Title: Office of Lawyer Regulation v. Michael P. Erhard
Citation: N/A
Docket Number: 2017AP001275-D
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: September 12, 2018

2018 WI 95 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2017AP1275-D 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings  
Against Michael P. Erhard, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Michael P. Erhard, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST ERHARD 
 
 
OPINION FILED: 
September 12, 2018 
SUBMITTED ON BRIEFS: 
      
ORAL ARGUMENT: 
      
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING: DALLET, J., did not participate.       
 
 
 
ATTORNEYS: 
 
 
      
 
 
2018 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.   2017AP1275-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings  
Against Michael P. Erhard, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Michael P. Erhard, 
 
          Respondent. 
 
FILED 
 
SEP 12, 2018 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   We review the report of Referee William 
Eich, in which he found, based on the admissions of Attorney 
Michael P. Erhard, that Attorney Erhard had committed 11 counts 
of professional misconduct, and in which he recommended that 
Attorney Erhard's license to practice law in this state be 
suspended for a period of six months.  After carefully reviewing 
the matter, we accept Attorney Erhard's admission that he 
committed the first ten counts of misconduct alleged in the 
No. 
2017AP1275-D   
 
2 
 
complaint filed by the Office of Lawyer Regulation (OLR).  We do 
not decide whether Attorney Erhard's conduct in obtaining a 
cashier's check made payable to a third party constitutes a 
violation of former Supreme Court Rule (SCR) 20:1.15(e)(4)a, as 
alleged in Count 11, because that determination would not change 
the level of discipline we impose.  We conclude that a 
suspension 
of 
three 
months 
is 
the 
appropriate 
level 
of 
discipline to be imposed under the particular facts of this 
case.  As the OLR advises that there are no client funds to 
restore, we do not impose any restitution award.  We do require 
Attorney 
Erhard 
to 
pay 
the 
costs 
of 
this 
disciplinary 
proceeding, which were $3,190.26 as of April 17, 2018. 
¶2 
Attorney Erhard has been admitted to the practice of 
law in Wisconsin since August 1973.  He has practiced in a 
number of private law firms since his admission.  At the time of 
the events underlying this disciplinary proceeding, Attorney 
Erhard was a member of Erhard and Payette, LLC in Madison.  That 
firm is no longer in existence.   
¶3 
Attorney Erhard has been the subject of professional 
discipline on one prior occasion.  In 2002 he was privately 
reprimanded for professional misconduct that consisted of 
acquiring a proprietary interest in a client matter, making 
misrepresentations in a complaint filed in connection with the 
No. 
2017AP1275-D   
 
3 
 
client matter, and failing to notify the client when the civil 
action had been dismissed.  Private Reprimand 2002-3.1   
¶4 
The OLR filed its complaint alleging 11 counts of 
misconduct 
in 
July 
2017. 
 
Attorney 
Erhard's 
answer 
and 
affirmative defenses admitted most of the allegations of the 
complaint, but did object to a number of factual allegations and 
did provide some additional explanatory information.  Despite 
those objections, Attorney Erhard's answer admitted all 11 
counts of misconduct. 
¶5 
All of the allegations of misconduct in this matter 
arise out of Attorney Erhard's handling of his firm's client 
trust account.  The Erhard and Payette firm maintained both a 
client trust account and an operating account for the business 
of the firm.  Initially, those accounts were maintained at Chase 
Bank.  On May 16, 2014, Attorney Erhard opened a new client 
trust account at Johnson Bank.  For a few months, both trust 
accounts were in existence.2  On August 14, 2014, the law firm 
closed the Chase Trust Account.   
¶6 
It appears that Attorney Erhard was the person at the 
firm primarily in charge of the client trust account.  He signed 
                                                 
1 Copies of private reprimands are ordinarily available on 
the court's website.  This reprimand is not available on the 
court's website, but a copy could be obtained by contacting the 
OLR. 
2 For the sake of brevity and clarity, this opinion will 
refer to the two client trust accounts as the Chase Trust 
Account and the Johnson Trust Account. 
No. 
2017AP1275-D   
 
4 
 
checks drawn on the account and made the electronic transfers to 
and from the account that are the subject of this proceeding.  
The firm employed a paralegal, who was responsible for providing 
an accounting firm with the necessary information so that the 
accountants 
could 
prepare 
checks 
for 
Attorney 
Erhard's 
signature.  The accounting firm also maintained the trust 
account records for the firm.   
¶7 
Most of the allegations in the OLR's complaint relate 
to Attorney Erhard's handling of trust account funds connected 
to two client matters involving civil actions—one on behalf of 
E.A. and one on behalf of J.O.  We will divide the allegations 
between the periods prior to and after the switch of the client 
trust accounts from Chase Bank to Johnson Bank. 
¶8 
With respect to the E.A. matter during the time period 
in which the Chase Trust Account was being used, between May 2, 
2014, and May 29, 2014, Attorney Erhard made seven disbursements 
in the total amount of $200,000 from the Chase Trust Account to 
E.A., M.A., S.A., and the law firm's operating account.  The 
four disbursements to the operating account were made by 
electronic transfers.  These seven disbursements exceeded the 
amount in the Chase Trust Account for the E.A. matter by 
$100,000, which resulted in funds from other clients covering 
these disbursements.   
¶9 
On May 30, 2014, a deposit of $537,000 for E.A. was 
wired into the Chase Trust Account.  This repaid the $100,000 
that had been taken from other client accounts and left a 
positive balance of $437,000 for E.A.  On that same date 
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2017AP1275-D   
 
5 
 
Attorney 
Erhard 
made 
two 
additional 
electronic 
transfers 
totaling $125,000 from the Chase Trust Account to the firm's 
operating account.  In June 2014, Attorney Erhard issued three 
checks to E.A., M.A., and S.A. in the total amount of $267,315 
and made two electronic transfers in the total amount of 
$2,673.38 from the Chase Trust Account to the firm's operating 
account.  Thus, at the end of these transactions, there was a 
balance of $42,011.62 in funds belonging to E.A. in the Chase 
Trust Account. 
¶10 With respect to the J.O. matter specifically, there 
were three particular transactions that formed the basis for 
allegations of misconduct.  First, on June 25, 2014, Attorney 
Erhard purchased two cashier's checks out of the Chase Trust 
Account with funds belonging to J.O.  The two cashier's checks, 
totaling 
$68,256.75, 
were 
made 
payable 
to 
the 
Wisconsin 
Department of Revenue (DOR).  Attorney Erhard caused those two 
cashier's checks to be sent to the DOR in payment of the income 
tax liability for J.O. and his wife.  On July 1, 2014, Attorney 
Erhard electronically transferred $178,125 from the Chase Trust 
Account to the law firm's operating account as payment for legal 
fees.  On that same date he also electronically transferred 
$211,590.15 to J.O.'s checking account. 
¶11 The 
OLR's 
complaint 
also 
contains 
allegations 
regarding the transfer of funds from the Chase Trust Account to 
the Johnson Trust Account.  On July 2, 2014, the firm's 
operating account had a balance of $167,135.33.  On that date 
Attorney Erhard signed a hand-written check for $400,000 drawn 
No. 
2017AP1275-D   
 
6 
 
on the operating account and payable to the Johnson Trust 
Account.  The check was deposited with Johnson Bank on that same 
date. 
 
On 
July 
3, 
2014, 
Attorney 
Erhard 
electronically 
transferred $400,000 from the Chase Trust Account to the firm's 
operating account to cover the check he had deposited the day 
before.  Nearly all of that $400,000 belonged to nine clients.  
After this transfer there remained a balance of $17,986.86 in 
the Chase Trust Account. 
¶12 On August 1, 2014, Attorney Erhard electronically 
transferred $17,000 from the Chase Trust Account to the 
operating account.  These funds were used to cover a number of 
checks and electronic withdrawals from the operating account 
that were used to pay business expenses and to pay a $5,000 draw 
to Attorney Erhard.  On that same date, however, Attorney Erhard 
deposited $17,000 from another source to the Johnson Trust 
Account to replenish the trust account funds. 
¶13 On August 14, 2014, Attorney Erhard transferred the 
remaining $986.86 in the Chase Trust Account into the firm's 
operating account.  As with the earlier movement of the $17,000, 
on that same date Attorney Erhard deposited a check from the 
operating account into the Johnson Trust Account.  With the 
transactions on both August 1 and August 14, 2014, Attorney 
Erhard effectively moved client funds from one trust account to 
the other, but for some reason he routed them through the firm's 
operating account. 
¶14 The OLR's complaint also contains some allegations 
regarding the disbursement of funds for E.A. after the firm's 
No. 
2017AP1275-D   
 
7 
 
switch to the Johnson Trust Account.  After Attorney Erhard 
moved the firm's client trust funds to the Johnson Trust 
Account, the balance of trust account funds for E.A. was 
$42,011.62.  From September 15, 2014, to December 12, 2014, 
Attorney Erhard made four disbursements totaling $124,573.62 
related to the E.A. matter.  One of the four disbursements was a 
$10,000 check from the Johnson Trust Account to the firm's 
operating account in payment of legal fees.  The first of these 
four disbursements created a negative balance of nearly $27,000 
for the E.A. matter in the Johnson Trust Account.  After the 
last of the four disbursements, the negative balance had grown 
to $82,562.  This meant that funds from other clients were used 
to cover the four disbursements.  Approximately six months after 
the last of these four disbursements, Attorney Erhard deposited 
$82,562 into the Johnson Trust Account to replenish the funds 
belonging to the other clients and eliminate the negative 
balance for E.A. 
¶15 The OLR's complaint charged Attorney Erhard with 
committing 11 separate counts of professional misconduct arising 
out of the facts described above.  The complaint, however, 
alleged multiple counts for the same conduct.  For example, 
Counts 1, 2, and 3 all alleged that over a roughly three-week 
period in May 2014 Attorney Erhard had improperly disbursed from 
the Chase Trust Account $100,000 more in connection with E.A.'s 
matter than was in the trust account for that client.  Count 1 
No. 
2017AP1275-D   
 
8 
 
alleged 
that 
this 
conduct 
had 
violated 
former 
SCR 20:1.15(f)(1)b.3  Count 2 alleged that this same conduct had 
violated SCR 20:1.15(b)(1).4  Count 3 alleged that this same 
conduct had violated SCR 20:8.4(c).5 
¶16 Counts 4, 5, and 6 repeated this pattern with respect 
to Attorney Erhard's excessive disbursements in connection with 
                                                 
3 Effective July 1, 2016, substantial changes were made to 
Supreme Court Rule 20:1.15, the "trust account rule." See S. Ct. 
Order 14-07, (issued Apr. 4, 2016, eff. July 1, 2016).  Because 
the conduct underlying this case arose prior to July 1, 2016, 
unless otherwise indicated, all references to the supreme court 
rules will be to those in effect prior to July 1, 2016. 
Former SCR 20:1.15(f)(1)b provided: 
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.   
4 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.    
5 SCR 20:8.4(c) provides:  "It is professional misconduct 
for a lawyer to engage in conduct involving dishonesty, fraud, 
deceit or misrepresentation." 
No. 
2017AP1275-D   
 
9 
 
the E.A. matter over the period of September to December 2014.  
Count 
4 
alleged 
that 
this 
conduct 
had 
violated 
former 
SCR 20:1.15(f)(1)b.  Count 5 alleged that this same conduct had 
violated SCR 20:1.15(b)(1).  Count 6 alleged that this same 
conduct had violated SCR 20:8.4(c). 
¶17 Count 7 related to Attorney Erhard's routing of the 
$400,000 in trust funds through the firm's operating account 
when moving the money from the Chase Trust Account to the 
Johnson Trust Account on July 3, 2014.  The OLR alleged in Count 
7 that the electronic transfer of the $400,000 in client funds 
to the firm's operating account had violated SCR 20:1.15(b)(1). 
¶18 Counts 8 and 9 related to the routing of the $17,000 
in client trust funds through the firm's operating account on 
August 1, 2014, and the use of those funds for other purposes.  
Specifically, Count 8 alleged that the initial transfer of the 
$17,000 in client trust funds from the Chase Trust Account to 
the operating account and the use of those funds to pay business 
expenses and a monthly draw to Attorney Erhard had violated 
SCR 20:1.15(b)(1).  Count 9 alleged that this same conduct also 
had violated SCR 20:8.4(c). 
¶19 Count 10 addressed all electronic transfers that 
Attorney Erhard had made out of the Chase Trust Account to the 
firm's operating account, as well as the July 1, 2014 electronic 
transfer from the Chase Trust Account to J.O.'s checking 
No. 
2017AP1275-D   
 
10 
 
account.  This count alleged that the use of such electronic 
transfers had been in violation of former SCR 20:1.15(e)(4)c.6 
¶20 Finally, Count 11 alleged that Attorney Erhard's 
purchase of two cashier's checks payable to the DOR using funds 
from 
the 
Chase 
Trust 
Account 
had 
violated 
former 
SCR 20:1.15(e)(4)a.7  The OLR characterized this as two separate 
transactions.  It alleged that Attorney Erhard first withdrew 
cash from the Chase Trust Account and then used that cash to 
purchase the two cashier's checks.  It alleged that the 
withdrawal of cash had constituted the ethical violation. 
¶21 Attorney Erhard's answer admitted all 11 counts of 
misconduct in the OLR's complaint.  The answer even admitted the 
violation of former SCR 20:1.15(e)(4)a in Count 11, although the 
answer disputed that the purchase of the cashier's checks had 
constituted a withdrawal of cash from the trust account. 
¶22 Given Attorney Erhard's admission of all 11 counts in 
the complaint, the only issue that was addressed at the 
evidentiary hearing in this proceeding was the appropriate level 
of discipline.  In addition to testifying himself, Attorney 
Erhard 
called 
four 
witnesses, 
including 
a 
federal 
judge 
appearing in response to a subpoena, all of whom had extensive 
                                                 
6 Former SCR 20:1.15(e)(4)c provided:  "A lawyer shall not 
make deposits to or disbursements from a trust account by way of 
an Internet transaction." 
7 Former SCR 20:1.15(e)(4)a provided:  "No disbursement of 
cash shall be made from a trust account and no check shall be 
made payable to 'Cash.'" 
No. 
2017AP1275-D   
 
11 
 
experience with Attorney Erhard as a practicing lawyer and spoke 
highly of his competence as a lawyer and his good character and 
integrity.   
¶23 The 
referee 
ultimately 
recommended 
a 
six-month 
suspension and the imposition of two conditions on Attorney 
Erhard's return to the practice of law following the suspension:  
(1) that Attorney Erhard never hold responsibility for any trust 
property or trust account in the future and (2) that Attorney 
Erhard annually certifies to the OLR that he is not responsible 
for overseeing any trust property or trust account.  The referee 
agreed with the OLR that several aggravating factors——the number 
of charges (11), the existence of a "pattern" of misconduct, and 
the amount of money involved——required a suspension.  On the 
other hand, the referee concluded that several mitigating 
factors cited by Attorney Erhard——his lack of intent or malice, 
the restitution he made by depositing personal funds into the 
trust account, and his cooperation with the OLR throughout the 
investigation and disciplinary proceeding——required a suspension 
shorter than the nine-month suspension sought by the OLR.   
¶24 Attorney Erhard filed a motion for reconsideration 
that focused on Count 11 regarding the purchase of the cashier's 
checks payable to the DOR.  He urged the referee to reconsider 
the referee's conclusion that Attorney Erhard had admitted, 
without qualification, that his purchase of the two cashier's 
checks had been a cash withdrawal from the trust account in 
violation of former SCR 20:1.15(e)(4)a.  He asserted that he had 
substantially complied with the spirit and purpose of that rule 
No. 
2017AP1275-D   
 
12 
 
and had not converted or misappropriated any client funds.  He 
suggested that it would be more appropriate to find that the 
manner of the purchase and the nature of the checks had not 
complied with the formalities of a different rule, former 
SCR 20:1.15(f)(1)e(1).  He further asked the referee to reduce 
the recommended suspension to one just shy of six months so that 
he would not have to go through the formal reinstatement 
process. 
¶25 The referee denied the reconsideration motion.  The 
referee refused to amend his report because he stated that 
Attorney Erhard had indeed admitted the violation of former 
SCR 20:1.15(e)(4)a in Count 11.  The referee also refused to 
reduce the recommended suspension, stating that he had taken 
into account Attorney Erhard's lack of intentional or malicious 
conduct in recommending a suspension less than the nine-month 
suspension sought by the OLR. 
¶26 When we review a referee's report and recommendation 
in an attorney disciplinary case, the standard of review we 
utilize is well-established.  We affirm a referee's findings of 
fact unless they are found to be clearly erroneous, but we 
review the referee's conclusions of law on a de novo basis.  In 
re Disciplinary Proceedings Against Inglimo, 2007 WI 126, ¶5, 
305 Wis. 2d 71, 740 N.W.2d 125.  We determine the appropriate 
level of discipline to impose given the particular facts of each 
case, 
independent 
of 
the 
referee's 
recommendation, 
but 
benefiting from it.  In re Disciplinary Proceedings Against 
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. 
No. 
2017AP1275-D   
 
13 
 
¶27 The first ten counts of alleged misconduct and the 
factual allegations supporting those counts do not present any 
concerns.  Given Attorney Erhard's admission of the allegations, 
we adopt the referee's findings of fact and we conclude that 
those findings demonstrate that Attorney Erhard committed the 
misconduct alleged in Counts 1-10. 
¶28 Count 11, however, is not so easily resolved.  We have 
not previously decided whether purchasing a cashier's check made 
payable to a third party on behalf of a client using funds in an 
attorney's client trust account constitutes a withdrawal of cash 
in violation of former SCR 20:1.15(e)(4)a.  We determine that we 
need not do so here because we conclude that a decision on 
whether or not there was a technical violation of former 
SCR 20:1.15(e)(4)a would not impact the level of discipline we 
would impose.   
¶29 We now turn to the issue of the appropriate level of 
discipline that should be imposed for the ten counts of 
misconduct we have found.  It is clear that Attorney Erhard 
failed to manage his firm's client trust account as he was 
ethically required to do.  Moreover, this was not a single 
occurrence, but a repeated shortcoming.  On the other hand, we 
conclude that the number of counts of misconduct alleged in the 
complaint overstates the instances of misconduct.  The complaint 
used the same conduct to allege multiple counts.  If it had not 
done so, there would have been five or six counts instead of 11.  
Moreover, there are no allegations here that any client 
ultimately suffered lasting harm.  The referee found that the 
No. 
2017AP1275-D   
 
14 
 
level of discipline should be mitigated by Attorney Erhard's 
lack of intent or malice, and we agree.  Attorney Erhard has a 
substantial history as a practicing lawyer in this state, and 
the testimony that he presented at the evidentiary hearing 
supports a conclusion that his failure to manage his trust 
account properly was an aberration, rather than an indication of 
his character.  He has cooperated with the OLR's investigation, 
admitted his misconduct, returned all funds to the trust 
account, and expressed remorse for his failings.   
¶30 Under these specific facts, we determine that a three-
month suspension would accomplish the goals of discipline.  We 
agree with the referee that a reprimand would unduly depreciate 
the seriousness of Attorney Erhard's failings, but we do not 
believe that it is necessary to require Attorney Erhard to go 
through the formal reinstatement process.  While the level of 
appropriate discipline must be determined on the basis of the 
facts in each case, we have imposed similar levels of discipline 
in other cases involving a lawyer's failure to properly hold and 
manage client funds in the lawyer's trust account.  See, e.g., 
In re Disciplinary Proceedings Against Kitto, 2018 WI 71, 382 
Wis. 2d 368, 913 N.W.2d 874 (60-day suspension imposed for five 
counts of misconduct, including failing to hold client funds in 
trust and converting over $10,000 for the lawyer's personal use, 
where lawyer admitted misconduct and had made full restitution);  
In re Disciplinary Proceedings Against Clark, 2016 WI 36, 368 
Wis. 2d 409, 878 N.W.2d 662 (four-month suspension imposed on 
experienced attorney for eight counts of misconduct, including 
No. 
2017AP1275-D   
 
15 
 
failing to hold client funds in trust, disbursing funds in 
excess of amounts held in trust for a particular client, making 
cash withdrawals from a trust account, and hiding income or 
assets from taxing authorities). 
¶31 We do not impose the condition as recommended by the 
referee.  It is almost impossible for a practicing lawyer to 
"never [have] responsibility for any fiduciary or trust property 
or account."  A client delivering to a lawyer a check for an 
advanced fee imposes a fiduciary obligation on that lawyer, even 
if the lawyer's obligation is simply to hand over the check to 
another person in the law firm that supervises the firm's client 
trust account.  We do require Attorney Erhard to attend six 
credits of continuing legal education on the subject of trust 
account management within the next 12 months, as approved by the 
OLR. 
¶32 As is our usual custom, we also find it appropriate to 
assess the full costs of the proceeding against Attorney Erhard. 
This case presents no reason for departing from our standard 
practice of imposing costs on respondent attorneys on whom 
discipline is imposed. 
¶33 IT IS ORDERED that the license of Michael P. Erhard to 
practice law in Wisconsin is suspended for a period of three 
months, effective October 12, 2018. 
¶34 IT IS FURTHER ORDERED that Michael P. Erhard shall 
attend six credits of continuing legal education on the subject 
of trust account management within the next 12 months, to be 
approved by the Office of Lawyer Regulation.   
No. 
2017AP1275-D   
 
16 
 
¶35 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Michael P. Erhard shall pay to the Office of 
Lawyer Regulation the costs of this proceeding, which are 
$3,190.26 as of April 17, 2018.   
¶36 IT IS FURTHER ORDERED that Michael P. Erhard shall 
comply with the provisions of SCR 22.26 concerning the duties of 
an attorney whose license to practice law has been suspended.  
¶37 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See 
SCR 22.28(2). 
¶38 REBECCA FRANK DALLET, J., did not participate. 
 
No. 
2017AP1275-D   
 
 
 
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