Office of Lawyer Regulation v. Stern (In re Disciplinary Proceedings Against Walter W. Stern)

• Decision Date: 23 November 2021
• Docket Number: No. 2020AP201-D,2020AP201-D
• Citation: 2021 WI 84,966 N.W.2d 622,399 Wis.2d 451
• Parties: In the MATTER OF DISCIPLINARY PROCEEDINGS AGAINST Walter W. STERN, III, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Walter W. Stern, III, Respondent.
• Court: Wisconsin Supreme Court

399 Wis.2d 451

966 N.W.2d 622

2021 WI 84

In the MATTER OF DISCIPLINARY PROCEEDINGS AGAINST Walter W. STERN, III, Attorney at Law:Office of Lawyer Regulation, Complainant,

v.Walter W. Stern, III, Respondent.

No. 2020AP201-D

Supreme Court of Wisconsin.

Opinion Filed: November 23, 2021

ATTORNEY disciplinary proceeding. Attorney's license suspended.

PER CURIAM.

¶1We review a report filed by Referee Jean A. DiMotto, recommending the court suspend Attorney Walter W. Stern, III's license to practice law for a period of 45 days for three counts of professional misconduct. No appeal has been filed so we consider this matter pursuant to Supreme Court Rule (SCR) 22.17(2).¹

¶2 We approve and adopt the referee's findings of fact and conclusions of law. We conclude that the seriousness of Attorney Stern's misconduct warrants a 60-day license suspension and we impose the full costs of this proceeding on Attorney Stern. The OLR did not seek restitution in this matter and no restitution is ordered.

¶3 Attorney Stern has been licensed to practice law in Wisconsin since 1974 and has been the subject of five previous disciplinary proceedings. In August of 1988, the Board of Attorneys Professional Responsibility (BAPR), the predecessor to the OLR, imposed a private reprimand on Attorney Stern for professional misconduct consisting of communicating on the subject of the representation with a party he knew to be represented by a lawyer without the consent of that lawyer.

¶4 In September of 1992, BAPR publicly reprimanded Attorney Stern for professional misconduct consisting of advancing a factual position without a basis; failing to maintain the respect due courts of justice and judicial officers; violating the Attorney's Oath; and engaging in offensive personality. Public Reprimand of Walter W. Stern, III, No. 1992-11 (electronic copy available at https://compendium.wicourts.gov/app/raw/000305.html).

¶5 In November of 1993, Attorney Stern consented to a private reprimand for professional misconduct consisting of failing to pay a third-party lien from settlement proceeds after receiving notice of the lien. BAPR Private Reprimand, No. 1993-25 (electronic copy available at https://compendium.wicourts.gov/app/raw/000111.html).

¶6 In March of 2008, Attorney Stern consented to a private reprimand for professional misconduct consisting of committing criminal acts that reflected adversely on his honesty, trustworthiness, or fitness as a lawyer. The discipline was a result of Attorney Stern pleading no contest to a second and third offense of operating a motor vehicle while under the influence. OLR Private Reprimand, No. 2008-08.

¶7 In 2013, Attorney Stern's license was suspended for two years for professional misconduct consisting of engaging in conduct resulting in his federal criminal conviction for conspiring to commit money laundering. In re Disciplinary Proceedings Against Stern, 2013 WI 46, 347 Wis. 2d 552, 830 N.W.2d 674. Two months later, his conviction was reversed by the United States Circuit Court for the Seventh Circuit. He was released from prison and pled guilty to misdemeanor contempt of court. Attorney Stern's license to practice law was reinstated on February 4, 2016. In re Reinstatement of Stern, 2016 WI 6, 366 Wis. 2d 431, 874 N.W.2d 93.

¶8 On January 30, 2020, the OLR filed a complaint alleging that Attorney Stern committed three counts of professional misconduct involving his representation of two clients. The OLR later amended its complaint to add a fourth count, alleging that Attorney Stern violated SCR 20:1.18(b) by having a discussion with a prospective client and thereafter by using or revealing to other parties information he learned in the consultation. However, the OLR dismissed this fourth count on March 22, 2021.

¶9 In April 2021, Attorney Stern executed a no contest plea to the three remaining counts of misconduct alleged in the amended complaint and the parties executed a stipulation that added some additional context for the allegations. The parties disputed the appropriate sanction. The OLR recommended a 90-day license suspension and Attorney Stern sought a public reprimand.

¶10 On August 6, 2021, the referee filed findings of fact, conclusions of law, and a recommendation. She accepted the parties' stipulation and Attorney Stern's no contest plea and, based on admissions in Attorney Stern's Answer to the Amended Complaint as well as the stipulation and no contest plea, she determined that there was clear, satisfactory, and convincing evidence that Attorney Stern violated the three counts of professional conduct, as alleged. The referee recommended this court suspend Attorney Stern's license to practice law for 45 days and impose full costs upon him.

¶11 We will affirm a referee's findings of fact unless they are clearly erroneous; conclusions of law are reviewed de novo. See In re Disciplinary Proceedings Against Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747. This court is free to impose whatever discipline it deems appropriate, regardless of the referee's recommendation. See In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.

¶12 The first two counts of misconduct pertain to Attorney Stern's representation of F.J. Attorney Stern first met with F.J. and F.J.'s mother (who had a power of attorney for F.J.) on February 11, 2016, shortly after his law license was reinstated following his 2013 license suspension. F.J. was seeking legal representation in a pending child support action, a dog bite injury case, and regarding potential claims against a neighbor and the Wauwatosa Police Department. As Attorney Stern was aware, F.J. suffers some cognitive challenges resulting from injuries he sustained when he was the victim of a serious beating several years ago.

¶13 Daniel Storm, f/k/a Daniel Slaughter, an associate of Attorney Stern, also attended this meeting. Daniel Storm had been working as an investigator for Attorney Stern for several months at the time of this meeting, including while Attorney Stern's law license was suspended. The parties stipulated that Attorney Stern believed that F.J. had a prior, lengthy relationship with Daniel Storm, because Storm had posted bond for F.J. when F.J. was held in the county jail. Attorney Stern also believed that F.J. and/or his mother acknowledged that they owed Storm $17,000 for work that Storm had performed on F.J.'s behalf.

¶14 During that meeting, F.J. agreed to pay $4,000 in fees for representation in each of the child support and dog bite cases. At the meeting, Attorney Stern provided F.J. and his mother with a document entitled "Promissory Note With Payment on Demand" which stated that F.J. was to pay Attorney Stern $25,000 by February 29, 2016 toward the child support and dog bite matters ($8,000) and for the work performed by Storm ($17,000). Attorney Stern also asked F.J. and his mother to sign an "Irrevocable Assignment" which purported to give Attorney Stern the right to ask for $20,000 upon demand toward the Promissory Note.

¶15 Critically, Attorney Stern did not notify F.J. in writing of the desirability of seeking independent counsel, give F.J. a reasonable opportunity to seek the advice of independent counsel on the transaction, or obtain informed written consent from F.J. regarding the essential terms of the transaction and Attorney Stern's role in the transaction and whether Attorney Stern was representing F.J. in the transaction.

¶16 F.J. and his mother signed the Promissory Note and the "Assignment" that day. F.J. also signed a contingent fee agreement for his representation for potential claims against his neighbor, as well as a contingent fee agreement for his potential claims against the Wauwatosa Police Department.

¶17 The OLR alleged, the parties stipulated, and the referee concluded that by having F.J. and his mother sign a promissory note and assignment for $25,000 without notifying them in writing of the desirability of seeking, and giving them a reasonable opportunity to seek, the advice of independent counsel, and without informing them and obtaining written consent from them about the essential terms of the transaction and Attorney Stern's role in the transaction including whether he was representing them in the transaction, Attorney Stern violated SCR 20:1.8(a).²

¶18 On February 16, 2016, Attorney Stern appeared for F.J. in the child support, termination of parental rights and adoption case in Winnebago County Circuit Court and moved the court to appoint a guardian ad litem for F.J. to provide the court with information about F.J.'s competency. Eventually, the court also approved a stipulation allowing Attorney Stern to expend $2,000 of funds retained in his trust account to hire Dr. Terry Bruett to conduct a psychological evaluation of F.J.

¶19 There was a significant delay in paying Dr. Bruett for the services he provided. Accordingly, the OLR alleged, the parties stipulated, and the referee concluded that, by failing to promptly deliver $2,000 directly to Dr. Bruett from funds held in trust for services rendered by Dr. Bruett, Attorney Stern violated SCR 20:1.15(e)(1).³ It is not disputed that Dr. Bruett has since been paid in full.

¶20 The third count of professional misconduct relates to Attorney Stern's actions in the matter of the Estate of T.T. In April 2016, T.T. died while in custody at the Milwaukee County jail. T.T. was survived by two adult sons, and other family members. A Seattle law firm agreed to provide the family with legal guidance and subsequently contacted local Milwaukee counsel to assist them. The family was advised to establish an estate for T.T. so the estate could pursue claims against Milwaukee County.

¶21 Initially, T.R., was the family's main contact person and she offered to be the estate's representative. Local counsel prepared the estate paperwork, including a Petition for Special Administration naming T.R. as Special Administrator of the T.T. Estate....