Office of Lawyer Regulation v. Jelinske (In re Jelinske)

Decision Date12 September 2018
Docket NumberNo. 2016AP1897-D,2016AP1897-D
Citation383 Wis.2d 604,2018 WI 94,917 N.W.2d 542
Parties In the Matter of DISCIPLINARY PROCEEDINGS AGAINST Thad W. JELINSKE, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Thad W. Jelinske, Respondent.
CourtWisconsin Supreme Court

ATTORNEY disciplinary proceeding. Attorney's license suspended.

PER CURIAM.

¶ 1 We review the report and recommendation of Referee Jonathan V. Goodman, which approves a stipulation between Attorney Thad W. Jelinske and the Office of Lawyer Regulation (OLR) by which Attorney Jelinske pled no contest to 15 of the 23 allegations of misconduct in the OLR's complaint. Consistent with the parties' stipulation, the referee recommended that this court suspend Attorney Jelinske's Wisconsin law license for 18 months, retroactive to October 16, 2017. The referee further recommended that Attorney Jelinske be assessed the full costs of the proceeding, which are $13,032.92 as of August 13, 2018. The OLR does not seek the payment of restitution.

¶ 2 Because no appeal has been filed, we review this matter pursuant to SCR 22.17(2)1 . We agree with the parties' stipulation and the referee's determination that the allegations of the disciplinary complaint and the information contained within the over two-dozen exhibits to the parties' stipulation provide an adequate factual basis for Attorney Jelinske's no contest pleas. We also agree with the referee's determination that Attorney Jelinske engaged in numerous forms of professional misconduct, and that the seriousness of this misconduct warrants an 18-month suspension of his law license. We part ways with the referee in holding that, under the circumstances present here, the suspension of Attorney Jelinske's law license should not be backdated to October 16, 2017, but rather should be made effective as of the date of this decision. We impose full costs. No restitution was sought and none is ordered.

¶ 3 The OLR complaint alleged, and the referee found based on the parties' stipulation,2 the following facts.

¶ 4 Attorney Jelinske was admitted to practice law in Wisconsin in 1986. At all relevant times, he was a partner and head of the commercial litigation department at a law firm in Milwaukee. He has no disciplinary history.

¶ 5 In July 2001, Attorney Jelinske's firm prepared a revocable trust and pour-over will for R.S.M., who had been a client of the firm for many years.

¶ 6 R.S.M. died on August 1, 2011. R.S.M.'s will named Attorney Jelinske as the personal representative of the estate and successor trustee, and named Attorney Jelinske's law partner as an alternative personal representative and trustee.

¶ 7 Attorney Jelinske commenced informal probate proceedings in Waukesha County Circuit Court, despite having no experience in probating estates. The court appointed Attorney Jelinske as the personal representative of the estate, and the will was admitted to probate.

¶ 8 The estate was insolvent. R.S.M. died owing over $3,000,000 to one particular bank alone.

¶ 9 During the probate proceedings, Attorney Jelinske wrote checks from the estate account for personal expenditures for such things as shoes, shoe repairs, clothing, and credit card expenses.

¶ 10 During the probate proceedings, Attorney Jelinske and the firm arranged for the firm to loan the estate $238,755.43 in order to pay off a mortgage on R.S.M.'s home, as the mortgage was in danger of foreclosure. Attorney Jelinske, on behalf of the estate, executed a promissory note in favor of the firm with an interest rate of eight percent. The terms of the note included a "success fee" to the firm of one-third of the net proceeds from the sale of the home. Attorney Jelinske arranged for the sale of the home for $395,000.

From the proceeds, Attorney Jelinske repaid the firm the amount of the loan, plus a $42,173.22 "success fee," plus $1,117.42 in accrued interest, leaving net proceeds to the estate of $84,348.44. Attorney Jelinske did not obtain approval from the court for the transactions involving the home.

¶ 11 R.S.M.'s estate included an interest in a hair salon. The salon was in default on a commercial lease. Attorney Jelinske arranged for a sale of the salon. He double-billed the estate in the amount of $4,700 for legal services related to this sale. He also converted to his own use $834.61 of funds from an estate bank account that he had created to manage payments to R.S.M.'s business interests, including the salon. This misappropriation created a negative balance in the estate account and triggered a non-sufficient funds fee, which he covered by transferring funds from another account associated with R.S.M.'s estate.

¶ 12 Attorney Jelinske also converted to his own use two payments—$573.61 and $1,565.52—from two separate life insurance policies held by R.S.M. Attorney Jelinske deposited the $573.61 insurance check into the estate account and, using a counter check which he endorsed as the personal representative, withdrew that same amount in cash. Attorney Jelinske endorsed the $1,565.52 insurance check as the personal representative and deposited the funds directly into his own checking account. Attorney Jelinske did not maintain complete and accurate records regarding these disbursements.

¶ 13 Contrary to Wis. Stat. § 857.05(3) (2013-14),3 Attorney Jelinske billed R.S.M.'s estate for both personal representative fees and attorney fees even though R.S.M.'s will did not authorize dual fees. By September 2013, Attorney Jelinske had billed the estate approximately $167,463 in legal fees. After payment to Attorney Jelinske and the firm for legal fees, only $174,885.58 remained available to distribute to creditors.

¶ 14 In October 2013, Attorney Jelinske filed an inventory in the probate proceedings that contained several misrepresentations. The inventory did not accurately account for the life insurance funds that he had converted to his own use; it omitted the net proceeds from the sale of the hair salon; and it failed to disclose that he had double-billed the estate for his work regarding the sale of the salon.

¶ 15 In June 2014, Attorney Jelinske filed an estate account in the probate proceedings that contained several misrepresentations. He classified as "personal representative fees" the $834.61 amount that he had converted from the estate bank account used to manage payments to R.S.M.'s business interests. He similarly classified as "personal representative fees" the $1,565.52 distribution from R.S.M.'s life insurance policy that he deposited directly into his own checking account. Attorney Jelinske also omitted the fact that he had double-billed the estate for his work in handling the hair salon sale.

¶ 16 The main creditor bank of the estate eventually began litigation against Attorney Jelinske and his law firm. At a deposition, Attorney Jelinske falsely denied that certain checks he wrote from the estate account were for personal expenses. He also falsely denied knowing about both the existence of the estate bank account that he had created to manage payments to R.S.M.'s business interests, and the purpose of the fund transfer that he made to cover the negative balance in that account caused by his misappropriation of funds.

¶ 17 During an ensuing trial to the circuit court, Attorney Jelinske falsely testified about the nature of certain expenditures he made from estate funds. He also claimed that he did not recall seeing the distribution check from R.S.M.'s life insurance policy that he had deposited into his own checking account.

¶ 18 At the conclusion of the trial, the court removed Attorney Jelinske as personal representative and found that he had violated his fiduciary obligation to the estate by converting estate assets to his own use and by arranging for the roughly $42,000 "success fee" in connection with his law firm's sale of R.S.M.'s home.

¶ 19 After the trial, the parties litigated the creditor bank's entitlement to attorney's fees and costs. According to a hearing transcript attached to the parties' stipulation,4 the circuit court described R.S.M.'s estate as having become "mired in a morass of self-dealing ethical lapses" and "conduct amounting to conversion." The circuit court found that Attorney Jelinske "was not truthful in portions of his testimony," and that he made a "continued effort to evade responsibility."

The circuit court described Attorney Jelinske's conduct throughout the administration of the estate and the subsequent trial as "shocking" and "reek[ing] of bad faith" and "delinquent dishonesty." In a subsequent written order, also attached to the parties' stipulation, the circuit court wrote that Attorney Jelinske "engaged in shocking bad faith conduct including obstruction of discovery, deliberate misrepresentation, self[-] dealing, unethical conduct, conversion, false statements[,] and less than truthful statements to the Court."

¶ 20 During the ensuing OLR investigation against Attorney Jelinske, Attorney Jelinske made various misrepresentations to the OLR.

¶ 21 The parties stipulated and the referee concluded that Attorney Jelinske's conduct, described above, amounted to the following forms of professional misconduct:

• By paying personal expenses out of fiduciary funds and failing to keep all of the estate funds in trust, Attorney Jelinske violated former SCR 20:1.15(j)(1)5 (Count 1).
• By, on behalf of the estate, entering into a loan agreement with his law firm that was a prohibited transaction under Wis. Stat. § 860.13,6 Attorney Jelinske violated SCR 20:8.4(f)7 (Count 2).
• By double-billing the estate for certain legal work, Attorney Jelinske violated SCR 20:1.5(a)8 (Count 6).
• By misappropriating funds held in fiduciary accounts and misappropriating insurance proceeds belonging to the estate, Attorney Jelinske violated former SCR 20:1.15(j)(1) (Counts 8, 10, 11).
• By failing to maintain complete and accurate records of disbursements involving life insurance proceeds and other funds belonging to fiduciary accounts, Attorney
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3 cases
  • Office of Lawyer Regulation v. Krill (In re Krill)
    • United States
    • Wisconsin Supreme Court
    • 20 February 2020
    ...albeit for conversion of lesser amounts or where mitigating circumstances were present. In re Disciplinary Proceedings Against Jelinske, 2018 WI 94, 383 Wis. 2d 604, 917 N.W.2d 542 ; In re Disciplinary Proceedings Against Voss, 2014 WI 75, 356 Wis. 2d 382, 850 N.W.2d 190 ; and In re Discipl......
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    • Wisconsin Supreme Court
    • 12 September 2018
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