Office of Lawyer Regulation v. Raneda, 2011AP817–D.

• Decision Date: 01 May 2012
• Docket Number: No. 2011AP817–D.,2011AP817–D.
• Citation: 340 Wis.2d 273,811 N.W.2d 412,2012 WI 42
• Parties: In the Matter of DISCIPLINARY PROCEEDINGS AGAINST J. Manuel RANEDA, Attorney at Law.Office of Lawyer Regulation, Complainant, v. J. Manuel Raneda, Respondent.
• Court: Wisconsin Supreme Court

2012 WI 42

340 Wis.2d 273

811 N.W.2d 412

In the Matter of DISCIPLINARY PROCEEDINGS AGAINST J. Manuel RANEDA, Attorney at Law.Office of Lawyer Regulation, Complainant,

v.J. Manuel Raneda, Respondent.

No. 2011AP817–D.

Supreme Court of Wisconsin.

Decided May 1, 2012.

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

[340 Wis.2d 274] ¶ 1 On November 28, 2011, Referee Hannah C. Dugan issued a report recommending that Attorney J. Manuel Raneda be declared in default, concluding that Attorney Raneda engaged in numerous counts of professional misconduct, and recommending that his license to practice law in Wisconsin be suspended for one year and that he pay the full costs of this proceeding.

¶ 2 We conclude that the referee's findings of fact are supported by satisfactory and convincing evidence. Since Attorney Raneda failed to present a defense despite being given multiple opportunities to do so, we declare him to be in default. We further agree with the referee that Attorney Raneda's professional misconduct warrants a suspension of his license to practice law in Wisconsin for a period of one year. We also agree that the full costs of the proceeding, which are $3,232.05 as of December 19, 2011, should be assessed against Attorney Raneda.

¶ 3 Attorney Raneda was admitted to practice law in Wisconsin in 2002. He practiced in Milwaukee. According to the record, he now lives in San Francisco, California. He has no previous disciplinary history.

¶ 4 On April 12, 2011, the Office of Lawyer Regulation (OLR) issued a complaint against Attorney Raneda alleging 14 counts of misconduct with respect to his handling of two client matters.

¶ 5 The first client matter detailed in the OLR's complaint involved Attorney Raneda's representation of T.W. T.W. fell behind on his mortgage payments, and in 2006 a judgment of foreclosure was entered against him. In March 2007 T.W.'s home was sold at a sheriff's sale. Prior to a hearing to confirm the sheriff's sale, a real estate investor contacted T.W. and offered to purchase the home pursuant to a sale-leaseback arrangement whereby T.W. would sell the house to the investor, enter into a residential lease agreement, and later purchase the house back once T.W.'s credit was restored.

¶ 6 T.W. sold the home to the investor's assignee and signed a residential month-to-month lease agreement whereby he agreed to pay rent in the amount of $1,500 per month. The agreement included an option for T.W. to repurchase the home once his credit history was repaired. The parties later agreed to raise the rental payments to $1,800 per month.

¶ 7 T.W. was unable to pay the monthly rent or repurchase the home. In December 2007 the owner of the home filed a small claims complaint seeking to evict T.W. from the home. T.W. hired Attorney Raneda to defend him in the eviction action. Attorney Raneda filed an answer, counterclaims, and a third-party summons and complaint naming the real estate investor and other parties as third-party defendants. The pleadings filed by Attorney Raneda alleged that the sale-leaseback arrangement was a fraud and that the defendants had made multiple misrepresentations regarding the sale and lease of the property.

¶ 8 On January 4, 2008, the homeowner, through his attorney, Matthew O'Neill, filed a motion for judgment of eviction and a writ of restitution. The circuit court held a hearing on January 16, 2008. The court denied the motion for judgment of eviction, ordered T.W. to deposit into a trust account all past due rents by February 1, 2008, and ordered T.W. to continue paying all future rent into the trust account until further order of the court. The court also ordered Attorney Raneda to provide documentation showing the rent deposits.

¶ 9 Attorney Raneda agreed to keep the rent payments in his client trust account. On January 31, 2008, Attorney Raneda filed an affidavit with the court showing that T.W. had paid $5,100 into his client trust account, representing past due rent from October 2007 through January 2008. Attorney Raneda stated in the affidavit that the funds were deposited into his IOLTA trust account, and Attorney Raneda stated he would retain the funds until further court order.

¶ 10 Notwithstanding the express statements made in his affidavit, Attorney Raneda took $5,000 out of his client trust account on February 1, 2008, to pay himself attorney's fees. He did not notify the court or opposing counsel of the withdrawal.

¶ 11 A second hearing was held on February 19, 2008, to clarify the precise terms of the court's earlier order, including whether T.W. was to pay $1,500 or $1,800 monthly rent. By order of February 20, 2008, the circuit court required T.W. to make monthly deposits into Attorney Raneda's trust account for past due rents at $1,800 per month until the matter was fully resolved. The court ordered that, upon request, T.W. was to provide the court and opposing counsel proof of each deposit. Attorney Raneda did not tell the court or opposing counsel that he had already taken $5,000 out of his client trust account to pay himself attorney's fees, and he did not provide a full written accounting of his distribution of the trust property.

¶ 12 Attorney O'Neill made multiple written requests for proof from Attorney Raneda that T.W. was continuing to make rent payments into Attorney Raneda's trust account. Attorney Raneda told Attorney O'Neill he had “received payments from [his] client” and that he would provide details about the payments.

¶ 13 On March 24, 2008, Attorney Raneda filed a motion for default judgment. On April 14, 2008, he filed a motion for declaratory judgment. On April 29, 2008, the homeowner filed a motion for sanctions against T.W. seeking dismissal of his counterclaims and other claims. On May 2, 2008, the circuit court denied Attorney Raneda's motions for default and declaratory judgment. The court ruled, however, that the buyback agreement entered into by T.W. failed to satisfy the statute of frauds.

¶ 14 On May 9, 2008, Attorney Raneda filed a response to the sanction motion in which he denied that he had disobeyed the terms of the court's February 20, 2008 order. Attorney Raneda's response to the motion for sanctions included an affidavit from T.W. showing that he had paid $8,728 into Attorney Raneda's trust account. Of that amount, Attorney Raneda had already withdrawn $5,000.

¶ 15 The circuit court held a hearing on the motion for sanctions on May 14, 2008. Despite having already paid himself $5,000, Attorney Raneda said T.W. did not have the ability to pay him and that, “I haven't gotten paid.” The circuit court denied the request for sanctions, but reaffirmed its February 20, 2008 order that required T.W. to pay rent owed into an escrow account. The court warned Attorney Raneda that in the event of T.W.'s failure to pay the rent, the court would strike T.W.'s pleadings as a sanction.

¶ 16 On May 14, 2008, Attorney Raneda wrote himself a check from his client trust account in the amount of $3,700 for attorney's fees. He did not notify the court or opposing counsel of this withdrawal.

¶ 17 On May 28, 2008, the circuit court entered a written order reiterating the requirement that T.W. pay into escrow all amounts due under the February 20, 2008 order. That same day Attorney Raneda wrote the court indicating that T.W. was unable to meet the financial obligations set by the court at the May 14, 2008 hearing. He noted that T.W. had decided to file an interlocutory appeal. Attorney Raneda did not inform the court that he had removed $8,700 from his trust account to pay himself attorney's fees.

¶ 18 Also on May 28, 2008, Attorney Raneda wrote Attorney O'Neill saying that T.W. had requested the withdrawal of the remaining funds left in his client trust account. Attorney Raneda also said he had a priority lien over the funds. On May 29, 2008, the homeowner filed an additional motion for sanctions for T.W.'s failure to comply with the circuit court orders. The circuit court granted the sanction motion on June 23, 2008, finding that T.W. had failed to comply with a valid court order and that his conduct was “egregious,” “without justifiable excuse,” and “repetitive.” The court ordered T.W.'s counterclaims and third-party complaint dismissed and also ordered that the escrowed funds be turned over to the homeowner. At no time did Attorney Raneda inform the court or opposing counsel that the escrowed funds had already been distributed to pay his attorney's fees.

¶ 19 On July 11, 2008, the circuit court issued a written order striking T.W.'s counterclaims and third-party claims due to his failure to obey the court's previous orders. The July 11 order also required that Attorney Raneda was to pay the homeowner's counsel all funds held in escrow within ten days.

¶ 20 On August 1, 2008, Attorney Raneda filed a notice of appeal of the sanction order. That same day the homeowner filed a renewed motion for summary judgment on the eviction action. On September 3, 2008, the circuit court held a hearing and granted summary judgment in favor of the homeowner. At the close of the hearing, the court admonished Attorney Raneda to “keep holding” the money in escrow so it could be collected by the homeowner in a garnishment action.

¶ 21 On September 15, 2008, the circuit court entered a written order granting the homeowner's motion for summary judgment and dismissing the action. The court ordered restitution to the homeowner in the amount of $20,700, representing the rent T.W. owed. T.W. had already paid $12,000 rent to the homeowner. The restitution order thus placed in dispute the $8,700 deposited by T.W. into Attorney Raneda's client trust account. Attorney Raneda filed a notice of appeal from that order on September 17, 2008, and the court of appeals consolidated T.W.'s two appeals.

¶ 22 On October 10, 2008, the homeowner filed a non-earnings garnishment action against Attorney Raneda to collect the...