Office of Lawyer Regulation v. Douglas Katerinos
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2010 WI 28 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2008AP1637-D In the Matter of Disciplinary Proceedings Against Douglas Katerinos, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Douglas Katerinos, Respondent. DISCIPLINARY PROCEEDINGS AGAINST KATERINOS OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: April 20, 2010 2010 WI 28 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2008AP1637-D STATE OF WISCONSIN : IN SUPREME COURT In the Matter of Disciplinary Proceedings Against Douglas Katerinos, Attorney at Law: FILED Office of Lawyer Regulation, Complainant, APR 20, 2010 v. David R. Schanker Clerk of Supreme Court Douglas Katerinos, Respondent. ATTORNEY disciplinary proceeding. Attorney publicly reprimanded. ¶1 PER CURIAM. We review the report and recommendation of Referee John A. Fiorenza that Attorney Douglas Katerinos be publicly reprimanded for professional misconduct and required to pay the costs of this disciplinary proceeding. No appeal from the referee's report and recommendation has been filed. our independent committed review, professional we agree misconduct that that Attorney warrants Upon Katerinos a public No. 2008P1637-D reprimand, and we order Attorney Katerinos to pay the full costs of this disciplinary proceeding. ¶2 Attorney Katerinos has been licensed to practice law in Wisconsin since 2000. Milwaukee. He has not He has an previously office been in his disciplined home by in this court. ¶3 The disciplinary 2008, Office of complaint alleging five Lawyer against counts Regulation Attorney of (OLR) Katerinos professional filed on a July 1, misconduct. The referee conducted an evidentiary hearing on May 5 and 6, 2009, and issued a report on September 10, 2009. Attorney Katerinos filed of a Supreme letter Court proceeding and addressed on to September various the 30, justices 2009, aspects However, he did not file an appeal. of the objecting the Wisconsin to referee's the OLR report. Therefore, we consider this matter pursuant to SCR 22.17(2).1 ¶4 All the claims in the OLR complaint relate to Attorney Katerinos' handling of a small claims dispute on behalf of his clients, M.O. and R.O. for dental 1 services M.O. and R.O. failed to pay a $591 bill performed by Dr. H. After efforts 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. 2 to No. 2008P1637-D negotiate a payment plan failed, Dr. H. referred M.O. and R.O.'s unpaid debt to Hawthorne Collection Services, Inc. (Hawthorne). M.O. and R.O. paid $100 toward the balance but then refused to pay any more of the debt. ¶5 M.O. and R.O. retained Attorney Katerinos and, in November 2002, commenced a small claims lawsuit against Dr. H. and Hawthorne for an alleged violation of the Wisconsin Consumer Act. The complaint alleged that Dr. H.'s collection efforts amounted to illegal collection activity. Attorney Christopher counterclaimed, balance for recovery seeking the of Drosen, costs denied recovery dental of services. for Dr. H., represented by $491.36, Dr. a frivolous 2003, liability H. claim the and outstanding also sought under Wis. the Stat. § 814.025. ¶6 On February 10, commissioner dismissed M.O. and the R.O.'s small claims complaint and court ordered them to pay Dr. H. the outstanding balance of $491.36. No ruling was made as to Dr. H.'s request for attorney fees. ¶7 the M.O. and R.O. and defendant Hawthorne each appealed commissioner's trial. Dr. H. decision filed a to the motion for circuit summary court, seeking judgment in a the circuit court, seeking a dismissal of M.O. and R.O.'s complaint, an award of $491.36 as found by the commissioner, and an award of costs and attorney fees for pursuant to Wis. Stat. § 814.025. filing a frivolous appeal Hawthorne, represented by Attorney Bernard Stein, filed its own summary judgment motion 3 No. 2008P1637-D seeking a dismissal of the complaint and an award of attorney fees and costs under the same statute. ¶8 The Honorable August 11, 2003. dismissed Judge M.O. Flanagan Mel Flanagan conducted a hearing on By order dated October 7, 2003, Judge Flanagan and R.O.'s complaint specifically found as to there both was defendants. no evidence to support M.O. and R.O.'s claim and concluded that the action was frivolous. and Judge Flanagan awarded costs against M.O. and R.O. Attorney Katerinos, jointly and severally, in favor of Dr. H. and Hawthorne in the amounts of $5,437.50 and $2,347.50, respectively. ¶9 June 28, M.O. and 2004, R.O. while appealed the First (the "First Appeal was Appeal"). pending, On Attorney Katerinos filed a motion in the circuit court to reopen the underlying litigation, alleging fraud pursuant to Wis. Stat. § 806.07(1)(c). ¶10 Attorney The Honorable Katerinos' Christopher motion to Foley reopen held the a hearing litigation on on January 31, 2005, and indicated on the record that "[s]ome of this stuff that is cited in support of the proposition that the judgment resulted from fraud is simply silly." Judge Foley denied Attorney Katerinos' motion to reopen the litigation by order dated February a specific finding that Attorney Katerinos' motion was frivolous. Attorney Katerinos appealed 21, that 2005, order but on Appeal"). 4 did March not 4, make 2005 (the "Second No. ¶11 Meanwhile, in the First Appeal, Attorney 2008P1637-D Katerinos filed an appeal brief on July 19, 2004, in which he asked the court of appeals to reverse summary judgment order. Judge Flanagan's October 2003 In that brief Attorney Katerinos made two statements that are relevant in this disciplinary matter. Attorney Katerinos Defendants' misused wrote, counterclaims the trial court "There is nothing for frivolousness. and the to support The relationship the Defendants between Judge Flanagan and Mr. Stein [Hawthorne's attorney] to victimize [M.O. and R.O.] and statement was their counsel." misleading Attorney because he Stein did asserts not this have a "relationship" of any kind with Judge Flanagan, other than as a lawyer appearing before her in court. ¶12 Attorney Katerinos also argued in the appeal brief that the circuit court lacked authority to impose costs and fees against him because he was not a named party to the underlying litigation. Attorney Katerinos stated: Respondents' mutual entry of judgments against [M.O. and R.O.'s] counsel are particularly disturbing. Without naming him as a party, or service of process, or any proper motion, Respondents entered judgments in contrast to the circuit court's contrary decision on the record. . . . These longstanding authorities regarding jurisdiction over a non-party were mistakenly not given consideration and instead the court of appeals misapplied Ziebell v. Ziebell, 2003 WI App 127, 265 Wis. 2d 664, 666 N.W.2d 107 (Wis. App. 2003) in affirming the circuit court, despite additional notice that a judgment or order which is void may be expunged by a court at any time. 5 No. ¶13 2008P1637-D Essentially, Attorney Katerinos took the position that the circuit court did not have jurisdiction to impose costs and sanctions on him, personally, because he had not been served in the underlying proceeding. If this argument succeeded, Attorney Katerinos would be exonerated from the costs and fees associated with filing a frivolous pleading but his clients would remain responsible for the costs and fees. Attorney Katerinos did not have and a written waiver from M.O. R.O. to pursue this potentially adverse argument on appeal. ¶14 On November 16, 2004, the court of appeals affirmed Judge Flanagan's decision in all respects and found that the First Appeal, itself, was frivolous. The court of appeals noted that the frivolous finding made in the circuit court was "amply supported by the record before the trial court."2 2 The court of The court of appeals stated: Plaintiffs' claim, that there was an agreement by [Dr. H.] to accept periodic payments, is unsupported by any evidence. It is undisputed that [Dr. H.'s] initial offer to permit [M.O. and R.O.] to suggest a payment method was ignored by [M.O. and R.O.] for months. It is undisputed that [M.O. and R.O.] made not a single payment while the proposal was open, and that [M.O.] made no payment at all until contacted by Hawthorne. Even then the partial payment of $100 was initially refused by [Dr. H.]. If there was ever an "offer" to accept periodic payments, it was withdrawn by referral to collection, and never thereafter renewed by [Dr. H.]. Indeed, the claimed existence of any "agreement" to periodic payments is further refuted by correspondence to [M.O. and R.O.] from both [Dr. H.'s] office and Hawthorne Collection Agency. Summary judgment dismissing the complaint is amply supported by the record. Olsen v. Hoffmann, No. 03-3500, unpublished slip op., ¶5 (Wis. Ct. App. Nov. 16, 2004). 6 No. 2008P1637-D appeals noted that M.O. had admitted the only reason he brought the lawsuit was because his sister-in-law works for Dr. H. and "family doesn't put family in collection." ¶15 The court of appeals remanded the First Appeal to the circuit court to determine the exact amount of attorney fees and costs to be awarded to the defendants. No. 2003-3500, unpublished slip op. See Olsen v. Hoffmann, (Wis. Ct. App. Nov. 16, 2004). ¶16 On December 16, 2004, Attorney Katerinos petition for review of the decision on the First Appeal. filed a In the petition for review he reiterated his argument that he could not be held personally responsible for fees and sanctions because the court lacked jurisdiction over him on the theory that he was not a named party to the lawsuit. ¶17 On July 5, 2005, while the petition for review in the First Appeal was pending before this court, and while the Second Appeal was pending in the court of appeals, Attorney Katerinos filed a motion in the circuit court for sanctions against defense counsel, Attorney Drosen and Attorney Stein, for "fraud, perjury, and other alleged malfeasance." This motion was substantially similar in content to the motion to reopen the small claims litigation which the circuit court had already denied, and which was at the time the subject of the Second Appeal. Attorney Katerinos claimed that "Defendants' counsels had to resort to . . . threats of violence . . . to obtain their void judgments" (emphasis added). Both defense attorneys denied ever threatening Attorney Katerinos in any way. 7 Defense counsel No. 2008P1637-D filed motions for protective orders asking the circuit court to bar discovery into this claim pending resolution of the Second Appeal. ¶18 Judge Foley conducted a hearing on the motions for protective orders on September 19, 2005. Judge Foley ordered Attorney Katerinos not to issue any discovery requests pending resolution of the matters then pending before the Wisconsin Supreme Court and the Wisconsin Court of Appeals, and granted defense counsels' motions for protective orders. Attorney Katerinos was ordered to pay costs to the defendants on the motion and was directed that these costs should be borne by him personally. ¶19 On October 17, 2005, Judge Foley conducted a hearing on Attorney Katerinos' motion for sanctions. Judge Foley noted the defendants had prevailed in small claims court, the circuit court, and the court of appeals, and the supreme court had denied Attorney Katerinos' petition for review on October 3, 2005. Judge Foley found no basis for the sanctions sought by Attorney Katerinos and denied the motion. Judge Foley directed the defendants to present affidavits with calculations of their costs and attorney fees. On November 21, 2005, Judge Foley issued written orders confirming his September 19 and October 17 rulings. Attorneys Judge Drosen Foley and ordered Stein the Attorney sums of Katerinos $1,222 and to pay $862.50, respectively, on or before January 15, 2006. ¶20 Judge Foley conducted hearings on November 28 and 30, 2005, to determine the costs due the defendants for attorney 8 No. 2008P1637-D fees incurred in defending the First Appeal, together with other motion costs. In January 2006 Judge Foley issued a written order awarding Dr. H. a total of $6,139.10 in fees and costs and awarded Hawthorne a total of $2,222.93. Judge Foley apportioned responsibility for these costs on a 90/10 basis between Attorney Katerinos and M.O. and R.O., respectively. Orders for judgment on these amounts were filed on February 23 and 24, 2006, and judgments entered on Attorney Katerinos February 28, appealed the 2006. orders On for April 7, 2006, judgment, which included by reference the November 21, 2005, orders denying his motion for sanctions and imposing costs in favor of the other attorneys ("Third Appeal"). ¶21 On April 11, 2006, the court of appeals issued a decision in the Second Appeal, affirming the circuit court on all counts. The court of appeals flatly rejected Attorney Katerinos' claims that the judgment entered against him and his clients was based upon the defendants' fraudulent activities, stating: This court agrees with the trial court's conclusions made on the record that there is "nothing here to suggest that this judgment resulted from fraud perpetrated on the Court, by any of the lawyers, by any of the defendants, by any representatives of the defendants, et cetera. Some of this stuff that is cited in support of the proposition that the judgment resulted from fraud is simply silly." Olsen v. Hoffman, No. 2005AP644, unpublished slip op., ¶14 (Wis. Ct. App. Apr. 11, 2006) (stating, inter alia, "It is time for 9 No. this litigation to come to an end."). found that the Second Appeal was 2008P1637-D The court of appeals also frivolous and remanded the matter to the circuit court for a determination of costs and attorney fees owed to the defendants on the Second Appeal. On May amount of with the 3, 2006, $1,147.50 Judge in favor Foley of ordered Dr. H. for judgment costs in the associated Second Appeal. ¶22 Attorney Katerinos reached a settlement for the fees and costs and personally paid them in full. In August 2006 Attorneys Katerinos, Stein, and Drosen reached a settlement and executed a stipulation and order of dismissal upon conditions relating to defendants. Attorney Katerinos' payment of sanctions to the The Third Appeal was voluntarily dismissed in late August 2006. ¶23 Attorney Katerinos' conduct in this small litigation gave rise to this disciplinary proceeding. claims The OLR complaint alleged five counts of professional misconduct: ¢ Count One. By over-litigating this small claims case for two and one-half years to his clients' financial detriment, Attorney Katerinos violated SCR 20:1.1.3 ¢ Count Two. By arguing during the First Appeal a position that was adverse and detrimental to his clients' interests and was potentially 3 favorable to Attorney SCR 20:1.1 provides, "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation." 10 No. 2008P1637-D Katerinos' own interest, Attorney Katerinos violated former SCR 20:1.7(b).4 ¢ September Count Three. 2005 that By filing a motion for sanctions in generally repeated grounds Attorney Katerinos had previously (and unsuccessfully) raised in a motion to reopen that the circuit court had already denied, Attorney Katerinos violated SCRs 20:3.1(a)(l) and (3).5 4 Former SCR 20:1.7(b) (effective through June 30, 2007) provided: A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless: (1) the lawyer reasonably believes representation will not be adversely affected; and the (2) the client consents in writing after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved. 5 SCR 20:3.1(a)(1) and (3) provide, in pertinent part, that in representing a client, a lawyer shall not: (1) knowingly advance a claim or defense that is unwarranted under existing law, except that the lawyer may advance such claim or defense if it can be supported by good faith argument for an extension, modification or reversal of existing law; . . . (3) file a suit, assert a position, conduct a defense, delay a trial or take other action on behalf of the client when the lawyer knows or when it is obvious that such an action would serve merely to harass or maliciously injure another. 11 No. ¢ Count Four. By making baseless a 2008P1637-D statement indicating the defendants had misused their "relationship" between the attorneys to presiding judge victimize the and one plaintiffs of the and defense plaintiffs' counsel when, in fact, no relationship between the judge and the defense attorney existed, Attorney Katerinos violated SCR 20:8.2(a).6 ¢ Count Five. By making a baseless statement in a motion for sanctions to the trial court filed on or about June 30, 2005, that the defense attorneys had made "threats of violence" against him, Attorney Katerinos violated former SCR 20:3.3(a)(1).7 ¶24 costs. The OLR sought a public reprimand and imposition of The referee conducted an evidentiary hearing in May 2009 and requested post hearing briefs. on September 10, 2009. a lengthy letter to The referee filed his report As indicated earlier, although he wrote the justices of this court dated September 30, 2009, Attorney Katerinos did not formally appeal 6 SCR 20:8.2(a) provides as follows: A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer, or of a candidate for election or appointment to judicial or legal office. 7 Former SCR 20:3.3(a)(1) (effective through June 30, 2007) stated a lawyer shall not knowingly "make a false statement of fact or law to a tribunal . . . ." 12 No. the referee's report. Therefore, we consider 2008P1637-D this matter pursuant to SCR 22.17(2). ¶25 The establishing referee the concluded allegations that in OLR the met its complaint burden by of clear, satisfactory, and convincing evidence and recommended imposition of a public reprimand. We agree. We have carefully reviewed the record in this matter, and the record evidence supports the referee's findings of fact and conclusions of law with respect to each allegation of misconduct. ¶26 Attorney Katerinos continued to pursue the small claims litigation over a bill of less than $500 despite clear warnings from the trial court and the court of appeals that his arguments were "silly" "frivolous on its face." and that further discovery would be Indeed, at one point the circuit court advised Attorney Katerinos that if he pursued discovery on his third motion for sanctions the court would "anticipate putting you [Attorney Katerinos] in jail for it." The referee made the following findings: The Findings clearly indicate that Attorney Katerinos was very aggressive in this case and refused to accept the decision of the trial court and decisions of the Court of Appeals. His action in the case was clearly frivolous. He had a fixation on his interpretation of the Wisconsin Consumer Act and would not tolerate any other position but his. In the disciplinary hearing he spent more time on substantiating his position in the small [claims] case than defending himself on the five counts in the Disciplinary Complaint. He clearly violated Count 1, and I so find. 13 No. ¶27 We adopt these findings and agree 2008P1637-D that Attorney Katerinos violated SCR 20:1.1. ¶28 We also agree that the record supports a finding that Attorney Katerinos violated SCR 20:1.7(b) when he attempted to exonerate himself Attorney Katerinos and obtained a from argument. from waiver a judgment his his for clients sanctions jointly clients imposed without before on having pursuing this We agree with the referee's conclusion: Mr. Katerinos' attempts to extricate himself of the frivolous fees, would have put the burden of all the fees on his clients. This was a direct conflict with his clients' interest. He had not procured a waiver of the conflict from his clients. Mr. Katerinos violated SCR [20:1.7(b)]. ¶29 Attorney Katerinos also violated SCRs 20:3.1(a)(1) and (3) when he filed a motion to reopen the litigation on June 28, 2004, based on an allegation of fraud, and when he filed a motion for sanctions on July 5, 2005. When Attorney Katerinos filed his motion for sanctions he had already lost a motion to reopen the litigation in the circuit court. That motion had raised almost the same issue of attorney misconduct. As such, Attorney Katerinos' motion for sanctions asserted a duplicative position injure that other "would merely individuals, defendants' counsel." serve to here the harass or defendants maliciously and the We agree with the referee's observation that: During the course of the litigation Mr. Katerinos repeated motions that had already been heard and disposed of by the Court. One such incident was the motion for sanctions filed by him in [July 2005]. This 14 No. 2008P1637-D matter had been raised in a motion to reopen that the Circuit Court had already denied. Mr. Katerinos violated [SCRs 20:3.1(a)(1) and (3)]. ¶30 The Katerinos referee violated concluded, SCR and 20:8.2(a) we with agree, respect that to Attorney statements included in the brief he filed with the court of appeals on July 19, 2004. In this brief Attorney Katerinos said "[t]he Defendants misused the trial court and the relationship between Judge Flanagan and Mr. Stein to victimize [R.O. and M.O.] and their counsel . . . ." Stein denied he had At any the type evidentiary of hearing, "relationship" Attorney with Judge Flanagan other than that of an attorney who appeared in the judge's courtroom on legal matters. The referee found that Attorney Katerinos could not substantiate this statement and, as such, the referee concluded that Attorney Katerinos' assertion that there was a "relationship" involving Judge Flanagan and a defense attorney was false and related to the integrity of the judge. More specifically, the referee stated: The statement by Mr. Katerinos that Judge Flanagan and Mr. Stein had a relationship that was detrimental to [his clients'] case had no basis in fact. The statement was careless and was a disservice to Judge Flanagan and Attorney Stein. He just made the statement without presenting any factual basis. Brash statements with no foundation have no place in the Court System. Mr. Katerinos violated SCR 20:8.2(a). ¶31 Finally, we agree that Attorney Katerinos violated ethical standards when he accused defense counsel of harassing M.O. and R.O., pilfering them financially, and denying their day in court. For example, Attorney Katerinos stated, "Defendants' 15 No. 2008P1637-D counsels had to resort to fraud, perjury, threats of violence, and intentional misstatements to obtain their void judgments." A review of the record reflects that both Attorneys Drosen and Stein denied making any threats of violence towards Attorney Katerinos. Attorney Katerinos claimed that Stein "shook his fist" in about the face of the prospects Attorney of Katerinos collecting and money "mumbled" words from his client. describing the alleged Attorney Stein denied this occurred. ¶32 conduct The as referee agreed "threats that of by violence" Attorney mischaracterized to the court what had occurred. Katerinos The referee stated, and we agree that: The statement made in the motion for sanction[s] [filed] on [July 5, 2005] that the defense attorneys had made threats of violence against Mr. Katerinos has no foundation. Mr. Katerinos violated SCR 20:3.3(a)(1). ¶33 A referee's findings of fact will not be overturned unless clearly erroneous. Against Carroll, N.W.2d 718. We conclusions. this WI 130, independently ¶29, review 248 the Wis. 2d 662, referee's 636 legal Id. ¶34 2001 See In re Disciplinary Proceedings appeal, As was submitted findings and the court without are unchallenged and they are also supported by the record. We approve Fiorenza's to conclusions therefore Referee matter and adopt the referee's findings conclusions regarding Attorney Katerinos' misconduct. 16 and No. ¶35 Although Attorney Katerinos declined to 2008P1637-D appeal the referee's report he nonetheless sent a 17-page letter to each justice. He challenges many aspects of the referee's recommendation which he describes as "rife with numerous errors, omissions, and misrepresentations." His assertion that "[t]he lack Wis. of respect and regard for Stat. § 427.105 is 'shockingly not right' . . . ," registers his disagreement with credibility Katerinos determinations further made maintained by that the "OLR referee. Attorney repeatedly interfered with the underlying small claims case while the action was still pending in the court system" (emphasis supplied). He states, inter alia: While acting as a shadow party, OLR repeatedly abused the power and resources of the State of Wisconsin to derail the pending case and obtain the penalizing outcome it desired to punish the Respondent. He then provides the court with an extremely lengthy list that he emphasizes is "not intended to be comprehensive" of the errors and omissions he perceives in the referee's report. ¶36 Attorney Katerinos explicitly declined to appeal the referee's report and recommendations. Therefore, we need not, and will not, address the many and varied complaints set forth at length in his letter to this court. ¶37 We will note, however, that many of Attorney Katerinos' objections and claims of purported error or omission are grounded in his own belief in the validity of his legal argument, notwithstanding the fact that several circuit and appellate courts have advised him that his arguments lack merit. 17 No. 2008P1637-D Indeed, the letter to this court reflects a disturbing lack of awareness or procedure. respect for appropriate legal practice and As the OLR stated in written submissions, "[w]ere every such lawsuit to be handled in a similar fashion, our court system would come to a grinding halt." ¶38 We accept the referee's recommendation for a public reprimand and we impose the full costs of this proceeding.8 ¶39 IT IS ORDERED that Douglas Katerinos is publicly reprimanded as discipline for professional misconduct. ¶40 IT IS FURTHER ORDERED that within 90 days of the date of this order, Douglas Katerinos pay to the Office of Lawyer Regulation the costs of this proceeding. If costs are not paid within the time specified and absent a showing of his inability to pay the costs within that time, Douglas Katerinos' license to practice law in Wisconsin shall be suspended until further order of the court. 8 Supreme court rule 22.24 governs the assessment of costs. Under SCR 22.24(1m), the court's general policy is to impose costs on the respondent. To award less than full costs, the court must find "extraordinary circumstances." Id. Attorney Katerinos has not formally objected to the costs and has not claimed extraordinary circumstances to justify the imposition of less than full costs. We conclude Attorney Katerinos shall bear the entire costs of the proceedings. On September 29, 2009, the OLR filed a statement of costs in this matter totaling $20,543.75. 18 No. 1 2008P1637-D
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