Office of Lawyer Regulation v. Jay Andrew Felli
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2005 WI 58 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2003AP1333-D In the Matter of Disciplinary Proceedings Against Jay Andrew Felli, Attorney at Law: Office of Lawyer Regulation, Complainant-Respondent, v. Jay Andrew Felli, Respondent-Appellant. DISCIPLINARY PROCEEDINGS AGAINST FELLI OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: May 25, 2005 February 3, 2005 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: CONCUR/DISSENT ABRAHAMSON, C.J., concurs (opinion filed). CROOKS, J., joins the concurrence. BUTLER, JR., J., concurs in part, dissents in part (opinion filed). PROSSER and ROGGENSACK, J.J., join the concurrence/dissent. DISSENTED: NOT PARTICIPATING: ATTORNEYS: For the respondent-appellant there were briefs by Terry E. Johnson, Heidi M. Biasi and Peterson, Johnson & Murray, S.C., Milwaukee, and oral argument by Terry. E. Johnson. For the complainant-respondent there was a brief by Robert G. Krohn and Roethe, Krohn, Pope, McCarthy, Haas & Robinson, LLP, Edgerton, and oral argument by Robert G. Krohn. 2005 WI 58 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2003AP1333-D STATE OF WISCONSIN : IN SUPREME COURT In the Matter of Disciplinary Proceedings Against Jay Andrew Felli, Attorney at Law: Office of Lawyer Regulation, FILED May 25, 2005 Complainant-Respondent, v. Cornelia G. Clark Clerk of Supreme Court Jay Andrew Felli, Respondent-Appellant. ATTORNEY disciplinary proceeding. Attorney publicly reprimanded. ¶1 from a PER CURIAM. referee's professional Attorney Jay Andrew Felli has appealed report misconduct concluding and that recommending that he engaged his in license to practice law in Wisconsin be suspended for a period of three months. ¶2 supported We conclude that the referee's findings of fact are by satisfactory and convincing evidence. We also agree with the referee's conclusions of law that Attorney Felli No. engaged in professional misconduct. the appropriate discipline for 2003AP1333-D We conclude, however, that the misconduct is a public reprimand rather than a suspension of his license to practice law. We agree with the referee that the costs of the law in 1998 he proceedings should be assessed against Attorney Felli.1 ¶3 Attorney Wisconsin received in a Felli 1994 and private was admitted practices in reprimand Wisconsin State Bar dues. for to practice Brookfield. failure to In timely pay his He has not been the subject of any other previous discipline. ¶4 filed In May 2003, the Office of Lawyer Regulation (OLR) a complaint alleging that Attorney Felli engaged in professional misconduct with respect to his representation of three clients. misconduct. matter. The OLR's complaint alleged 11 counts of Kathleen Callan Brady was appointed referee in the Three days of hearings were held in early 2004. On June 7, 2004, the referee filed her report and recommendation in which she concluded that the OLR had proven three out of the 11 counts of misconduct alleged in its complaint. The OLR had sought a one-year suspension of Attorney Felli's license. As noted above, the referee recommended a three-month suspension. ¶5 The majority of the counts of misconduct alleged in the OLR's complaint involved his representation of S.R., a woman who retained Attorney Felli in a divorce action filed by her 1 The total costs assessment in this matter, as of February 24, 2005, is $22,171.60. 2 No. husband, J.R., in Milwaukee County Circuit Court. 2003AP1333-D The couple had been married for 20 years but had lived apart for five. divorce was quite amicable. The The primary issue of concern was S.R.'s need for continuing health insurance coverage after the divorce. S.R. had a history of severe asthma that required frequent and costly medical treatment. Both she and her husband wanted to find a way for her to continue her insurance coverage. During their marriage S.R. had insurance coverage through her husband's union plan, but that coverage would end if they were divorced. Omnibus While S.R. could possibly rely on the Consolidated Budget Reconciliation Act (COBRA) to temporarily maintain her insurance coverage for an additional 18 months to three years after the divorce, COBRA was not a viable option for her because the cost would be prohibitive and she would unlikely be able to afford the premiums. ¶6 The attorneys for both parties tried to resolve the insurance coverage issue by holding open the divorce case on the trial court's docket for three years, at which time S.R. would be 65 years old and eligible for Medicare. When counsel broached the idea with the judge, the judge told the attorneys he would not allow the case to linger on his docket for so long. The judge suggested that the parties could agree to terminate the divorce proceeding, put together another proposed marital settlement agreement, and let that agreement be the agreement used in the future divorce action to be filed when S.R. turned 65 and could qualify for Medicare. 3 No. ¶7 A preliminary agreement was reached 2003AP1333-D whereby S.R.'s husband would keep his pension, but would continue to insure S.R. until she turned 65. The agreement provided that the divorce would be voluntarily dismissed until S.R. turned 65 and qualified for Medicare. Attorney Felli drew up a proposed marital settlement agreement which he sent to Attorney Stanley Lind, counsel for S.R.'s husband, sometime before December 18, 2000. The trial court had set December 18, 2000 as the date on which the divorce case would be administratively dismissed if it were not voluntarily dismissed pursuant to a settlement before that date. ¶8 would Attorney Felli said he believed that S.R.'s husband sign the agreement before the dismissal date and that Attorney Lind would then file a motion to dismiss the case so that no one would have to appear at the administrative dismissal hearing on December 18, 2000. However, S.R.'s husband never signed the marital settlement agreement, so Attorney Lind did not file dismissal a motion hearing, to dismiss. neither At Attorney the Felli December nor S.R. 18, 2000 appeared. Although Attorney Felli knew about the court date, he said he did not believe an appearance was necessary because the parties had negotiated a dismissal hearing settlement. and Attorney explained to the Lind appeared court that at the while a settlement had been reached, his client had not yet executed the agreement. The trial court dismissed the divorce case, as had been expected, on Attorney Lind's motion. 4 No. ¶9 Following the termination of her 2003AP1333-D insurance benefits through S.R.'s husband's coverage, S.R. was able to get Title XIX coverage. Attorney Richard Podell, a family law expert who testified at the hearing before the referee in this matter, said that S.R. was not damaged by executed the failure before the to get divorce a marital settlement agreement action was dismissed. Attorney Podell said the fact S.R.'s husband did not sign the agreement before the dismissal actually benefited S.R. as it enhanced the chance that the agreement would be enforced as a valid postnuptial agreement. ¶10 The referee concluded that by failing to appear at the December 18, 2000 divorce hearing, Attorney Felli violated SCR 20:1.3.2 ¶11 In response to the OLR's investigation, Attorney Felli forwarded correspondence he had allegedly sent to S.R. One of the items forwarded to the OLR was a letter dated December 1, 2000, in which Attorney Felli advised S.R. that Attorney Lind had told Attorney Felli he had signed the stipulated marital property agreement and forwarded it to S.R.'s husband. The referee concluded that the letter was inconsistent with Attorney Lind's deposition testimony which was that Attorney Felli sent Attorney Lind the marital property agreement on December 14, 2000. The referee concluded 2 that Attorney Felli made SCR 20:1.3 provides: "A lawyer shall act with reasonable diligence and promptness in representing a client." 5 No. 2003AP1333-D misrepresentations to the OLR with respect to the letter, in violation of SCR 22.03(6).3 ¶12 The referee found that the OLR did not prove by clear, convincing and satisfactory evidence any of the violations set forth in the remaining counts of its complaint with respect to the handling of S.R.'s case.4 ¶13 The OLR's complaint also alleged three counts of misconduct with respect to Attorney Felli's representation of C.K., who retained Attorney Felli to benefits on behalf of her father, H.K. Attorney Felli that his legal fees apply for Title XIX C.K. was advised by would be $1500 for the preparation of all paperwork and attendance at the application hearing. C.K. paid Attorney Felli $1500 in advance. At the time Attorney Felli was retained, H.K. was in a nursing home facility and Medicare was paying for the cost of his stay, but it was possible that his Medicare coverage would terminate. ¶14 page of On September 28, 2000, Attorney Felli faxed the first the Title XIX application to the Milwaukee County 3 SCR 22.03(6) provides: "(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." 4 The OLR's complaint also alleged that Attorney Felli failed to provide competent representation to a client, failed to keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information, and failed to return an advance payment of a fee that had not been earned. 6 No. Department of Human Services. 2003AP1333-D On October 3, 2000, the Milwaukee County caseworker sent Attorney Felli a form entitled "Request for Verification Letter" asking for verification of information concerning the application. The form set a deadline submission of the information of October 17, 2000. Felli called the caseworker indicating that the letter and left a was erroneous Attorney voicemail and that requested a meeting to review the message Title provisions allowed for a 30-day application process. Felli for XIX Attorney application with a caseworker, and a meeting was scheduled for October 24, 2000. ¶15 On October 18, 2000, C.K. called Attorney Felli and advised that her father's Medicare benefits were being cut off that day. Attorney Felli told C.K. he would try to expedite the Title XIX application process. H.K. died the following day. C.K. called Attorney Felli's office after her father's death and left a voicemail message informing Attorney Felli of her father's death and saying the hearing was unnecessary. ¶16 The referee found that Attorney Felli willfully failed to turn over to the OLR a November 11, 2000 letter addressed to the Wisconsin Department of Health and Family Services saying that Attorney Felli was enclosing the Title XIX benefits application and confirming a Title XIX interview scheduled in the matter for November 19, 2000. the hearing before the Attorney Felli testified at referee that he personally typed the letter in question but could not recall exactly when he did so and his best estimate was that he typed it sometime in October 2000. Attorney Felli testified he never intended to represent 7 No. 2003AP1333-D to the OLR that the letter accurately reflected a letter he had sent to the Department of Health and Family Services in the H.K. matter, and he testified it was not possible the letter was generated on November 11, 2000 because he was out of the state on that date. ¶17 Attorney Felli admitted that he could not explain why the letter was in H.K.'s file or why it was dated November 11, 2000. He offered the theory that he may have pulled up a letter in the H.K. matter on his computer and revised it to send to the department on a different Title XIX case he was handling, changing the date but forgetting to change the client's name. The referee concluded that by misrepresenting the nature and extent of his contacts with the Department of Health and Family Services to the OLR staff and to OLR district committee investigators, Attorney Felli violated SCR 22.03(6).5 ¶18 The OLR's complaint had also alleged two counts of misconduct with respect to Attorney Felli's handling of a matter for a third client. The referee found that the OLR failed to present clear, convincing and satisfactory evidence to support either of its claims of misconduct regarding this client. The OLR did not appeal from the referee's report and recommendation. ¶19 Attorney Felli appealed, arguing that the OLR failed to offer clear, convincing and satisfactory evidence that he 5 The OLR found there was no clear, convincing and satisfactory evidence to support the OLR's allegations on the other two counts alleged in the complaint which were failing to act with reasonable diligence and promptness in representing a client and failing to refund an unearned fee. 8 No. committed any violations of supreme court rules. 2003AP1333-D With respect to his representation of S.R., Attorney Felli admits that in hindsight he hearing, but should he have says at appeared the at time the he December did not 18, 2000 believe an appearance was necessary because the parties had negotiated a settlement. Attorney Felli points out that Attorney Podell, his expert witness, characterized S.R. as better served by having the divorce action dismissed since she remained married and therefore insured through her husband's union coverage. ¶20 Felli With respect to the December 1, 2000 letter, Attorney says Attorney Lind's memory was at times sketchy, and Attorney Felli asserts Attorney Lind was mistaken about a number of matters. Attorney Felli argues that while the OLR based its claim that he fraudulently created the letter and that it was never sent to S.R. on the fact that S.R. did not have a copy of the letter in her files, by her own admission S.R.'s house was disorganized. evidence Attorney suggesting Felli that also asserts Attorney the Felli OLR found no fraudulently manufactured the December 1, 2000 letter during the course of the OLR's investigation. ¶21 With respect to the November 11, 2000 letter addressed to the Wisconsin Department of Health and Family Services found in the H.K. file, Attorney Felli says it is impossible to know why the letter was dated November 11, 2000, but that there is no proof he made any willful misrepresentations to the OLR when he produced the letter and instead he asserts he discharged his 9 No. 2003AP1333-D obligation to provide the OLR with all documents referencing or otherwise pertaining to the H.K. case. ¶22 Attorney Felli argues that the referee's conclusions of law with respect to the three counts on which he was found to have engaged in misconduct should be reversed. In the alternative, he argues that in the event the court does find that he engaged in misconduct, the referee's recommendation for a three-month suspension of his license to practice law is excessive and a lesser discipline should be imposed. ¶23 The OLR argues that it did sustain its burden of proof regarding proven the by three the counts referee. of professional The OLR also misconduct asserts found that the seriousness of the misconduct warrants a suspension of Attorney Felli's license to practice law. ¶24 they are A referee's findings of fact are to be affirmed unless clearly erroneous. In re Disciplinary Proceedings Against Sosnay, 209 Wis. 2d 241, 243, 562 N.W.2d 137 (1997). Conclusions of law are reviewed de novo. In re Disciplinary Proceedings Against Carroll, 2000 WI 130, ¶29, 248 Wis. 2d 662, 636 N.W.2d 718. The record supports the referee's findings of fact and conclusions of law and we adopt them. ¶25 Although this court takes into account the referee's recommendation as to appropriate discipline, it does not accord the referee's recommendation any conclusive or great weight, and it is this court's responsibility to determine the appropriate discipline to be imposed for an attorney's misconduct. In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261 10 No. Wis. 2d 45, 660 N.W.2d 686. 2003AP1333-D The lawyer regulation system in this state has been established to, among other things, "protect the public from Wisconsin." See discipline several for factors misconduct Preamble by to professional persons SCR Chapter misconduct, including: practicing (1) the 21. this In court seriousness, law in imposing considers nature and extent of the misconduct; (2) the level of discipline needed to protect the public, the court, and the legal system from repetition of the attorney's misconduct; (3) the need to impress upon the attorney the seriousness of the misconduct; and (4) the need to deter misconduct. ¶26 other attorneys from committing similar Carroll, 248 Wis. 2d 662, ¶40. Under all the circumstances of this case, including the fact that this is the first time Attorney Felli has been disciplined referee S.R.'s for professional specifically interest and found that misconduct, that the fact Felli was S.R. Attorney damaged not did by that the represent Attorney Felli's representation, we conclude a public reprimand is the appropriate sanction to be imposed. ¶27 publicly IT IS ORDERED reprimanded that for Attorney his Jay professional Andrew Felli misconduct is as determined in this matter. ¶28 IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Jay Andrew Felli pay to the Office of Lawyer Regulation the costs of this proceeding, provided that if the costs are not paid within the time specified, and absent a showing to this court of his inability to pay those costs within 11 No. 2003AP1333-D that time, the license of Attorney Jay Andrew Felli to practice law in Wisconsin shall be suspended until further order of the court. 12 No. ¶29 SHIRLEY S. ABRAHAMSON, C.J. 2003AP1333-D.ssa My (concurring). concurrence in In re Disciplinary Proceedings Against Konnor, 2005 WI 37, ___ Wis. 2d ___, 694 N.W.2d 376, provides context and perspective regarding costs in disciplinary proceedings and also stands as a concurrence in the present case. See also In re WI Disciplinary Proceedings Against Polich, 2005 36, ___ Wis. 2d ___, 694 N.W.2d 367 (Abrahamson, C.J., concurring); In re Disciplinary Proceedings Against Backes, 2005 WI 59, ___ Wis. 2d ___, ___ N.W.2d ___ (Abrahamson, C.J., concurring). ¶30 Keith Sellen, Director of the Office of Lawyer Regulation, has filed an administrative rules petition proposing certain changes to assessment of costs. fall of this year. the Petition for the Supreme Court Rules relating to The court will hear the petition in the See Rules Petition 05-01, In the Matter of Amendment to Supreme Court Rule 22.0001(3) Relating to Cost Assessments in the Lawyer Regulation System (Jan. 18, 2005). ¶31 Until the court decides the petition, I would continue the court's practice of generally assessing full costs. ¶32 I am authorized to state CROOKS joins this opinion. 1 that Justice N. PATRICK No. ¶33 LOUIS B. BUTLER, JR., J. 2003AP1333-D.lbb (concurring in part, dissenting in part). I join the court's decision and order as to the discipline imposed in this action. I write separately because I disagree with the court that full costs should be imposed in this case. in part, For the reasons stated in my concurring dissenting in part, opinions in In re Disciplinary Proceedings Against Polich, 2005 WI 36, ___ Wis. 2d ___, 694 N.W.2d 367, and In re Disciplinary Proceedings Against Backes, 2005 WI 59, ___ Wis. 2d ___, ___ N.W.2d ___, because Attorney Felli was absolved of any misconduct in the matter involving a third unnamed client, see per curiam op., ¶18, I would not assess any costs for the two counts associated with that matter. I would adopt a "substantially related" test for violations that were not established by Office of Lawyer Regulation ("OLR") before assessing costs on counts for which there was no proof. Costs should not be assessed against an attorney in unrelated, unsuccessful counts where no misconduct concerning a particular client. has been found Such an assessment simply does not support the purposes underlying the factors we consider in determining the appropriate level of discipline where misconduct has occurred but in unrelated matters. ¶34 I therefore respectfully dissent from that portion of the court's opinion that assesses full costs against Attorney Felli. ¶35 I concur with the remainder of the decision. I am authorized to state that Justices DAVID PROSSER, JR. and PATIENCE DRAKE ROGGENSACK join this opinion. 1 T. No. 2 2003AP1333-D.lbb No. 1 2003AP1333-D.lbb
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