Title: Office of Lawyer Regulation v. James M. Schoenecker

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2011 WI 76 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2011AP48-D 
COMPLETE TITLE: 
 
In the Matter of Disciplinary Proceedings 
Against  
James M. Schoenecker, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
James M. Schoenecker, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST SCHOENECKER 
 
 
OPINION FILED: 
July 15, 2011   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
 
 
 
 
2011 WI 76
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2011AP48-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against James M. Schoenecker, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
James M. Schoenecker, 
 
          Respondent. 
 
FILED 
 
JUL 15, 2011 
 
A. John Voelker 
Acting Clerk of Supreme 
Court 
 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   
Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   We review a stipulation filed by the 
Office of Lawyer Regulation (OLR) and Attorney James S. 
Schoenecker pursuant to SCR 22.12.  In the stipulation, Attorney 
Schoenecker 
agrees 
that 
he 
committed 
multiple 
acts 
of 
professional misconduct.  Although the stipulation lists seven 
counts, there are actually more than seven violations of the 
Rules of Professional Conduct for Attorneys because a number of 
the counts contain multiple violations of a single rule.  The 
No. 
2011AP48-D   
 
2 
 
stipulation 
requests 
that 
the 
court 
impose 
a 
three-year 
suspension as discipline for Attorney Schoenecker's professional 
misconduct.  There is no request in this matter for a 
restitution award nor is there a request in the stipulation for 
the imposition of costs against Attorney Schoenecker. 
¶2 
After fully reviewing the matter, we approve the 
stipulation and impose the requested three-year suspension.  The 
professional misconduct committed by Attorney Schoenecker is 
quite disturbing and calls for a substantial suspension.  We 
also note that this suspension will require Attorney Schoenecker 
to undergo the formal reinstatement procedure in SCRs 22.29-
22.33, in which he will be required to demonstrate, among other 
things, that he has a proper understanding of and attitude 
toward the standards that are imposed upon members of the bar in 
this state and that he will act in conformity with those 
standards.  See SCR 22.29(4)(f). 
¶3 
Attorney Schoenecker was admitted to the practice of 
law in Wisconsin in September 2004.  He has not previously been 
the subject of professional discipline. 
¶4 
Much of Attorney Schoenecker's misconduct relates to 
his relationship (both personal and professional) with M.F.  In 
2007 Attorney Schoenecker and M.F. were engaged to be married.  
In December of that year they opened a joint checking account.  
M.F. also obtained a $100,000 home equity line of credit and 
then made a loan of $48,500 to Attorney Schoenecker.  In 
exchange 
for 
the 
loan, 
Attorney 
Schoenecker 
executed 
a 
No. 
2011AP48-D   
 
3 
 
promissory note, in which he promised to repay the loan with 
interest. 
¶5 
Two 
days 
after 
making 
the 
loan 
to 
Attorney 
Schoenecker, M.F. learned that Attorney Schoenecker had made 
cash withdrawals from her checking account1 at a casino.  Those 
withdrawals had resulted in a $1,500 negative balance in the 
account.  This discovery apparently caused M.F. to close the 
joint checking account and to end her engagement to Attorney 
Schoenecker. 
¶6 
Attorney Schoenecker repaid only $26,500 of the loan 
balance.  With interest, he still owed M.F. approximately 
$23,000.  At some point in 2009 M.F. filed a collection action 
against Attorney Schoenecker.  The parties ultimately reached a 
settlement, pursuant to which Attorney Schoenecker paid the 
total sum of $32,106.36 to M.F. as part of a full resolution of 
the financial issues between the individuals.2 
¶7 
In March 2008, between the end of the parties' 
engagement and M.F.'s filing of the collection lawsuit, Attorney 
Schoenecker became an associate at the Clair Law Offices (Clair 
law firm) in Lake Geneva.  It appears from the stipulation that 
                                                 
1 The stipulation is not clear as to whether the withdrawals 
were made from the joint checking account the two had recently 
established or from a separate checking account owned solely by 
M.F.   
2 Although the stipulation does not note this fact, the 
court takes judicial notice that the circuit court docket record 
for the action brought by M.F. against Attorney Schoenecker 
shows that the final dismissal of the case did not occur until 
January 2011. 
No. 
2011AP48-D   
 
4 
 
prior to this time Attorney Schoenecker had been representing 
M.F. in a dispute with a contractor who had performed some work 
on a property owned by M.F.  Attorney Schoenecker informed the 
law firm that he was representing M.F. and sent her a Legal 
Representation and Fee Agreement letter on behalf of the Clair 
law firm.  M.F. was then considered a client of the firm.  
Ultimately, after the contractor filed a lawsuit against M.F. in 
small claims court, Attorney Schoenecker withdrew as M.F.'s 
attorney. 
¶8 
Attorney Schoenecker provided legal representation to 
M.F. at the same time as he was a debtor to her pursuant to the 
December 2007 loan and promissory note.  Attorney Schoenecker 
did not obtain M.F.'s written consent to waive any actual or 
potential conflict of interest in the legal representation 
caused by the creditor/debtor relationship. 
¶9 
The policy of the Clair law firm was that senior 
attorneys of the firm had to approve bills before they were sent 
to clients.  Attorney Schoenecker, however, sent out two 
invoices to M.F. in September and October 2008 without obtaining 
the necessary approval.  The total amount shown on the bills was 
$13,523, but a substantial number of the entries on those 
invoices were fraudulent.  The OLR's memorandum in support of 
the stipulation alleges that Attorney Schoenecker's submission 
of these inflated invoices to M.F. was an attempt to offset the 
remaining amount that he owed M.F. from the December 2007 loan. 
¶10 In addition to attempting to defraud M.F. through the 
invoices, Attorney Schoenecker also engaged in a pattern of 
No. 
2011AP48-D   
 
5 
 
attempted and completed thefts from her bank accounts.  In 
December 2008 he obtained some of M.F.'s personal information 
without her consent and began attempting to withdraw money from 
a business account that she maintained. 
¶11 Attorney Schoenecker used M.F.'s personal information 
to enter her business account without her permission and set up 
an online bill paying account.  He changed the e-mail address on 
the account so that M.F. would not receive notice of any checks 
he intended to draw on her account. 
¶12 Attorney Schoenecker first generated two checks in 
December 2008 that he made payable to himself in the amounts of 
$950 and $450.  He was able to cash the $950 check, but his 
attempt to cash the $450 check was apparently unsuccessful.  
Attorney Schoenecker tried to cash a third check in the amount 
of $1,750 in January 2009, but the check did not clear due to 
insufficient funds in the account.  Attorney Schoenecker did not 
have M.F.'s consent to generate or cash any of these checks. 
¶13 Attorney Schoenecker was charged in two separate 
criminal proceedings arising out his actions concerning M.F.  In 
a Walworth County proceeding, State v. Schoenecker, Case No. 
2009CF250, the state charged Attorney Schoenecker with two 
counts of felony identity theft for the purpose of obtaining 
money for his attempts to withdraw money from M.F.'s business 
account.  On January 27, 2010, pursuant to a plea agreement, 
Attorney Schoenecker pled guilty to one felony count of identity 
theft.  See Wis. Stat. § 943.201(2)(a).  The second count of 
identity theft was dismissed and read in for sentencing 
No. 
2011AP48-D   
 
6 
 
purposes.  The Walworth County circuit court imposed two years 
of probation and ordered Attorney Schoenecker to pay restitution 
and court costs. 
¶14 In a Waukesha County proceeding, State v. Schoenecker, 
Case No. 2009CF732, Attorney Schoenecker was charged with one 
count of felony forgery for creating the $1,750 check that he 
unsuccessfully attempted to cash in January 2009.  On March 12, 
2010, Attorney Schoenecker pled guilty to a reduced misdemeanor 
charge of Theft-Moveable Property (less than $2,500).  The 
Waukesha County circuit court imposed and stayed a sentence of 
four months in jail and placed Attorney Schoenecker on probation 
for a period of one year.  The circuit court also ordered 
Attorney Schoenecker to pay restitution to M.F., as well as 
court costs. 
¶15 Attorney 
Schoenecker 
did 
not 
provide 
written 
notification of either of his convictions to the OLR or this 
court within five days.  He has, however, paid all restitution 
amounts and court costs, except for $283.25 in costs in the 
Walworth County action, which amount is not due until January 
2012. 
¶16 In addition to his misconduct involving M.F., Attorney 
Schoenecker also set up his own separate law firm on the side 
while working as an associate attorney for the Clair law firm.  
He did not inform the Clair law firm of this fact.  He did set 
up a client trust account for his separate practice, but he did 
not disclose the existence of this separate trust account in his 
No. 
2011AP48-D   
 
7 
 
Fiscal 2010 State Bar of Wisconsin Membership Dues and Supreme 
Court Assessments Statement. 
¶17 The final part of Attorney Schoenecker's professional 
misconduct involves his own personal bankruptcy proceeding.  On 
July 22, 2009, while M.F.'s collection action against him was 
pending and a few weeks after the two state criminal actions had 
been filed against him, Attorney Schoenecker filed a Chapter 7 
bankruptcy petition.  In his bankruptcy schedules Attorney 
Schoenecker claimed that he had become unemployed on June 30, 
2009.  He failed to disclose, however, that he had also been 
operating a separate solo law practice apart from his prior 
employment with the Clair law firm.  He disclosed only the 
income he had earned from the Clair law firm.  He did not 
disclose any of the income he had received from his "side" 
practice.  In addition to filing these inaccurate schedules, 
Attorney Schoenecker also falsely testified under oath at a 
meeting of creditors on August 31, 2009, that his bankruptcy 
filing was true and correct and did not need to be amended, 
except to correct the names of some creditors. 
¶18 On January 12, 2010, the bankruptcy court granted 
Attorney Schoenecker a discharge in bankruptcy.  After the U.S. 
Trustee learned of Attorney Schoenecker's practice of law on his 
own apart from the Clair law firm, the Trustee moved to revoke 
Attorney Schoenecker's discharge in bankruptcy on the ground 
that the bankruptcy had been gained through fraud.  Attorney 
Schoenecker agreed to a stipulation to revoke his bankruptcy 
discharge in May 2010.  In the stipulation, he acknowledged that 
No. 
2011AP48-D   
 
8 
 
he had testified falsely at the August 2009 meeting of creditors 
and in a subsequent deposition taken on October 20, 2009.  He 
also admitted that his bankruptcy schedules had not been true 
because he had failed to disclose that he had received income 
from his private law practice during the six-month period prior 
to filing his bankruptcy petition.  On the basis of the 
stipulation, the bankruptcy court did ultimately revoke Attorney 
Schoenecker's discharge in bankruptcy. 
¶19 Although there is no indication in the stipulation 
filed in this court that he was ever criminally charged for 
violations of federal bankruptcy law, Attorney Schoenecker 
agrees that his conduct in the bankruptcy proceeding was a 
violation 
of 
11 
U.S.C. 
§ 727(a)(4)(A), 
which, 
in 
turn, 
constituted a bankruptcy crime under 18 U.S.C. § 152 for making 
a false oath or account in a bankruptcy proceeding. 
¶20 On the basis of these facts, the parties' stipulation 
sets forth seven counts of professional misconduct.  The first 
two 
counts 
relate 
specifically 
to 
Attorney 
Schoenecker's 
interactions with and representation of M.F.  Count One alleges 
that 
by 
agreeing 
to 
represent 
M.F. 
while 
maintaining 
a 
creditor/debtor relationship with her without obtaining her 
informed consent, Attorney Schoenecker violated SCR 20:1.7(a).3  
                                                 
3 SCR 20:1.7(a) states: 
Except as provided in par. (b), a lawyer shall 
not represent a client if the representation involves 
a concurrent 
conflict of interest. A concurrent 
conflict of interest exists if: 
No. 
2011AP48-D   
 
9 
 
Count Two alleges that Attorney Schoenecker violated SCR 
20:1.5(a)4 by sending invoices to M.F. for services that he did 
not perform and charging her fees she did not incur. 
                                                                                                                                                             
(1) the representation of one client will be 
directly adverse to another client; or 
(2) there 
is 
a 
significant 
risk 
that 
the 
representation 
of 
one 
or 
more 
clients 
will 
be 
materially limited by the lawyer's responsibilities to 
another client, a former client or a third person or 
by a personal interest of the lawyer. 
4 SCR 20:1.5(a) provides: 
A lawyer shall not make an agreement for, charge, 
or collect an unreasonable fee or an unreasonable 
amount for expenses. The factors to be considered in 
determining the reasonableness of a fee include the 
following:  
(1) the time and labor required, the novelty and 
difficulty of the questions involved, and the skill 
requisite to perform the legal service properly;   
(2) the likelihood, if apparent to the client, 
that the acceptance of the particular employment will 
preclude other employment by the lawyer;  
(3) the fee customarily charged in the locality 
for similar legal services;  
(4) the amount involved and the results obtained;  
(5) the time limitations imposed by the client or 
by the circumstances;  
(6) the nature and length of the professional 
relationship with the client;   
(7) the experience, reputation, and ability of 
the lawyer or lawyers performing the services; and  
(8) whether the fee is fixed or contingent.  
No. 
2011AP48-D   
 
10 
 
¶21 Counts Three and Four involve aspects of the separate 
law practice that Attorney Schoenecker established while working 
as an associate for the Clair law firm.  Count Three states that 
Attorney Schoenecker's 2010 dues statement failed to identify 
the client trust account that he had set up for his separate 
private law practice, in violation of SCR 20:1.15(i).5  Count 
                                                 
5 SCR 20:1.15(i) states:  Certification of compliance with 
trust account rules. 
(1) Annual requirement.  A member of the state 
bar of Wisconsin shall file with the state bar of 
Wisconsin annually, with payment of the member's state 
bar dues or upon any other date approved by the 
supreme court, a certificate stating whether the 
member is engaged in the practice of law in Wisconsin.  
If the member is practicing law, the member shall 
state the account number of any trust account, and the 
name of each financial institution in which the member 
maintains a trust account, a safe deposit box, or 
both, as required by this section.  The state bar 
shall supply to each member, with the annual dues 
statement, or at any other time directed by the 
supreme court, a form on which the certification must 
be made. 
(2) Trust account record compliance.  Each state 
bar member shall explicitly certify on the state bar 
certificate described in par. (1) that the member has 
complied with each of the record-keeping requirements 
set forth in subs. (f) and (j)(5). 
(3) Certification by law firm.  A law firm shall 
file one certificate on behalf of the lawyers in the 
firm who are required to file a certificate under par. 
(1).  The law firm shall give a copy of the 
certificate to each lawyer in the firm. 
(4) Suspension for non-compliance.  The failure 
of a state bar member to file the certificate is 
grounds for automatic suspension of the member's 
membership in the state bar in the same manner 
provided in SCR 10.03(6) for nonpayment of dues.  The 
No. 
2011AP48-D   
 
11 
 
Four asserts that Attorney Schoenecker's establishment of a 
clandestine law practice while working as an associate attorney 
for the Clair law firm and his failure to disclose and to 
account for the fees he earned in the separate law practice 
constituted a breach of his fiduciary duty to the Clair law firm 
and a breach of his duty of honesty in his professional dealings 
with the firm, in violation of SCR 20:8.4(f).6 
¶22 Count Five alleges that Attorney Schoenecker committed 
a host of criminal acts that violated SCR 20:8.4(b):7 (1) 
misappropriating the personal information of M.F. and using that 
information to generate two checks payable to him from her 
business bank account; (2) hacking into M.F.'s business bank 
account; (3) generating a third check for $1,750 and attempting 
to cash it; (4) making false statements under oath in his 
bankruptcy petition and other bankruptcy documents; and (5) 
giving false testimony under oath in the bankruptcy proceeding. 
¶23 Count Six similarly lists a number of statements made 
or 
actions 
taken 
by 
Attorney 
Schoenecker 
that 
involved 
dishonesty, fraud, deceit or misrepresentation, in violation of 
                                                                                                                                                             
filing of 
a 
false certificate is unprofessional 
conduct and is grounds for disciplinary action. 
6 SCR 20:8.4(f) states it is professional misconduct for a 
lawyer to "violate a statute, supreme court rule, supreme court 
order or supreme court decision regulating the conduct of 
lawyers; . . . ." 
7 SCR 20:8.4(b) provides 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. 
2011AP48-D   
 
12 
 
SCR 20:8.4(c):8  (1) sending fraudulent billing statements to 
M.F.; (2) using misappropriated personal information of M.F. in 
attempts 
to 
withdraw 
money 
from 
her 
bank 
account; 
(3) 
fraudulently entering M.F.'s bank account to withdraw money from 
the account; (4) establishing a solo private law practice while 
employed by the Clair law firm without disclosing such practice 
to his employer or providing an accounting of the legal fees 
earned in that solo practice; (5) failing to disclose the 
separate solo law practice or fees earned in that practice on 
his bankruptcy schedules; (6) failing to disclose the client 
trust account for the separate solo law practice on his 
bankruptcy schedules; (7) giving false testimony under oath at 
the meeting of creditors; and (8) giving false testimony under 
oath at a bankruptcy deposition that he had not opened a client 
trust account. 
¶24 Finally, in Count Seven, Attorney Schoenecker agrees 
that his failure to notify the OLR and the clerk of this court 
of his convictions in the Walworth County and Waukesha County 
criminal actions constituted violations of SCR 21.15(5),9 which 
is enforced via SCR 20:8.4(f). 
                                                 
8 SCR 20:8.4(c) states that it is professional misconduct 
for a lawyer to "engage in conduct involving dishonesty, fraud, 
deceit or misrepresentation; . . . ." 
9 SCR 21.15(5) provides as follows: 
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 
No. 
2011AP48-D   
 
13 
 
¶25 The stipulation states that Attorney Schoenecker fully 
understands the nature of the misconduct allegations against him 
and his right to contest those allegations.  It also states that 
Attorney Schoenecker understands his right to the assistance of 
counsel and notes that Attorney Schoenecker has been represented 
by counsel during the disciplinary process.  The parties further 
assert that the stipulation is not the product of plea-
bargaining.  Finally, Attorney Schoenecker represents that he is 
entering the stipulation knowingly and voluntarily. 
¶26 The stipulation requests that the court impose the 
three-year suspension sought by the OLR as discipline for 
Attorney Schoenecker's professional misconduct.  As support for 
a substantial suspension in this case, the OLR's memorandum in 
support of the stipulation cites a number of prior disciplinary 
decisions.  See, e.g., In re Disciplinary Proceedings Against 
George, 2008 WI 21, 308 Wis. 2d 50, 746 N.W.2d 236 (suspension 
of four years and three months for criminal conduct involving, 
among other things, conspiracy to commit offenses involving 
federal program funds); In re Disciplinary Proceedings Against 
Gral, 2007 WI 22, 299 Wis. 2d 160, 727 N.W.2d 495 (three-year 
suspension for criminal conduct involving federal mail fraud); 
In re Disciplinary Proceedings Against Webster, 217 Wis. 2d 371, 
                                                                                                                                                             
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. 
2011AP48-D   
 
14 
 
577 N.W.2d 21 (1998) (two-year suspension for criminal conduct 
involving aiding and abetting the fraudulent concealment of his 
clients' property in a bankruptcy proceeding). 
¶27 After reviewing the matter, we approve the stipulation 
and adopt the stipulated facts and legal conclusions of 
professional misconduct.  Although the cases cited by the OLR 
are not precisely on point because of factual differences, we 
agree that a three-year suspension of Attorney Schoenecker's 
license to practice law in Wisconsin is an appropriate level of 
discipline in this case in light of his serious misconduct.  
Attorney Schoenecker engaged in a disturbing series of illegal 
and dishonest actions, which were designed to benefit him 
financially to the injury of his client, his law firm employer, 
and his creditors.  As we noted at the beginning of this 
opinion, before he will be allowed to practice law again in this 
state, Attorney Schoenecker will need to demonstrate that, among 
other things, he has a proper understanding of and attitude 
toward the standards that are imposed upon members of the bar in 
this state and that he will act in conformity with those 
standards.  See SCR 22.29(4)(f).  We do not impose restitution, 
as the OLR did not make any such request.  Finally, because 
Attorney Schoenecker entered into a comprehensive stipulation 
under SCR 22.12, thereby obviating the need for the appointment 
of a referee and a full disciplinary proceeding, we do not 
impose costs in this matter. 
No. 
2011AP48-D   
 
15 
 
¶28 IT IS ORDERED that the license of James M. Schoenecker 
to practice law in Wisconsin is suspended for a period of three 
years, effective August 15, 2011. 
¶29 IT IS FURTHER ORDERED that James M. Schoenecker 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. 
 
No.  2011AP48-D.awb 
 
1 
 
 
¶30 ANN WALSH BRADLEY, J.   (dissenting).  I believe the 
seriousness of Attorney Schoenecker's admitted conduct warrants 
rejection of the stipulation of the parties.  Although a three-
year suspension is a severe sanction, I think that Attorney 
Schoenecker's conduct may merit a greater sanction.  
¶31 Because I would reject the stipulation, appoint a 
referee to preside over this case, and allow the complaint to 
proceed 
through 
the 
disciplinary 
process, 
I 
respectfully 
dissent.  
¶32 I am authorized to state that Chief Justice SHIRLEY S. 
ABRAHAMSON joins this dissent. 
 
No.  2011AP48-D.awb 
 
 
 
1