Case Name: In the Matter of Disciplinary Proceedings Against Mitchell J. Barrock, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Mitchell J. Barrock, Respondent
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 2007-02-22
Citations: 299 Wis. 2d 207
Docket Number: No. 2005AP2180-D
Parties: In the Matter of Disciplinary Proceedings Against Mitchell J. Barrock, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Mitchell J. Barrock, Respondent.
Judges: 
Reporter: Wisconsin Reports Second
Volume: 299
Pages: 207–233

Head Matter:
In the Matter of Disciplinary Proceedings Against Mitchell J. Barrock, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Mitchell J. Barrock, Respondent.
Supreme Court
No. 2005AP2180-D.
Decided February 22, 2007.
2007 WI 24
(Also reported in 727 N.W.2d 833.)

Opinion:
PER CURIAM.
¶ 1. We review the referee's recommendation that the license of Attorney Mitchell J. Barrock to practice law in this state be suspended for a period of 60 days due to his professional misconduct.
¶ 2. Neither the Office of Lawyer Regulation (OLR) nor Attorney Barrock has appealed the referee's recommendation. Thus, the matter is submitted to the court for its review pursuant to SCR 22.17(2). In conducting our review, we will affirm the referee's findings of fact unless they are clearly erroneous. See In re Disciplinary Proceedings Against Sosnay, 209 Wis. 2d 241, 243, 562 N.W.2d 137 (1997). We review the referee's conclusions of law, however, on a de novo basis. See In re Disciplinary Proceedings Against Carroll, 2001 WI 130, ¶ 29, 248 Wis. 2d 662, 636 N.W.2d 718. Finally, in accordance with our authority to supervise the practice of law in this state, we determine the level of discipline that is appropriate under the particular circumstances, independent of the referee's recommendation, but benefiting from it. See In re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶ 44, 261 Wis. 2d 45, 660 N.W.2d 686.
¶ 3. After our independent review of the record, we adopt the referee's findings of fact and conclusions of law. Further, we agree with the referee's recommendation that Attorney Barrock's license to practice law in this state be suspended for a period of 60 days. We also decide that Attorney Barrock should pay the full costs of this disciplinary proceeding.
¶ 4. On August 26, 2005, the OLR filed a complaint against Attorney Barrock that alleged six counts of professional misconduct, which are explained below. The OLR's complaint sought a 60-day suspension of Attorney Barrock's license to practice law. Attorney Barrock initially filed an answer that admitted some of the factual allegations of the complaint, denied other factual allegations, and denied any violation of the Rules of Professional Conduct. Reserve Judge Dennis J. Flynn was appointed referee.
¶ 5. Just prior to the scheduled disciplinary hearing, Attorney Barrock entered into a stipulation and no contest plea. The stipulation provided that Attorney Barrock was withdrawing his answer and was now pleading no contest to each of the six counts alleged in the complaint. The stipulation further stated that the referee could use the factual allegations of the OLR's complaint, with the exception of two paragraphs not central to the complaint's charges, as the factual basis for a determination of misconduct. The stipulation set forth the parties' joint request that the court impose the 60-day suspension. Finally, the stipulation stated that Attorney Barrock was entering into the stipulation and no contest plea voluntarily and with knowledge of the relevant facts and rights that he was waiving and that Attorney Barrock's plea was not the result of plea-bargaining.
¶ 6. The referee accepted Attorney Barrock's no contest plea. Based on the allegations of the complaint, he concluded that Attorney Barrock had violated the Rules of Professional Conduct as alleged in the six counts of the complaint.
¶ 7. According to the OLR's complaint, which has been stipulated as true, Attorney Barrock practices law with his father in Brookfield. He was privately reprimanded in 1992 for having violated SCR 20:1.16(d) and the attorney's oath found in SCR 40.15.
¶ 8. The misconduct in the present case relates to a personal injury matter involving W.F. W.F. originally retained the law firm of Michael H. Hupy & Associates (Hupy) to pursue a claim stemming from an automobile accident. W.F. signed a retainer agreement with Hupy that stated that Hupy would receive 33V3 percent of any monies that W.F. received in connection with his claim. The retainer agreement further provided an attorney lien in favor of Hupy for such percentage.
¶ 9. On June 15, 2000, approximately one year after W.F. entered into the retainer agreement with Hupy, Attorney Barrock's father, Attorney James Bar-rock, sent a letter to Hupy stating that WF. wished to have another attorney take over his case. The letter proposed alternatives for dividing the attorney fees produced by the case.
¶ 10. Hupy rejected all of the alternatives proposed by James Barrock's letter. Instead, Hupy put forth another alternative and asked that the expenses already incurred by Hupy be protected.
¶ 11. On June 23, 2000, although the attorney fee issue had not been resolved, Attorney Barrock entered into a fee agreement with W.F.
¶ 12. On March 20, 2001, Hupy sent James Bar-rock a letter reminding him of the existence of the lien that Hupy had on any monies generated by WF.'s claim. Hupy also requested an update on the progress of WF.'s claim.
¶ 13. A couple of days later, Attorney Barrock responded to Hupy's letter. Attorney Barrock's letter stated that he did not have a copy of any lien in his file and that WF. had informed him that Hupy had released its interest against WF.'s case.
¶ 14. On April 23, 2001, Hupy replied to Attorney Barrock's letter and referred him to the initial, June 15, 2000 letter, written by James Barrock. Hupy requested that Attorney Barrock state whether he acknowledged Hupy's lien.
¶ 15. Attorney Barrock and Hupy exchanged additional letters in June 2001. Hupy reiterated that it had a valid lien on any recovery obtained by W.F. Attorney Barrock stated that Hupy had done little work on W.F.'s claim and that he doubted that W.F. would be willing to pay any attorney fee to Hupy.
¶ 16. In early August 2002 W.F. entered into a settlement agreement with Omni Insurance (Omni), by which Omni would pay $34,135 to W.F. This amount was deposited into Attorney Barrock's trust account on August 8, 2002. Those funds were disbursed to various parties that same day. The closing statement showed that the attorney fees totaled $11,378.33. Attorney Barrock disbursed $6225.17 to his father and $5689.16 to himself, for a total of $11,914.33. Attorney Barrock also gave W.F. a check for $17,195.69, pursuant to the closing statement.
¶ 17. On October 1, 2002, Hupy sent a letter to Attorney Barrock again stating that Hupy had a lien against any funds recovered by WF.
¶ 18. In a response letter, Attorney Barrock told Hupy that WF. had instructed him not to acknowledge Hupy's lien and that Attorney Barrock had therefore made all appropriate disbursements.
¶ 19. Hupy then requested Attorney Barrock to confirm that he had disbursed disputed funds from his trust account. By copy of this letter, Hupy advised Omni's attorney that Hupy was demanding to receive one-third of the settlement.
¶ 20. Omni's attorney then wrote a letter to Attorney Barrock telling him that it was Attorney Barrock's responsibility to address any attorney liens granted by his client, W.F.
¶ 21. On November 14, 2002, Attorney Barrock sent a letter to Hupy, stating that WF. did not believe that Hupy had a "justifiable lien" and that WF. had instructed Attorney Barrock not to honor it.
¶ 22. On November 19, 2002, Hupy demanded that Attorney Barrock place one-third of the settlement amount in Hupy's trust account within ten days or else Hupy would file a lawsuit. When Attorney Barrock did not satisfy Hupy's demand, Hupy filed a lawsuit against Attorney Barrock and Omni seeking one-third of the settlement amount. Attorney Barrock filed an answer and cross-complaint. Attorney Barrock's cross-complaint stated that WF. had told him that Hupy had released WF. from all contracts. Attorney Barrock also asserted that W.F. had agreed to indemnify him for all claims and liens connected with Attorney Barrock's representation, including prior attorney fees. WF. had not made any such indemnification agreement.
¶ 23. Although Attorney Barrock continued to have an obligation to W.F. to represent him regarding the fee dispute with Hupy, Attorney Barrock did not do so and did not seek W.F.'s consent to withdraw and pursue Attorney Barrock's own claims. W.F., on his own, chose to retain a third attorney to represent him in connection with the fee dispute. Attorney Barrock ultimately executed a "Covenant Not to Sue" W.F. This covenant related to any potential claims arising out of Attorney Barrock's representation of W.F.
¶ 24. Attorney Barrock was deposed in June 2003. At that deposition, Attorney Barrock was asked whether he had in fact disbursed the attorney fees from WF.'s settlement. Attorney Barrock responded, "No. They're in the trust account." This was not true, as Attorney Barrock had made disbursements to himself and to his father in August 2002.
¶ 25. In response to the OLR's investigation about the disputed attorney fees, Attorney Barrock wrote in a January 12, 2004 letter, "I have held $5,000.00 in fees in our trust account to cover Attorney Hupy's potential lien interest." He further stated, "I have withdrawn for attorney fees regarding this case in the amount of $5,689.17." Attorney Barrock did not disclose the disbursement of the attorney fee of $6225.17 to his father. In a subsequent letter, after the OLR noted the bank records showing the full disbursement of the attorney fees, Attorney Barrock further stated that the funds necessary to protect Hupy's interest were still being held in trust in funds that had been "earmarked" for Attorney Barrock.
¶ 26. Finally, during the OLR's review of Attorney Barrock's trust account records, the OLR discovered an August 14, 2002 check for $300 that had been drawn on Attorney Barrock's trust fund account and that had the notation "loan" in the memo line. Attorney Barrock claimed that the check was not a personal loan from trust funds, but actually represented a partial distribution of attorney fees that he had earned. The OLR then requested additional trust account records from Attorney Barrock to verify this claim, including a "side sheet" that he allegedly maintained. Attorney Barrock was not able to produce the trust account records requested by the OLR, claiming that they had been discarded when his firm switched to a new accounting program in 2002.
¶ 27. On the basis of the facts as described above, the referee concluded that Attorney Barrock had committed six violations of the Supreme Court Rules of Professional Conduct for Attorneys. First, the referee concluded that by failing to hold in his trust account a portion of the settlement proceeds despite his knowledge of Hupy's lien on those funds, Attorney Barrock had violated SCR 20:1.15(d).
¶ 28. By knowingly misrepresenting in his cross-complaint that WF. had agreed to indemnify him for all claims and liens, including prior attorney fees, relating to his representation of WF., Attorney Barrock know ingly advanced a factual position without a basis for doing so, in violation of SCR 20:3.1(a)(2).
¶ 29. The referee also stated that Attorney Bar-rock had continued to represent W.F. while at the same time attempting to implead WE as a third-party defendant in a pending lawsuit in which Attorney Barrock was a named defendant. The referee concluded that this situation represented a conflict of interest for which Attorney Barrock had not obtained a written waiver, contrary to SCR 20:1.7(b).
¶ 30. With respect to the fourth count, the referee concluded that Attorney Barrock's deposition testimony that the attorney fees remained in his trust account constituted conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of SCR 20:8.4(c).
¶ 31. Next, the referee found that Attorney Bar-rock had failed to disclose to the OLR that he had disbursed attorney fees to his father and had asserted that he continued to maintain funds in trust to cover Hupy's lien when in fact all funds had been disbursed. The referee concluded that this conduct had violated SCR 22.03(6), in further violation of SCR 20:8.4(f).
¶ 32. Finally, the referee determined that Attorney Barrock had violated SCR 20:1.15(e) when he had failed to maintain records of trust account funds for the required minimum of six years, including records relating to the August 14, 2002 check.
¶ 33. With respect to the question of discipline, the referee did not note many aggravating or mitigating factors in this case. On the aggravating side, the referee pointed to the fact that Attorney Barrock had already been privately reprimanded in 1992. On the mitigating side, the referee noted that Attorney Barrock had recently attended an OLR-sponsored seminar on trust account practices. In the end, the referee concluded that the 60-day suspension stipulated to by the parties was a reasonable level of discipline given Attorney Barrock's admitted misconduct. In addition, the referee recommended that Attorney Barrock be required to pay the costs of this disciplinary proceeding. Those costs totaled $6942.90, as of June 20, 2006.
¶ 34. After independently reviewing the record in this matter, we adopt the referee's findings of fact based on the allegations in the OLR's complaint, to which Attorney Barrock stipulated. We further adopt the referee's legal conclusions that the stipulated facts prove each of the OLR's six counts of professional misconduct against Attorney Barrock. We agree that Attorney Barrock's serious violation of the rules regarding disputed trust account monies, in connection with his other misconduct, warrants a 60-day suspension of his license to practice law in this state. Finally, we determine that Attorney Barrock should be required to pay the full costs of this disciplinary proceeding.
¶ 35. IT IS ORDERED that the license of Attorney Mitchell J. Barrock to practice law in Wisconsin is suspended for a period of 60 days, effective April 6, 2007.
¶ 36. IT IS FURTHER ORDERED that within 60 days of the date of this order, Attorney Mitchell J. Barrock shall pay to the Office of Lawyer Regulation the costs of this proceeding. If the costs are not paid within the time specified and absent a showing to this court of his inability to pay those costs within that time, the license of Attorney Barrock to practice law in Wisconsin shall remain suspended until further order of the court.
¶ 37. IT IS FURTHER ORDERED that if he has not already done so, Attorney Mitchell J. Barrock 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.
SCR 22.17(2) provides: Review; appeal.
(2) If no appeal is filed timely, the supreme court shall review the referee's report; adopt, reject or modify the referee's findings and conclusions or remand the matter to the referee for additional findings; and determine and impose appropriate discipline. The court, on its own motion, may order the parties to file briefs in the matter.
At this time, Attorney Barrock and his father shared office space.
SCR 20:1.15(d) provides in relevant part: Prompt notice and delivery of property.
(3) 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. . . .
SCR 20:3.1(a)(2) provides that in representing a client, a lawyer shall not "knowingly advance a factual position unless there is a basis for doing so that is not frivolous."
SCR 20:1.7(b) provides that "[a] lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interest."
SCR 20:8.4(c) provides that it is professional misconduct for a lawyer to "engage in conduct involving dishonesty, fraud, deceit or misrepresentation."
SCR 22.03(6) provides that "[i]n 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."
SCR 20:8.4(f) provides that 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."
SCR 20:1.15(e) provides in relevant part: "(6) Record retention. A lawyer shall maintain complete records of trust account funds and other trust property and shall preserve those records for at least 6 years after the date of termination of the representation."