a positive balance in his trust account when the account was actually overdrawn and vice versa. Ward employed a series of accountants to assist him with record keeping.
At one point, the transaction registers and client ledgers for two of the trust accounts were combined into a single set of records. Although the trust accounts were reconciled on a sporadic basis, those reconciliations failed to identify individual client balances and were deficient or inaccurate in other respects. The OLR also discovered delays ranging from two years to six years in the disbursement of funds in 30 separate matters.
By late 2005, Ward recognized that there were serious problems with his trust account records. Based on his review of those records, he concluded that he was entitled to receive $15,511.30 in undistributed fees and that he had disbursed $10,432.92 more than he was holding in trust in connection with numerous matters. Instead of disbursing $15,511.30 to his firm and then depositing $10,432.92 to the trust account, Ward disbursed $5,078.38 to his firm (i.e., $15,511.30 minus $10,432.92) and divided that disbursement between 223 separate client ledgers. With respect to the clients who had negative ledger balances, the applicable portion of that disbursement was identified as a deposit. In the client matters where fees had been undistributed for years, the applicable amount was identified as a disbursement of fees. Ward made a second attempt to address the problems in his client ledgers in 2008, after the OLR had asked him to produce various records.
The OLR’s review of Ward’s trust account records identified numerous irregularities and violations. The amounts involved in individual matters ranged from a few dollars to thousands of dollars. Examples of the problems that were discovered include the following:
- disbursement from the trust account of a $3,600 refund to a client in January 2003, when the client’s fee advance had been deposited into Ward’s business account;
- disbursement from the trust account of $800 in December 2005, although there were no funds in trust for the client until a $5,000 deposit was made three months later;
- disbursement of a fee refund that was $2,863 more than the amount in trust for a client, based on an inaccurate software report of that client’s balance;
- failure to disburse $500 of a personal injury settlement that had been held in trust since December 2005;
- disbursement of a $185 “reimbursable” expense to Ward’s firm without documentation of the expense; and
- disbursement of a $600 fee to Ward’s firm without documentation that the fee was earned.
By disbursing at least $14,473.89 from his trust accounts in connection with multiple client matters, when there were either insufficient or no funds in trust relating to those matters, and thereby failing to hold funds belonging to other clients in trust, Ward violated former SCR 20:1.15(a) (effective before July 1, 2004) and SCR 20:1.15(b)(1) (effective July 1, 2004), which require a lawyer to hold in trust clients’ and third parties’ property that is in the lawyer’s possession in connection with a representation, and SCR 20:1.15(f)(1)b. (effective July 1, 2004), which prohibits a lawyer from disbursing funds from a trust account if doing so creates a negative balance with respect to any individual client or matter.
By depositing fee and cost advances to his business account in multiple client matters, and thereby failing to hold those funds in trust, Ward violated former SCR 20:1.15(a) (effective before July 1, 2004), which required a lawyer to hold the property of clients and third persons in trust, separate from the lawyer’s own property and in an identifiable trust account; and former SCR 20:1.15(b) (effective, July 1, 2004 through June 30, 2007) and SCR 20:1.15(b) (effective July 1, 2007), which require unearned fees to be held in trust until earned by the lawyer and advanced payments of costs to be held in trust until the costs are incurred.
By disbursing cost reimbursements to his firm in numerous client matters, without providing an accounting to the clients involved, Ward violated SCR 20:1.15(d)(2) (effective July 1, 2004), which requires a lawyer to promptly render a full written accounting to a client or third party who has an ownership interest in the property upon the final distribution of that trust property.
By holding in trust fee and cost advances, earned fees, and other funds in multiple client matters for periods ranging from two to six years and thereby failing to promptly deliver funds to which his clients or his law firm were entitled, Ward violated SCR 20:1.15(b)(3) (effective July 1, 2004), which prohibits depositing or retaining in trust funds that belong to the lawyer or law firm, except funds reasonably sufficient to pay monthly account service charges; SCR 20:1.15(d)(1) (effective July 1, 2004), which requires that, upon receiving funds in which a client has an interest or in which the lawyer has received notice that a third party has an interest identified by a lien, court order, judgment, or contract, the lawyer must promptly deliver to the client or third party any funds that the client or third party is entitled to receive; former SCR 20:1.16(d) (effective before July 1, 2007) and SCR 20:1.16(d) (effective July 1, 2007), which require a lawyer to take steps to the extent reasonably practicable to protect a client’s interests upon termination of representation, including surrendering papers and property to which the client is entitled and refunding any advanced payment of fees or expenses that has not been earned or incurred.
By failing to reconcile his trust accounts on a monthly basis from July 2004 through at least April 2008 and by failing to retain printed reconciliation reports, reflecting the subsidiary ledger balances, Ward violated SCR 20:1.15(f)(1)g. (effective, July 1, 2004), which requires a lawyer to prepare at least every 30 days and retain a printed reconciliation report documenting that the lawyer has completed several specific procedures identified in the rule.
This public reprimand was subject to five conditions. Ward met the following four conditions before the reprimand was imposed: 1) refund $425 to the client in the second matter; 2) disburse funds to which 29 former clients were entitled; 3) close an inactive trust account after escheating any unclaimed or unidentifiable funds in that account to the state treasurer’s office; and 4) substitute a cash-basis accounting system for his accrual-basis system. The fifth and final condition requires Ward to provide the OLR with quarterly reports from an accountant regarding his trust account for one year.
Ward had a prior private reprimand and a public reprimand.