Office of Lawyer Regulation v. Batterman (In re Disciplinary Proceedings Against Thomas W. Batterman)

Docket Number2022AP1213-D
Decision Date24 February 2023
Citation406 Wis.2d 14,2023 WI 13,985 N.W.2d 779
Parties In the MATTER OF DISCIPLINARY PROCEEDINGS AGAINST Thomas W. BATTERMAN, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Thomas W. Batterman, Respondent.
CourtWisconsin Supreme Court

ATTORNEY disciplinary proceeding. Attorney's license revoked.

PER CURIAM.

¶1 Attorney Thomas W. Batterman has filed a petition for the consensual revocation of his license to practice law in Wisconsin pursuant to Supreme Court Rule (SCR) 22.19.1 In his petition, Attorney Batterman states that he cannot successfully defend against the allegations of misconduct in connection with a grievance investigated by the Office of Lawyer Regulation (OLR).

¶2 Attorney Batterman was admitted to practice law in Wisconsin in 1982. His license is currently active and in good standing. He has not practiced law since 1985, does not maintain a law office and has no clients, and has no intention to practice law in the future. He has no previous disciplinary history.

¶3 On July 19, 2022, OLR filed a complaint against Attorney Batterman alleging four counts of misconduct. The first two counts of misconduct arose out of Attorney Batterman's representation of J.G.

¶4 Attorney Batterman is the founder, registered agent, and principal of Financial Fiduciaries and the president and majority shareholder of WTC, Inc. (WTC), the sole member of Financial Fiduciaries. In April 1988, J.G. established and funded a revocable living trust which provided that if J.G.’s wife should predecease him, the assets remaining in the trust, together with any assets received into the trust, shall be distributed to the following charities: 25% to the Diocese of the Catholic Church for Superior, Wisconsin, for educational purposes; 25% to Bruce High School, Bruce, Wisconsin, to fund scholarships for students pursuing a college education; 25% to the Alzheimer's Association for research; and 25% to the American Cancer Society for research.

¶5 In March 2011, J.G. amended the trust to provide that the bequest to the American Cancer Society be paid through local fundraising events such as Relay for Life in a manner and for such purposes as the organization saw fit. The amendment also changed the successor trustee from Vigil Asset Management Group, Inc. to Vigil Trust and Financial Advocacy of Wausau, Wisconsin, or its successors (Vigil).

¶6 WTC was the entity that provided investment management services to Vigil's trust clients. Vigil was a registered tradename for Investors Independent Trust Company (IITC). Attorney Batterman did not have an ownership interest in IITC and was neither an employee nor an officer of IITC.

¶7 A trust services agreement between WTC and IITC permitted employees of WTC and Financial Fiduciaries to assist IITC with ministerial duties in the administration of trusts in which Vigil is to be named trustee.

¶8 J.G. died on December 27, 2014. At that time, the trust was required to distribute 25% of the trust assets to each of the four beneficiaries. Vigil was the trustee.

¶9 In February of 2015, Attorney Batterman discussed the administration of the trust with his then-fiancé, D.R., who was the senior manager for the Relay for Life division of the American Cancer Society. Attorney Batterman and D.R. discussed an incremental distribution to the American Cancer Society over a period of up to ten years and discussed splitting the gift between the Eagle River and Wausau Relay for Life.

¶10 The unambiguous language of the trust stated that 25% of trust assets shall be distributed to the American Cancer Society. There was no provision in the trust which provided for incremental distribution. In a May 20, 2015 email to the American Cancer Society, Attorney Batterman offered only incremental distribution of trust assets. Attorney Batterman told the American Cancer Society that Vigil was his company, although he had no ownership interest in it. In a June 15, 2015 letter to the American Cancer Society, Attorney Batterman said the trust was discretionary, when he knew it was an irrevocable trust. In the letter, Attorney Batterman said that the donor wished to remain anonymous, which was also not true.

¶11 The trust provided that after J.G.’s death, 25% of trust proceeds be distributed to Bruce High School. Instead, Vigil hired a law firm to create the J.G. Scholarship Trust. Attorney Batterman was the primary contact person with the law firm. The scholarship trust was created without notice to Bruce High School. The scholarship trust named Vigil as the trustee, and Attorney Batterman was named trust protector. As trust protector, Batterman should have informed Bruce High School of its status as beneficiary to the trust. In a July 9, 2015 email to the high school, Attorney Batterman failed to inform the high school that the trust was required to distribute 25% of the trust assets to the school. Attorney Batterman also failed to inform the school that Vigil was the trustee and Attorney Batterman was the trust protector.

¶12 In late June or early July of 2015, the Alzheimer's Association Major Gifts Division made contact with Attorney Batterman because the Alzheimer's Association had received information of its status as a beneficiary of a trust for which Vigil was the trustee. Attorney Batterman sent an email to the Alzheimer's Association Trust and Estate Specialist on July 6, 2015 saying he was "just going to begin the process of trying to get in touch with the local Alzheimer's office." Prior to that date, neither Vigil nor Attorney Batterman had notified the Alzheimer's Association of its status as a beneficiary, as was the trustee's duty. In the same email, Attorney Batterman identified the trust as revocable when he knew that the trust was irrevocable. Attorney Batterman knew the trust required distribution of 25% of the trust assets to each of the four named fiduciaries.

¶13 In July 2015, over six months after J.G.’s death, Attorney Batterman first notified the Superior, Wisconsin Diocese of the Catholic Church of its status as a beneficiary under the trust.

¶14 In September and October of 2015, the American Cancer Society, the School District of Bruce, the Superior, Wisconsin Diocese of the Catholic Church, and the Alzheimer's Association all filed petitions for the removal of the trustee in the matter of the J.G. Revocable Trust filed in Marathon County Circuit Court. In its petition, the American Cancer Society alleged that Attorney Batterman concocted a plan to distribute funds over a ten year period, rather than make an outright gift to the American Cancer Society as required by the trust instrument. Through this plan Attorney Batterman would reap the benefit of long-term trustee and investment fees paid from the trust, while his fiancé, an American Cancer Society employee responsible for implementing the local Relay for Life events, would benefit from enhanced opportunities for salary increases through the trust's stepped-up annual gifting.

¶15 Bruce High School alleged that Attorney Batterman failed to notify the school it was entitled to a one-time distribution of its 25% share, and instead Vigil created a scholarship trust. Bruce High School also alleged that Attorney Batterman failed to notify the school that Vigil was the trustee and Attorney Batterman was the trust protector.

¶16 Attorney Batterman filed a responsive affidavit addressing the four petitions requesting removal of the trustee. On October 23, 2015, the circuit court granted the petitionersrequests for removal of the trustee and appointed Attorney Terrance Byrn as the new successor trustee.

¶17 On March 1, 2017, Attorney Batterman was deposed in the trust matter. In his sworn deposition testimony, he acknowledged that J.G. never indicated he wanted his gifts to be anonymous. Attorney Batterman also admitted that while he stated to the American Cancer Society that the trust was a discretionary trust, Vigil in fact had no discretion over the trust.

¶18 A court trial was conducted in the trust case on April 27 and May 23, 2017. On September 18, 2017, the circuit court determined:

Vigil owes each beneficiary a duty to inform and report. Breach of this duty constitutes a breach of trust. From the testimony, the Court cannot help but find Mr. Batterman, slash, Vigil failed to provide the necessary information to several of the beneficiaries regarding the gift in a timely manner and upon request in which many ways has resulted in this extensive and arguably unnecessary litigation...
This Court finds that the manner in which Vigil failed to give the appropriate notice to the American Cancer Association and the manner in which the gift was set up for distribution not authorized within the trust document, often providing incomplete information and by setting up unilaterally disposition -- or distribution plans which arguably favor Vigil's constant breach of loyalty and duty to inform and report.

¶19 Following the circuit court's decision, significant litigation ensued regarding payment of attorney's fees. In a March 19, 2018 oral ruling, the circuit court ordered that Attorney Batterman and Vigil shall be jointly and severally liable for attorney's fees. Attorney Batterman and Midwest Trust Company, the successor in interest to IITC, filed a notice of appeal. In January 2019, the appeal was voluntarily dismissed.

¶20 The OLR's complaint alleged the following counts of misconduct with respect to Attorney Batterman's handling of the J.G. Trust:

Count 1: By engaging in conduct that amounted to a breach of trust in In the Matter of the [J.G.] Revocable Trust , Attorney Batterman violated SCR 20:8.4 (c).2
Count 2: By misrepresenting to ACS that the trust donor wished to remain anonymous and that the funds came from a discretionary trust, Attorney Batterman violated SCR 20:8.4 (c).

¶21 The OLR's complaint also alleged that the American Cancer Society filed a complaint with the Securities Exchange Commission (SEC) against...

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