In the Matter of Disciplinary Proceedings v. Schoenecker

• Decision Date: 15 July 2011
• Docket Number: No. 2011AP48–D.,2011AP48–D.
• Citation: 804 N.W.2d 686,336 Wis.2d 253,2011 WI 76
• Parties: In the Matter of DISCIPLINARY PROCEEDINGS AGAINST James M. SCHOENECKER, Attorney at Law:Office of Lawyer Regulation, Complainant,v.James M. Schoenecker, Respondent.
• Court: Wisconsin Supreme Court

336 Wis.2d 253

804 N.W.2d 686

2011 WI 76

In the Matter of DISCIPLINARY PROCEEDINGS AGAINST James M. SCHOENECKER, Attorney at Law:Office of Lawyer Regulation, Complainant,

v.James M. Schoenecker, Respondent.

No. 2011AP48–D.

Supreme Court of Wisconsin.

Decided July 15, 2011.

PER CURIAM.ATTORNEY disciplinary proceeding. Attorney's license suspended.

We review a stipulation filed by the Office of Lawyer Regulation (OLR) and Attorney James S. Schoenecker pursuant to SCR 22.12. In the stipulation, Attorney Schoenecker agrees that he committed multiple acts of professional misconduct. Although the stipulation lists seven counts, there are actually more than seven violations of the Rules of Professional Conduct for Attorneys because a number of the counts contain multiple violations of a single rule. The stipulation requests that the court impose a three-year suspension as discipline for Attorney Schoenecker's professional misconduct. There is no request in this matter for a restitution award nor is there a request in the stipulation for the imposition of costs against Attorney Schoenecker.

¶ 2 After fully reviewing the matter, we approve the stipulation and impose the requested three-year suspension. The professional misconduct committed by Attorney Schoenecker is quite disturbing and calls for a substantial suspension. We also note that this suspension will require Attorney Schoenecker to undergo the formal reinstatement procedure in SCRs 22.29–22.33, in which he will be required to demonstrate, among other things, that he has a proper understanding of and attitude toward the standards that are imposed upon members of the bar in this state and that he will act in conformity with those standards. See SCR 22.29(4)(f).

¶ 3 Attorney Schoenecker was admitted to the practice of law in Wisconsin in September 2004. He has not previously been the subject of professional discipline.

Much of Attorney Schoenecker's misconduct relates to his relationship (both personal and professional) with M.F. In 2007 Attorney Schoenecker and M.F. were engaged to be married. In December of that year they opened a joint checking account. M.F. also obtained a $100,000 home equity line of credit and then made a loan of $48,500 to Attorney Schoenecker. In exchange for the loan, Attorney Schoenecker executed a promissory note, in which he promised to repay the loan with interest.

¶ 5 Two days after making the loan to Attorney Schoenecker, M.F. learned that Attorney Schoenecker had made cash withdrawals from her checking account ¹ at a casino. Those withdrawals had resulted in a $1,500 negative balance in the account. This discovery apparently caused M.F. to close the joint checking account and to end her engagement to Attorney Schoenecker.

¶ 6 Attorney Schoenecker repaid only $26,500 of the loan balance. With interest, he still owed M.F. approximately $23,000. At some point in 2009 M.F. filed a collection action against Attorney Schoenecker. The parties ultimately reached a settlement, pursuant to which Attorney Schoenecker paid the total sum of $32,106.36 to M.F. as part of a full resolution of the financial issues between the individuals.²

In March 2008, between the end of the parties' engagement and M.F.'s filing of the collection lawsuit, Attorney Schoenecker became an associate at the Clair Law Offices (Clair law firm) in Lake Geneva. It appears from the stipulation that prior to this time Attorney Schoenecker had been representing M.F. in a dispute with a contractor who had performed some work on a property owned by M.F. Attorney Schoenecker informed the law firm that he was representing M.F. and sent her a Legal Representation and Fee Agreement letter on behalf of the Clair law firm. M.F. was then considered a client of the firm. Ultimately, after the contractor filed a lawsuit against M.F. in small claims court, Attorney Schoenecker withdrew as M.F.'s attorney.

¶ 8 Attorney Schoenecker provided legal representation to M.F. at the same time as he was a debtor to her pursuant to the December 2007 loan and promissory note. Attorney Schoenecker did not obtain M.F.'s written consent to waive any actual or potential conflict of interest in the legal representation caused by the creditor/debtor relationship.

¶ 9 The policy of the Clair law firm was that senior attorneys of the firm had to approve bills before they were sent to clients. Attorney Schoenecker, however, sent out two invoices to M.F. in September and October 2008 without obtaining the necessary approval. The total amount shown on the bills was $13,523, but a substantial number of the entries on those invoices were fraudulent. The OLR's memorandum in support of the stipulation alleges that Attorney Schoenecker's submission of these inflated invoices to M.F. was an attempt to offset the remaining amount that he owed M.F. from the December 2007 loan.

¶ 10 In addition to attempting to defraud M.F. through the invoices, Attorney Schoenecker also engaged in a pattern of attempted and completed thefts from her bank accounts. In December 2008 he obtained some of M.F.'s personal information without her consent and began attempting to withdraw money from a business account that she maintained.

¶ 11 Attorney Schoenecker used M.F.'s personal information to enter her business account without her permission and set up an online bill paying account. He changed the e-mail address on the account so that M.F. would not receive notice of any checks he intended to draw on her account.

¶ 12 Attorney Schoenecker first generated two checks in December 2008 that he made payable to himself in the amounts of $950 and $450. He was able to cash the $950 check, but his attempt to cash the $450 check was apparently unsuccessful. Attorney Schoenecker tried to cash a third check in the amount of $1,750 in January 2009, but the check did not clear due to insufficient funds in the account. Attorney Schoenecker did not have M.F.'s consent to generate or cash any of these checks.

¶ 13 Attorney Schoenecker was charged in two separate criminal proceedings arising out his actions concerning M.F. In a Walworth County proceeding, State v. Schoenecker, Case No.2009CF250, the state charged Attorney Schoenecker with two counts of felony identity theft for the purpose of obtaining money for his attempts to withdraw money from M.F.'s business account. On January 27, 2010, pursuant to a plea agreement, Attorney Schoenecker pled guilty to one felony count of identity theft. See Wis. Stat. § 943.201(2)(a). The second count of identity theft was dismissed and read in for sentencing purposes. The Walworth County circuit court imposed two years of probation and ordered Attorney Schoenecker to pay restitution and court costs.

In a Waukesha County proceeding, State v. Schoenecker, Case No.2009CF732, Attorney Schoenecker was charged with one count of felony forgery for creating the $1,750 check that he unsuccessfully attempted to cash in January 2009. On March 12, 2010, Attorney Schoenecker pled guilty to a reduced misdemeanor charge of Theft–Moveable Property (less than $2,500). The Waukesha County circuit court imposed and stayed a sentence of four months in jail and placed Attorney Schoenecker on probation for a period of one year. The circuit court also ordered Attorney Schoenecker to pay restitution to M.F., as well as court costs.

¶ 15 Attorney Schoenecker did not provide written notification of either of his convictions to the OLR or this court within five days. He has, however, paid all restitution amounts and court costs, except for $283.25 in costs in the Walworth County action, which amount is not due until January 2012.

¶ 16 In addition to his misconduct involving M.F., Attorney Schoenecker also set up his own separate law firm on the side while working as an associate attorney for the Clair law firm. He did not inform the Clair law firm of this fact. He did set up a client trust account for his separate practice, but he did not disclose the existence of this separate trust account in his Fiscal 2010 State Bar of Wisconsin Membership Dues and Supreme Court Assessments Statement.

¶ 17 The final part of Attorney Schoenecker's professional misconduct involves his own personal bankruptcy proceeding. On July 22, 2009, while M.F.'s collection action against him was pending and a few weeks after the two state criminal actions had been filed against him, Attorney Schoenecker filed a Chapter 7 bankruptcy petition. In his bankruptcy schedules Attorney Schoenecker claimed that he had become unemployed on June 30, 2009. He failed to disclose, however, that he had also been operating a separate solo law practice apart from his prior employment with the Clair law firm. He disclosed only the income he had earned from the Clair law firm. He did not disclose any of the income he had received from his “side” practice. In addition to filing these inaccurate schedules, Attorney Schoenecker also falsely testified under oath at a meeting of creditors on August 31, 2009, that his bankruptcy filing was true and correct and did not need to be amended, except to correct the names of some creditors.

¶ 18 On January 12, 2010, the bankruptcy court granted Attorney Schoenecker a discharge in bankruptcy. After the U.S. Trustee learned of Attorney Schoenecker's practice of law on his own apart from the Clair law firm, the Trustee moved to revoke Attorney Schoenecker's discharge in bankruptcy on the ground that the bankruptcy had been gained through fraud. Attorney Schoenecker agreed to a stipulation to revoke his bankruptcy discharge in May 2010. In the stipulation, he acknowledged that he had testified falsely at the August 2009 meeting of creditors and in a subsequent deposition taken on October 20, 2009. He also admitted that his bankruptcy schedules had not been true because he had failed to disclose that he had received income from his private law practice during the six-month period prior to filing his bankruptcy...