Office of Lawyer Regulation v. Shawn G. Rice
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2017 WI 1 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2014AP2307-D In the Matter of Disciplinary Proceedings Against Shawn G. Rice, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Shawn G. Rice, Respondent. DISCIPLINARY PROCEEDINGS AGAINST RICE OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: January 6, 2017 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: ABRAHAMSON, S. J., joined by BRADLEY, A. W. J., dissent (Opinion filed). 2017 WI 1 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2014AP2307-D STATE OF WISCONSIN : IN SUPREME COURT In the Matter of Disciplinary Proceedings Against Shawn G. Rice, Attorney at Law: FILED Office of Lawyer Regulation, Complainant, JAN 6, 2017 v. Diane M. Fremgen Clerk of Supreme Court Shawn G. Rice, Respondent. ATTORNEY disciplinary proceeding. Attorney's license report Referee suspended. ¶1 PER CURIAM. We review the of Christine Harris Taylor, concluding that Attorney Shawn G. Rice committed one count of professional misconduct as alleged in the Office of Lawyer Regulation's (OLR) complaint. Referee Taylor recommends license the court suspend Attorney Rice's for a period of 60 days and that we order Attorney Rice to pay the full costs of this disciplinary proceeding. No. ¶2 2014AP2307-D No appeal was filed from the referee's report so we review this matter pursuant to SCR 22.17(2).1 After completing our review, we agree that the stipulated facts and the record are sufficient 20:8.4(c).2 to establish that Attorney Rice violated SCR We further agree that Attorney Rice's license should be suspended for 60 days. We accede to the OLR's conclusion that restitution is not warranted. We deny Attorney Rice's objection to costs and direct him to pay the full costs of this disciplinary proceeding which are $14,064.72 as of August 29, 2016. ¶3 Wisconsin Attorney in 1993. Rice was He admitted has been discipline on one prior occasion. to subject practice to law in professional In 2007, he received a public reprimand for three counts of professional misconduct related to his personal involvement in a commercial real estate transaction in which he made false statements in a deposition and executed a document falsely reflecting an individual as a member of an LLC. 1 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 SCR 20:8.4(c) provides: "It is professional misconduct for a lawyer to: . . . engage in conduct involving dishonesty, fraud, deceit or misrepresentation." 2 No. 2014AP2307-D In re Disciplinary Proceedings Against Rice, 2007 WI 68, 301 Wis. 2d 94, 732 N.W.2d 440. ¶4 This matter came to the OLR's attention during Rice's acrimonious divorce proceeding. In 1996, Attorney Rice and Ms. Liesl M. Testwuide (Ms. Testwuide) were married. In 1992, when Ms. Testwuide was still unmarried and childless, Ms. Testwuide's parents created a trust for the benefit of Ms. Testwuide and her children. Ms. Testwuide was co-trustee of the trust along with Kenneth Kazmierczak, a business associate of Ms. Testwuide's father. ¶5 2011, In 2010, Ms. Testwuide filed for divorce. while the divorce was pending, Ms. Testwuide In July filed a grievance with the OLR alleging that Attorney Rice had removed over $600,000 from the trust without proper authorization by forging Ms. Testwuide's signature and the signature of her cotrustee. in Attorney Rice self-reported the same misconduct and, October 2011, Attorney Rice submitted a lengthy written response to the grievance acknowledging that he signed documents without proper authorization but asserting Ms. Testwuide knew and tacitly approved his actions. Rice's divorce judgment was Ms. Testwuide and Attorney entered in October 2011; they continued to litigate custody, placement, and other issues. ¶6 On November 21, 2011, Ms. Testwuide filed a civil action against Attorney Rice and his former law firm, alleging fraud, conversion, and legal 2011CV1184, Sheboygan County. malpractice. Testwuide v. Rice, On December 18, 2012, the circuit court granted Rice's motion for summary judgment, ruling that 3 No. 2014AP2307-D several claims were barred by the statute of limitations. May 2013, a stipulation and order dismissing the In remaining claims against Rice was entered. ¶7 On October 2, 2014, the OLR filed a disciplinary complaint alleging that Attorney Rice violated SCR 20:8.4(c) by forging the Testwuide signatures 1992 of Trust the on co-trustees various of checks the and Liesl M. documents. Initially, the OLR sought a six month license suspension. In July 2015, after pretrial discovery, the OLR and Attorney Rice executed a "Stipulation Disciplinary Charge." Regarding Factual Allegations and Attorney Rice admitted that he violated SCR 20:8.4(c) by preparing and executing, without authorization, numerous forms, checks and other Trust documents for a 12-year period during the marriage and continuing until Ms. Testwuide filed for divorce in 2010. ¶8 The referee accepted the stipulation. The parties continued to dispute the appropriate discipline and conducted additional discovery, including depositions. ¶9 Attorney Rice maintained that, circumstances, a public reprimand was sufficient. 2016, days before a scheduled evidentiary under the On April 15, hearing, the OLR reduced its recommendation from a six-month license suspension to a 60-day license suspension. Attorney Rice continued to assert that a public reprimand was sufficient, but the parties agreed to waive the scheduled hearing and permit the referee to resolve the question of appropriate 4 discipline based on the No. stipulation, the existing record, and the 2014AP2307-D parties' written submissions. ¶10 The referee issued her report and recommendation dated August 9, 2016. ¶11 in an Neither party appealed. When we review a referee's report and recommendation attorney disciplinary case, we affirm the referee's findings of fact unless they are found to be clearly erroneous, but we review the referee's conclusions of law on a de novo basis. 126, In re Disciplinary Proceedings Against Inglimo, 2007 WI ¶5, 305 Wis. 2d 71, 740 N.W.2d 125. We determine the appropriate level of discipline to impose given the particular facts of each case, independent of the referee's recommendation, but benefiting from it. In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. ¶12 findings There are is no clearly showing erroneous that and the we referee's accept them. factual The complaint alleges, Attorney Rice has stipulated, and the record supports the finding that Attorney Rice arranged for numerous checks and disbursals from the trust account, without authorization, the aggregate amount of which was several hundred thousand dollars.3 3 We do not know how much money Rice transferred from the trust without proper authorization. The OLR states that its "investigation did not and most probably could not have calculated the total amount involved in the transactions at issue." See OLR's Restitution Statement at 1-2. 5 No. ¶13 Supreme professional Court Rule misconduct for 20:8.4(c) a lawyer provides to 2014AP2307-D that engage in it is conduct involving dishonesty, fraud, deceit, or misrepresentation. The stipulation and the record before the court are sufficient to support a legal conclusion that Attorney Rice violated SCR 20:8.4(c). ¶14 The primary question in this matter is the appropriate discipline for Attorney Rice's misconduct. determining appropriate attorney Factors relevant to discipline include the seriousness, nature and extent of the misconduct; the level of discipline needed to protect the public, the courts, and the legal system from repetition of the attorney's misconduct; the need to impress misconduct; committing and upon the similar the attorney need to the deter misconduct. seriousness other See In of the attorneys re from Disciplinary Proceedings Against Hammis, 2011 WI 3, ¶39, 331 Wis. 2d 19, 793 N.W.2d 884; In re Disciplinary Proceedings Against Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747. ¶15 The referee identified as aggravating factors, Attorney Rice's prior discipline, a dishonest or selfish motive, and the fact that the misconduct spanned years. As mitigating factors, the referee noted that Attorney Rice self-reported his misconduct and that he was cooperative in these proceedings. ¶16 After itemizing a number of unauthorized trust transactions, the referee stated that she was not persuaded by Attorney Rice's claim that it was "impossible" to locate the cotrustee after the co-trustee relocated to Minneapolis, and found 6 No. further that the "overwhelming information in 2014AP2307-D this record supports the fact that [Rice's] misconduct in accessing Trust funds, without authorization was well in excess of any dollar amounts necessary to 'pay bills.'." However, the referee acknowledged the "personal nature of the issues leading [Rice] to engage in the misconduct that he admits to" and found credible Attorney Rice's assertion that he sincerely believed that he was acting as a "de facto" trustee. ¶17 Throughout these proceedings Attorney Rice has maintained that he engaged in the trust transactions, albeit unauthorized, but with the knowledge and consent of his wife, who was both a co-trustee and a beneficiary of the trust. He claims that she did not want to be involved in the marital finances. He support a income, and maintains marital paid that lifestyle for, among the trust that funds other exceeded things, were their used to employment property vacations, and the remodeling of a vacation home. taxes, He claims that Ms. Testwuide's grievance was both selective and incomplete in terms of the trust transactions it identified. The referee did not make specific findings in this regard, however, merely noting the "conflicting" evidence provided. There is no finding that Attorney Rice misused the trust funds. ¶18 In terms of the appropriate discipline, the referee described Attorney Rice's misconduct as serious, but ultimately accepted the OLR's recommendation for a 60-day suspension. deemed analogous In re Disciplinary Proceedings She Against Riegleman, 2003 WI 3, 259 Wis. 2d 1, 657 N.W.2d 339, in which 7 No. this court endorsed a imposed a settlement 60-day check suspension without upon the 2014AP2307-D a lawyer insurance who company's consent, failed to inform the insurance company the lawyer was in possession of the funds, and distributed settlement funds despite knowing there was a dispute regarding the funds. See also In re Disciplinary Proceedings Against Glesner, 2000 WI 18, 233 Wis. 2d 35, 606 N.W.2d 173 (imposing 60-day suspension for adding unearned charges to a client's billing and creating an invoice with fabricated time entries); In re Disciplinary Proceedings Against Krueger, 2006 WI 17, 288 Wis. 2d 586, 709 N.W.2d 857 (imposing 60-day suspension for preparing and filing inaccurate bankruptcy schedules and failing to disclose a prebankruptcy debt owed to him by the debtor of over $7,000). referee thus recommends the court suspend Attorney The Rice's license for 60 days and further recommends that we impose the full costs of this proceeding on Attorney Rice. ¶19 Attorney Rice statement of costs. he committed the filed an objection to the OLR's He contends that he conceded all along that alleged misconduct but felt compelled to litigate the case because the OLR "overreached with respect to the punishment" suspension. it initially sought, namely, a six-month He contends that he was effectively left with "no viable course of action other than fully litigating the case" as occurred in In re Disciplinary Proceedings Against Frisch, 2010 WI 60, 326 Wis. 2d 128, 784 N.W.2d 670. He points out that the OLR reduced its requested discipline to a 60-day suspension a mere two days before a scheduled hearing, whereupon he agreed to 8 No. 2014AP2307-D have the referee consider the matter on written submissions. He asks the court to impose only half the costs upon him. ¶20 The OLR maintains that full costs are appropriate. The OLR reminds the court that Attorney Rice continued to seek a public reprimand; that is, he did not "acquiesce" when the OLR reduced the discipline. recommended sanction, nor did he stipulate to The OLR maintains that its costs were incurred in the normal course of litigating this case. ¶21 We agree. We find no reason to depart from our general practice of imposing full costs on attorneys found to have committed misconduct. See SCR 22.25. While Attorney Rice did admit his misconduct and ultimately stipulated to certain facts, disagreement regarding the appropriate sanction resulted in the parties litigating this matter for some time and required the preparation of a referee's report. ¶22 Finally, Attorney Rice. we impose no restitution obligation on The OLR has not sought restitution and we accede to its determination that restitution is not appropriate in this case. See SCR 21.16(1m)(em) and (2m)(a)1. ¶23 IT IS ORDERED that the license of Shawn G. Rice to practice law in Wisconsin is suspended for a period of 60 days, effective February 17, 2017. ¶24 IT IS FURTHER ORDERED that Shawn G. Rice shall comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice suspended. 9 law in Wisconsin has been No. ¶25 2014AP2307-D IT IS FURTHER ORDERED that within 60 days of the date of this order, Shawn G. Rice shall pay to the Office of Lawyer Regulation the costs of this proceeding, which are $14,064.72 as of August 29, 2016. ¶26 IT IS FURTHER ORDERED that compliance conditions of this order is required for reinstatement. 22.29(4)(c). 10 with all See SCR No. ¶27 join SHIRLEY S. ABRAHAMSON, J. this per curiam because the 2014AP2307-D.ssa (dissenting). stipulation, I cannot the referee's report, and this per curiam do not make clear the nature and extent of Attorney Rice's conduct that is charged as a violation of SCR 20:8.4(c). Without knowing the nature and extent of the conduct determine occurred I cannot and, discipline. ¶28 I if there whether was a a violation violation, of the the Code appropriate Accordingly, I dissent. am authorized to state BRADLEY joins this dissent. 1 that Justice ANN WALSH No. 1 2014AP2307-D.ssa
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