Title: Office of Lawyer Regulation v. Michael W. Steinhafel

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2013 WI 93 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2012AP1826-D  
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against Michael W. Steinhafel, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Michael W. Steinhafel, 
          Respondent.   
 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST STEINHAFEL  
 
 
OPINION FILED: 
November 26, 2013 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: ZIEGLER, J., did not participate.    
 
 
 
ATTORNEYS: 
 
 
 
 
 
 
2013 WI 93
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2012AP1826-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Michael W. Steinhafel, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Michael W. Steinhafel, 
 
          Respondent. 
 
FILED 
 
NOV 26, 2013 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   On June 26, 2013, Referee Richard C. 
Ninneman issued a report recommending that Attorney Michael W. 
Steinhafel be declared in default, concluding that Attorney 
Steinhafel 
engaged 
in 
multiple 
counts 
of 
professional 
misconduct, and recommending that his license to practice law in 
Wisconsin be suspended for four months. 
¶2 
We conclude that the referee's findings of fact are 
supported by satisfactory and convincing evidence.  Due to 
No. 
2012AP1826-D   
 
2 
 
Attorney 
Steinhafel's 
repeated 
failure 
to 
appear 
for 
or 
participate in a deposition, rescheduled deposition, and status 
conferences, we declare him to be in default.  We further 
conclude that the seriousness of his misconduct warrants the 
suspension of his license to practice law in Wisconsin for a 
period of four months.  We also agree with the referee that the 
full costs of the proceeding, which are $2,638.99 as of July 16, 
2013, should be assessed against Attorney Steinhafel. 
¶3 
Attorney Steinhafel was admitted to practice law in 
Wisconsin in 1989.  He practiced in Milwaukee.  During the 
course of the proceedings, Attorney Steinhafel stated he has not 
practiced law in years and has no intention of practicing law 
again. 
¶4 
On August 16, 2012, the Office of Lawyer Regulation 
(OLR) issued a complaint against Attorney Steinhafel alleging 
seven counts of misconduct.  Four of the misconduct counts arose 
out of Attorney Steinhafel's representation of S.R. in a 
Milwaukee County divorce proceeding.  While the divorce was 
pending, S.R. wanted to sell one of her two income properties.  
In order for the sale to take place, her husband, C.R., had to 
execute two affidavits waiving his interests in the property.  
In exchange for signing the affidavits, an agreement was reached 
between Attorney Steinhafel and C.R.'s attorney, Dana Gimbel, 
that any proceeds from the sale would be held in trust by 
Attorney Steinhafel pending a determination of the parties' 
respective interests. 
No. 
2012AP1826-D   
 
3 
 
¶5 
The sale of S.R.'s income property closed in September 
2006.  Contrary to the agreement regarding disposition of the 
sale proceeds, the entire amount of the sale was directly 
distributed to S.R. and none of the funds were ever placed in 
trust. 
¶6 
In November of 2007, while the divorce was still 
pending, S.R. wanted to sell a second income property.  An 
agreement similar to the one regarding the sale of the first 
property was made between Attorney Steinhafel and Attorney 
Gimbel.  On November 30, 2007, the proceeds of the sale of 
S.R.'s second income property were deposited into the trust 
account of the Schroeder Group Law Firm, the firm that employed 
Attorney Steinhafel at the time.  On December 21, 2007, contrary 
to the agreement entered into between Attorney Steinhafel and 
Attorney Gimbel, the entire amount of the sale proceeds was 
distributed to S.R. 
¶7 
At the divorce hearing, Attorney Gimbel informed the 
court the parties had reached a stipulation, and that part of 
the stipulation was that the proceeds from the sale of the two 
properties were being held in Attorney Steinhafel's trust 
account.  Attorney Steinhafel was present at the trial, but did 
not inform the court or Attorney Gimbel that the funds were not 
in fact in his trust account and had already been distributed to 
S.R. 
¶8 
The OLR's complaint alleged the following counts of 
misconduct with respect to Attorney Steinhafel's representation 
of S.R.: 
No. 
2012AP1826-D   
 
4 
 
 
COUNT ONE.  By failing to provide notice of the 
receipt 
of 
sale 
proceeds 
to 
adverse 
counsel, 
[Attorney] Steinhafel violated SCR 20:1.15(d)(1).1  
 
COUNT TWO.  By failing to hold the sale proceeds 
in 
trust, 
[Attorney] 
Steinhafel 
violated 
SCR 20:1.15(d)(3).2  
 
COUNT THREE.  By disbursing the sale proceeds to 
his client in direct contradiction of an agreement he 
made 
with 
adverse 
counsel, 
[Attorney] 
Steinhafel 
violated SCR 20:8.4(c).3  
 
COUNT FOUR.  By continuing to misrepresent to 
adverse counsel in court that he was holding sale 
                                                 
1 SCR 20:1.15(d)(1) states: 
 
Notice and disbursement.  Upon receiving funds or 
other property in which a client has an interest, or 
in which the lawyer has received notice that a 3rd 
party has an interest identified by a lien, court 
order, 
judgment, 
or 
contract, 
the 
lawyer 
shall 
promptly notify the client or 3rd party in writing. 
Except as stated in this rule or otherwise permitted 
by law or by agreement with the client, the 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. 
2 SCR 20:1.15(d)(3) provides:  
 
Disputes regarding trust property.  When the 
lawyer and another person or the client and another 
person claim ownership interest in trust property 
identified by a lien, court order, judgment, or 
contract, the lawyer shall hold that property in trust 
until there is an accounting and severance of the 
interests. If a dispute arises regarding the division 
of the property, the lawyer shall hold the disputed 
portion in trust until the dispute is resolved.  
Disputes between the lawyer and a client are subject 
to the provisions of sub. (g)(2). 
3 SCR 20:8.4(c) states it is professional misconduct for a 
lawyer to "engage in conduct involving dishonesty, fraud, deceit 
or misrepresentation . . . ." 
No. 
2012AP1826-D   
 
5 
 
proceeds in trust, [Attorney] Steinhafel violated 
SCR 20:8.4(c). 
¶9 
The OLR's complaint also alleged that in November of 
2006, D.C. hired Attorney Steinhafel to represent him in a small 
claims action.  D.C. said he signed a fee agreement and paid 
Attorney Steinhafel an advance fee of $1,500. 
¶10 D.C. filed a grievance with the OLR on March 2, 2011, 
saying that Attorney Steinhafel had failed to diligently pursue 
his case, failed to communicate with him, and failed to respond 
to his request for a refund of the advanced fee and the return 
of his documents.  Attorney Steinhafel sent a response to the 
OLR saying he had tried to locate D.C.'s file at his former law 
firm, but was unable to do so, and that he had lost contact with 
D.C. after he left the law firm where he was affiliated in 
October 2007 and did not take the file with him to his new law 
firm.  Attorney Steinhafel further told OLR that after he became 
aware of D.C.'s request for a refund of fees, he promptly sent a 
check representing a refund of all fees.  The OLR's complaint 
alleged the following count of misconduct with respect to 
Attorney Steinhafel's representation of D.C.: 
 
COUNT FIVE.  By failing to provide his client 
with notice of his move from one law firm to another, 
by failing to inform his client of his apparent 
termination of his representation and by failing to 
provide his client with a refund of the unearned 
portion of the advance fee more than five years after 
payment, 
[Attorney] 
Steinhafel 
violated 
of 
[sic] 
SCR 20:1.16(d).4 
                                                 
4 SCR 20:1.16(d) provides as follows: 
 
Upon termination of representation, a lawyer 
shall take steps to the extent reasonably practicable 
No. 
2012AP1826-D   
 
6 
 
¶11 The OLR's complaint also alleged that on October 29, 
2009, Attorney Steinhafel was the subject of a traffic stop 
which led to a felony charge against him of operating while 
under the influence of an intoxicant, third offense, with a 
minor child in the vehicle, and misdemeanor charges of operating 
with a prohibited blood alcohol concentration, third offense, 
and operating a motor vehicle after revocation.  On July 19, 
2010, Attorney Steinhafel pled guilty to the felony charge.  The 
remaining charges were dismissed and read-in at sentencing. 
¶12 Attorney Steinhafel did not provide written notice of 
his conviction to the OLR within five days of the finding of 
guilt.  Attorney Steinhafel's counsel in the OWI case did inform 
the OLR of Attorney Steinhafel's guilty plea and sentencing in a 
letter to the OLR dated September 23, 2010. 
¶13 The OLR's complaint alleged the following counts of 
misconduct with respect to the felony conviction: 
 
COUNT SIX.  By engaging in conduct leading to a 
felony 
criminal 
traffic 
conviction, 
[Attorney] 
Steinhafel violated SCR 20:8.4(b).5 
                                                                                                                                                             
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. 
5 SCR 20:8.4(b) states it is professional misconduct for a 
lawyer to "commit a criminal act that reflects adversely on the 
lawyer's honesty, trustworthiness or fitness as a lawyer in 
other respects; . . . ." 
No. 
2012AP1826-D   
 
7 
 
 
COUNT 
SEVEN.  By 
failing 
to 
provide 
written 
notice of his finding of guilt in a criminal case 
within 
five 
days, 
[Attorney] 
Steinhafel 
violated 
SCR 21:15(5).6 
¶14 On November 8, 2012, Attorney Jon E. Fredrickson filed 
a notice of appearance and an answer to the complaint on behalf 
of Attorney Steinhafel.  In March 2013 Attorney Frederickson 
moved to withdraw as counsel for Attorney Steinhafel.  The 
referee granted that motion. 
¶15 Attorney Steinhafel failed to appear for a scheduled 
deposition on April 24, 2013.  He again failed to appear for a 
rescheduled deposition on May 14, 2013.  The OLR filed a motion 
for sanctions which was to be heard on May 13, 2013.  That date 
was 
changed 
to 
a 
telephone 
scheduling/status 
conference.  
Attorney Steinhafel failed to be available by telephone on 
May 13.  After Attorney Steinhafel failed to appear for his 
rescheduled deposition on May 14, 2013, the OLR filed a second 
motion for sanctions which was scheduled to be heard on June 6, 
2013.  Following another telephone conference between the OLR's 
retained counsel, Attorney Steinhafel, and the referee, the 
                                                 
6 SCR 21.15(5) provides: 
 
An attorney found guilty or convicted of any 
crime on or after July 1, 2002, shall notify in 
writing the office of lawyer regulation and the clerk 
of the Supreme Court within 5 days after the finding 
or conviction, whichever first occurs. The notice 
shall include the identity of the attorney, the date 
of finding or conviction, the offenses, and the 
jurisdiction.  An attorney's failure to notify the 
office of lawyer regulation and clerk of the supreme 
court of being found guilty or his or her conviction 
is misconduct.  
No. 
2012AP1826-D   
 
8 
 
June 6 
hearing 
was 
changed 
to 
another 
telephone 
status 
conference. 
 
Attorney 
Steinhafel 
again 
failed 
to 
make 
arrangements to participate in the June 6 telephone conference.  
In an order dated June 6, 2013, the referee set the OLR's second 
motion for sanctions to be heard on June 19, 2013.  Attorney 
Steinhafel failed to appear in person, but did call in and 
participate by telephone. 
¶16 At the June 19, 2013 hearing, the referee granted the 
OLR's motion for sanctions, struck Attorney Steinhafel's answer 
to the complaint, and recommended that a default judgment be 
entered.  The referee found the OLR proved all of the 
allegations in its complaint by clear, satisfactory, and 
convincing evidence.  The referee recommended that Attorney 
Steinhafel's license to practice law be suspended for four 
months, as requested in the OLR's complaint, and that all costs 
of the proceeding be assessed against Attorney Steinhafel.  
Attorney Steinhafel has not filed an appeal from the referee's 
report and recommendation. 
¶17 In light of Attorney Steinhafel's repeated failure to 
appear 
for 
scheduled 
depositions, 
status 
conferences, 
and 
hearings, we deem it appropriate to strike his answer to the 
OLR's complaint and declare him in default. 
¶18 A referee's findings of fact are affirmed unless 
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.  The court may impose 
whatever sanction it sees fit regardless of the referee's 
No. 
2012AP1826-D   
 
9 
 
recommendation.  See In re Disciplinary Proceedings Against 
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. 
¶19 There is no showing that any referee's findings of 
fact are clearly erroneous.  Accordingly, we adopt them.  We 
also agree with the referee's conclusions of law that Attorney 
Steinhafel violated the various rules of professional conduct as 
alleged in the OLR's complaint.  We agree with the referee that 
a four-month suspension of Attorney Steinhafel's license to 
practice law in Wisconsin is an appropriate sanction for his 
misconduct.  Because this case presents no extraordinary 
circumstances, we further determine that Attorney Steinhafel 
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).  
We note the OLR is not seeking restitution. 
¶20 IT 
IS 
ORDERED 
that 
the 
license 
of 
Michael 
W. 
Steinhafel to practice law in Wisconsin is suspended for a 
period of four months, effective January 6, 2014. 
¶21 IT IS FURTHER ORDERED that Michael W. Steinhafel shall 
comply with the provisions of SCR 22.26 concerning the duties of 
a person whose license to practice law in Wisconsin has been 
suspended. 
¶22 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Michael W. Steinhafel shall pay to the Office of 
Lawyer Regulation the costs of this proceeding. 
No. 
2012AP1826-D   
 
10 
 
¶23 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See 
SCR 22.28(2). 
¶24 ANNETTE KINGSLAND ZIEGLER, J., did not participate. 
 
 
No. 
2012AP1826-D   
 
 
 
1