2016 WI 93

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-Respondent,

 v.

John Hotvedt,

 Respondent-Appellant.

DISCIPLINARY PROCEEDINGS AGAINST HOTVEDT

OPINION FILED: November 18, 2016

SUBMITTED ON BRIEFS: 

ORAL ARGUMENT:

SOURCE OF APPEAL:

COURT:

COUNTY:

JUDGE:

JUSTICES:

CONCURRED:

DISSENTED:

NOT PARTICIPATING: 

ATTORNEYS:
2016 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. 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

NOV 18, 2016

Diane M. Fremgen

Clerk of Supreme Court

ATTORNEY disciplinary proceeding. Attorney's license 

suspended. 

¶1 PER CURIAM. We review a report and recommendation of 

Referee Richard C. Ninneman approving a stipulation filed by the 

Office of Lawyer Regulation (OLR) and Attorney John E. Hotvedt. 

In the stipulation, Attorney Hotvedt stipulated to the facts 

underlying the five counts of misconduct alleged in the OLR's 

amended complaint and joined the OLR in jointly recommending an 

18-month suspension of Attorney Hotvedt's Wisconsin law license. 

The referee agreed that an 18-month suspension was appropriate.
No. 2016AP48-D 

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¶2 Upon careful review of this matter, we uphold the 

referee's findings of fact and conclusions of law and agree that 

an 18-month suspension is an appropriate sanction for Attorney 

Hotvedt's misconduct. We also find it appropriate to impose the 

full costs of this proceeding, which are $6,309.67 as of 

September 19, 2016, on Attorney Hotvedt. Since Attorney Hotvedt 

has already made restitution to his law firm, the OLR does not 

seek a restitution order.

¶3 Attorney Hotvedt was admitted to practice law in 

Wisconsin in 2001 and practices in Kenosha. He has no prior 

disciplinary history. 

¶4 On January 7, 2016, the OLR filed a complaint against 

Attorney Hotvedt alleging five counts of misconduct. Attorney 

Hotvedt filed an answer on February 12, 2016. The referee was 

appointed on April 5, 2016. The OLR filed an amended complaint 

on July 11, 2016. The parties' stipulation and Attorney 

Hotvedt's no contest plea was filed on August 8, 2016.

¶5 As part of the stipulation, Attorney Hotvedt agreed 

that the referee could use the factual allegations of the 

amended complaint as an adequate basis in the record for a 

determination of misconduct as to the five counts alleged in the 

amended complaint. 

¶6 According to the amended complaint, Attorney Hotvedt 

was formerly employed at the Burlington, Wisconsin law firm of 

Lloyd, Phenicie, Lynch, Kelly, Hotvedt & Terry, S.C. He was a 

stockholder, director, and officer of the firm and had practiced 

with the firm since he graduated from law school. By common and 
No. 2016AP48-D 

3

accepted practice, and pursuant to written employment 

agreements, all attorneys at the firm understood and agreed that 

revenues generated by the practice of law belonged to the firm. 

¶7 In January 2014, Attorney Hotvedt and Attorney Todd 

Terry told firm shareholders that they would be withdrawing from 

the firm and establishing their own law practice in Kenosha. 

The shareholders of the firm agreed to dissolve the corporation 

effective May 31, 2014. All firm members signed a dissolution 

agreement winding up the corporation.

¶8 Subsequent to the dissolution of the firm, and in 

connection with the winding up of the firm, Attorney Dennis 

Lynch, the former President of the firm, noticed billing 

discrepancies attributable to Attorney Hotvedt, including 

writing off substantial amounts of firm billings in the years 

2011 through 2013. In many instances, Attorney Hotvedt had 

written off client billings, but clients reported to the firm 

that they had paid legal fees directly to Attorney Hotvedt.

¶9 Review of firm accounts showed that Attorney Hotvedt 

had deposited client fee payments directly into his own personal 

bank account rather than depositing the fees into the law firm 

account. Attorney Hotvedt did not disclose to the firm's 

shareholders that he was depositing firm funds paid by clients 

into his personal bank account. Attorney Hotvedt continued his 

conduct of depositing client funds belonging to the firm into 

his personal bank account during 2014, after he had announced 

his departure from the firm and after he had executed a 

dissolution agreement.
No. 2016AP48-D 

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¶10 As part of its investigation into the grievance filed 

against Attorney Hotvedt, the OLR discovered that in 2014 

Attorney Hotvedt established his own consulting company, JBG 

Consulting Services, during the time period in which he was 

preparing to leave the firm. Through this consulting company, 

Attorney Hotvedt converted additional attorney's fees belonging 

to the firm. The OLR's investigation revealed that the total 

amount of identifiable client funds converted by Attorney 

Hotvedt from his former law firm was over $173,000.

¶11 The OLR's amended complaint alleged the following 

counts of misconduct:

 Count One: By converting client funds belonging 

to the firm in an amount in excess of $173,000 

over the years 2011 through 2014, Attorney 

Hotvedt violated SCR 20:8.4(c).1

 Count Two: By writing off client fees owed to 

the firm, Attorney Hotvedt violated SCR 

20:8.4(c).

 Count Three: By establishing JBG Consulting 

Services to convert client fees while employed by

the firm for the purpose of advancing his own 

financial interests, Attorney Hotvedt violated 

SCR 20:8.4(c).

 Count Four: By misrepresenting to the firm that 

he would not bill or otherwise recover client 

fees from firm clients; by converting client 

funds owed to his law firm, by writing off client 

billings; by establishing JBG Consulting Services 

for the purpose of converting client fees owed to 

 

1 SCR 20:8.4(c) provides: "It is professional misconduct 

for a lawyer to: . . . engage in conduct involving dishonesty, 

fraud, deceit or misrepresentation.
No. 2016AP48-D 

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the firm, Attorney Hotvedt breached his fiduciary 

duties owed to his firm and his duty of honesty 

in his professional dealings with the firm, 

thereby violating a standard of conduct set forth 

by the Supreme Court in In re Disciplinary 

Proceedings Against Shea, 190 Wis. 2d 560, 527 

N.W.2d 314 (1995), actionable via SCR 20:8.4(f).2

 Count Five: By failing to disclose to the OLR 

the full extent of funds converted from the firm; 

by failing to initially disclose the full amount 

of fees received from JBG Consulting Services, an 

entity that served to convert client funds 

belonging to the firm; by failing to disclose to 

the OLR that he had converted additional firm 

funds through another bank after specifically 

denying to the OLR that there was any other bank 

into which such deposits were made, Attorney 

Hotvedt violated SCR 22.03(2)3 and SCR 22.03(6),4

enforced through 20:8.4(h).5

 

2 SCR 20:8.4(f) provides: "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. 

3 SCR 22.03(2) provides:

Upon commencing an investigation, the director shall 

notify the respondent of the matter being investigated 

unless in the opinion of the director the 

investigation of the matter requires otherwise. The 

respondent shall fully and fairly disclose all facts 

and circumstances pertaining to the alleged misconduct 

within 20 days after being served by ordinary mail a 

request for a written response. The director may 

allow additional time to respond. Following receipt 

of the response, the director may conduct further 

investigation and may compel the respondent to answer 

questions, furnish documents, and present any 

information deemed relevant to the investigation.
No. 2016AP48-D 

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¶12 In the stipulation, Attorney Hotvedt represented that 

he fully understands the misconduct allegations; fully 

understands his right to contest the matter; fully understands 

the ramifications of his entry into the stipulation; 

acknowledges that he has had the representation and advice of 

counsel; and states that the entry into the stipulation is made 

knowingly and voluntarily.

¶13 As noted above, the parties agreed that an appropriate 

level of discipline for Attorney Hotvedt's misconduct was an 18-

month suspension of his license to practice law in Wisconsin. 

The referee agreed. 

¶14 The referee's August 30, 2016 report and 

recommendation found that the OLR met its burden of proof with 

respect to the five counts of misconduct set forth above. The 

referee said the amount of firm money misappropriated by 

Attorney Hotvedt, coupled with the attorney's admitted 

allegations of failing to cooperate with the OLR, supported a 

very serious level of discipline. The referee commented that 

 

4 SCR 22.03(6) provides: "In the course of the 

investigation, the respondent's wilful failure to provide 

relevant information, to answer questions fully, or to furnish 

documents and the respondent's misrepresentation in a disclosure 

are misconduct, regardless of the merits of the matters asserted 

in the grievance."

5 SCR 20:8.4(h) provides: "It is professional misconduct 

for a lawyer to: . . . fail to cooperate in the investigation 

of a grievance filed with the office of lawyer regulation as 

required by SCR 21.15(4), SCR 22.001(9)(b), SCR 22.03(6), or SCR 

22.04(1)."
No. 2016AP48-D 

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deciding on an appropriate level of discipline was made more 

difficult since the parties reached a stipulation and no contest 

agreement without a hearing, which meant the referee had no 

opportunity to meet and observe Attorney Hotvedt's demeanor as 

to his misconduct.

¶15 The referee went on to say that an 18-month suspension 

for a relatively new attorney who recently started a new firm is 

a significant discipline, particularly considering the 

additional time it may take for him to be reinstated under the 

reinstatement procedures dictated by SCR 22.28(3). The referee 

noted that Attorney Hotvedt has no prior disciplinary history; 

he reached an agreement with his former firm regarding 

restitution; and he ultimately was willing to enter into a 

stipulation and no contest agreement. Upon consideration of all 

those factors, the referee said he had no difficulty agreeing to 

recommend the 18-month suspension recommended by both the OLR 

and Attorney Hotvedt as part of the stipulation. 

¶16 This court will adopt a referee's findings of fact 

unless they are 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 sanctions it sees fit, regardless of 

the referee's recommendation. See In re Disciplinary 

Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 

N.W.2d 686.

¶17 We adopt the referee's findings of fact and 

conclusions of law that Attorney Hotvedt violated the supreme 
No. 2016AP48-D 

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court rules as alleged in the five counts set forth above. We 

further agree with the referee that an 18-month suspension of 

Attorney Hotvedt's license to practice law in Wisconsin is an 

appropriate level of discipline. Since no two cases are 

precisely the same, there is no standard sanction for any 

particular misconduct. We note that in In re Disciplinary 

Proceedings Against Brown, 2005 WI 49, 280 Wis. 2d 44, 695 

N.W.2d 295, this court accepted a stipulation in which an 

attorney agreed to an 18-month suspension for accepting fees 

from clients while informing his law firm he was acting pro 

bono, converting fees belonging to the law firm, and making 

misrepresentations to the OLR as part of its investigation. We 

find the misconduct at issue in this case to be somewhat 

analogous to the misconduct in Brown, and we find a similar 

suspension to be appropriate. We also deem it appropriate, as 

is our usual custom, to impose the full costs of this 

disciplinary proceeding on Attorney Hotvedt.

¶18 IT IS ORDERED that the license of John E. Hotvedt to 

practice law in Wisconsin is suspended for a period of 18 

months, effective December 30, 2016.

¶19 IT IS FURTHER ORDERED that within 60 days of the date 

of this order, John E. Hotvedt shall pay to the Office of Lawyer 

Regulation the costs of this proceeding, which are $6,309.67.

¶20 IT IS FURTHER ORDERED that John E. Hotvedt 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. 2016AP48-D 

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¶21 IT IS FURTHER ORDERED that compliance with all 

conditions with this order is required for reinstatement. See

SCR 22.28(3).
No. 2016AP48-D 

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