In re Dis. Proceedings against DeMaio
| Decision Date | 01 October 2009 |
| Docket Number | No. 2008AP1119-D.,2008AP1119-D. |
| Citation | 773 N.W.2d 439,2009 WI 95 |
| Parties | In the Matter of DISCIPLINARY PROCEEDINGS AGAINST Daniel F. DeMAIO, Attorney at Law. Office of Lawyer Regulation, Complainant-Respondent, v. Daniel F. DeMaio, Respondent-Appellant. |
| Court | Wisconsin Supreme Court |
We review a report and recommendation by Referee James G. Curtis that Attorney Daniel F. DeMaio be publicly reprimanded for his professional misconduct and that he be ordered to pay the full costs of this disciplinary proceeding.
¶ 2 Following the filing of the referee's report and recommendation, Attorney DeMaio filed a document entitled "Respondent's Dispositional Memo," which purported to address the question of the appropriate sanction. After the Office of Lawyer Regulation (OLR) filed a motion to strike this filing because it was not a notice of appeal, Attorney DeMaio withdrew the document. Thus, since no appeal has been filed, our review proceeds under SCR 22.17(2).1
¶ 3 When reviewing a referee's report and recommendation in a disciplinary matter, we will affirm the referee's findings of fact unless they are found to be clearly erroneous, but we review conclusions of law de novo. See In re Disciplinary Proceedings Against Inglimo, 2007 WI 126, ¶ 5, 305 Wis.2d 71, 740 N.W.2d 125; In re Disciplinary Proceedings Against Carroll, 2001 WI 130, ¶ 29, 248 Wis.2d 662, 636 N.W.2d 718. With respect to the question of discipline, we determine the appropriate level of discipline given the particular facts of each case, independent of the referee's recommendation, but benefiting from it. See In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶ 44, 261 Wis.2d 45, 660 N.W.2d 686.
¶ 4 Attorney DeMaio was admitted to the practice of law in Wisconsin in 1990 and currently practices in Hudson. In 1998 he received a private reprimand. That is the only prior discipline imposed on Attorney DeMaio.
¶ 5 All three counts in this disciplinary proceeding relate to Attorney DeMaio's representation of and interactions with client M.B. The relevant facts set forth below are taken from the referee's findings of fact.
¶ 6 As of 2004 M.B. was married to, but separated from, G.P. M.B. and G.P. together owned a piece of residential real estate that will be referenced in this decision simply as the "Property." In February 2004 M.B. and G.P. signed a listing contract for the sale of the Property. The Property was subject to a number of mortgages. On May 13, 2004, First National Bank of Hudson (FNB) obtained a judgment of foreclosure on the Property. A sheriff's sale was held later in 2004, at which time FNB became the entity entitled to purchase the Property, subject to the circuit court confirming the sale.
¶ 7 Attorney DeMaio's attorney-client relationship with M.B. began in October 2004, when the St. Croix County circuit court appointed Attorney DeMaio at county expense to represent M.B. in a criminal proceeding. The circuit court ordered M.B. to make monthly $100 payments to the county as reimbursement for payment of Attorney DeMaio's fees. M.B. made two such payments. In April 2005 the state filed a motion to dismiss the criminal charges against M.B., and the circuit court granted the motion to dismiss. The court approved Attorney DeMaio's fee request and ordered that M.B.'s cash bail of $750 and her two $100 monthly payments be applied toward the payment of Attorney DeMaio's fees and expenses.
¶ 8 While Attorney DeMaio was representing M.B. on the criminal matter, he also began to represent her on a private pay basis with respect to debt relief matters. In light of the foreclosure action and the sheriff's sale regarding the Property, Attorney DeMaio told M.B. that he could delay the foreclosure process by filing a bankruptcy petition on behalf of M.B. and G.P. M.B. retained Attorney DeMaio to pursue a bankruptcy action. At least initially, the primary purpose of these efforts was to preserve any equity in the Property for M.B. and G.P.
¶ 9 The referee found that Attorney DeMaio never entered into a written fee agreement with M.B. regarding his representation of her on debt relief matters. In addition, there is no writing which itemizes Attorney DeMaio's time, the work he performed, or the expenses he incurred when representing M.B., with the exception of his work on the criminal matter.
¶ 10 Attorney DeMaio had M.B. complete a relatively short debt relief client information sheet. Attorney DeMaio then filed a Chapter 13 personal bankruptcy petition on M.B.'s behalf. Although a Chapter 13 petition is designed for individuals with employment income, M.B. had no employment income at the time the petition was filed. In addition, the petition was filed only on behalf of M.B. and did not include G.P.
¶ 11 The bankruptcy court ordered M.B. to submit a Chapter 13 plan and other documents by December 20, 2004. It also scheduled an initial meeting of M.B.'s creditors for January 18, 2005.
¶ 12 On December 16, 2004, Attorney DeMaio sent a letter to M.B. asking her to come to his office immediately in order to prepare a Chapter 13 plan. On December 17, 2004, Attorney DeMaio sent another letter to M.B., this time advising her that the Property had been sold at a sheriff's sale and was awaiting court confirmation of the sale.
¶ 13 On December 20, 2004, the United States bankruptcy trustee assigned to M.B.'s case filed a motion seeking dismissal of her Chapter 13 petition because she had failed to file a plan as required by the bankruptcy court's order. M.B. gave a $700 money order to Attorney DeMaio that he was to send to the trustee as evidence of her good faith. Attorney DeMaio forwarded the money order to the trustee on January 18, 2005. Also on that date Attorney DeMaio and M.B. attended the initial meeting of creditors.
¶ 14 Despite the pendency of the trustee's motion to dismiss, Attorney DeMaio and M.B. did not file a Chapter 13 plan. Consequently, on January 21, 2005, the bankruptcy court dismissed the bankruptcy petition. According to a specific finding by the referee, the dismissal of the Chapter 13 bankruptcy proceeding did not end the attorney-client relationship between Attorney DeMaio and M.B. with respect to obtaining debt relief for M.B.
¶ 15 On or about January 31, 2005, the trustee sent to Attorney DeMaio a $700 check made payable to M.B. The check was intended to be a refund of the $700 money order that Attorney DeMaio had submitted on M.B.'s behalf. Although M.B. may have been informed orally that Attorney DeMaio's office had received the $700 refund check, Attorney DeMaio did not inform M.B. of that fact in writing. The referee further found that Attorney DeMaio never sought written authority or permission from M.B. to deposit the $700 check. Attorney DeMaio deposited the $700 check into an account that his law office maintained. Although Attorney DeMaio initially stated that the check had been deposited into a "Cost Account," he later told the OLR District Committee that he had deposited the check into his "Earned Fee Account."
¶ 16 Attorney DeMaio knew from his representation of M.B. that M.B. and G.P. were attempting to sell the Property even while the sheriff's sale was awaiting confirmation. M.B. had attempted to convince Attorney DeMaio that he should consider personally purchasing the Property. In late February 2005 Attorney DeMaio told M.B. that he and his wife might be interested in the Property and that they wished to view it. As a result, M.B.'s real estate agent showed the Property to Attorney DeMaio and his wife, who expressed an interest in purchasing it.
¶ 17 At some point around this time, M.B. learned that the confirmation of the sheriff's sale of the Property was imminent. She subsequently met with Attorney DeMaio. Attorney DeMaio admits that he had a conversation with M.B. concerning his interest in purchasing the Property and the matter of the real estate agent's commission. Attorney DeMaio asserts that M.B. raised the question as to whether she could avoid paying a commission to the real estate agent by filing a bankruptcy petition. The referee did not make a specific factual finding as to when these discussions occurred.
¶ 18 Attorney DeMaio did begin to prepare Chapter 7 bankruptcy documents for M.B. in mid-March 2005. According to the referee's report, "DeMaio stated he does not recall precisely why he was preparing Chapter 7 bankruptcy documents for [M.B.] at that time, but he `presumes' it was at [M.B.'s] request." As part of these efforts, Attorney DeMaio also sent forms to G.P. to be completed and returned. Attorney DeMaio sent no further written communications to M.B. requesting additional information or indicating that additional steps needed to be taken in order to commence a Chapter 7 bankruptcy action. Attorney DeMaio, however, never filed a Chapter 7 bankruptcy on behalf of M.B. or G.P.
¶ 19 On March 14, 2005, FNB obtained an order confirming the sheriff's sale of the Property to FNB. FNB took title to the Property and changed the locks on the house. M.B. had vacated the Property by this time.
¶ 20 Either M.B. or the real estate agent informed Attorney DeMaio that FNB had obtained title to the Property. After FNB took title to the Property, Attorney DeMaio contacted FNB and expressed an interest in purchasing the Property from the bank. Attorney DeMaio initially offered to pay $250,000 for the Property, but the bank responded that the purchase price was $270,000. Attorney DeMaio and his wife subsequently purchased the Property from FNB for $270,000.
¶ 21 Attorney DeMaio did not inform M.B. that he intended to make an offer to purchase the Property before he submitted an offer to the bank. The appraisal report and property inspection report connected with Attorney DeMaio's offer to purchase are dated March 28, 2005, after FNB took title to the Property. The transaction closed on April 1, 2005, with...
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