Opinion ID: 1296515
Heading Depth: 1
Heading Rank: 1

Heading: foreclosure actions

Text: ¶ 10. The referee found that between June 1998 and March 2000 Webster filed and prosecuted three foreclosure actions [5] as a trustee of a revocable inter vivos trust of which his parents are lifetime beneficiaries and in which he and his sisters are residuary beneficiaries. These foreclosure actions were brought in Pierce County, Polk County, and Burnett County Circuit Courts. In all three actions Webster appeared in a fiduciary capacity representing the legal interest of the trust and/or the trust beneficiaries. The referee found that in those three foreclosure cases Webster subsequently sought and was awarded fees and costs for his services as trustee in prosecuting the foreclosure actions. Webster's fees totaled approximately $4600, and he was awarded costs in addition to those fees. ¶ 11. The referee further determined that although none of the circuit court judges in the foreclosure actions questioned whether Webster's appearance in a representative or fiduciary capacity as a trustee constituted the practice of law, the circuit court judge in the Polk County action questioned the fee Webster requested calling it . . . nothing more than a thinlyveiled attempt to obtain fees at the rate normally charged by an attorney practicing this type of law in this area. To allow this would be a sham with regard to the order previously entered suspending Mr. Webster's right to practice law. ¶ 12. Subsequently the circuit court in the Polk County case substantially reduced the fee awarded Webster in that foreclosure action. His fees in the other two foreclosure cases were awarded in the amount he requested. ¶ 13. The referee further found that prior to commencing these foreclosure actions Webster had not asked BAPR whether his conduct would constitute the practice of law. However, in September 1999 a defendant in one of those foreclosure actions contacted the United States attorney's office and Webster's federal supervised release officer questioning whether Webster's activities on behalf of the trust in that foreclosure action constituted practicing law. After that question was raised Webster contacted the district attorney's office in the county where that action was pending and secured an opinion from the district attorney that Webster's activities on behalf of the trust in the foreclosure action did not violate the proscriptions in Wis. Stat. § 757.30 (1999-2000) against practicing law without a license. [6] ¶ 14. In addition, the referee determined that it was more than 15 months after Webster filed the first of the foreclosure actions, and then only after the question was raised by the United State's attorney's office, that Webster contacted the State Bar's Ethics Hotline seeking advice about whether his activities on behalf of the trust constituted practicing law; the Hotline declined to give advice about whether Webster's activities in the foreclosure cases constituted the practice of law. ¶ 15. According to the referee, Webster's activities as trustee on behalf of the trust in the foreclosure cases contravened the holding in Life Science Church v. Shawano County, 221 Wis. 2d 331, 585 N.W.2d 625 (Ct. App. 1998). The referee noted that the court of appeals in Life Science Church, citing Jadair Inc. v. United States Fire Insurance Co., 209 Wis. 2d 187, 562 N.W.2d 401 (1997), and cases from other jurisdictions, held that trustees may appear in Wisconsin courts without licensed legal counsel only to represent the trustee's own legal interest in his or her individual capacity; a trustee, who is not licensed to practice law, may not, however, represent the legal interests of the trust or trust beneficiaries in a representative fiduciary capacity as trustee. Life Science Church, 221 Wis. 2d at 334. Furthermore, according to the Life Science Church court, this court in Jadair recognized that non-lawyers who attempt to speak for the legal interests of others are engaged in the unauthorized practice of law. Id. at 333. The referee determined that despite the crystal clear holding in Life Science Church, Webster nevertheless prosecuted the three foreclosure actions on behalf of the trust and beneficiaries in his representative fiduciary capacity after his license to practice law had been suspended. ¶ 16. In testimony before the referee Webster acknowledged that he had not read the Life Science Church case until the spring of 2000after he had already commenced and prosecuted the foreclosure actions. Webster claimed that he was unaware of the Life Science Church decision when he filed the foreclosure actions because he had cancelled his subscription to the Wisconsin Reports after his license had been suspended and he did not have access to that case while in prison. According to Webster, the research he did on the subject of practicing law while under suspension only revealed two cases: In re Disciplinary Proceedings Against Eisenberg, 126 Wis. 2d 435, 446, 337 N.W.2d 160 (1985), and In re Disciplinary Proceedings Against Eisenberg, 96 Wis. 2d 342, 291 N.W.2d 565 (1980). Webster believed that both of these cases supported his understanding that although he could not represent a corporation while under suspension, there was nothing barring him from representing a trust in which he was the trustee and beneficiary. Webster noted that Wis. Stat. § 757.30 contains no specific reference or prohibition against a fiduciary trustee representing a trust. ¶ 17. In addition, in his testimony before the referee, Webster claimed that he had relied on the district attorney's opinion that filing the foreclosure cases in a representative capacity as a trustee, did not constitute the practice of law without a license. Webster also observed that none of the judges in the foreclosure actions questioned whether his appearance constituted the practice of law. And, finally, Webster explained that he had not contacted BAPR to obtain an opinion on whether his activities would constitute practicing law, because he did not think that BAPR would give him an opinion on the subject. ¶ 18. Webster's explanations did not persuade the referee that he had not been practicing law during his suspension. In the first place, according to the referee, Webster could have easily found the Life Science Church decision had he done basic legal research on the issue; the referee thought that his failure to do so cast doubt on Webster's competence as a lawyer. ¶ 19. Moreover, the referee found that Webster's reliance on the two Eisenberg disciplinary decisions was misplaced because those cases did not address the issue of whether a trustee, who does not have a law license, may appear in courts in this state on behalf of a trust. ¶ 20. Similarly, the referee said that while Webster may have taken some comfort from the district attorney's favorable opinion, if Webster had conducted his own research, he would have discovered that the district attorney's opinion was clearly wrong in light of Life Science Church. The referee also reasoned that Webster should draw little solace from the fact that none of the judges before whom he appeared in the foreclosure actions questioned whether he was practicing law; according to the referee, it was Webster's responsibility, not someone else's, to make certain that his conduct during the suspension conformed to the rules against practicing law. ¶ 21. The referee also found it significant that Webster's inquiries into whether his activities on behalf of the trust constituted the practice of law, occurred only after the United States attorney's office and Webster's federal supervised release officer questioned whether he was practicing law. ¶ 22. On appeal Webster reiterates his argument that by prosecuting the three foreclosure matters as a trustee, he was not practicing law as that term is used in Wis. Stat. § 757.30 and SCR 22.26(2). Webster points out that the words trust, fiduciary, principal or any other reference to legal actions taken on behalf of a principal are conspicuously absent from both Wis. Stat. § 757.30 and SCR 22.26(2). According to Webster, had the legislature intended to preclude a trustee from commencing and maintaining legal actions on behalf of a trust without enlisting the services of an attorney, the legislature could have easily so provided in the statute. ¶ 23. Furthermore, Webster maintains on appeal that despite the referee's description of the holding in Life Science Church as crystal clear, Webster believed it was notespecially when applied to a trustee of an inter vivos trust. Webster contrasts his actions as trustee of the inter vivos trust with the actions of the trustees in the Life Science Church case. Here Webster notes that he actually held title to the property, was authorized by the trust to prosecute legal actions on behalf of the trust, and had been appointed by the settlers of the trust to safeguard their asserts and to hold, manage, and distribute them. According to Webster, in bringing the three foreclosure actions as trustee on behalf of the trust, he was simply fulfilling his duties as trustee; he was not practicing law. ¶ 24. We are not convinced. The distinction Webster attempts to draw between a trustee of a church, like that involved in Life Science Church case, and a trustee of an inter vivos trust, is not as persuasive as Webster would have it. In any event, had Webster simply read the Life Science Church case or this court's decision in Jadair both of which were issued before Webster filed the first foreclosure action on behalf of the trusthe would have been put on notice that his activities on behalf of the trust could be construed as practicing law. ¶ 25. Recently in In re Disciplinary Proceedings Against Hyndman, 2002 WI 6, 249 Wis. 2d 650, 638 N.W.2d 293, this court discussed the prohibition in SCR 22.26(2) against a suspended or revoked attorney practicing law. Hyndman recognized that if certain acts would not constitute practicing law for a non-lawyer, then those same acts would not constitute practicing law for a person whose license to practice law had been revoked or suspended. In view of the holding in Life Science Church that a trustee must appear in Wisconsin courts with licensed legal counsel unless the trustee is acting solely in an individual capacity, it is apparent that Webster's activities as trustee on behalf of the trust in the three foreclosure actions could not have been performed by a non-lawyer. The trustee in Life Science Church could not file a notice of appeal on behalf of the trust; similarly, Webster as trustee of the inter vivos trust could not commence and prosecute the foreclosure actions on behalf of the trust and beneficiaries. When Webster acted on behalf of the trust by filing and prosecuting the foreclosure actions he was practicing law. We believe that the referee correctly determined that Webster's activities constituted the practice of law. At the very least, he should have checked with BAPR before he filed the foreclosure actions. The referee's determination that Webster was practicing law when he commenced and prosecuted the foreclosure actions is not clearly erroneous.