Title: Office of Lawyer Regulation v. James T. Runyon

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2015 WI 95 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2015AP578-D 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against James T. Runyon, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
James T. Runyon, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST RUNYON 
 
 
OPINION FILED: 
October 8, 2015 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
      
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ABRAHAMSON, J., concurs. (Opinion filed.) 
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
 
 
 
 
 
 
 
 
 
 
2015 WI 95
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2015AP578-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against James T. Runyon, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
James T. Runyon, 
 
          Respondent. 
 
FILED 
 
OCT 8, 2015 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.  Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   We review a stipulation filed pursuant 
to Supreme Court Rule (SCR) 22.121 by the Office of Lawyer 
                                                 
1 SCR 22.12 provides: 
(1) The director may file with the complaint a 
stipulation of the director and the respondent to the 
facts, conclusions of law regarding misconduct, and 
discipline to be imposed.  The supreme court may 
consider the complaint and stipulation without the 
appointment of a referee, in which case the supreme 
court 
may 
approve 
the 
stipulation, 
reject 
the 
(continued) 
No. 
2015AP578-D   
 
2 
 
Regulation (OLR) and Attorney James T. Runyon.  In the 
stipulation, 
Attorney 
Runyon 
admits 
that 
he 
engaged 
in 
misconduct consisting primarily of a number of trust account 
violations.  The parties jointly request that this court impose 
a 60-day suspension of Attorney Runyon's license to practice law 
in Wisconsin as discipline for his admitted misconduct.  
¶2 
We approve the stipulation and suspend Attorney 
Runyon's license to practice law in this state for a period of 
60 days.  Because this matter was resolved with a stipulation 
                                                                                                                                                             
stipulation, 
or 
direct 
the 
parties 
to 
consider 
specific modifications to the stipulation. 
(2) If the supreme court approves a stipulation, 
it shall adopt the stipulated facts and conclusions of 
law and impose the stipulated discipline. 
(3) If the supreme court rejects a stipulation, a 
referee shall be appointed and the matter shall 
proceed as a complaint filed without a stipulation. 
(3m) If the supreme court directs the parties to 
consider specific modifications to the stipulation, 
the parties may, within 20 days of the date of the 
order, file a revised stipulation, in which case the 
supreme court may approve the revised stipulation, 
adopt the stipulated facts and conclusions of law, and 
impose the stipulated discipline. If the parties do 
not file a revised stipulation within 20 days of the 
date of the order, a referee shall be appointed and 
the matter shall proceed as a complaint filed without 
a stipulation. 
(4) A stipulation rejected by the supreme court 
has no evidentiary value and is without prejudice to 
the respondent's defense of the proceeding or the 
prosecution of the complaint. 
No. 
2015AP578-D   
 
3 
 
under SCR 22.12, we do not require Attorney Runyon to pay the 
costs of this proceeding.  There is no request for restitution. 
¶3 
Attorney Runyon was admitted to the practice of law in 
Wisconsin in 1978.  He practices law in the Tomahawk area.  In 
1984, Attorney Runyon's law license was suspended for one year 
for conduct involving moral turpitude, dishonesty, fraud, or 
deceit and for providing false testimony, violations of former 
SCRs 11.01, 20.04(3) and (4), 22.28(4)(b), and 40.13.  In re 
Disciplinary 
Proceedings 
Against 
Runyon, 
121 
Wis. 2d 
37, 
357 N.W.2d 545 (1984).  In 2006, Attorney Runyon received a 
private reprimand for misconduct involving dishonesty, fraud, 
deceit, or misrepresentation, in violation of SCR 20:8.4(c).  
Private Reprimand No. 2006-11.  
¶4 
On March 23, 2015, the OLR filed a complaint alleging 
six counts of misconduct relating to trust account violations 
that occurred over a period of several months in 2013 and early 
2014.  On May 12, 2015, the parties executed a stipulation 
pursuant to SCR 22.12.  
¶5 
Attorney Runyon maintained an IOLTA trust account at 
First Merit Bank in Kaukauna, Wisconsin.  Between September and 
October 2013, a series of overdrafts occurred.  At the OLR's 
request, Attorney Runyon provided the OLR with his transaction 
register, client ledger, and bank statements.  Attorney Runyon's 
transaction register consisted of handwritten check stubs, which 
did not show a consistent, accurate running balance, did not 
include the source and client matter for all deposits, and did 
not include the purpose for all disbursements.  Attorney Runyon 
No. 
2015AP578-D   
 
4 
 
did 
not 
perform 
complete 
and 
accurate 
monthly 
account 
reconciliations.  For example, Attorney Runyon's handwritten 
check stubs indicate that the balance in his trust account as of 
June 27, 2013, should have been $134,924.09.  However, bank 
records show that Attorney Runyon's actual trust account balance 
on June 27, 2013, was only $5,944.86.  
¶6 
Because the OLR was unable to determine the cause of 
the overdrafts based solely upon records provided by Attorney 
Runyon, the OLR obtained Attorney Runyon's bank statements, 
checks, and deposit records for 2013 directly from the bank and 
conducted an audit.  
¶7 
The OLR's reconstructed records indicate that Attorney 
Runyon's trust account first became overdrawn (on the books, as 
opposed to the bank balance) by a total of $16,651.33 at the end 
of the day on September 16, 2013.  On September 19, 2013, the 
largest overdraft occurred, in the amount of $24,151.33.  
¶8 
On November 4, 2013, in the wake of these overdrafts, 
Attorney Runyon opened a new trust account at River Valley Bank 
and made an initial deposit of $20,000.  
¶9 
On November 12 and 14, 2013, River Valley Bank charged 
Attorney Runyon miscellaneous fees associated with opening the 
new account.  Attorney Runyon did not account for such fees and 
did not keep any firm funds designated to cover account fees and 
charges in the trust account. 
¶10 On December 2, 2013, Attorney Runyon closed the First 
Merit Bank trust account, withdrew its remaining balance of 
$8,072.60, and deposited it into his River Valley Bank trust 
No. 
2015AP578-D   
 
5 
 
account.  The $8,072.62 belonged to Attorney Runyon either as 
earned fees or as personal funds.  
¶11 On December 31, 2013, there was an overdraft in the 
amount of $1,518.75 on Attorney Runyon's River Valley Bank trust 
account.  A trust account check in the amount of $2,500 was 
presented and returned unpaid.  
¶12 In response to the December 31, 2013 overdraft, 
Attorney Runyon provided copies of various records requested by 
the OLR, including his transaction register, bank statements, 
images of the canceled checks, deposit slips, and copies of the 
client ledgers at issue.  A number of the canceled checks did 
not include the client matter and purpose of the check on the 
memo line.  In addition, a number of the original deposit slips 
that were submitted to the bank by Attorney Runyon did not 
include client information.  Attorney Runyon stipulated to his 
commission of the misconduct charged as follows: 
¶13 By failing to hold in trust and account for at least 
$19,053.61 and as much as $86,850.68 in client and third-party 
funds between June 27, 2013, and October 1, 2013, Attorney 
Runyon violated SCR 20:1.15(b)(1)2 (Count One).   
                                                 
2 SCR 20:1.15(b)(1) provides: 
A lawyer shall hold in trust, separate from the 
lawyer's own property, that property of clients and 
3rd parties that is in the lawyer's possession in 
connection with a representation.  All funds of 
clients and 3rd parties paid to a lawyer or law firm 
in connection with a representation shall be deposited 
in one or more identifiable trust accounts. 
No. 
2015AP578-D   
 
6 
 
¶14 By failing to hold in trust and account for at least 
$19,053.61 and as much as $86,850.68 in client and third-party 
funds between June 27, 2013, and October 1, 2013, and, on 
numerous occasions, by converting funds from client matters in 
order to cover checks he issued in other client matters for 
which there was not sufficient funds on deposit in the trust 
account, Attorney Runyon violated SCR 20:8.4(c)3 (Count Two).   
¶15 By depositing eight checks into his trust account 
totaling $18,550 that were drawn upon his business account, 
Attorney Runyon violated SCR 20:1.15(b)(3)4 (Count Three).   
¶16 By failing to maintain a transaction register that 
accurately reflected the activity in his trust account and that 
included the balance after each transaction, the source and 
client matter for all deposits, and the purpose for all 
disbursements, Attorney Runyon violated SCR 20:1.15(f)(l)a.5  
                                                 
3 SCR 20:8.4(c) provides that it is professional misconduct 
for a lawyer to "engage in conduct involving dishonesty, fraud, 
deceit or misrepresentation." 
4 SCR 20:1.15(b)(3) provides that "[n]o 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." 
5 SCR 20:1.15(f)(1)a. provides: 
The 
transaction 
register 
shall 
contain 
a 
chronological record of all account transactions, and 
shall include all of the following: 
1. the date, source, and amount of all deposits; 
(continued) 
No. 
2015AP578-D   
 
7 
 
Further, by failing to maintain client ledgers that accurately 
reflected the activity in his trust account, and by making 
disbursements of funds from his trust account that created final 
total negative balances of $53,772.73 in 14 client ledgers as of 
October 1, 2013, and by allowing five client ledgers to become 
overdrawn temporarily in July and August 2013 by a total amount 
of $6,759.36, Attorney Runyon violated SCR 20:1.15(f)(l)b.6 
(Count Four).  
¶17 By depositing $8,072.60 of personal funds into his 
River Valley Bank trust account on December 2, 2013, Attorney 
Runyon violated SCR 20:1.15(b)(3) (Count Five).  
                                                                                                                                                             
2. the date, check or transaction number, payee 
and amount of all disbursements, whether by check, 
wire transfer, or other means; 
3. the date and amount of every other deposit or 
deduction of whatever nature; 
4. the identity of the client for whom funds were 
deposited or disbursed; and 
5. 
the 
balance 
in 
the 
account 
after 
each 
transaction. 
6 SCR 20:1.15(f)(1)b. provides: 
A subsidiary ledger shall be maintained for each 
client or 3rd party for whom the lawyer receives trust 
funds that are deposited in an IOLTA account or any 
other pooled trust account.  The lawyer shall record 
each receipt and disbursement of a client's or 3rd 
party's 
funds 
and 
the 
balance 
following 
each 
transaction.  A lawyer shall not disburse funds from 
an IOLTA account or any pooled trust account that 
would create a negative balance with respect to any 
individual client or matter. 
No. 
2015AP578-D   
 
8 
 
¶18 By failing to identify the client matter on his trust 
account deposit slips submitted to the bank, Attorney Runyon 
violated 20:1.15(f)(l)d.7  Further, by issuing checks from his 
River Valley Bank trust account without including the client 
matter and purpose on the memo lines of such checks, Attorney 
Runyon violated 20:1.15(f)(l)e.l.8  Lastly, by failing to obtain, 
and maintain with his trust account records, imaged checks or 
copies of the canceled checks issued from his trust account, 
Attorney Runyon violated 20:1.15(f)(l)e.2.9 (Count Six).   
                                                 
7 SCR 20:1.15(f)(1)d. provides: 
Deposit slips shall identify the name of the 
lawyer or law firm, and the name of the account.  The 
deposit slip shall identify the amount of each deposit 
item, the client or matter associated with each 
deposit item, and the date of the deposit.  The lawyer 
shall maintain a copy or duplicate of each deposit 
slip.  All deposits shall be made intact.  No cash, or 
other form of disbursement, shall be deducted from a 
deposit.  Deposits of wired funds shall be documented 
in the account's monthly statement. 
8 SCR 20:1.15(f)(1)e.1. provides: 
Checks shall be pre-printed and pre-numbered.  
The name and address of the lawyer or law firm, and 
the name of the account shall be printed in the upper 
left corner of the check.  Trust account checks shall 
include 
the 
words 
"Client 
Account," 
or 
"Trust 
Account," or words of similar import in the account 
name.  Each check disbursed from the trust account 
shall identify the client matter and the reason for 
the disbursement on the memo line. 
9 SCR 20:1.15(f)(1)e.2. provides that "[c]anceled checks 
shall be obtained from the financial institution.  Imaged checks 
may be substituted for canceled checks." 
No. 
2015AP578-D   
 
9 
 
¶19 The stipulation clearly states that it was not the 
result of plea bargaining.  Attorney Runyon states that he fully 
understands the allegations of misconduct against him and his 
right to contest those allegations.  He nonetheless admits his 
misconduct and assents to the discipline sought by the OLR.  He 
further states that he fully understands the ramifications that 
will follow if this court accepts the stipulation and imposes 
the requested level of discipline.  Attorney Runyon also 
represents that he understands his right to consult with counsel 
in this matter.  Finally, he asserts that his entry into the 
stipulation is made knowingly and voluntarily. 
¶20 The only real issue here is whether the stipulated 
level of discipline (a 60-day suspension) is an appropriate 
level of discipline.  Precedent in the area of failing to hold 
funds in trust is clustered on two extremes.  The most egregious 
trust account misconduct, misappropriation, can merit revocation 
or a lengthy suspension.  Other cases, however, warrant a much 
less severe level of discipline, such as a reprimand or short 
suspension.  Attorney Runyon's conduct lies closer to the lower 
end of the two extremes.  
¶21 Although it was improper for Attorney Runyon to 
deposit personal funds into his trust account, his motive was to 
make the trust account whole. 
¶22 The OLR states that it considered several cases, as 
well 
as 
aggravating 
factors—including 
Attorney 
Runyon's 
disciplinary history—and mitigating factors, when analyzing what 
level of discipline it would seek in this matter.  See, e.g., 
No. 
2015AP578-D   
 
10 
 
In re Disciplinary Proceeding Against Grogan, 2011 WI 7, 
331 Wis. 2d 341, 795 N.W.2d 745 (imposing 60-day suspension on 
attorney with previous reprimand who engaged in various trust 
account violations, including commingling funds in the trust 
account and paying for office rent, groceries, and prepaid cash 
cards from the trust account); In re Disciplinary Proceedings 
Against Molinaro, 2009 WI 61, 318 Wis. 2d 375, 769 N.W.2d 458 
(imposing 
60-day 
suspension 
for 
trust 
account 
anomalies, 
including inappropriate transfers of funds between personal, 
trust, and business accounts).   
¶23 The OLR deems suspension warranted in this case 
because Attorney Runyon was, at the least, extremely reckless 
with managing his trust account.  In a four-month period, 
Attorney Runyon's trust account was repeatedly out of balance.  
Attorney Runyon knew or should have known that he did not have 
sufficient funds in his trust account to cover many of the 
disbursements he made to clients.  Indeed, Attorney Runyon made 
$18,550 in deposits of personal funds to the account between 
June 29 and September 19, 2013, prior to the bank issuing its 
first overdraft notice on September 20, 2013.  After the 
overdrafts occurred, Attorney Runyon then deposited additional 
personal funds to make the account whole.  So, while no clients 
were ultimately harmed, that is due only to the fact that 
Attorney Runyon had sufficient personal funds available to make 
up for his overextension.  
¶24 On review of the entire record, we accept the 
stipulation and impose the jointly requested sanction of a 60-
No. 
2015AP578-D   
 
11 
 
day suspension of Attorney Runyon's license to practice law in 
this state.  No restitution was sought so we do not impose 
restitution.  Because this matter was resolved with the filing 
of a stipulation under SCR 22.12 and without the appointment of 
a referee, the OLR does not seek costs and we will not require 
Attorney Runyon to pay any costs. 
¶25 IT IS ORDERED that the license of James T. Runyon to 
practice law in Wisconsin is suspended for a period of 60 days, 
effective November 7, 2015. 
¶26 IT IS FURTHER ORDERED that James T. Runyon 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. 
¶27 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See 
SCR 22.28(2). 
 
 
No.  2015AP578-D.ssa 
 
 
1 
 
¶28 SHIRLEY S. ABRAHAMSON, J.   (concurring).  I write to 
express concern that the per curiam does not sufficiently 
justify the 60-day suspension the court approves in this 
stipulated matter.  Attorney Runyon and the OLR stipulated to 
the violation of the trust accounting rules and to a 60-day 
suspension.   
¶29 Attorney Runyon has had two prior brushes with OLR.  
In 1988, his license was suspended for one year.  In 2006, he 
received a private reprimand.   
¶30 In contrast, Attorney Thomas Mulligan receives a 
9-month suspension for violating trust accounting rules.  OLR v. 
Mulligan, 2015 WI 96, ___ Wis. 2d ___, ___ N.W.2d ___.  Attorney 
Mulligan contested the OLR complaint and proposed discipline.  
Attorney Mulligan has had three prior brushes with OLR.  In 
1997, Attorney Milligan received a private reprimand. In 2005, 
Mulligan received a private reprimand.  In 2009, he received a 
public reprimand. 
¶31 I 
have 
difficulty 
reconciling 
the 
significantly 
different levels of discipline imposed in these two trust 
accounting violation cases. 
No.  2015AP578-D.ssa 
 
 
 
 
1