Court Opinion

ID: 4018109
Source: CourtListenerOpinion
Date Created: 2016-07-22 13:24:24.02272+00
Date Added: 2024-06-11T09:36:51.434495
License: Public Domain

2016 WI 74

                  SUPREME COURT          OF   WISCONSIN
CASE NO.:               2012AP385-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against Mary K. Biester, Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        Mary K. Biester,
                                  Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST BIESTER

OPINION FILED:          July 22, 2016
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:           ABRAHAMSON, J. concurs (Opinion filed).
   DISSENTED:
   NOT PARTICIPATING:

ATTORNEYS:
                                                                      2016 WI 74
                                                              NOTICE
                                                This opinion is subject to further
                                                editing and modification.   The final
                                                version will appear in the bound
                                                volume of the official reports.
No.   2012AP385-D

STATE OF WISCONSIN                         :             IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Mary K. Biester, Attorney at Law:

Office of Lawyer Regulation,                                       FILED
            Complainant,                                      JUL 22, 2016
      v.
                                                                 Diane M. Fremgen
Mary K. Biester,                                              Clerk of Supreme Court

            Respondent.

      ATTORNEY    disciplinary    proceeding.           Attorney's        license

suspended.

      ¶1    PER CURIAM.        We review the report filed by Referee

Dennis J. Flynn recommending the court suspend Attorney Mary K.

Biester's license to practice law in Wisconsin for the maximum

period allowed for multiple violations of supreme court rules,

including converting client funds.          Since no appeal has been

filed,     we   review   the   referee's   report       and     recommendation

pursuant to Supreme Court Rule (SCR) 22.17(2).                    Upon careful

review of the matter, we adopt the referee's findings of fact
and conclusions of law.        We conclude, however, that rather than
                                                                           No.    2012AP385-D

suspending       Attorney      Biester's     license        for    the    maximum    period

allowed, a three year and six month suspension of her license is

an appropriate sanction.           Because we noted in our previous order

imposing a one year suspension that any sanction imposed as a

result     of       an   additional    finding         of    misconduct          shall    run

consecutive to the one year suspension, we deem it appropriate

to make the three year and six month suspension retroactive to

November 25, 2014, one year after the previous suspension was

imposed.        We also agree with the referee that Attorney Biester

should be required to make restitution to the Wisconsin Lawyers'

Fund for Client Protection and that she should pay the full

costs of this proceeding, which were $8,712.86 as of December

18, 2015.

     ¶2        Attorney     Biester    was       admitted         to    practice    law    in

Wisconsin in 1979 and practiced in Beloit.                        As previously noted,

on November 25, 2013, her license to practice law in Wisconsin

was suspended for one year.                  The suspension arose out of 30

counts    of    misconduct      involving        six   clients.           The    misconduct
included failing to act with reasonable diligence and promptness

in representing a client; failing to keep the client reasonably

informed about the status of the matter; failing to explain a

matter to the extent reasonably necessary to permit the client

to   make       informed       decisions     regarding            the     representation;

engaging       in    conduct    involving        dishonesty,           fraud,    deceit    or

misrepresentation;          multiple       trust       account          violations;       and

failing to cooperate in the investigation of a grievance filed
with the Office of Lawyer Regulation (OLR).                            In re Disciplinary
                                             2
                                                                     No.    2012AP385-D

Proceedings against Biester, 2013 WI 85, 350 Wis. 2d 707, 838
N.W.2d 79.    Her license remains suspended.

      ¶3    This disciplinary proceeding involves Count Two of the

OLR's amended complaint, the only count that was not addressed

in   the   2013   decision.      Count       Two    of   the   amended      complaint

involved Attorney Biester's representation of L.T.                         L.T. hired

Attorney Biester to represent her in a divorce matter in 2008.

Attorney    Biester   was    experiencing          financial   problems      at   that

time, and her home was the subject of a foreclosure action.

L.T. had inherited a large sum of money, and Attorney Biester

advised L.T. she should protect those funds from her husband.

In February 2009, Attorney Biester's nonlawyer assistant, J.M.,

convinced L.T. to transfer $78,000 of her inherited funds into

Attorney     Biester's      client     trust        account    for     safekeeping.

Attorney Biester wire transferred $78,000 from her client trust

account to the bank that held the first mortgage on Attorney

Biester's    home.       Count   Two    of    the     OLR's    amended      complaint

alleged the following violations of supreme court rules:

                                     COUNT TWO

                         (Multiple Rule Violations)

           24(a).    While representing L.T. at the time
      Biester deposited and then disbursed funds belonging
      to L.T. from her client trust account to pay off her
      personal   mortgage   with  Associated Bank,   Biester
      represented a client when the representation of that
      client    was    materially   limited  to    Biester's
      responsibilities to a third person or by her own

                                         3
                                                      No.   2012AP385-D

    personal   interest,   all       in   violation    of    SCR
    20:1.7(a)(2).1

         24(b).   By failing until August 24, 2009, to
    inform L.T. that her funds had been deposited and
    disbursed from the client trust account and in failing
    to keep L.T. reasonably informed about the status of
    her legal matter, Biester violated SCR 20:1.4(a)(3).2

         24(c). With knowledge of a court order limiting
    the transfer of property in the divorce action, and in
    failing to inform L.T. and the Court that L.T.'s funds
    had been deposited in Biester's client trust account
    and then transferred out of the client trust account
    to pay Biester's personal mortgage, Biester disobeyed
    an obligation under the rules of a tribunal, in
    violation of SCR 20:3.4(c).3

          24(d).  By depositing funds belonging to L.T.
    into her client trust account and converting those
    funds    for the   purpose  of   paying  her   mortgage
    obligation and in failing to inform her client and the
    Court of these events, Biester engaged in conduct
    involving     dishonesty,     fraud,     deceit,     or
    misrepresentation, in violation of SCR 20:8.4(c).4

    1
       SCR 20:1.7(a)(2) provides:   "Except as provided in par.
(b), a lawyer shall not represent a client if the representation
involves a concurrent conflict of interest.        A concurrent
conflict of interest exists if there is a significant risk that
the representation of one or more clients will be materially
limited by the lawyer's responsibilities to another client, a
former client or a third person or by a personal interest of the
lawyer."
    2
       SCR 20:1.4(a)(3) provides:     "A lawyer shall keep         the
client reasonably informed about the status of the matter."
    3
       SCR 20:3.4(c) provides:   "A lawyer shall not knowingly
disobey an obligation under the rules of a tribunal, except for
an open refusal based on an assertion that no valid obligation
exists."
    4
       SCR 20:8.4(c) provides:  "It is professional misconduct
for a lawyer to engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."

                                 4
                                                                   No.     2012AP385-D

         24(e).   In failing to notify L.T. in writing of
    the receipt of funds in which L.T. had an interest, in
    failing to promptly deliver to L.T. any funds to which
    L.T. was entitled to receive, and in failing to
    provide a full accounting regarding the distribution
    of L.T.'s funds to L.T., Biester violated SCR
    20:1.5(d)(1) and SCR 20:1.15(d)(2).5
    ¶4      Referee     Flynn      also       presided      over     the     earlier

disciplinary   proceeding.          When      the    referee    issued     his   first

report in 2013, there was a possibility that criminal charges

might be filed against Attorney Biester.                    In order to protect

Attorney     Biester's      Fifth     Amendment         right      against       self-

incrimination, the referee stayed proceedings as to Count Two.

In March of 2015, the OLR notified this court that the Wisconsin

Department   of   Justice    had    determined         it   will   not   criminally

prosecute    Attorney    Biester      for      her    conduct      involving      L.T.

    5
       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.

     SCR 20:1.15(d)(1) and SCR 20:1.15(d)(2) provide: "(1) Upon
receiving funds or other property in which a client has an
interest, or in which the lawyer has received notice that a 3rd
party has an interest identified by a lien, court order,
judgment, or contract, the lawyer shall promptly notify the
client or 3rd party in writing. Except as stated in this rule
or otherwise permitted by law or by agreement with the client,
the lawyer shall promptly deliver to the client or 3rd party any
funds or other property that the client or 3rd party is entitled
to receive.

     (2) Upon final distribution of any trust property or upon
request by the client or a 3rd party having an ownership
interest in the property, the lawyer shall promptly render a
full written accounting regarding the property."

                                          5
                                                                        No.     2012AP385-D

Criminal charges are apparently pending against J.M. On May 12,

2015, this court granted the OLR's motion to lift the stay of

proceedings with respect to Count Two and further ordered that

the matter be referred to a referee for additional proceedings

regarding Count Two of the amended complaint.                      Referee Flynn was

again appointed to preside over the proceedings regarding Count

Two of the amended complaint.

       ¶5    An     evidentiary     hearing      in    this   matter      was    held    on

November 16, 2015.          The only witnesses to testify at the hearing

were   Attorney       Biester      and    Attorney      Arthur     K.    Thexton,       the

character witness called by Attorney Biester.                       Attorney Thexton

stated that Attorney Biester has a reputation for being truthful

and honest.         He also said he knows of J.M. from a time in the

1980s when he was a Wisconsin district attorney and he secured a

conviction     against      J.M.    for    criminal      fraud.         The   conviction

resulted in a prison sentence for J.M.

       ¶6    The referee issued his report and recommendation on

Count Two of the amended complaint on December 1, 2015.                                 The
referee     noted    that   in     its    case   in    chief,     OLR    presented      the

videotaped        deposition       of    L.T.         L.T.    testified         that    her

interaction       with   Attorney        Biester      regarding    her    divorce       was

almost exclusively through J.M.                  L.T. said she was advised by

Attorney Biester, acting through J.M., to transfer $78,000 into

Attorney Biester's client trust account as a way of protecting

those funds from her husband in the divorce proceeding.                                L.T.

said she learned from J.M. about a month after transferring the
$78,000 that the money had been used to purchase a home that
                                            6
                                                                     No.    2012AP385-D

J.M. was going to remodel and then "flip" it and that J.M. was

going to give L.T. $10,000 to boot within a month.                          L.T. said

when she heard this she was furious and wanted her money back.

    ¶7      L.T. testified that in August 2009 Attorney Biester

told L.T. that she had learned J.M. had taken the money from

Attorney     Biester's      client     trust    account      and     had    paid     off

Attorney    Biester's       mortgage    on     the    home    that    was     then    in

foreclosure.        L.T. wrote a letter to the court in the divorce

matter and explained what had happened.                 The court allowed L.T.

to obtain new counsel.          L.T.'s divorce was ultimately finalized

but because of the way the $78,000 had been handled, that amount

was determined to be comingled and viewed as marital property.

L.T. subsequently made a claim to the Wisconsin Lawyers' Fund

for Client Protection, which awarded her a full refund of the

$78,000 due to her being the victim of fraud.

    ¶8      In his report, the referee noted that Attorney Biester

claimed she did not know that J.M. had a criminal fraud record

and did not know the $78,000 that was deposited into her client
trust     account    came    from    L.T.       She    said    J.M.        alone   made

arrangements for L.T. to put the funds into the trust account

and it was not until later that Attorney Biester learned from

J.M. that the source of the $78,000 was L.T. and some associates

of J.M.

    ¶9      The referee found L.T.'s testimony to be credible, and

he found that Attorney Biester was not credible when she claimed

she did not know that L.T. was the source of the $78,000.                            The
referee noted that the $78,000 was the exact same amount of
                                         7
                                                                        No.    2012AP385-D

money that Attorney Biester believed L.T. had received as an

inheritance and was at issue in the division of the marital

estate in the divorce action.                   The referee further noted that

Attorney Biester was actually at her client trust account bank

when the $78,000 was wired and received.                         The referee opined

this suggests that Attorney Biester knew the funds were coming

and she was immediately prepared to use those funds for her own

benefit.

       ¶10   The   referee    said      a    reasonable         inference       from    the

evidence was that Attorney Biester and J.M. were acting together

with full knowledge of what was occurring, and he said Attorney

Biester had full knowledge that her client's funds were being

wrongfully     placed      into   her       client      trust     account      and     were

thereafter wrongfully converted to Attorney Biester's personal

use.    The referee said:

       She knew fully what was occurring on 10 February 2009
       in terms of obtaining and converting her client's
       $78,000.   She tried to cover up her wrongful conduct
       by placing the entire blame on her legal assistant,
       J.M.    However, Respondent's failure to notify her
       client was intentional under the credible evidence and
       no reasonable excuse for Respondent not informing L.T.
       was provided.
       ¶11   For   these    reasons,        the    referee      found   that     the    OLR

presented     clear,       satisfactory           and    convincing      evidence        of

misconduct    by    Attorney      Biester         as    alleged    in    each    of     the

averments in Count Two of the amended complaint.

       ¶12   Turning to the appropriate sanction, the referee said
the misconduct at issue here is quite serious.                      The referee said

                                            8
                                                                   No.    2012AP385-D

the misconduct was aggravated because Attorney Biester continued

to claim that she was innocent of wrongdoing and that she had

been   a     victim   of    fraud   by   her   employee.     The    referee     said

Attorney Biester took advantage of her relationship with L.T.

and worked with her employee to have the $78,000 deposited into

Attorney Biester's client trust account.               The referee said, "The

actions of this attorney have brought distain [sic] and dishonor

to the entire legal profession in our State.                        A client was

seriously harmed when she should have been protected."

       ¶13    The referee pointed to several mitigating factors.                  He

noted that prior to her 2013 suspension, Attorney Biester had no

discipline imposed during her 36-year legal career.                      The referee

further noted that Attorney Biester has various health issues.

He also pointed out that she has fully served the one year

suspension that was previously ordered by this court.                       He also

noted that Attorney Biester states she is now living on a very

meager monthly Social Security award.                 The referee also noted

Attorney Biester says she does not know where she would get the
funds to meet her continuing legal education and ethics course

requirements in the event she were to seek reinstatement of her

law license in the future.

       ¶14    The referee concluded that Attorney Biester's license

to   practice     law      should   be   suspended   for   the   maximum      period

                                           9
                                                                            No.    2012AP385-D

allowed.6        The referee also recommends that Attorney Biester be

ordered to pay the full costs of this proceeding and that she be

ordered     to    reimburse      the    Wisconsin        Lawyers       Fund       for   Client

Protection for the $78,000 that it paid to L.T.

     ¶15     A    referee's      findings          of   fact    are    affirmed         unless

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     sanction       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.

     ¶16     There is no showing that any of the referee's findings

of fact are clearly erroneous.                     According, we adopt them.                We

also agree with the referee's conclusions of law that Attorney

Biester violated the supreme court rules set forth above.

     ¶17     With respect to the appropriate level of discipline,

upon careful review of the matter, we conclude that rather than

suspending       Attorney    Biester's        license     for    the       maximum       period
allowed, retroactive to November 25, 2013, Attorney Biester's

license     should    be    suspended        for    three      years       and    six   months

retroactive to November 25, 2014.

     6
       We are unsure what the referee meant by the term "the
maximum period allowed."    The most severe sanction this court
can impose is the revocation of an attorney's license.         An
attorney whose license has been revoked may petition for
reinstatement five years after the effective date of revocation.
See SCR 22.29(2). A suspension for "the maximum period allowed"
would presumably be approximately four years and eleven months.

                                              10
                                                                        No.     2012AP385-D

       ¶18    As part of its order imposing the one year suspension

of     Attorney      Biester's         Wisconsin      law     license,        this    court

specifically ordered that in the event the stay of proceedings

relating to Count Two of the amended complaint was lifted and

there was an additional finding of misconduct as to Count Two,

"any sanction imposed as a result of that misconduct shall run

consecutive to the one year suspension imposed by the terms of

this    order."         Disciplinary          Proceedings     Against      Biester,     350
Wis. 2d 707, ¶33.             In order for the sanction imposed in the

instant       case   to      run      consecutive     to      the     prior     one    year

suspension,       the   new        sanction    must   be    effective      November    25,

2014.

       ¶19    We agree that the misconduct at issue here was very

serious, but we are not convinced that it rises to the level of

warranting a suspension of Attorney Biester's law license that

approaches five years.               Although no two disciplinary proceedings

are    identical,       we    find     the     decision     in   In   re   Disciplinary

Proceedings Against Carter, 2014 WI 126, 359 Wis. 2d 70, 856
N.W.2d 595 to be somewhat similar.                    In Carter, an attorney who

had been in practice for nearly 40 years pled no contest to 11

counts of misconduct, including converting over $72,000 of a

client's funds.           Carter's law license was suspended for three

years.       Mitigating factors in Carter were the attorney's lack of

previous misconduct and his expression of remorse.                            Aggravating

factors      included        the    fact     that   the     attorney's     conduct     was

reckless and highly unprofessional and the attorney initially
accused the client of trying to take advantage of him.
                                               11
                                                               No.    2012AP385-D

    ¶20    In this case, Attorney Biester practiced law for over

30 years before being disciplined.            Attorney Biester converted a

similar amount of money as Attorney Carter.                   However, unlike

Attorney Carter, Attorney Biester has still not accepted full

responsibility for her actions and instead continues to blame

her former employee and portray herself as a victim.                 For all of

these   reasons,   we   conclude   that   a    three   year    and   six   month

suspension    of   Attorney    Biester's        license,      retroactive     to

November 25, 2014, is an appropriate sanction.

    ¶21    We agree with the referee that Attorney Biester should

be required to reimburse the Wisconsin Lawyers' Fund for Client

Protection and that she should also be required to pay the full

costs of this proceeding.

    ¶22    IT IS ORDERED that the license of Mary K. Biester to

practice law in Wisconsin is suspended for a period of three

years and six months, retroactive to November 25, 2014.

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

of this order, Mary K. Biester shall make restitution in the
amount of $78,000 to the Wisconsin Lawyers' Fund for Client

Protection.

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

of this order, Mary K. Biester shall pay to the Office of Lawyer

Regulation the costs of this proceeding, which are $8,712.86 or

enter into a payment agreement plan with the Office of Lawyer

Regulation for the full payment of costs over a period of time.

                                    12
                                                       No.   2012AP385-D

    ¶25   IT IS FURTHER ORDERED that the restitution specified

above is to be completed prior to paying costs to the Office of

Lawyer Regulation.

    ¶26   IT   IS    FURTHER   ORDERED   that   compliance   with   all

conditions of this order is required for reinstatement.        See SCR

22.29(4)(c).

                                  13
                                                          No.   2012AP385-D.ssa

       ¶27    SHIRLEY S. ABRAHAMSON, J.         (concurring).       I join the

court's decision and order as to the discipline imposed in this

matter.      I write separately to address costs and restitution.

       ¶28    Attorney Biester has been ordered to pay the Office of

Lawyer Regulation $8,712.86 in costs and to make restitution in

the amount of $78,000 to the Wisconsin Lawyers' Fund for Client

Protection.         In the event Attorney Biester petitions for the

reinstatement of her license to practice law in Wisconsin, she

will be required to demonstrate that she has complied fully with

the terms of the order of suspension, see SCR 22.29(4)(c), and

that   she    has    made   restitution   to   or   settled   all   claims   of

persons injured or harmed by her misconduct or explained the

failure or inability to do so.        See SCR 22.29(4m).

       ¶29    If an attorney has satisfied all of the requirements

set forth in        SCRs 22.31(1) and 22.29(4)(a)-(4m), his or her

license to practice law may be reinstated notwithstanding the

failure to pay costs or make restitution provided the attorney
has been unable to do so due to a lack of financial resources.

I write separately to clarify that Attorney Biester's inability

to pay costs or make restitution, standing alone, would not

automatically bar her from regaining her law license.                     See,

e.g., In re Disciplinary Proceedings Against Widule, 2012 WI 63,

341 Wis. 2d 493, 817 N.W.2d 822; In re Disciplinary Proceedings

Against Gilbert, 2002 WI 102, 255 Wis. 2d 311, 647 N.W.2d 845.

                                      1
    No.   2012AP385-D.ssa

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