Opinion ID: 1792167
Heading Depth: 2
Heading Rank: 1

Heading: Misconduct Charges

Text: ¶ 7. Counts 1-3 alleged that while subject to an administrative law license suspension, Attorney Scanlan continued to practice law, giving rise to violations of SCR 20:1.4(a) and (b), [2] SCR 22.26(1), [3] and SCR 22.03(2). [4] In August 2002 R.M. was charged with second offense operating while intoxicated and operating while revoked, and she retained Attorney Scanlan to represent her. The referee found that while Attorney Scanlan's law license was administratively suspended from October 31, 2002, to November 20, 2002, for failure to pay required bar dues and assessments, a scheduled pretrial was held on November 18 for R.M.'s matter. The district attorney's office had checked a court or state bar Web site and learned that Attorney Scanlan's law license had been suspended. However, Attorney Scanlan never informed the district attorney's office or local judges that he had been administratively suspended. ¶ 8. The referee specifically found that Attorney Scanlan did not attend R.M.'s scheduled pretrial conference because at that point he knew his license had been temporarily suspended. R.M. appeared unrepresented at the pretrial conference. The pretrial conference evolved into a plea hearing during which R.M. pled guilty to a charge of operating under the influence of an intoxicant. ¶ 9. R.M. filed a grievance with the OLR. The referee found Attorney Scanlan did not respond to two OLR letters, but responded to a third, after he had sought reinstatement from a temporary suspension occasioned by his non-cooperation in another OLR grievance investigation. ¶ 10. As to Count 1, relating to Attorney Scanlan's obligation to keep his client reasonably informed, the OLR agreed that because R.M. failed to appear at the disciplinary hearing although subpoenaed, the OLR did not meet its burden of proof. Therefore, Count 1 was dismissed. ¶ 11. The referee next determined the OLR did not meet its burden to show a violation of SCR 22.26(1) as charged in Count 2. Count 2 alleged that by failing to notify the court, the district attorney's office and his client of his administrative license suspension and inability to practice law, Attorney Scanlan violated SCR 22.26(1), requiring notification to clients and others of his suspension. ¶ 12. The referee concluded that because SCR 22.26(1) does not apply to an administrative license suspension, the OLR failed to meet its burden of proof. The referee determined: [Attorney] Scanlan argued persuasively that SCR 22.26(1) does not apply to administrative suspensions based upon a lawyer's failure to pay State bar dues pursuant to SCR 10.03(6) because it is not a Supreme Court suspension nor revocation. Therefore, the referee dismissed Count 2. ¶ 13. As to Count 3, by not filing timely responses to the OLR's requests, the referee concluded Attorney Scanlan violated SCR 22.03(2), requiring full disclosure of all facts pertaining to alleged misconduct within 20 days of the request.
¶ 14. Counts 4-7 involved Attorney Scanlan's failure to deposit an advance fee in his trust account and failure to return an unearned fee to his client, J.K., giving rise to violations of former SCR 20:1.15(a), [5] SCR 20:1.16(d), [6] SCR 22.03(2), and SCR 22.03(6). [7] ¶ 15. The referee found that in October 2001 J.K. retained Attorney Scanlan in a divorce matter and paid a $2500 retainer as an advance toward hourly fees, which Attorney Scanlan deposited in his business account. Approximately one week later, J.K. notified Attorney Scanlan that she did not wish to proceed with the divorce. Eventually, J.K. hired another attorney to recover the $2500. Attorney Scanlan told J.K.'s attorney he would send a check and an accounting within a week but failed to do so. A grievance was filed on J.K.'s behalf and the OLR sent two letters to Attorney Scanlan, to which he did not respond. Attorney Scanlan eventually sent an accounting to J.K.'s attorney as well as a refund of $1990. ¶ 16. Attorney Scanlan did not respond to the OLR's request for information with which he was personally served. As a result, after this court issued an order to show cause, Attorney Scanlan's license was temporarily suspended on January 14, 2003. The OLR subsequently reported that Attorney Scanlan had responded to its request for information and Attorney Scanlan's license was reinstated on April 29, 2003. ¶ 17. In May 2003 the OLR again inquired whether Attorney Scanlan had deposited J.K.'s $2500 retainer into his trust account. Attorney Scanlan did not respond until August 2003 after the OLR had written another letter and Attorney Scanlan had asked for two extensions. Based on hearing testimony the referee found Attorney Scanlan never put J.K.'s $2500 retainer fee in his trust account. ¶ 18. As to Count 4, the referee concluded that Attorney Scanlan had an absolute duty to deposit the $2500 advance into his trust account and by failing to do so, he violated former SCR 20:1.15(a), providing that a lawyer must hold a client's property in trust, separate from the lawyer's own property. ¶ 19. As to Count 5, the referee concluded that Attorney Scanlan was obliged to refund J.K.'s unearned fees and by failing to do so for more than a year after termination of the client relationship, Attorney Scanlan violated SCR 20:1.16(d), providing that upon termination of representation, the attorney should take reasonable steps to protect a client's interests, including refunding unearned advanced fees. ¶ 20. With respect to Count 6, it was stipulated that by failing to provide a written response to J.K.'s grievance for over seven months after it was due, causing Attorney Scanlan's license to be temporarily suspended for non-cooperation, Attorney Scanlan violated SCR 22.03(2), requiring timely disclosure. ¶ 21. Concerning Count 7, the referee determined Attorney Scanlan's failure to respond timely to the OLR violated SCR 22.03(6), providing it is misconduct to willfully fail to provide information during an OLR investigation.
¶ 22. Counts 8 and 9 alleged that Attorney Scanlan practiced law during a time that his law license was administratively suspended, giving rise to violations of SCR 10.03(6), [8] SCR 20:8.4(f), [9] and SCR 22.03(2). In September 2002 T.V. was charged with misdemeanor bail jumping and on September 23, 2002, Attorney Scanlan entered a notice of appearance on T.V.'s behalf. ¶ 23. The referee determined, based on agreed upon facts, that due to Attorney Scanlan's failure to pay dues and assessments, his license was suspended on November 1, 2002. During his period of suspension, on November 6, 2002, Attorney Scanlan appeared in court and entered a guilty plea on behalf of his client, T.V. It is undisputed that Attorney Scanlan had not received a letter notifying him of his suspension at that time. After paying his dues and assessments, Attorney Scanlan's license was reinstated on November 20, 2002. Attorney Scanlan did not respond to two investigative requests regarding this matter, but responded in April 2003 while seeking reinstatement from temporary suspension. ¶ 24. The referee concluded as to Count 8 that the OLR failed to meet its burden of proof for the same reasons it failed to meet its Burden of Proof in count #2 and therefore, dismissed Count 8. [10] ¶ 25. As to Count 9, because Attorney Scanlan failed to provide information regarding the grievance for over three months after a response was due, the referee found that Attorney Scanlan violated SCR 22.03(2), requiring timely disclosure.
¶ 26. Count 10 alleged that Attorney Scanlan violated SCR 20:1.1 [11] involving a collection matter. The referee determined, based on agreed upon facts, that in April 2001 Attorney Scanlan had agreed to represent R.J. in a civil lawsuit and made a brief appearance but failed to appear at trial, which proceeded in his client's absence and resulted in a judgment against R.J. for interest, attorney fees and costs, and which assessed fees and costs personally against Attorney Scanlan. The referee found the circuit court granted attorney fees and costs on the ground that Attorney Scanlan's continuance of R.J.'s defense following discovery was frivolous. The referee concluded that by failing to determine whether his client had a viable defense, failing to file an amendment to his client's pro se answer and to respond to the cross-claim, or alternatively seek settlement, Attorney Scanlan failed to provide competent representation, contrary to SCR 20:1.1.
¶ 27. Count 11 alleged that the Door County District Attorney filed a grievance relating to several criminal cases that formed a basis for Attorney Scanlan's violation of SCR 22.03(2). The Door County Assistant District Attorney reported to the OLR that several criminal defendants had complained to the district attorney's office about Attorney Scanlan's representation. The OLR wrote four letters of inquiry to Attorney Scanlan, who did not respond. Finally, in April 2002 the OLR sought temporary suspension for non-cooperation and this court issued an order to show cause. Attorney Scanlan failed to respond within the deadline, but did so before the suspension order was issued and as a result his license was not suspended. Attorney Scanlan agreed, and the referee concluded, this conduct violated 22.03(2), requiring full timely disclosure of facts regarding misconduct.
¶ 28. Counts 12-14 involved a family law matter in which Attorney Scanlan was alleged to have violated SCR 20:1.3, [12] former SCR 20:1.15(a), and SCR 20:1.16(d). Attorney Scanlan agreed to represent M.M. to seek an amendment to an existing custody and placement order. In April 2002 M.M. paid an advance of $2000, which Attorney Scanlan placed in his business checking account rather than his client trust account. Attorney Scanlan closed his Wisconsin office in July 2002 and moved to Illinois without telling M.M., or providing contact information to him. Attorney Scanlan took no steps to amend the existing custody and placement order and did not contact M.M. or refund any part of the $2000 advance fee, or return documents M.M. had left with him. ¶ 29. The referee found that the $2000 fee was an advance against hourly fees and was deposited in Attorney Scanlan's business, rather than trust account. Attorney Scanlan did not prepare a fee agreement. Absolutely no work was done for the $2000 and eventually M.M. applied for and received $2000 from the Wisconsin Lawyers' Fund for Client Protection. ¶ 30. Attorney Scanlan agreed, as to Count 12, that his conduct violated SCR 20:1.3, requiring counsel to represent a client with reasonable diligence and promptness. As to Count 13, the referee concluded that by failing to deposit the $2000 advance in his trust account, Attorney Scanlan violated former SCR 20:1.15(a), providing counsel must hold a client's property in trust. As for Count 14, Attorney Scanlan agreed, and the referee concluded, that by moving to Illinois without notice and without returning papers or the $2000 advance fee, Attorney Scanlan violated 20:1.16(d), providing upon termination of representation, counsel shall take reasonable steps to protect his client's interests.
¶ 31. Counts 15-20 alleged violations of former SCR 20:1.15(a), former SCR 20:1.15(b), [13] and SCR 20:8.4(c), [14] in collection matters that Attorney Scanlan handled for a business, H.V.R. Attorney Scanlan arranged to retain one-third of any amount he collected as a fee. These counts pertain to Attorney Scanlan's conversion of client funds, mishandling of payments, and his poor recordkeeping. ¶ 32. The referee made numerous findings with respect to Attorney Scanlan's handling of client funds, including that Attorney Scanlan deposited six checks totaling $1000 belonging to H.V.R., into his business account, rather than his trust account. [15] The referee also found that between August 16, 2001, and September 14, 2001, Attorney Scanlan made eight telephone transfers from his client trust account to his business checking account and, although he should have been holding $820 in his trust account for H.V.R., the balance in his trust account fell to $333.03. [16] The referee also found that on August 21, 2001, Attorney Scanlan overdrew his business checking account and it continued in overdraft status until August 28, 2001. ¶ 33. The Door County Sheriff's Department opened an investigation regarding Attorney Scanlan's handling of H.V.R.'s funds and provided the OLR with a copy of its file. In May 2003 the OLR requested Attorney Scanlan to provide an accounting of all funds he had received on behalf of H.V.R., and provide complete trust account records from January 1, 2001, through May 30, 2002, but Attorney Scanlan did not respond. After further requests, Attorney Scanlan provided responses, but omitted documentation. At one point the OLR inquired whether Attorney Scanlan had disbursed to H.V.R. two-thirds of the trust account deposits made for its benefit on three specific dates and Attorney Scanlan responded that his records were not clear and he did not have copies of correspondence which would permit him to answer. ¶ 34. The referee also found that the trust account records Attorney Scanlan did provide revealed among other things that some of the deposits to the trust account appeared to represent payment of fees that had already been earned and billed, and therefore, constituted personal funds belonging to Attorney Scanlan. The referee also found that on October 2, 2001, there was an automatic withdrawal from the client trust account to U.S. Cellular, constituting a personal payment. [17] ¶ 35. As to Count 15, the referee determined Attorney Scanlan deposited six checks, totaling $1000 belonging to H.V.R., into his personal business account rather than his trust account, contrary to former SCR 20.1.15(a). As to Count 16, the referee concluded that Attorney Scanlan commingled personal and client funds by depositing earned fee payments into the trust account and paying a personal bill out of the trust account, contrary to former SCR 20:1.15(a). ¶ 36. With respect to Count 17, the referee concluded by failing to notify H.V.R. of the funds he collected and failing to deliver them, Attorney Scanlan violated former SCR 20:1.15(b), which provides that upon receiving funds or other property in which his client has an interest, a lawyer shall promptly notify the client in writing and deliver the funds as well as render a full accounting on request. The referee found that $3086.67 was still missing. ¶ 37. The referee dismissed Counts 18 and 19, both of which charged violations of SCR 20:8.4(c). Count 18 alleged that by converting $3086.67 belonging to H.V.R., Attorney Scanlan engaged in dishonesty, fraud, deceit or misrepresentation. Count 19 alleged that Attorney Scanlan made telephone transfers of over $48,000 in funds from his client trust account to his personal business account, without identifying and knowing the purpose of the withdrawals and to whom the funds belonged, and therefore engaged in dishonesty, fraud, deceit or misrepresentation. The referee found, based on medical testimony, that Attorney Scanlan's failure to properly account for and turn money over to his client resulted from sloppy bookkeeping and ineffective office administration rather than intentional wrongdoing. The referee dismissed Counts 18 and 19. ¶ 38. Count 20 alleged that Attorney Scanlan failed to maintain trust account records and was unable to produce such records for the OLR inspection and unable to identify funds on deposit. Attorney Scanlan agreed, and the referee concluded, that by failing to maintain a complete trust account record, including individual client ledgers, receipts and disbursement journals, and checkbook reconciliation, so that he was unable to produce records for the OLR's inspection, and unable to identify the ownership of $49,455.23 in funds un-deposited in his client trust account as of December 1, 2000, he violated former SCR 20:1.15(a).
¶ 39. Counts 21 and 22 alleged that Attorney Scanlan violated SCR 22.03(2) by failing to respond timely to the OLR's requests for information. Two clients, R.P. and R.B., filed grievances. Attorney Scanlan did not respond promptly to a number of requests. The referee concluded that this conduct violated SCR 22.03(2), for failing to provide a timely disclosure or response.