Case Title: Office of Lawyer Regulation v. Gerald D. Stange

Citation: 2012 WI 66

Docket Number: 2011AP001663-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2012-06-27T00:00:00Z

Document:
2012 WI 66 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2011AP1663-D 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings  
Against Gerald D. Stange, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Gerald D. Stange, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST STANGE 
 
 
OPINION FILED: 
June 27, 2012   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
   
 
NOT PARTICIPATING:  
 
 
 
ATTORNEYS: 
 
      
 
 
 
 
2012 WI 66
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2011AP1663-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings  
Against Gerald D. Stange, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Gerald D. Stange, 
 
          Respondent. 
 
 
FILED 
 
JUN 27, 2012 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   Attorney's 
license 
revoked.   
 
¶1 
PER 
CURIAM.   This 
case 
is 
before 
us 
under 
SCR 22.14(2)1 and SCR 22.17(2)2 on a stipulation between the 
                                                 
1 SCR 22.14(2) states: 
 
The respondent may by answer plead no contest to 
allegations of misconduct in the complaint.  The 
referee shall make a determination of misconduct in 
respect to each allegation to which no contest is 
pleaded and for which the referee finds an adequate 
factual basis in the record.  In a subsequent 
disciplinary or reinstatement proceeding, it shall be 
No. 
2011AP1663-D   
 
2 
 
parties, Attorney Gerald D. Stange and the Office of Lawyer 
Regulation (OLR).  In the stipulation, Attorney Stange pled no 
contest to all 54 counts of misconduct alleged in the OLR's 
complaint involving a variety of client matters.  Attorney 
Stange reserved his right to be heard on the matter of 
sanctions.  After holding a hearing on sanctions and receiving 
post-hearing briefs, the referee issued a report recommending 
that the court revoke Attorney Stange's license, order Attorney 
Stange to pay restitution in the amount of $200,544.38 before 
interest ($152,652.12 of which is owed to the Wisconsin Lawyers' 
Fund for Client Protection), and order Attorney Stange to pay 
the full costs of this proceeding, which total $13,202.44 as of 
May 9, 2012. 
¶2 
We approve the stipulation and adopt the stipulated 
findings of fact and conclusions of law.  We agree with the 
referee's 
conclusion 
that 
Attorney 
Stange's 
professional 
misconduct 
warrants 
the 
revocation 
of 
Attorney 
Stange's 
Wisconsin law license.  We further order that Attorney Stange 
                                                                                                                                                             
conclusively presumed that the respondent engaged in 
the misconduct determined on the basis of a no contest 
plea. 
2 SCR 22.17(2) states:   
 
If no appeal is filed timely, the supreme court 
shall review the referee's report; adopt, reject or 
modify the referee's findings and conclusions or 
remand the matter to the referee for additional 
findings; 
and 
determine 
and 
impose 
appropriate 
discipline.  The court, on its own motion, may order 
the parties to file briefs in the matter. 
No. 
2011AP1663-D   
 
3 
 
make restitution to various clients and the Wisconsin Lawyers' 
Fund for Client Protection (the Fund) as outlined below, and 
that he pay the full costs of this disciplinary proceeding. 
¶3 
Attorney Stange was admitted to practice law in 
Wisconsin in 1977.  His disciplinary history consists of a 
private reprimand imposed in 1997 for failing over extended 
periods 
of 
time 
to 
obtain, 
complete, 
and 
file 
required 
documentation 
to 
complete 
three 
estates 
with 
reasonable 
diligence and promptness.  Private Reprimand No. 1997-1. 
¶4 
On July 21, 2011, the OLR filed a complaint against 
Attorney Stange consisting of some 350 separately numbered 
paragraphs describing 54 counts of misconduct in connection with 
Attorney Stange's work on over 20 trust and estate matters.  
Attorney Stange filed an answer to the OLR's complaint in which 
he generally denied most of the 54 counts of misconduct alleged 
in the complaint.  Before the scheduled hearing on the 
complaint, Attorney Stange entered into the stipulation now 
before the court, in which he withdrew his answer and pled no 
contest to all 54 counts.   
¶5 
The referee, Robert E. Kinney, accepted all of the 
factual allegations of the complaint as his findings of fact.  
Based on those facts, the referee concluded that Attorney Stange 
had engaged in 54 separate acts of professional misconduct.   
¶6 
Given the volume of the factual findings and legal 
conclusions made by the referee, we do not repeat them all here.  
It is sufficient to provide the following summary information 
concerning the serious misconduct at issue in this matter.   
No. 
2011AP1663-D   
 
4 
 
¶7 
The stipulation provided and the referee concluded 
that, contrary to SCR 20:1.3,3 Attorney Stange failed to act with 
diligence and promptness during his work on the estates of the 
following individuals:  J.W. (Count 1), A.G. (Count 6), J.K. 
(Count 7), C.W. (Count 8), A.W. (Count 9), M.I. (Count 10), B.L. 
(Count 13), R.G. (Count 21), A.H. (Count 29), L.K. (Count 34), 
U.P. (Count 37), and D.B. (Count 43). 
¶8 
The stipulation provided and the referee concluded 
that, contrary to SCR 20:1.15(f)(1)a.44 and SCR 20:1:15(f)(1)g.,5 
                                                 
3 SCR 20:1.3 provides:  "A lawyer shall act with reasonable 
diligence and promptness in representing a client."  
4 SCR 20:1.15(f)(1)a.4 provides:  "The transaction register 
shall 
contain 
a 
chronological 
record 
of 
all 
account 
transactions, and shall include all of the following:  4. the 
identity of the client for whom funds were deposited or 
disbursed."  
5 SCR 20:1.15(f)(1)g. provides:   
 
For each trust account, the lawyer shall prepare 
and retain a printed reconciliation report on a 
regular and periodic basis not less frequently than 
every 30 days.   Each reconciliation report shall show 
all of the following balances and verify that they are 
identical:  
 
1. the balance that appears in the transaction 
register as of the reporting date;  
 
2. the total of all subsidiary ledger balances 
for 
IOLTA 
accounts 
and 
other 
pooled 
accounts, 
determined by listing and totaling the balances in the 
individual client ledgers and the ledger for account 
fees and charges, as of the reporting date; and  
 
3. the adjusted balance, determined by adding 
outstanding deposits and other credits to the balance 
in the financial institution’s monthly statement and 
No. 
2011AP1663-D   
 
5 
 
Attorney Stange failed to keep complete and accurate trust 
account records during his work on the Estate of J.W. (Count 5). 
¶9 
The stipulation provided and the referee concluded 
that, contrary to SCR 20:1.15(b)6 as in effect prior to July 1, 
2004, and SCR 20:1.15(d)(1)7 as in effect thereafter, Attorney 
Stange failed to properly disburse funds during his work on the 
estates of M.I. (Count 11), B.L. (Count 15), M.F. (Count 19), 
R.G. (Count 22), F.Z. (Count 27), A.H. (Count 30), L.K. (Count 
35), U.P. (Count 38), D.B. (Count 40), and in his handling of 
trust account funds on behalf of A.S. (Count 45). 
¶10 The stipulation provided and the referee concluded 
that, contrary to SCR 20:1.15(b)(3),8 Attorney Stange improperly 
retained funds in his trust account during his work on the 
Estate of M.E. (Count 18). 
                                                                                                                                                             
subtracting outstanding checks and other deductions 
from the balance in the monthly statement. 
6 SCR 20:1.15(b), as in effect prior to July 1, 2004, 
provided in pertinent part:  "[A] lawyer shall promptly deliver 
to the client or third person any funds or other property that 
the client or third person is entitled to receive . . . ."  
7 SCR 20:1.15(d)(1) (effective July 1, 2004) provides in 
pertinent part:  "[T]he lawyer shall promptly deliver to the 
client or 3rd party any funds or other property that the client 
or 3rd party is entitled to receive." 
8 SCR 20:1.15(b)(3) provides:  "No funds belonging to the 
lawyer or law firm, except funds reasonably sufficient to pay 
monthly account service charges, may be deposited or retained in 
a trust account." 
No. 
2011AP1663-D   
 
6 
 
¶11 The stipulation provided and the referee concluded 
that, contrary to SCR 20:1.15(d)(2),9 Attorney Stange failed to 
provide a full written accounting in the Estate of R.G. (Count 
23).  
¶12 The stipulation provided and the referee concluded 
that, contrary to SCR 20:3.3(a)(1)10 as in effect in 2006, 
Attorney Stange knowingly made false statements to a tribunal 
during his work on the estates of B.L. (Count 14) and F.Z. 
(Count 26). 
¶13 The stipulation provided and the referee concluded 
that, contrary to SCR 20:3.3(a)(1),11 effective July 1, 2007, 
Attorney Stange knowingly made false statements to a tribunal 
during his work on the Estate of A.H. (Count 31). 
¶14 The stipulation provided and the referee concluded 
that, contrary to SCR 20:3.4(c)12 and SCR 20:1.16(d),13 Attorney 
                                                 
9 SCR 20:1.15(d)(2) provides:  "Upon final distribution of 
any trust property or upon request by the client or a 3rd party 
having an ownership interest in the property, the lawyer shall 
promptly 
render 
a 
full 
written 
accounting 
regarding 
the 
property." 
10 SCR 20:3.3(a)(1), as it was in effect in 2006, provided 
that a lawyer shall not knowingly "make a false statement of 
fact or law to a tribunal; . . . ." 
11 SCR 20:3.3(a)(1) (effective July 1, 2007) provides that a 
lawyer shall not knowingly "make a false statement of fact or 
law to a tribunal or fail to correct a false statement of 
material fact or law previously made to the tribunal by the 
lawyer; . . . ." 
12 SCR 20:3.4(c) states a lawyer shall not knowingly 
"disobey an obligation under the rules of a tribunal, except for 
an open refusal based on an assertion that no valid obligation 
exists; . . . ." 
No. 
2011AP1663-D   
 
7 
 
Stange knowingly disobeyed a court order and failed to take 
steps reasonably practical to protect a client's interests 
during his work on the Estate of D.B. (Count 44). 
¶15 The stipulation provided and the referee concluded 
that, contrary to SCR 20:8.4(c),14  Attorney Stange engaged in 
dishonesty, fraud, deceit, or misrepresentation during his work 
on the estates of M.I. (Count 12), B.L. (Count 16), H.M. (Count 
20), R.G. (Count 24), F.Z. (Count 28), A.H. (Count 33), L.K. 
(Count 36), U.P. (Count 39), D.B. (Count 41), I.L. (Count 51), 
E.L. (Count 52),  and L.L. (Count 53), and in his handling of 
trust account funds on behalf of G.F. (Count 47), R.L. (Count 
48), and M.P. (Count 49). 
¶16 The stipulation provided and the referee concluded 
that, contrary to SCR 20:8.4(c), by writing trust account checks 
to 
himself 
totaling 
$71,161.56 
for 
which 
no 
client 
was 
identified, thereby creating shortfalls in the funds available 
                                                                                                                                                             
13 SCR 20:1.16(d) provides:   
 
Upon termination of representation, a lawyer 
shall take steps to the extent reasonably practicable 
to protect a client’s interests, such as giving 
reasonable notice to the client, allowing time for 
employment of other counsel, surrendering papers and 
property to which the client is entitled and refunding 
any advance payment of fee or expense that has not 
been earned or incurred.  The lawyer may retain papers 
relating to the client to the extent permitted by 
other law. 
14 SCR 20:8.4(c) states it is professional misconduct for a 
lawyer to "engage in conduct involving dishonesty, fraud, deceit 
or misrepresentation."  
No. 
2011AP1663-D   
 
8 
 
to pay clients and third parties the amounts they were entitled 
to receive, Attorney Stange misappropriated client funds from 
his trust account and thereby engaged in conduct involving 
dishonesty, fraud, deceit, or misrepresentation (Count 54). 
¶17 The stipulation provided and the referee concluded 
that, contrary to SCR 22.03(2)15 and SCR 20:8.4(h),16 Attorney 
Stange failed to fully and fairly disclose to the OLR all facts 
and circumstances pertaining to alleged misconduct during his 
work on the Estate of J.W., and failed to cooperate in the OLR's 
investigation into that work (Count 2). 
                                                 
15 SCR 22.03(2) provides:   
 
Upon commencing an investigation, the director 
shall notify the respondent of the matter being 
investigated unless in the opinion of the director the 
investigation of the matter requires otherwise.  The 
respondent shall fully and fairly disclose all facts 
and circumstances pertaining to the alleged misconduct 
within 20 days after being served by ordinary mail a 
request for a written response.  The director may 
allow additional time to respond.  Following receipt 
of the response, the director may conduct further 
investigation and may compel the respondent to answer 
questions, 
furnish 
documents, 
and 
present 
any 
information deemed relevant to the investigation. 
16 SCR 20:8.4(h) states it is professional misconduct for a 
lawyer to "fail to cooperate in the investigation of a grievance 
filed with the office of lawyer regulation as required by 
SCR 21.15(4), SCR 22.001(9)(b), SCR 22.03(2), SCR 22.03(6), or 
SCR 22.04(1); . . . ." 
No. 
2011AP1663-D   
 
9 
 
¶18 The stipulation provided and the referee concluded 
that, contrary to SCR 22.03(6),17 Attorney Stange willfully 
failed to provide relevant information, fully answer questions, 
or furnish documents in the course of the OLR's investigation 
into his work on the Estate of D.B. (Count 42). 
¶19 The stipulation provided and the referee concluded 
that, contrary to SCR 22.03(6) and SCR 20:8.4(h), Attorney 
Stange failed to cooperate with, and willfully failed to provide 
relevant 
information, 
fully 
answer 
questions, 
or 
furnish 
documents in the course of, the OLR's investigation into his 
work on the estates of J.W. (Count 3), B.L. (Count 17), R.G. 
(Count 25), and A.H. (Count 32), and the OLR's investigation 
into his handling of trust account funds on behalf of A.S. 
(Count 46) and M.P. (Count 50). 
¶20 Finally, the stipulation provided and the referee 
concluded that, contrary to SCR 20:1.15(e)(7),18 Attorney Stange 
                                                 
17 SCR 22.03(6) provides as follows:  "In the course of the 
investigation, 
the 
respondent’s wilful failure to provide 
relevant information, to answer questions fully, or to furnish 
documents and the respondent’s misrepresentation in a disclosure 
are misconduct, regardless of the merits of the matters asserted 
in the grievance." 
18 SCR 20:1.15(e)(7) states:   
 
All trust account records have public aspects 
related to a lawyer’s fitness to practice.  Upon 
request of the office of lawyer regulation, or upon 
direction of the supreme court, the records shall be 
submitted to the office of lawyer regulation for its 
inspection, 
audit, 
use, 
and 
evidence 
under 
any 
conditions to protect the privilege of clients that 
the court may provide.  The records, or an audit of 
the records, shall be produced at any disciplinary 
No. 
2011AP1663-D   
 
10 
 
failed to produce trust account records during the OLR's 
investigation into his work on the Estate of J.W. (Count 4).  
¶21 Because Attorney Stange pled no contest to the above 
counts of misconduct, the only disputed issue for the referee to 
decide was the level of discipline to be imposed.  Counsel for 
the OLR argued for revocation with an order for payment of full 
restitution and all costs; Attorney Stange argued for a two-year 
suspension with restitution.  
¶22 The referee agreed with the OLR's recommendation.  In 
his report, the referee recommended revocation with an order for 
payment 
of 
full 
restitution, 
totaling 
$200,544.38 
before 
interest. 
 
Of 
that 
amount, 
the 
referee 
determined 
that 
$152,652.12 is owed to the Fund as reimbursement for payments 
the Fund made to Attorney Stange's victims.  The referee further 
recommended the imposition of full costs, which total $13,202.44 
as of May 9, 2012.   
¶23 In reaching this recommendation, the referee noted, 
among other things, Attorney Stange's repeated lack of candor 
with courts, clients, estate beneficiaries, and his fellow 
attorneys; the significant delays caused by Attorney Stange's 
late, incomplete, and inconsistent responses to the OLR; the 
particular vulnerability of many of Attorney Stange's clients 
and their beneficiaries, including charitable organizations; 
                                                                                                                                                             
proceeding involving the lawyer, whenever material.  
Failure 
to 
produce 
the 
records 
constitutes 
unprofessional conduct and grounds for disciplinary 
action. 
No. 
2011AP1663-D   
 
11 
 
Attorney Stange's indifference to making his victims whole; and 
the similarity between the misconduct involved in this case and 
that involved in Attorney Stange's 1997 private reprimand for 
failing to timely prepare and file required documentation in 
several estate proceedings.  The referee also noted that 
although Attorney Stange's decision to plead no contest to all 
charges eliminated the need for a lengthy and difficult hearing, 
there was little doubt of what the outcome of such a hearing 
would 
have 
been 
given 
the 
vast 
documentary 
evidence 
of 
misconduct assembled by the OLR.  The referee also noted that 
Attorney 
Stange's 
excuses 
for 
his 
conduct——the 
time 
and 
financial stresses of his solo practice and his mother's medical 
problems——were not sufficiently unique or compelling as to 
constitute mitigating factors.  Finally, the referee noted that 
there appears to be no other disciplinary case with misconduct 
this severe that did not result in license revocation. 
¶24 Because no appeal was filed from the referee's report 
and 
recommendation, 
our 
review 
proceeds 
pursuant 
to 
SCR 22.17(2).  When reviewing a report and recommendation in an 
attorney disciplinary proceeding, we affirm a referee's findings 
of fact unless they are found to be clearly erroneous.  In re 
Disciplinary Proceedings Against Inglimo, 2007 WI 126, ¶5, 305 
Wis. 2d 71, 740 N.W.2d 125.  We review the referee's conclusions 
of law, however, on a de novo basis.  Id.  Finally, we determine 
the appropriate level of discipline given the particular facts 
of each case, independent of the referee's recommendation, but 
No. 
2011AP1663-D   
 
12 
 
benefiting from it.  In re Disciplinary Proceedings Against 
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. 
¶25 We adopt the findings of fact and conclusions of law 
to which the parties have stipulated, and as adopted by the 
referee.  We agree with the referee that Attorney Stange's 
misconduct warrants the revocation of his Wisconsin law license.  
Attorney 
Stange's 
mishandling 
of 
client 
matters, 
his 
misappropriation of client funds, his pattern of dishonesty, and 
his failure to fully and forthrightly cooperate with the OLR 
demonstrate that he does not appreciate the obligations that 
apply to an individual who has been granted a Wisconsin law 
license.  By his deceitful, dishonest, and unprofessional 
conduct, 
Attorney 
Stange 
has 
forfeited 
the 
privilege 
of 
practicing law in this state. 
¶26 Because 
this 
case 
presents 
no 
extraordinary 
circumstances, we further determine that Attorney Stange should 
be required to pay the full costs of this matter.  See 
SCR 22.24(1m) (supreme court's general policy upon a finding of 
misconduct is to impose all costs upon the respondent attorney). 
¶27 Finally, we turn to the issue of restitution.  The OLR 
seeks restitution in specific amounts for sums that the Fund 
paid to certain injured clients and for other sums that Attorney 
Stange misappropriated from other specified clients.  Attorney 
Stange had multiple opportunities to object to the restitution 
amounts before both the referee and this court.  He has not done 
so.  Consequently, we determine that Attorney Stange should be 
No. 
2011AP1663-D   
 
13 
 
ordered to pay restitution to the entities and in the amounts 
requested by the OLR and as set forth below.   
¶28 IT IS ORDERED that the license of Gerald D. Stange to 
practice law in Wisconsin is revoked, effective as of the date 
of this order. 
¶29 IT IS FURTHER ORDERED that Gerald D. Stange shall 
comply with the provisions of SCR 22.26 concerning the duties of 
a person whose license to practice law in Wisconsin has been 
revoked. 
¶30 IT IS FURTHER ORDERED that within 60 days of the date 
of this order Gerald D. Stange shall pay restitution plus 
interest 
at the legal rate.  See Wis. Stat. § 138.04.  
Restitution shall be paid as follows: 
• 
$152,652.12 plus interest to the Wisconsin Lawyers' 
Fund for Client Protection ($102,652.12 regarding the 
Estate of L.K., plus interest from December 11, 2006; 
$50,000.00 regarding the Estate of D.B., plus interest 
from December 21, 2007); 
• 
$26,653.65 plus interest from July 23, 2001, to the 
Estate of M.I.; 
• 
$1,472.50 plus interest from June 14, 2006, to the 
Estate of H.M.; 
• 
$14,943.9819 plus interest from March 2, 2006, to the 
Estate of A.H.; and 
                                                 
19 We note that the referee's report lists this figure as 
$14,953.98.  This $10 discrepancy appears to be a typographical 
error, as the parties stipulated to restitution of $14,943.98 
for the Estate of A.H. 
No. 
2011AP1663-D   
 
14 
 
• 
$4,822.13 plus interest from July 3, 2007, to the 
Estate of U.P. 
¶31 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Gerald D. Stange shall pay to the Office of 
Lawyer Regulation the imposed costs of this proceeding.   
¶32 IT IS FURTHER ORDERED that the restitution specified 
above is to be completed prior to paying costs to the Office of 
Lawyer Regulation. 
No. 
2011AP1663-D   
 
 
 
1