Office of Lawyer Regulation v. Constant (In re Disciplinary Proceedings Against Terry L. Constant)
| Decision Date | 28 January 2020 |
| Docket Number | No. 2017AP666-D,2017AP666-D |
| Citation | 937 N.W.2d 599,390 Wis.2d 1,2020 WI 4 |
| Parties | In the MATTER OF DISCIPLINARY PROCEEDINGS AGAINST Terry L. CONSTANT, Attorney at Law: Office of Lawyer Regulation, Complainant-Respondent-Cross-Appellant, v. Terry L. Constant, Respondent-Appellant-Cross-Respondent. |
| Court | Wisconsin Supreme Court |
ATTORNEY disciplinary proceeding. Attorney's license suspended.
¶1 Attorney Terry L. Constant has appealed a report and recommendation filed by Referee Dennis J. Flynn, concluding that Attorney Constant committed eight counts of professional misconduct and recommending that his license to practice law in Wisconsin be suspended for five months. Attorney Constant argues that the referee mistakenly allowed his bank records into evidence; that the Office of Lawyer Regulation (OLR) failed to meet its burden of proof as to the eight counts of misconduct; that the referee erred in making a credibility determination; and that a five-month suspension of his license to practice law is an excessive sanction. The OLR has filed a cross-appeal arguing that a five-month suspension is insufficient and that this court should suspend Attorney Constant's license for at least one year.
¶2 Upon careful review of this matter, we uphold the referee's findings of fact and conclusions of law. We conclude that a six-month suspension of Attorney Constant's Wisconsin law license is an appropriate sanction for the misconduct at issue. We also find it appropriate to follow our normal custom of imposing the full costs of this disciplinary proceeding, which are $13,409.63 as of December 10, 2019, on Attorney Constant.
¶3 Attorney Constant was admitted to practice law in Wisconsin in 1968 and practices in Kenosha. He has no prior disciplinary history.
¶4 On April 14, 2017, the OLR filed a complaint alleging nine counts of misconduct. In 2009, M.B. hired Attorney Constant to represent her in a personal injury case. In 2010 and 2011, Attorney Constant disbursed 13 checks from his trust account at U.S. Bank in connection with M.B.'s claim. Attorney Constant had not deposited any funds into the trust account for his representation of M.B. when he wrote the checks.
¶5 In January 2012, Attorney Constant filed a lawsuit on behalf of M.B. in Kenosha County Circuit Court. In the first half of 2013, Attorney Constant settled M.B.'s claim for $175,000. Between June 14 and July 5, 2013, Attorney Constant disbursed six checks from his client trust account totaling $3,144 in connection with M.B.'s case. One of the checks was payable to Attorney Constant in the amount of $1,000. During this time period, Attorney Constant had not deposited any funds into his trust account for M.B.'s case.
¶6 On July 9, 2013, Attorney Constant deposited the $175,000 settlement check into his trust account. He did not promptly notify M.B. in writing that he had received and deposited the funds. Attorney Constant's settlement statement showed he was entitled to $50,000 in attorney's fees and $5,290.93 in costs.
¶7 Between July 11, 2013 and October 10, 2013, Attorney Constant disbursed $57,300 in attorney fees and $2,028.71 for costs in the M.B. matter out of funds in his trust account. After these disbursements, the trust account held $178,359.13, of which $115,421.29 was attributable to M.B.'s case.
¶8 During November and December of 2013, Attorney Constant transferred $16,200 from his trust account to his business account without identifying the client matter. During the same time frame, Attorney Constant withdrew $4,600 in cash from the trust account without identifying the purpose or client matter. On December 31, 2013, the trust account had a balance of $86,386.58. It should have held $115,421.29 in the M.B. matter alone.
¶9 The $175,000 settlement amount was subject to numerous liens, and Attorney Constant negotiated settlements with the lienholders so that M.B. would recover a portion of the $175,000. On January 10, 2014, Attorney Constant disbursed a $21,882.35 trust account check to the federal government in the M.B. matter. After issuing this check, the trust account held $70,108.53. Attorney Constant should have been holding $93,538.94 for the M.B. matter alone.
¶10 On January 21, 2014, Attorney Constant issued a check for $40,000 to M.B. in partial payment of the settlement funds. At that point his trust account should have held $53,538.94 in remaining funds for M.B., but the entire balance in the trust account was $19,021.16.
¶11 On January 2, 2015, Attorney Constant's trust account had a balance of $363.11. On January 13, 2015, Attorney Constant deposited $800,000 into the trust account which was unrelated to the M.B. matter. Attorney Constant's trust account records show that on January 14, 2015 he disbursed $25,000 from the trust account to himself for reimbursement of costs in the M.B. matter.
¶12 On January 16, 2015, Attorney Constant issued a $10,000 trust account check to M.B. Without the $800,000 deposit a few days earlier, which was not related to M.B.'s case, the trust account did not have enough funds to cover the $10,000 check.
¶13 Attorney Constant's trust account records show that on February 7, 2015, he paid M.B. $4,540.58. As of the date the OLR filed its complaint, Attorney Constant retained $2,100.65 in settlement proceeds due to M.B. The record indicates that during the prosecution of this case, Attorney Constant made full restitution to M.B.
¶14 On April 22, 2014, Attorney Constant transferred $15,000 in personal funds from his business account to his trust account, raising the balance of the trust account to $15,759.57.
¶15 On October 29, 2014, Attorney Constant deposited $9,500.94 into his trust account in connection with the K.C. matter. After this deposit, the trust account had a balance of $9,548.98.
¶16 On October 30, 2014, Attorney Constant withdrew $4,300 in attorney fees from his trust account and deposited that amount into his business account. The remaining balance in the trust account was then $5,248.98.
¶17 On October 31, 2014, Attorney Constant wrote two trust account checks, one for $68.30 for a lien in the K.C. case and $1,467.32 to K.C.
¶18 On November 3, 2014, Attorney Constant transferred $2,000 from his trust account to his business account. On November 4, 2014, Attorney Constant withdrew $500 in cash from the trust account. On November 5, 2014, Attorney Constant withdrew $1,500 in cash from the trust account, leaving a balance of $1,248.98. That same day, U.S. Bank denied payment on Attorney Constant's October 31, 2014 check in the amount of $1,467.32 due to insufficient funds. On November 7, 2014, U.S. Bank denied payment on the check again, as Attorney Constant had not deposited any additional funds into the trust account.
¶19 After the denial of payment by U.S. Bank, Attorney Constant wrote a replacement check payable to K.C. in the amount of $1,467.32. The replacement check cleared the trust account on November 17, 2014.
¶20 In October and November of 2014, Attorney Constant made 13 cash withdrawals totaling $11,730 from his trust account. During October and December of 2014, Attorney Constant made eight electronic transfers from the trust account into his business account. He had made other electronic transfers from the trust account to the business account since July 2013.
¶21 Attorney Constant maintained a transaction register for October and November of 2014, but it did not include accurate balances following his transactions; the date, payee, and amount of all disbursements; a $500 transfer from the trust account to the business account; various checks that were issued; return of the K.C. checks that caused the overdrafts; the identity of all clients for whom Attorney Constant disbursed funds; and accurate dates for the transactions.
¶22 Attorney Constant's client ledgers did not consistently contain accurate dates, amounts of deposits and disbursements which he had made on his clients' behalf, nor did it consistently contain balances of funds remaining in the trust account pertaining to each client.
¶23 In November 2014, Attorney Constant's bank informed the OLR of the overdrafts in Attorney Constant's trust account. On December 9, 2014, the OLR notified Attorney Constant of its investigation into the overdrafts. During the investigation, Attorney Constant provided the OLR with trust account and client records that were sometimes inconsistent with each other and incomplete. During the investigation, Attorney Constant wrote to the OLR representing he had not made cash withdrawals from his trust account.
¶24 The OLR's complaint alleged the following counts of misconduct:
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Office of Lawyer Regulation v. Constant (In re Constant)
...history consists of a six-month suspension of his license to practice law in 2020. In re Disciplinary Proceedings Against Constant, 2020 WI 4, 390 Wis. 2d 1, 937 N.W.2d 599 ( Constant I ). That case involved nine counts of misconduct involving numerous trust account violations, conversion, ......
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Constant v. Constant
...also did not respond to further inquiries in January 2020 about the status of S.R.'s claims and settlement. ¶27 On January 28, 2020, in Constant I, this suspended Attorney Constant's license to practice law in Wisconsin for six months, effective March 10, 2020. Nonetheless, in February and ......