Office of Lawyer Regulation v. Michael W. Steinhafel
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2013 WI 93 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2012AP1826-D In the Matter of Disciplinary Proceedings Against Michael W. Steinhafel, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Michael W. Steinhafel, Respondent. DISCIPLINARY PROCEEDINGS AGAINST STEINHAFEL OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: November 26, 2013 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: ZIEGLER, J., did not participate. 2013 WI 93 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2012AP1826-D STATE OF WISCONSIN : IN SUPREME COURT In the Matter of Disciplinary Proceedings Against Michael W. Steinhafel, Attorney at Law: Office of Lawyer Regulation, FILED Complainant, NOV 26, 2013 v. Diane M. Fremgen Clerk of Supreme Court Michael W. Steinhafel, Respondent. ATTORNEY disciplinary proceeding. Attorney's license suspended. ¶1 PER CURIAM. On June 26, 2013, Referee Richard C. Ninneman issued a report recommending that Attorney Michael W. Steinhafel be Steinhafel declared engaged in in default, multiple concluding counts of that Attorney professional misconduct, and recommending that his license to practice law in Wisconsin be suspended for four months. ¶2 supported We conclude that the referee's findings of fact are by satisfactory and convincing evidence. Due to No. Attorney Steinhafel's repeated failure to 2012AP1826-D appear for or participate in a deposition, rescheduled deposition, and status conferences, we declare him to be in default. We further conclude that the seriousness of his misconduct warrants the suspension of his license to practice law in Wisconsin for a period of four months. We also agree with the referee that the full costs of the proceeding, which are $2,638.99 as of July 16, 2013, should be assessed against Attorney Steinhafel. ¶3 Wisconsin Attorney Steinhafel was admitted to practice law in in 1989. He practiced in Milwaukee. During the course of the proceedings, Attorney Steinhafel stated he has not practiced law in years and has no intention of practicing law again. ¶4 On August 16, 2012, the Office of Lawyer Regulation (OLR) issued a complaint against Attorney Steinhafel alleging seven counts of misconduct. out of Milwaukee Attorney County Four of the misconduct counts arose Steinhafel's divorce representation proceeding. While of the S.R. in divorce a was pending, S.R. wanted to sell one of her two income properties. In order for the sale to take place, her husband, C.R., had to execute two affidavits waiving his interests in the property. In exchange for signing the affidavits, an agreement was reached between Attorney Steinhafel and C.R.'s attorney, Dana Gimbel, that any Attorney proceeds from Steinhafel the pending sale a would be determination respective interests. 2 held in of the trust by parties' No. ¶5 2006. sale 2012AP1826-D The sale of S.R.'s income property closed in September Contrary to the agreement regarding disposition of the proceeds, the entire amount of the sale was directly distributed to S.R. and none of the funds were ever placed in trust. ¶6 In pending, November S.R. wanted of to 2007, sell while a the second divorce income was still property. An agreement similar to the one regarding the sale of the first property was Gimbel. On November 30, 2007, the proceeds of the sale of S.R.'s second made between income Attorney property were Steinhafel deposited and into Attorney the trust account of the Schroeder Group Law Firm, the firm that employed Attorney Steinhafel at the time. On December 21, 2007, contrary to the agreement entered into between Attorney Steinhafel and Attorney Gimbel, the entire amount of the sale proceeds was distributed to S.R. ¶7 At the divorce hearing, Attorney Gimbel informed the court the parties had reached a stipulation, and that part of the stipulation was that the proceeds from the sale of the two properties account. were being held in Attorney Steinhafel's trust Attorney Steinhafel was present at the trial, but did not inform the court or Attorney Gimbel that the funds were not in fact in his trust account and had already been distributed to S.R. ¶8 The OLR's complaint alleged the following counts of misconduct with respect to Attorney Steinhafel's representation of S.R.: 3 No. 2012AP1826-D COUNT ONE. By failing to provide notice of the receipt of sale proceeds to adverse counsel, [Attorney] Steinhafel violated SCR 20:1.15(d)(1).1 COUNT TWO. By failing to hold the sale proceeds in trust, [Attorney] Steinhafel violated SCR 20:1.15(d)(3).2 COUNT THREE. By disbursing the sale proceeds to his client in direct contradiction of an agreement he made with adverse counsel, [Attorney] Steinhafel violated SCR 20:8.4(c).3 COUNT FOUR. By continuing to misrepresent to adverse counsel in court that he was holding sale 1 SCR 20:1.15(d)(1) states: Notice and disbursement. 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. 2 SCR 20:1.15(d)(3) provides: Disputes regarding trust property. When the lawyer and another person or the client and another person claim ownership interest in trust property identified by a lien, court order, judgment, or contract, the lawyer shall hold that property in trust until there is an accounting and severance of the interests. If a dispute arises regarding the division of the property, the lawyer shall hold the disputed portion in trust until the dispute is resolved. Disputes between the lawyer and a client are subject to the provisions of sub. (g)(2). 3 SCR 20:8.4(c) states it is professional misconduct for a lawyer to "engage in conduct involving dishonesty, fraud, deceit or misrepresentation . . . ." 4 No. proceeds in trust, SCR 20:8.4(c). ¶9 [Attorney] Steinhafel 2012AP1826-D violated The OLR's complaint also alleged that in November of 2006, D.C. hired Attorney Steinhafel to represent him in a small claims action. D.C. said he signed a fee agreement and paid Attorney Steinhafel an advance fee of $1,500. ¶10 D.C. filed a grievance with the OLR on March 2, 2011, saying that Attorney Steinhafel had failed to diligently pursue his case, failed to communicate with him, and failed to respond to his request for a refund of the advanced fee and the return of his documents. Attorney Steinhafel sent a response to the OLR saying he had tried to locate D.C.'s file at his former law firm, but was unable to do so, and that he had lost contact with D.C. after he left the law firm where he was affiliated in October 2007 and did not take the file with him to his new law firm. Attorney Steinhafel further told OLR that after he became aware of D.C.'s request for a refund of fees, he promptly sent a check representing a refund of all fees. alleged the following count of The OLR's complaint misconduct with respect Attorney Steinhafel's representation of D.C.: COUNT FIVE. By failing to provide his client with notice of his move from one law firm to another, by failing to inform his client of his apparent termination of his representation and by failing to provide his client with a refund of the unearned portion of the advance fee more than five years after payment, [Attorney] Steinhafel violated of [sic] SCR 20:1.16(d).4 4 SCR 20:1.16(d) provides as follows: Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable 5 to No. ¶11 2009, 2012AP1826-D The OLR's complaint also alleged that on October 29, Attorney Steinhafel was the subject of a traffic stop which led to a felony charge against him of operating while under the influence of an intoxicant, third offense, with a minor child in the vehicle, and misdemeanor charges of operating with a prohibited blood alcohol concentration, third offense, and operating a motor vehicle after revocation. On July 19, 2010, Attorney Steinhafel pled guilty to the felony charge. The remaining charges were dismissed and read-in at sentencing. ¶12 Attorney Steinhafel did not provide written notice of his conviction to the OLR within five days of the finding of guilt. Attorney Steinhafel's counsel in the OWI case did inform the OLR of Attorney Steinhafel's guilty plea and sentencing in a letter to the OLR dated September 23, 2010. ¶13 The OLR's complaint alleged the following counts of misconduct with respect to the felony conviction: COUNT SIX. By engaging in conduct leading to a felony criminal traffic conviction, [Attorney] 5 Steinhafel violated SCR 20:8.4(b). to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law. 5 SCR 20:8.4(b) states it is professional misconduct for a lawyer to "commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects; . . . ." 6 No. 2012AP1826-D COUNT SEVEN. By failing to provide written notice of his finding of guilt in a criminal case within five days, [Attorney] Steinhafel violated SCR 21:15(5).6 ¶14 On November 8, 2012, Attorney Jon E. Fredrickson filed a notice of appearance and an answer to the complaint on behalf of Attorney Steinhafel. moved to withdraw as In March 2013 Attorney Frederickson counsel for Attorney Steinhafel. The referee granted that motion. ¶15 Attorney Steinhafel failed to appear for a scheduled deposition on April 24, 2013. He again failed to appear for a rescheduled deposition on May 14, 2013. The OLR filed a motion for sanctions which was to be heard on May 13, 2013. was changed to a Attorney Steinhafel May 13. After telephone failed Attorney scheduling/status to be Steinhafel available failed by to That date conference. telephone appear for on his rescheduled deposition on May 14, 2013, the OLR filed a second motion for sanctions which was scheduled to be heard on June 6, 2013. Following another telephone conference between the OLR's retained 6 counsel, Attorney Steinhafel, and the referee, SCR 21.15(5) provides: An attorney found guilty or convicted of any crime on or after July 1, 2002, shall notify in writing the office of lawyer regulation and the clerk of the Supreme Court within 5 days after the finding or conviction, whichever first occurs. The notice shall include the identity of the attorney, the date of finding or conviction, the offenses, and the jurisdiction. An attorney's failure to notify the office of lawyer regulation and clerk of the supreme court of being found guilty or his or her conviction is misconduct. 7 the No. June 6 hearing conference. was changed Attorney to another Steinhafel 2012AP1826-D telephone again failed status to make arrangements to participate in the June 6 telephone conference. In an order dated June 6, 2013, the referee set the OLR's second motion for sanctions to be heard on June 19, 2013. Steinhafel failed to appear in person, but did Attorney call in and participate by telephone. ¶16 At the June 19, 2013 hearing, the referee granted the OLR's motion for sanctions, struck Attorney Steinhafel's answer to the complaint, and recommended that a default judgment be entered. The allegations convincing in referee its the complaint evidence. Steinhafel's found The license to by proved of the satisfactory, clear, referee practice OLR and recommended law be all that suspended Attorney for four months, as requested in the OLR's complaint, and that all costs of the proceeding be assessed against Attorney Steinhafel. Attorney Steinhafel has not filed an appeal from the referee's report and recommendation. ¶17 appear In light of Attorney Steinhafel's repeated failure to for scheduled depositions, status conferences, and hearings, we deem it appropriate to strike his answer to the OLR's complaint and declare him in default. ¶18 A referee's clearly erroneous. findings of fact are affirmed unless 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. whatever sanction it sees fit 8 The court may impose regardless of the referee's No. recommendation. See In re Disciplinary 2012AP1826-D Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. ¶19 There is no showing that any referee's findings of fact are clearly erroneous. Accordingly, we adopt them. We also agree with the referee's conclusions of law that Attorney Steinhafel violated the various rules of professional conduct as alleged in the OLR's complaint. a four-month suspension of We agree with the referee that Attorney Steinhafel's license to practice law in Wisconsin is an appropriate sanction for his misconduct. Because circumstances, we this presents determine further case that no extraordinary Attorney Steinhafel should be required to pay the full costs of this matter. See SCR 22.24(1m) (supreme court's general policy upon a finding of misconduct is to impose all costs upon the respondent attorney). We note the OLR is not seeking restitution. ¶20 Steinhafel IT to IS ORDERED practice that law in the license Wisconsin is of Michael suspended for W. a period of four months, effective January 6, 2014. ¶21 IT IS FURTHER ORDERED that Michael W. Steinhafel shall comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been suspended. ¶22 IT IS FURTHER ORDERED that within 60 days of the date of this order, Michael W. Steinhafel shall pay to the Office of Lawyer Regulation the costs of this proceeding. 9 No. ¶23 IT IS FURTHER ORDERED that compliance 2012AP1826-D with conditions of this order is required for reinstatement. SCR 22.28(2). ¶24 ANNETTE KINGSLAND ZIEGLER, J., did not participate. 10 all See No. 1 2012AP1826-D
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