Title: Office of Lawyer Regulation v. John Hotvedt

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2021 WI 49 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2016AP48-D 
 
 
 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against John Hotvedt, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
John Hotvedt, 
          Respondent. 
 
 
 
 
 
ATTORNEY HOTVEDT REINSTATEMENT PROCEEDINGS 
Reported at 372 Wis. 2d 68,888 N.W.2d 393 
PDC No:2016 WI 93 - Published 
 
 
OPINION FILED: 
June 4, 2021   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
Per Curiam. 
NOT PARTICIPATING: 
        
 
 
 
ATTORNEYS: 
 
      
 
 
 
 
 
 
 
 
2021 WI 49
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2016AP48-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against John Hotvedt, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
John Hotvedt, 
 
          Respondent.  
FILED 
 
JUN 4, 2021 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY reinstatement proceeding.   Reinstatement granted.   
 
¶1 
PER CURIAM.   We review a report filed by Referee Kim M. 
Peterson, recommending this court reinstate John Hotvedt's license 
to practice law in Wisconsin.  After careful review of the matter, 
we agree that Attorney Hotvedt's license should be reinstated.  We 
also conclude that Attorney Hotvedt should be required to pay the 
full costs of this reinstatement proceeding, which are $4,867.82 
as of May 5, 2021. 
¶2 
Attorney Hotvedt was admitted to the practice of law in 
Wisconsin on May 21, 2001.  He currently resides in Burlington, 
No. 
2016AP48-D   
 
2 
 
Wisconsin and is employed as a Vice-President for the Bear Real 
Estate Group (BREG) in Kenosha.  
¶3 
On November 18, 2016, this court suspended Attorney 
Hotvedt's Wisconsin law license for 18 months, effective December 
30, 2016, and ordered Attorney Hotvedt to pay the costs of the 
disciplinary proceeding.  In Re Disciplinary Proceedings Against 
Hotvedt, 2016 WI 93, ¶17, 372 Wis. 2d 68, 888 N.W.2d 393.  In that 
matter, the referee recommended the disciplinary suspension after 
Attorney Hotvedt stipulated to the facts alleged in the 
disciplinary complaint filed by the Office of Lawyer Regulation 
(OLR), and agreed with the OLR that an 18-month suspension of his 
law license was merited.  
¶4 
Specifically, Attorney Hotvedt stipulated that he 
committed five counts of professional misconduct related to 
actions he took while associated with his former law firm as well 
as actions during his withdrawal from that firm.  Attorney Hotvedt 
converted to his own use client funds belonging to the firm in 
excess 
of 
$173,000, 
in 
violation 
of 
Supreme 
Court 
Rule 
(SCR) 20:8.4(c); wrote off client fees owed to the firm, in 
violation of SCR 20:8.4(c); established a consulting firm to 
convert client fees while still employed by his firm, in violation 
of SCR 20:8.4(c); breached his fiduciary duty to his firm by 
misrepresenting to his firm that he would not bill or otherwise 
recover client fees from firm clients, converting client funds 
owed to his law firm, writing off client billings, and establishing 
a consulting firm for the purpose of converting client fees owed 
to the firm, all in violation of SCR 20:8.4(f); and failed to 
No. 
2016AP48-D   
 
3 
 
disclose to the OLR during its investigation the full extent of 
funds 
he 
converted 
from 
his 
firm 
and 
otherwise 
making 
misrepresentations to the OLR during its investigation, in 
violation of SCRs 20:8.4(h), 22.03(2) and (6).  See Hotvedt, 2016 
WI 93, ¶11. 
¶5 
Attorney Hotvedt filed a petition for reinstatement of 
his license to practice law on November 12, 2019.  After an 
investigation, the OLR initially opposed Attorney Hotvedt's 
reinstatement because it appeared that Attorney Hotvedt had 
continued to practice law despite his law license suspension.  See 
SCR 22.29(4)(b).  The OLR observed that, during his license 
suspension, Attorney Hotvedt worked for BREG, a former firm client 
for which he worked prior to his suspension, and his duties 
appeared to include law-related work.   
¶6 
Admittedly, SCR 22.26(2) permits a suspended attorney to 
engage in "law related work" if the lawyer's efforts are engaged 
"for a commercial employer itself not engaged in the practice of 
law."  Id.  In other words, while suspended lawyers cannot practice 
law and cannot perform law student, law clerk, or other paralegal 
personnel work for entities engaged in the practice of law, they 
can perform law student, law clerk, or other paralegal personnel 
work for commercial employers who are not engaged in the practice 
of law.  Id.   
¶7 
The OLR acknowledged that BREG "is obviously not a law 
firm; it is a commercial employer in the real estate industry."  
However, it initially appeared that Attorney Hotvedt's employment 
with BREG exceeded the limited scope allowed by SCR 22.26(2).  His 
No. 
2016AP48-D   
 
4 
 
work as an employee of BREG appeared "largely indistinguishable 
from his work as their outside counsel."  So, the OLR expressed 
concern that Attorney Hotvedt's work for BREG constituted "the 
improper practice of law during his period of suspension."  If 
true, this concern would implicate several other reinstatement 
criteria, so the OLR questioned whether Attorney Hotvedt could 
satisfactorily fulfill other reinstatement criteria, as well. 
¶8 
The referee conducted a public evidentiary hearing on 
Attorney Hotvedt's reinstatement petition on December 15, 2020. 
The question of his work during his license suspension was 
thoroughly explored.  Both parties filed post-hearing briefs.  
After the hearing, the OLR withdrew its objection to Attorney 
Hotvedt's reinstatement.   
¶9 
On January 21, 2021, the referee filed a report 
recommending 
that 
this 
court 
grant 
Attorney 
Hotvedt's 
reinstatement petition.  Critical to the referee's recommendation 
is the referee's conclusion that Attorney Hotvedt did not 
impermissibly practice law during his license suspension. 
¶10 Neither 
party 
has 
appealed 
from 
the 
referee's 
recommendation, so the court considers this matter pursuant to 
SCR 22.33(3).1  On review, we accept a referee's findings of fact 
unless they are clearly erroneous.  We review a referee's legal 
conclusions, including whether the attorney has satisfied the 
                     
1 SCR 22.33(3) provides:  "If no appeal is timely filed, the 
supreme 
court 
shall 
review 
the 
referee's 
report, 
order 
reinstatement, with or without conditions, deny reinstatement, or 
order the parties to file briefs in the matter." 
No. 
2016AP48-D   
 
5 
 
criteria for reinstatement, on a de novo basis. See In re 
Disciplinary Proceedings Against Jennings, 2011 WI 45, ¶39, 334 
Wis. 2d 335, 801 N.W.2d 304; In re Disciplinary Proceedings 
Against Gral, 2010 WI 14, ¶22, 323 Wis. 2d 280, 779 N.W.2d 168. 
¶11 Supreme Court Rule 22.29(4)2 provides that a petition 
for reinstatement must show all of the following: 
(a) The petitioner desires to have the petitioner's 
license reinstated. 
(b) The petitioner has not practiced law during the 
period of suspension or revocation. 
(c) The petitioner has complied fully with the terms of 
the order of suspension or revocation and will continue 
to comply with them until the petitioner's license is 
reinstated. 
(d) The 
petitioner 
has 
maintained 
competence 
and 
learning in the law by attendance at identified 
educational activities. 
(e) The petitioner's conduct since the suspension or 
revocation has been exemplary and above reproach. 
(f) The petitioner has a proper understanding of and 
attitude toward the standards that are imposed upon 
members of the bar and will act in conformity with the 
standards. 
(g) The petitioner can safely be recommended to the 
legal profession, the courts and the public as a person 
fit to be consulted by others and to represent them and 
otherwise act in matters of trust and confidence and in 
                     
2 Effective January 1, 2021, substantial changes were made to 
the rules pertaining to lawyer disciplinary procedures, including 
the reinstatement rules, SCR 22.29 through 22.33.  See S. Ct. Order 
19-06, 19-07, 19-08, 19-09, 19-10, 19-11, and 19-12, 2020 WI 
62 (issued June 30, 2020, eff. Jan. 1, 2021).  Because this 
reinstatement proceeding commenced prior to January 1, 2021, 
unless otherwise indicated, all references to the supreme court 
rules will be to those in effect prior to January 1, 2021. 
No. 
2016AP48-D   
 
6 
 
general to aid in the administration of justice as a 
member of the bar and as an officer of the courts. 
(h) The 
petitioner 
has 
fully 
complied 
with 
the 
requirements set forth in SCR 22.26.  
(j) The petitioner's proposed use of the license if 
reinstated. 
(k) A full description of all of the petitioner's 
business activities during the period of suspension or 
revocation. 
¶12 In addition, SCR 22.29(4m) requires the petitioner to 
show that he or she has made restitution to or settled all claims 
of persons injured or harmed by the petitioner's misconduct, 
including reimbursement to the Wisconsin Lawyers' Fund for Client 
Protection for all payments made from that fund, or explained the 
failure or inability to do so.  Supreme Court Rule 22.31(1)(c) 
provides that an attorney seeking reinstatement has the burden of 
demonstrating 
all 
of 
the 
above 
requirements 
by 
clear, 
satisfactory, and convincing evidence.   
¶13 Supreme Court Rule 22.31(1) also provides that an 
attorney seeking reinstatement must show by clear, satisfactory, 
and convincing evidence that he or she has the moral character to 
practice law; that his or her resumption of the practice of law 
will not be detrimental to the administration of justice or 
subversive to the public interest; and that he or she has complied 
with SCR 22.26 and the terms of the underlying disciplinary order.  
See SCR 22.31(1)(a), (b), and (d). 
¶14 The referee's report focuses on what the referee viewed 
as the most significant challenge facing Attorney Hotvedt's 
reinstatement: whether he failed to satisfy SCR 22.29(4)(b) 
No. 
2016AP48-D   
 
7 
 
because he practiced law during his license suspension.  The 
relevant rule provides: 
An attorney whose license to practice law is suspended 
or revoked or who is suspended from the practice of law 
may not engage in this state in the practice of law or 
in any law work activity customarily done by law 
students, law clerks, or other paralegal personnel, 
except that the attorney may engage in law related work 
in this state for a commercial employer itself not 
engaged in the practice of law. 
SCR 22.26(2)(Emphasis added.) 
¶15 As the referee explained, "[t]here has been some 
question about whether Mr. Hotvedt practiced law during his 
suspension, while working at Bear Real Estate Group."  The referee 
examined SCR 22.26(2), noting when working for a commercial 
employer, "law related work" has been defined as work of a type 
done by non-lawyers.  The referee considered In re Disciplinary 
Proceedings Against Hyndman, 2002 WI 6, 249 Wis. 2d 650, 638 
N.W.2d 293, a case concluding that a lawyer who represented his 
commercial employer in small claims court and made appearances at 
creditors' meetings in federal bankruptcy proceedings while under 
revocation was working within the permitted scope of SCR 22.26(2). 
The referee definitively concluded that given the specifics of 
Attorney Hotvedt's employment he "has not engaged in the practice 
of law."  The referee explains: 
First, Bear Real Estate Group is a commercial employer 
that is not itself engaged in the practice of law.  Mr. 
Hotvedt was not involved in work that would normally be 
performed by a lawyer.  In fact, both Mr. Mills and Mr. 
Hotvedt testified that Bear hired outside counsel for 
its legal work and spent a considerable amount of money 
on outside lawyers. (Tr. 24:19-27:11).   
No. 
2016AP48-D   
 
8 
 
Moreover, work that could be considered "law related" 
was work that is routinely performed by non-lawyers.  
(Tr. 22:2-24:14).  For example, Mr. Mills testified that 
Mr. Hotvedt sometimes drafted various real estate 
documents or contracts, but that work was the same type 
of work that other non-lawyer employees at the company 
also performed. (Tr. 23:1-24:6).  Mr. Hotvedt testified 
similarly, that there were other employees, who were not 
lawyers, performed the same type of law related work 
that he did, like drafting contracts, dealing with 
commercial leases, engaging in real estate transactions, 
and similar work.  (Tr. 85:22-87:12).   
Finally, Mr. Hotvedt took many steps to ensure that he 
did not engage in the practice of law while at Bear, 
such as hiring counsel to help him determine what he 
could and could not do while working at Bear.  Also, 
after hearing the testimony presented the OLR has 
withdrawn any objection to Mr. Hotvedt's reinstatement.  
¶16 We agree with the referee's conclusion that Attorney 
Hotvedt's activities on behalf of his employer while he was under 
suspension did not constitute the practice of law within the 
proscription of SCR 22.26(2), such that he has established 
SCR 22.29(4)(b).  The testimony at the public hearing indicates 
that Attorney Hotvedt consulted with counsel in deciding which 
tasks to undertake, and that he did not hold himself out as lawyer.  
A review of the testimony and statements in the post-hearing briefs 
support the referee's finding and conclusion.  As the OLR observed, 
Attorney Hotvedt "took a conservative, measured approach to what 
work he did for [BREG]."  Accordingly, we accept the referee's 
findings and conclusions as they pertain to Attorney Hotvedt's 
satisfactory compliance with SCR 22.29(4)(b). 
¶17 Our task, however, is not merely to review, de novo, the 
referee's 
conclusion 
that 
Attorney 
Hotvedt 
satisfied 
the 
reinstatement requirements of SCR 22.29(4)(b).  Rather, we must 
No. 
2016AP48-D   
 
9 
 
consider more broadly whether Attorney Hotvedt met his burden with 
respect to all the applicable reinstatement criteria.  In this, 
our review is hindered by a very cursory report, which lacks 
detailed factual findings and conclusions regarding the various 
other reinstatement criteria.  The referee simply lists bare bones 
findings and conclusions, without analysis, and announces that 
reinstatement is appropriate.  However, by parsing through the 
record before us we are able to discern that Attorney Hotvedt has 
satisfactorily met the reinstatement criteria delineated above, 
thereby avoiding the costly delay that a remand for further 
proceedings would entail. 
¶18  Several of the reinstatement criteria are not disputed. 
Attorney Hotvedt's reinstatement petition states that he desires 
to have his license reinstated, SCR 22.29(a).  See also Referee 
Finding 2. The record indicates that Attorney Hotvedt has 
maintained competence and learning in the law by attendance at 
identified educational activities, SCR 22.29(d).3  Attorney 
Hotvedt's reinstatement petition indicates that, if reinstated, he 
intends to continue his employment with BREG, thereby satisfying 
SCR 22.29(4)(j).  The reinstatement petition recounted Attorney 
Hotvedt's business activities during his period of suspension, SCR 
22.29(4)(k), a factor that was thoroughly explored as it is 
                     
3 In his reinstatement petition Attorney Hotvedt itemized the 
continuing legal education classes he has completed.  Pet. at 5.  
By memorandum dated August 12, 2020, the Board of Bar Examiners 
confirmed that Attorney Hotvedt had attended sufficient seminars 
and is in compliance with the court's CLE and EPR requirements. 
No. 
2016AP48-D   
 
10 
 
ancillary to the question of whether he practiced law during his 
license suspension.  See also Referee Findings 9-10.4  The record 
supports the referee's finding that Attorney Hotvedt has made 
restitution to or settled all claims of persons injured or harmed 
by his misconduct, or explained the failure or inability to do so, 
SCR 22.29(4m); see also Referee Finding 11.5   
¶19 Determining whether Attorney Hotvedt established the 
remaining criteria requires some inferences on our part, but we 
deem them permissible inferences based on the available facts of 
record.  For example, the referee found that Attorney Hotvedt 
complied with the terms of the order of revocation and will 
continue to comply with them until his license is reinstated, as 
required by SCR 22.29(4)(c).  See Referee Finding 4.  Similarly, 
the referee determined that Attorney Hotvedt has complied with 
SCR 22.29(4)(h).  See Referee Finding 5.  Presumably, these 
determinations derive from the referee's reasoned conclusion that 
Attorney Hotvedt did not engage in unauthorized practice of law, 
so we accept them.  
¶20 The basis for the referee's remaining conclusions is 
less clear.  The referee determined, without explanation, that 
Attorney Hotvedt's conduct since the suspension has been exemplary 
                     
4 If reinstated, Attorney Hotvedt intends to use his license 
to practice law as an adjunct to his activities for his current 
employer, BREG.  
5 The record indicates that Attorney Hotvedt has acknowledged 
that his misconduct resulted in financial loss to his former law 
firm, and avers that he had resolved that loss before his license 
suspension, by a mutual settlement and release. 
No. 
2016AP48-D   
 
11 
 
and above reproach, as required by SCR 22.29(4)(e), see Referee 
Finding 6; that he has a proper understanding of and attitude 
towards the standards that are imposed upon members of the bar and 
will act in conformity with the standards as required by 
SCR 22.29(4)(f), see Referee Finding 7; and that he can be safely 
recommended to the legal profession, the courts and the public as 
a person fit to be consulted by others and to represent them and 
otherwise act in matters of trust and confidence and in general to 
aid in the administration of justice as a member of the bar and as 
an officer of the courts, SCR 22.29(4)(g), see Referee Finding 8.  
The referee did not explicitly find or conclude that Attorney 
Hotvedt has the moral character to practice law, as required by 
SCR 22.31(1)(a), although the referee's assessment that he has 
satisfied this factor is implicit in her other findings and 
conclusions and given the evidence in the record.6 
¶21 In concluding these factors are indeed satisfied, we are 
guided by positive character references submitted by Attorney 
Hotvedt;7 by statements made by witnesses regarding his character 
                     
6 During the evidentiary hearing, counsel questioned Mr. 
Stephen R. Mills, Attorney Hotvedt's employer, and Attorney Todd 
A. Terry, his colleague, as to whether they believe that Attorney 
Hotvedt has the moral character to practice law.  Both 
unequivocally opined that he does.   
7 Attorney J. Michael McTernan commented favorably on Attorney 
Hotvedt's "high moral character."  Attorney Thomas M. Santarelli 
stated that he believes Attorney Hotvedt is "honest" and "ethical" 
and states he has never observed him "compromise moral character 
for anything."  Attorney Katherine R. Rist states that she believes 
Attorney Hotvedt "has sound character and fitness to practice law." 
No. 
2016AP48-D   
 
12 
 
during the evidentiary hearing;8 by statements in Attorney 
Hotvedt's response to the OLR reinstatement questionnaire 
acknowledging that his previous misconduct was wrong and 
expressing remorse; by statements Attorney Hotvedt made during the 
evidentiary hearing;9 by the OLR's statements confirming that it 
uncovered, "no direct objective evidence that Attorney Hotvedt's 
resumption of the practice of law would be detrimental to the 
administration of justice or subversive of the public interest"; 
and, finally, the OLR's post-hearing brief, confirming that it 
does not oppose his reinstatement.  Therefore, on balance, we are 
persuaded that Attorney Hotvedt is entitled to reinstatement of 
his license to practice law in Wisconsin. 
¶22 With respect to the costs of this reinstatement 
proceeding, it is our general practice to assess the full costs of 
the 
proceeding 
against 
the 
petitioning 
attorney. 
 
See 
SCR 22.24(1m).  The OLR's statement of costs indicates that the 
costs of this proceeding, as of May 5, 2021, were $4,867.82.  
Attorney Hotvedt has not filed an objection to the OLR's statement 
of costs, and we find no basis to depart from our general policy 
                     
8 Mr. Stephen R. Mills, Attorney Hotvedt's employer, and 
Attorney Todd D. Terry both testified favorably as to Attorney 
Hotvedt's conduct since his suspension, his moral character, and 
as to whether Attorney Hotvedt can be safely recommended to the 
legal profession, the courts, and the public as a person fit to be 
consulted and to act in matters of trust and confidence.  
9 Attorney Hotvedt testified about his volunteer efforts in 
the community and testified that he has worked very hard to re-
establish his character and that he intends to "continue to do 
everything in my power to be . . . a good lawyer . . . and 
somebody that the [State] bar can be proud of despite my mistakes." 
No. 
2016AP48-D   
 
13 
 
in this matter.  Accordingly, we impose the full costs of the 
reinstatement proceeding on Attorney Hotvedt. 
¶23 IT IS ORDERED that the license of John Hotvedt to 
practice law in Wisconsin is reinstated, effective the date of 
this order. 
¶24 IT IS FURTHER ORDERED that within 60 days of the date of 
this order, John Hotvedt shall pay to the Office of Lawyer 
Regulation the costs of this proceeding, which are $4,867.82 as of 
May 5, 2021, or enter into a payment agreement plan with the Office 
of Lawyer Regulation for the full payment of costs over a period 
of time. 
 
No. 
2016AP48-D   
 
 
 
1