Office of Lawyer Regulation v. Schiltz (In re Schiltz), 2018AP497-D

• Decision Date: 28 December 2018
• Docket Number: No. 2018AP497-D,2018AP497-D
• Citation: 2018 WI 116,385 Wis.2d 24,922 N.W.2d 509
• Parties: In the Matter of DISCIPLINARY PROCEEDINGS AGAINST David W. SCHILTZ, Attorney at Law: Office of Lawyer Regulation, Complainant, v. David W. Schiltz, Respondent.
• Court: Wisconsin Supreme Court

385 Wis.2d 24

922 N.W.2d 509

2018 WI 116

In the Matter of DISCIPLINARY PROCEEDINGS AGAINST David W. SCHILTZ, Attorney at Law:

Office of Lawyer Regulation, Complainant,

v.David W. Schiltz, Respondent.

No. 2018AP497-D

Supreme Court of Wisconsin.

Opinion Filed: December 28, 2018

ATTORNEY disciplinary proceeding. Attorney's license suspended.

PER CURIAM.

¶ 1 We review Referee Dennis J. Flynn's recommendation that the court declare Attorney David W. Schiltz in default and suspend his Wisconsin law license for a period of 18 months for professional misconduct in connection with: (1) his work on certain client matters; (2) his practice of law while his law license was suspended for noncompliance with mandatory continuing legal education (CLE) reporting requirements; and (3) his failure to disclose his unauthorized practice of law in his reinstatement petition to the Board of Bar Examiners (BBE). The referee also recommended that this court order Attorney Schiltz to successfully complete 25 hours of continuing legal education (CLE) courses as deemed appropriate by the Office of Lawyer Regulation (OLR). Finally, the referee recommended that the court order Attorney Schiltz to make restitution to a former client and to pay the full costs of this proceeding.

¶ 2 Because no appeal has been filed, we review the referee's report pursuant to Supreme Court Rule (SCR) 22.17(2).¹ After conducting our independent review of the matter, we agree with the referee that, based on Attorney Schiltz's failure to answer the complaint filed by the OLR, the OLR is entitled to a default judgment. However, we disagree with the referee that Attorney Schiltz's professional misconduct warrants an 18-month suspension of his Wisconsin law license. We conclude, instead, that a nine-month suspension is warranted. We order Attorney Schiltz to make restitution and to successfully complete 25 hours of CLE courses as deemed appropriate by the OLR. We also find it appropriate to impose the full costs of this proceeding on Attorney Schiltz, which are $4,705.70 as of August 27, 2018.

¶ 3 Attorney Schiltz was admitted to practice law in Wisconsin in 1987. He had no disciplinary history prior to the filing of this complaint. His law license has been administratively suspended for failing to comply with CLE reporting requirements since May 31, 2016, and for failing to pay annual bar dues and to provide a required trust account certification since October 31, 2017.

¶ 4 On March 15, 2018, the OLR filed the current complaint against Attorney Schiltz. On June 25, 2018, the OLR filed an amended complaint. The amended complaint alleges a total of 25 counts of professional misconduct. The following facts are taken from the OLR's amended complaint, which, as discussed more fully below, Attorney Schiltz has admitted by default.

Practice During Suspension (Count 1)

¶ 5 On May 31, 2016, the BBE suspended Attorney Schiltz's law license due to his failure to comply with CLE reporting requirements. During his suspension, Attorney Schiltz continued to meet with clients and appear in court, primarily in estate matters. The OLR alleged in its amended complaint that this conduct gave rise to the following violation:

• Count 1: By continuing to practice law following the May 31, 2016 suspension of his law license, Attorney Schiltz violated SCR 22.26(2),² and SCR 31.10(1),³ enforceable via SCR 20:8.4(f).⁴

Estate of W.E.S. (Counts 2-3)

¶ 6 W.E.S. died in May 2015. In December 2015, the probate court appointed C.R. as the personal representative of W.E.S.'s estate. Because C.R. resided out of state, the court appointed Attorney Schiltz as the estate's resident agent.

¶ 7 At the time of his death, W.E.S. owned a 50 percent interest in certain real property. The property sold in February 2016, and Attorney Schiltz acted as the title company's disbursement agent for the sale. Attorney Schiltz received the $104,766.75 net proceeds of the sale, from which he was to disburse 50 percent of the sale proceeds ($52,383.38) to W.E.S.'s estate. He did not do so.

¶ 8 In August 2016, C.R. retained a lawyer to represent him and the estate in an effort to obtain the sale proceeds from Attorney Schiltz. The effort was unsuccessful.

¶ 9 In November 2016, W.E.S.'s estate sued Attorney Schiltz and the title company to obtain the owed portion of the real estate sale proceeds. Attorney Schiltz did not appear or participate in the civil case. In April 2017, the circuit court issued a default judgment against Attorney Schiltz for $55,875.59, representing the sale proceeds plus attorney fees. By early May 2017, Attorney Schiltz had paid $52,383.38 of the judgment, which represented the sale proceeds.

¶ 10 Although the BBE suspended Attorney Schiltz's law license on May 31, 2016, Attorney Schiltz did not inform either C.R. or the probate court of his suspension.

¶ 11 The OLR alleged in its amended complaint that the conduct described above gave rise to the following two violations:

• Count 2: By failing to promptly deliver $52,383.38 to the estate of W.E.S., Attorney Schiltz violated former SCR 20:1.15(d)(1) and current SCR 20:1.15(e)(1).⁵

• Count 3: By failing to notify C.R. that his Wisconsin law license had been suspended, by failing to advise C.R. to seek successor counsel, and by failing to provide written notification of his suspension to the probate court, Attorney Schiltz violated SCR 22.26(1).⁶

Estate of J.S. (Counts 4-8)

¶ 12 J.S. died in March 2015 with $3,000 in assets. J.S.'s son, W.R.S., hired Attorney Schiltz to assist him with J.S.'s affairs.

¶ 13 In May 2015, Attorney Schiltz drafted and had W.R.S. sign a transfer by affidavit form, seeking to have J.S.'s $3,000 in assets transferred to W.R.S. Consistent with the form's instructions, Attorney Schiltz sent a copy of the form to the Estate and Casualty Recovery Section (ECRS) of the Wisconsin Department of Health Services.

¶ 14 In July 2015, and again in February 2016, the ECRS wrote to Attorney Schiltz, asking him to provide information that would determine if J.S.'s estate owed any funds to the ECRS. Attorney Schiltz did not respond.

¶ 15 Between February and May of 2016, W.R.S. called Attorney Schiltz 16 times to find out the status of the matter. Attorney Schiltz did not respond.

¶ 16 In June 2016, Attorney Schiltz told W.R.S. that he had taken care of the ECRS claim. This was false.

¶ 17 Later in June 2016, the ECRS again wrote to Attorney Schiltz seeking documentation and any funds owed. That same day, the ECRS contacted W.R.S. directly, who learned that the matter had not been resolved. W.R.S. provided the requested information to the State.

¶ 18 In July 2016, W.R.S. filed a grievance with the OLR against Attorney Schiltz. Attorney Schiltz did not cooperate with the ensuing OLR investigation. On February 13, 2017, this court temporarily suspended Attorney Schiltz's law license for his non-cooperation.

¶ 19 Although the BBE suspended Attorney Schiltz's law license on May 31, 2016, Attorney Schiltz did not inform either W.R.S. or the probate court of his suspension.

¶ 20 The OLR alleged in its amended complaint that the conduct described above gave rise to the following five violations:

• Count 4: By failing to respond to the ECRS's attempts to contact him regarding its claim against his client, the estate of J.S., between July 2015 and June 2016, Attorney Schiltz violated SCR 20:1.3.⁷

• Count 5: By failing to respond to W.R.S.'s telephone calls between February and May 2016 requesting information regarding the status of the probate matter, Attorney Schiltz violated SCR 20:1.4(a)(4).⁸

• Count 6: By falsely informing W.R.S. that he had resolved the ECRS claim against the estate of J.S. when he had not done so, Attorney Schiltz violated SCR 20:8.4(c).⁹

• Count 7: By failing to notify W.R.S. that his license to practice law had been suspended, by failing to advise W.R.S. to seek successor counsel, and by failing to provide written notification of his suspension to the probate court, Attorney Schiltz violated SCR 22.26(1).

• Count 8: By willfully failing to respond timely to the OLR's written requests for information, Attorney Schiltz violated SCR 22.03(2)¹⁰ and SCR 22.03(6),¹¹ enforceable via SCR 20:8.4(h).¹²

Municipal representation (Counts 9-11)

¶ 21 At the time of his May 31, 2016 suspension for failure to comply with CLE reporting requirements, Attorney Schiltz had been the attorney for a particular town for several years, including acting as municipal prosecutor. Attorney Schiltz did not timely inform the town or the town's municipal judge of his suspension, nor did he timely advise the town to seek successor counsel.

¶ 22 From June of 2016 through at least April 30, 2017, Attorney Schiltz continued to represent the town in municipal court and other proceedings.

¶ 23 In May 2017, the OLR received a grievance against Attorney Schiltz concerning his representation of the town while his law license was suspended. Attorney Schiltz did not cooperate with the OLR's subsequent investigation.

¶ 24 The OLR alleged in its amended complaint that the course of conduct described above gave rise to the following three violations:

• Count 9: By continuing until April 30, 2017 to actively represent the town following the May 31, 2016 suspension of his law license, Attorney Schiltz violated SCR 22.26(2) and SCR 31.10(1), enforceable via SCR 20:8.4(f).

• Count 10: By failing to notify the town that his license to practice law had been suspended, by failing to advise the town to seek successor counsel, and by failing to provide written notification of his suspension to the municipal court before which he had matters pending, Attorney Schiltz violated SCR 22.26(1).

• Count 11: By failing to respond timely to the OLR's written requests for information, Attorney Schiltz violated SCR 22.03(2) and SCR 22.03(6), enforceable via SCR 20:8.4(h).

Limited Liability Partnership Representation (Counts 12-15)

¶ 25 In March 2015, a condominium association filed a civil suit against a limited liability...