Title: Office of Lawyer Regulation v. Michael M. Rajek

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2017 WI 85 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2014AP754-D 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against 
Michael M. Rajek, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Michael M. Rajek, 
          Respondent. 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST RAJEK 
 
 
OPINION FILED: 
September 15, 2017 
SUBMITTED ON BRIEFS: 
 
ORAL ARGUMENT: 
 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
 
 
2017 WI 85
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2014AP754-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings  
Against Michael M. Rajek, Attorney at Law: 
 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Michael M. Rajek, 
 
          Respondent. 
 
FILED 
 
SEP 15, 2017 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY disciplinary proceeding.   Complaint dismissed.   
 
¶1 
PER CURIAM.   We review Referee James R. Erickson's 
report recommending, consistent with a stipulation executed by 
the Office of Lawyer Regulation (OLR) and Attorney Michael M. 
Rajek, that we dismiss a pending disciplinary complaint against 
Attorney 
Rajek. 
 
We 
agree 
with 
the 
OLR's 
discretionary 
determination that the alleged rule violations do not warrant 
discipline in light of our decision in In re Disciplinary 
Proceedings Against Rajek, 2015 WI 18, 361 Wis. 2d 60, 859 
No. 
2014AP754-D   
 
2 
 
N.W.2d 439.  (Rajek I.)  We therefore dismiss the complaint.  No 
costs will be imposed. 
¶2 
Attorney Rajek was admitted to the practice of law in 
Wisconsin in 1974.  In 1986, he received a consensual private 
reprimand for engaging in conduct involving dishonesty, fraud, 
deceit or misrepresentation.  Private Reprimand No. 1986-5.  In 
2006, he received a consensual public reprimand for misconduct 
consisting of committing a criminal act that reflected adversely 
on his honesty, trustworthiness or fitness as a lawyer in other 
respects, and engaging in conduct involving dishonesty, fraud, 
deceit or misrepresentation.  Public Reprimand of Michael J. 
Rajek 
No. 
2006-4 
(electronic 
copy 
available 
at 
https://compendium.wicourts.gov/app/raw/001848.html). 
¶3 
On April 7, 2014, the OLR filed the disciplinary 
complaint presently before this court.  It alleged four counts 
of misconduct involving two clients and it sought a 60-day 
license suspension and costs.  Two of the counts of alleged 
misconduct involved deficiencies in the fee agreement Attorney 
Rajek used.  The fee agreement required a client to pay a 
specified amount of money up-front before Attorney Rajek would 
commence work.  Although characterized as a "non-refundable 
retainer" the payment was actually an "advanced fee" as defined 
in SCR 20:1.0(ag).  The fee agreement stated that the fee would 
not 
be 
held 
in 
trust, 
thus 
rendering 
it 
subject 
to 
SCR 20:1.15(b)(4m) ("Alternative protection for advanced fees.")  
This rule provides that an attorney electing not to hold an 
advanced fee in trust must provide certain notices to the 
No. 
2014AP754-D   
 
3 
 
client, in writing, upon accepting the advanced fee payment.1 
Attorney Rajek's fee agreement did not include several of these 
required notices, nor did any other document provide these 
required 
notices 
to 
the 
client 
at 
the 
outset 
of 
the 
                                                 
1 Effective July 1, 2016, substantial changes were made to 
Supreme Court Rule 20:1.15, the "trust account rule."  See S. 
Ct. Order 14-07, (issued Apr. 4, 2016, eff. July 1, 2016).  
Because the conduct underlying this case arose prior to July 1, 
2016, unless otherwise indicated, all references to the supreme 
court rules will be to those in effect prior to July 1, 2016. 
Former SCR 20:1.15(b)(4m) provided:  A lawyer who 
accepts advanced payments of fees may deposit the 
funds in the lawyer's business account, provided that 
review of the lawyer's fee by a court of competent 
jurisdiction is available in the proceeding to which 
the fee relates, or provided that the lawyer complies 
with each of the following requirements: 
a. Upon accepting any advanced payment of fees 
pursuant to this subsection, the lawyer shall deliver 
to the client a notice in writing containing all of 
the following information: 
 . . .  
4. that the lawyer has an obligation to refund 
any unearned advanced fee, along with an accounting, 
at the termination of the representation;  
5. that the lawyer is required to submit any 
unresolved 
dispute 
about 
the 
fee 
to 
binding 
arbitration within 30 days of receiving written notice 
of such dispute; and  
6. the ability of the client to file a claim with 
the Wisconsin lawyers' fund for client protection if 
the lawyer fails to provide a refund of unearned 
advanced fees.   
 
No. 
2014AP754-D   
 
4 
 
representation.  As such, by failing to include in his fee 
agreement the notices required by SCR 20:1.15(b)(4m)a.4., 5., 
and 6., Attorney Rajek allegedly violated those subsections of 
SCR 20:1.15(b)(4m) with respect to two clients, T.L. and M.J. 
¶4 
The other two counts of alleged misconduct pertained 
to an unresolved fee dispute with one of these clients and to 
Attorney Rajek's delay in cooperating with the ensuing OLR 
investigation.  In August 2011, M.J. hired Attorney Rajek to 
represent her on a non-criminal traffic charge.  The fee 
agreement required M.J. to pay Attorney Rajek an initial $2,500.  
M.J.'s case proceeded to a jury trial at which M.J. was found 
guilty.  Attorney Rajek filed a Notice of Appeal on M.J.'s 
behalf but M.J. opted to terminate representation and proceed 
pro se.  On April 26, 2012, Attorney Rajek sent M.J. a final 
bill reflecting a balance due of $8,250.  M.J. formally disputed 
the amount due and M.J. and Attorney Rajek were unable to 
resolve their disagreement regarding the fee.    
¶5 
Former SCR 20:1.15(b)(4m)c provided that when a fee 
dispute cannot be resolved upon termination of representation: 
Upon timely receipt of written notice of a dispute 
from the client, the lawyer shall attempt to resolve 
that dispute with the client, and if the dispute is 
not resolved, the lawyer shall submit the dispute to 
binding arbitration with the State Bar Fee Arbitration 
Program or a similar local bar association program 
within 30 days of the lawyer's receipt of the written 
notice of dispute from the client. 
(Emphasis added.) 
No. 
2014AP754-D   
 
5 
 
¶6 
On May 11, 2012, Attorney Rajek wrote to M.J., stating 
in part: 
I am in receipt of your letter disputing the bill that 
was sent to you regarding trial expenses followed by a 
notice informing the court that I will no longer be 
representing you.  It is mandatory that your dispute 
be subject to binding arbitration.  I have scheduled 
this matter with Judge Proctor for June 5, 2012, at 
11:00 a.m. at Proctor ADR, LLC located at 116 West 
Grand Ave, Eau Claire, W1 54703. 
Although Judge Proctor is a former Eau Claire County circuit 
court judge, who now provides alternative dispute resolution 
services, he was not affiliated with the State Bar Fee 
Arbitration Program or a similar local bar association program.  
Attorney Rajek's selection of Judge Proctor was unilateral. 
¶7 
M.J. objected to this choice and contacted the State 
Bar of Wisconsin Fee Arbitration Program, requesting binding 
arbitration.  The State Bar, in turn, contacted Attorney Rajek 
to coordinate arbitration but, as of the date the disciplinary 
complaint was filed, Attorney Rajek had not agreed to submit to 
arbitration through the State Bar's arbitration program.  The 
OLR alleged this violated SCR 20:1.15(b)(4m)c.   
¶8 
Attorney Rajek also delayed approximately two months 
before responding to the OLR's request for information regarding 
these matters.  The OLR alleged this violated SCR 22.03(2).  
¶9 
While the OLR and Attorney Rajek litigated this 
disciplinary proceeding, we issued our decision in Rajek I.  
That matter also involved several counts of misconduct related 
to Attorney Rajek's fee agreement.  We concluded that Attorney 
No. 
2014AP754-D   
 
6 
 
Rajak had committed five of the six alleged violations of the 
Rules of Professional Conduct but we opted to impose no 
discipline and we reduced the costs he was required to pay.  In 
re Disciplinary Proceedings Against Rajek, 2015 WI 18, ¶3, 361 
Wis. 2d 60, 859 N.W.2d 439.  We stated: 
[W]e conclude that Attorney Rajek committed the rule 
violations on five counts as found by the referee. The 
violations, 
however, 
involved 
relatively 
minor 
failures of communication, including failures in some 
instances to provide certain notices or pieces of 
information to clients under Supreme Court Rule (SCR) 
20:1.15(b)(4m), 
which 
sets 
forth 
the 
alternative 
procedure for handling advanced fees. They did not 
involve the sufficiency or quality of the legal 
representation 
provided 
by 
Attorney 
Rajek to 
his 
clients. Given the particular facts of this case and 
the nature of the violations, we determine that it is 
not necessary to impose any discipline on Attorney 
Rajek and that there is no basis for a restitution 
award. We do require Attorney Rajek to pay costs, but 
we reduce the amount of costs he must pay to $8,500. 
¶10 The Rajek I decision prompted the OLR to reconsider 
its position in this matter.  Eventually, on September 12, 2016, 
the parties executed and filed a stipulation providing that the 
referee could recommend dismissal of this disciplinary case if 
and when Attorney Rajek agreed to submit to, and complete, 
binding arbitration in the fee dispute with his former client.   
¶11 On March 15, 2017, the parties executed a revised 
stipulation.  Attorney Rajek agreed to revise the form of his 
fee agreement to comply with the current SCR 20:1.5(g),2 and he 
                                                 
2 SCR 20:1.5(g) provides: 
 
(g) A lawyer who accepts advanced payments of 
fees may deposit the funds in the lawyer's business 
(continued) 
No. 
2014AP754-D   
 
7 
 
executed an affidavit averring that he will, in the future, use 
a 
fee 
agreement 
that 
contains 
the 
notices 
required 
by 
SCR 20:1.5(g) and will, upon termination of representation of a 
client, who has paid an advanced fee, abide by the written 
accounting and notice requirements of SCR 20:1.15(g)(2).3 
                                                                                                                                                             
account, provided that review of the lawyer's fee by a 
court of competent jurisdiction is available in the 
proceeding to which the fee relates, or provided that 
the lawyer complies with each of the following 
requirements:  
(1) Upon accepting any advanced payment of fees 
pursuant to this subsection, the lawyer shall deliver 
to the client a notice in writing containing all of 
the following information:  
a. The amount of the advanced payment.  
b. The basis or rate of the lawyer's fee.  
c. Any expenses for which the client will be 
responsible.  
d. The lawyer's obligation to refund any unearned 
advanced fee, along with an accounting, at the 
termination of the representation.  
e. 
The 
lawyer's 
obligation 
to 
submit 
any 
unresolved 
dispute 
about 
the 
fee 
to 
binding 
arbitration within 30 days of receiving written notice 
of the dispute.  
f. The ability of the client to file a claim with 
the Wisconsin Lawyers' Fund for Client Protection if 
the lawyer fails to provide a refund of unearned 
advanced fees.  
3 SCR 20:1.15(g)(2) provides: 
(2) Upon termination of the representation, the 
lawyer shall deliver to the client in writing all of 
the following:  
(continued) 
No. 
2014AP754-D   
 
8 
 
¶12 On April 10, 2017, Referee Erickson filed a brief 
report 
recommending, 
consistent 
with 
the 
terms 
of 
the 
stipulation, the court dismiss the complaint.  
¶13 On April 21, 2017, the OLR filed a detailed statement 
of costs but noted that costs should not be imposed if the 
complaint was dismissed. In its statement of costs, the OLR 
described the stipulation: 
[ ], the parties stipulated that OLR's disciplinary 
complaint can be dismissed without any findings of 
miscount, [sic] if Attorney Rajek first met certain 
conditions.  It toke [sic] quite a while – years – but 
Attorney Rajek finally submitted the attorney fee 
dispute he had with his former client to binding 
arbitration with the State Bar of Wisconsin Fee 
Arbitration Program, and he has provided a new Flat 
Fee Agreement, compliant with current rules, which he 
will use in his law office for clients who pay an 
advanced fee.  It is under those circumstances that 
OLR asked the referee to dismiss the complaint.   
                                                                                                                                                             
a. A final accounting, or an accounting from the 
date of the lawyer's most recent statement to the end 
of the representation, regarding the client's advanced 
fee payment.  
b. A refund of any unearned advanced fees and 
costs.  
c. Notice that, if the client disputes the amount 
of the fee and wants that dispute to be submitted to 
binding arbitration, the client must provide written 
notice of the dispute to the lawyer within 30 days of 
the mailing of the accounting.  
d. Notice that, if the lawyer is unable to 
resolve the dispute to the satisfaction of the client 
within 30 days after receiving notice of the dispute 
from the client, the lawyer shall submit the dispute 
to binding arbitration.  
No. 
2014AP754-D   
 
9 
 
No appeal was filed and the matter was submitted to this court 
under SCR 22.17(2). 
¶14 Upon review, the court observed that the stipulation 
did not expressly set forth the rationale for the OLR's decision 
to dismiss the complaint.  Pursuant to long-standing policy, the 
court does not allow plea bargaining in attorney disciplinary 
cases. See, e.g., In re Disciplinary Proceedings Against 
Inglimo, 2007 WI 126, ¶85, 305 Wis. 2d 71, 740 N.W.2d 125 ("[W]e 
note that the OLR is not authorized to plea bargain disciplinary 
matters…").  In addition, the stipulation did not contain 
assurances that typically appear in a stipulation.4    
¶15 We directed the OLR to file a supplemental brief 
addressing: (1) whether the stipulation comports with the 
prohibition 
against 
plea 
bargaining 
and, 
if 
so, 
if 
the 
stipulation should be amended to say so, and (2) the legal basis 
and rationale for dismissal of the pending charges in exchange 
                                                 
4 Typically, stipulations executed in disciplinary matters 
state that the stipulation: did not result from plea bargaining; 
the lawyer avers that he or she fully understands the misconduct 
allegations; the lawyer understands the ramifications should 
this court impose the stipulated level of discipline; the lawyer 
understands his or her right to contest the matter;  the lawyer 
understands his or her right to consult with counsel; the lawyer 
states that his or her entry into the stipulation is made 
knowingly and voluntarily; the lawyer states that he or she has 
read the OLR's complaint and the stipulation and that entry into 
the stipulation represents a decision not to contest the 
misconduct alleged in the complaint or the level and type of 
discipline sought by the OLR director.  None of these assurances 
appear in this stipulation.  
No. 
2014AP754-D   
 
10 
 
for the attorney's compliance with supreme court rules.  The OLR 
filed its response on July 3, 2017.  
¶16 The OLR explains that in the wake of this court's 
decision in Rajek I, in which this court indicated that the fee 
agreement violations did not warrant discipline, the OLR 
determined that it would be inappropriate to continue to seek a 
60-day suspension in this case.  It opted to focus on resolving 
the existing concerns by inducing Attorney Rajek to comply with 
the applicable rules and obtaining some assurance that he would 
comply in the future.  The OLR states that its change in 
position "was a unilateral decision on the part of OLR, made 
following an assessment of the court's decision in [Rajek I] 
2015 WI 18 [and] was not the result of plea bargaining."  
¶17 The OLR asserts that the stipulation does not require 
amendment.  The OLR states that it is "entirely satisfied" that 
Attorney Rajek fully understood his rights and that to further 
amend the stipulation would only result in additional delay.  
The OLR adds that it believes the course it chose "aligns with 
the spirit of the court's more recent adoption of what is 
No. 
2014AP754-D   
 
11 
 
commonly called the 'discretion petition.'"5  Attorney Rajek did 
not submit a response although he was permitted to do so.   
¶18 Our decision in Rajek I is certainly relevant to the 
two alleged counts of misconduct involving Attorney Rajek's fee 
agreement.  Reasonable minds could differ as to whether the 
                                                 
5 The OLR's mention of the "discretion" rule refers to the 
court's decision to amend SCR 22.001(2) (the definition of 
"cause to proceed"); SCR 22.02(6) (intake); SCR 22.03(1) 
(investigation); 
and 
SCR 
22.25(3)-(4) 
(closing 
an 
investigation).  These rule changes confirm that the OLR has 
discretion 
at 
the 
pre-charging 
stage, 
with 
respect 
to 
investigating grievances and disposing of grievances upon 
completion of an investigation.  See S. Ct. Order 14-06, 2016 WI 
28 (issued Apr. 21, 2016, eff. July 1, 2016).   
As amended, one of the criteria for finding "cause to 
proceed" is that the alleged misconduct "warrants discipline."  
The court also added a policy statement in SCR 21.02(1).  The 
language added by the court is underlined, so it now provides: 
The Office of Lawyer Regulation consists of the 
director, investigative and support staff, and staff 
counsel and retained counsel.  The office receives and 
responds to inquiries and grievances relating to 
attorneys licensed to practice law or practicing law 
in 
Wisconsin 
and, 
when 
appropriate, 
investigates 
allegations 
of 
attorney 
misconduct 
or 
medical 
incapacity, and may divert a matter to an alternatives 
to discipline program.  The office is responsible for 
the prosecution of disciplinary proceedings alleging 
attorney misconduct and proceedings alleging attorney 
medical incapacity and the investigation of license 
reinstatement petitions.  The office has discretion 
whether to investigate and to prosecute de minimus 
violations. 
 
Discretion 
permits 
the 
office 
to 
prioritize resources on matters where there is harm 
and to complete them more promptly. 
 
 
No. 
2014AP754-D   
 
12 
 
other two counts involving refusal to submit to binding 
arbitration for a lengthy period of time and delay in 
cooperating 
with 
the 
OLR 
could 
warrant 
prosecution 
and 
discipline.  However, we acknowledge that the OLR may, in its 
discretion, cease prosecution if, as here, the OLR determines 
that the charges at issue are de minimus.  We are satisfied with 
the OLR's explanation for its decision to stipulate to dismissal 
of the pending complaint and its exercise of discretion in this 
matter.  Accordingly, we adopt the referee's report, accept the 
stipulation, and dismiss the complaint.  The OLR did not seek 
restitution and we do not order restitution in this case.  
Finally, because there is no finding of misconduct, we do not 
impose costs upon Attorney Rajek. 
¶19 IT IS ORDERED that the complaint against Attorney 
Michael M. Rajek is dismissed.   
¶20 IT IS FURTHER ORDERED no costs will be imposed.