Court Opinion

ID: 4113640
Source: CourtListenerOpinion
Date Created: 2017-01-06 14:15:58.038695+00
Date Added: 2024-06-11T08:45:19.867842
License: Public Domain

2017 WI 1

                  SUPREME COURT          OF   WISCONSIN
CASE NO.:              2014AP2307-D
COMPLETE TITLE:        In the Matter of Disciplinary Proceedings
                       Against Shawn G. Rice, Attorney at Law:

                       Office of Lawyer Regulation,
                                 Complainant,
                            v.
                       Shawn G. Rice,
                                 Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST RICE

OPINION FILED:         January 6, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:          ABRAHAMSON, S. J., joined by BRADLEY, A. W. J.,
                       dissent (Opinion filed).
  NOT PARTICIPATING:

ATTORNEYS:
                                                                          2017 WI 1
                                                                NOTICE
                                                  This opinion is subject to further
                                                  editing and modification.   The final
                                                  version will appear in the bound
                                                  volume of the official reports.
No.    2014AP2307-D

STATE OF WISCONSIN                            :            IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Shawn G. Rice, Attorney at Law:

Office of Lawyer Regulation,                                         FILED
           Complainant,                                          JAN 6, 2017
      v.                                                           Diane M. Fremgen
                                                                Clerk of Supreme Court
Shawn G. Rice,

           Respondent.

      ATTORNEY     disciplinary        proceeding.       Attorney's         license

suspended.

      ¶1   PER     CURIAM.     We   review     the      report       of     Referee

Christine Harris Taylor, concluding that Attorney Shawn G. Rice

committed one count of professional misconduct as alleged in the

Office of Lawyer Regulation's (OLR) complaint.                   Referee Taylor

recommends   the    court    suspend    Attorney     Rice's      license      for    a

period of 60 days and that we order Attorney Rice to pay the

full costs of this disciplinary proceeding.
                                                                     No.     2014AP2307-D

      ¶2     No appeal was filed from the referee's report so we

review this matter pursuant to SCR 22.17(2).1                       After completing

our review, we agree that the stipulated facts and the record

are   sufficient    to     establish         that    Attorney   Rice     violated     SCR

20:8.4(c).2     We further agree that Attorney Rice's license should

be suspended for 60 days.                We accede to the OLR's conclusion

that restitution is not warranted.                       We deny Attorney Rice's

objection to costs and direct him to pay the full costs of this

disciplinary proceeding which are $14,064.72 as of August 29,

2016.

      ¶3     Attorney      Rice        was    admitted     to      practice     law    in

Wisconsin     in   1993.          He    has       been   subject    to     professional

discipline on one prior occasion.                   In 2007, he received a public

reprimand for three counts of professional misconduct related to

his personal involvement in a commercial real estate transaction

in which he made false statements in a deposition and executed a

document falsely reflecting an individual as a member of an LLC.

      1
          SCR 22.17(2) provides:

      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.
      2
       SCR 20:8.4(c) provides:    "It is professional misconduct
for a lawyer to: . . . engage in conduct involving dishonesty,
fraud, deceit or misrepresentation."

                                              2
                                                                     No.    2014AP2307-D

In re Disciplinary Proceedings Against Rice, 2007 WI 68, 301
Wis. 2d 94, 732 N.W.2d 440.

      ¶4     This matter came to the OLR's attention during Rice's

acrimonious divorce proceeding.                   In 1996, Attorney Rice and Ms.

Liesl M. Testwuide (Ms. Testwuide) were married.                       In 1992, when

Ms. Testwuide was still unmarried and childless, Ms. Testwuide's

parents created a trust for the benefit of Ms. Testwuide and her

children. Ms. Testwuide was co-trustee of the trust along with

Kenneth     Kazmierczak,      a    business       associate     of   Ms.   Testwuide's

father.

      ¶5     In 2010, Ms. Testwuide filed for divorce.                          In July

2011,    while    the     divorce       was   pending,    Ms.    Testwuide     filed    a

grievance with the OLR alleging that Attorney Rice had removed

over $600,000 from the trust without proper authorization by

forging Ms. Testwuide's signature and the signature of her co-

trustee.      Attorney Rice self-reported the same misconduct and,

in   October      2011,    Attorney       Rice     submitted     a   lengthy    written

response to the grievance acknowledging that he signed documents
without proper authorization but asserting Ms. Testwuide knew

and tacitly approved his actions.                    Ms. Testwuide and Attorney

Rice's     divorce      judgment        was   entered     in    October    2011;     they

continued to litigate custody, placement, and other issues.

      ¶6     On    November       21,    2011,     Ms.   Testwuide    filed    a    civil

action against Attorney Rice and his former law firm, alleging

fraud,     conversion,      and    legal      malpractice.      Testwuide      v.   Rice,

2011CV1184, Sheboygan County.                 On December 18, 2012, the circuit
court granted Rice's motion for summary judgment, ruling that
                                              3
                                                                            No.       2014AP2307-D

several claims were barred by the statute of limitations.                                       In

May    2013,       a    stipulation       and    order       dismissing         the    remaining

claims against Rice was entered.

       ¶7      On      October    2,     2014,       the    OLR   filed     a     disciplinary

complaint alleging that Attorney Rice violated SCR 20:8.4(c) by

forging     the        signatures       of    the     co-trustees      of       the    Liesl    M.

Testwuide          1992    Trust         on     various       checks      and         documents.

Initially, the OLR sought a six month license suspension. In

July 2015, after pretrial discovery, the OLR and Attorney Rice

executed       a       "Stipulation          Regarding       Factual      Allegations          and

Disciplinary Charge."               Attorney Rice admitted that he violated

SCR 20:8.4(c) by preparing and executing, without authorization,

numerous forms, checks and other Trust documents for a 12-year

period during the marriage and continuing until Ms. Testwuide

filed for divorce in 2010.

       ¶8      The      referee    accepted          the   stipulation.           The     parties

continued to dispute the appropriate discipline and conducted

additional discovery, including depositions.
       ¶9      Attorney           Rice        maintained          that,           under        the

circumstances, a public reprimand was sufficient.                                 On April 15,

2016,   days        before    a    scheduled          evidentiary      hearing,         the    OLR

reduced its recommendation from a six-month license suspension

to a    60-day license suspension.                         Attorney Rice continued to

assert that a public reprimand was sufficient, but the parties

agreed to waive the scheduled hearing and permit the referee to

resolve     the        question    of    appropriate         discipline         based     on   the

                                                 4
                                                                              No.     2014AP2307-D

stipulation,           the    existing     record,         and    the     parties'          written

submissions.

       ¶10       The referee issued her report and recommendation dated

August 9, 2016.              Neither party appealed.

       ¶11       When we review a referee's report and recommendation

in   an     attorney         disciplinary       case,       we    affirm        the    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.

       ¶12       There       is   no    showing       that       the     referee's          factual

findings         are     clearly       erroneous      and    we        accept       them.       The

complaint alleges, Attorney Rice has stipulated, and the record

supports the finding that Attorney Rice arranged for numerous
checks       and       disbursals        from        the     trust       account,           without

authorization, the aggregate amount of which was several hundred

thousand dollars.3

       3
       We do not know how much money Rice transferred from the
trust without proper authorization.    The OLR states that its
"investigation did not and most probably could not have
calculated the total amount involved in the transactions at
issue." See OLR's Restitution Statement at 1-2.

                                                 5
                                                                                No.     2014AP2307-D

       ¶13       Supreme      Court    Rule       20:8.4(c)            provides       that    it     is

professional           misconduct      for       a       lawyer    to       engage     in    conduct

involving dishonesty, fraud, deceit, or misrepresentation.                                          The

stipulation and the record before the court are sufficient to

support      a    legal       conclusion         that      Attorney         Rice     violated      SCR

20:8.4(c).

       ¶14       The primary question in this matter is the appropriate

discipline for Attorney Rice's misconduct.                               Factors relevant to

determining            appropriate          attorney           discipline          include          the

seriousness, nature and extent of the misconduct; the level of

discipline needed to protect the public, the courts, and the

legal system from repetition of the attorney's misconduct; the

need   to        impress      upon    the    attorney            the    seriousness          of    the

misconduct;            and    the     need       to      deter     other       attorneys           from

committing         similar          misconduct.              See       In     re      Disciplinary

Proceedings Against Hammis, 2011 WI 3, ¶39, 331 Wis. 2d 19, 793
N.W.2d 884;        In re Disciplinary Proceedings Against Eisenberg,

2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747.
       ¶15       The     referee       identified            as        aggravating          factors,

Attorney Rice's prior discipline, a dishonest or selfish motive,

and the fact that the misconduct spanned years.                                    As mitigating

factors, the referee noted that Attorney Rice self-reported his

misconduct and that he was cooperative in these proceedings.

       ¶16       After       itemizing       a        number      of     unauthorized             trust

transactions, the referee stated that she was not persuaded by

Attorney Rice's claim that it was "impossible" to locate the co-
trustee after the co-trustee relocated to Minneapolis, and found
                                                     6
                                                                         No.     2014AP2307-D

further     that       the   "overwhelming           information       in      this    record

supports the fact that [Rice's] misconduct in accessing Trust

funds, without authorization was well in excess of any dollar

amounts     necessary        to     'pay    bills.'."           However,       the    referee

acknowledged the "personal nature of the issues leading [Rice]

to   engage      in    the   misconduct          that    he   admits     to"     and    found

credible Attorney Rice's assertion that he sincerely believed

that he was acting as a "de facto" trustee.

      ¶17       Throughout        these      proceedings         Attorney        Rice        has

maintained that he engaged in the trust transactions, albeit

unauthorized, but with the knowledge and consent of his wife,

who was both a co-trustee and a beneficiary of the trust.                                     He

claims that she did not want to be involved in the marital

finances.         He    maintains         that   the    trust    funds      were      used    to

support     a    marital      lifestyle          that   exceeded    their        employment

income,     and       paid   for,    among       other    things,      property        taxes,

vacations, and the remodeling of a vacation home.                                  He claims

that Ms. Testwuide's grievance was both selective and incomplete
in terms of the trust transactions it identified. The referee

did not make specific findings in this regard, however, merely

noting the "conflicting" evidence provided.                       There is no finding

that Attorney Rice misused the trust funds.

      ¶18       In terms of the appropriate discipline, the referee

described Attorney Rice's misconduct as serious, but ultimately

accepted the OLR's recommendation for a 60-day suspension.                                   She

deemed      analogous        In      re     Disciplinary         Proceedings          Against
Riegleman, 2003 WI 3, 259 Wis. 2d 1, 657 N.W.2d 339, in which
                                                 7
                                                                       No.        2014AP2307-D

this    court    imposed        a   60-day    suspension       upon      a       lawyer    who

endorsed     a   settlement         check    without    the    insurance           company's

consent, failed to inform the insurance company the lawyer was

in possession of the funds, and distributed settlement funds

despite knowing there was a dispute regarding the funds. See

also In re Disciplinary Proceedings Against Glesner, 2000 WI 18,

233 Wis. 2d 35, 606 N.W.2d 173 (imposing 60-day suspension for

adding unearned charges to a client's billing and creating an

invoice      with    fabricated       time        entries);    In   re       Disciplinary

Proceedings Against Krueger, 2006 WI 17, 288 Wis. 2d 586, 709
N.W.2d 857 (imposing 60-day suspension for preparing and filing

inaccurate bankruptcy schedules and failing to disclose a pre-

bankruptcy debt owed to him by the debtor of over $7,000).                                  The

referee      thus    recommends       the     court     suspend     Attorney           Rice's

license for 60 days and further recommends that we impose the

full costs of this proceeding on Attorney Rice.

       ¶19   Attorney       Rice      filed       an   objection       to        the      OLR's

statement of costs.             He contends that he conceded all along that
he    committed      the    alleged     misconduct       but    felt     compelled          to

litigate the case because the OLR "overreached with respect to

the    punishment"         it    initially        sought,     namely,        a     six-month

suspension.         He contends that he was effectively left with "no

viable course of action other than fully litigating the case" as

occurred in In re Disciplinary Proceedings Against Frisch, 2010
WI 60, 326 Wis. 2d 128, 784 N.W.2d 670.                     He points out that the

OLR reduced its requested discipline to a 60-day suspension a
mere two days before a scheduled hearing, whereupon he agreed to
                                              8
                                                                        No.     2014AP2307-D

have the referee consider the matter on written submissions.                             He

asks the court to impose only half the costs upon him.

    ¶20     The    OLR   maintains      that     full    costs     are        appropriate.

The OLR reminds the court that Attorney Rice continued to seek a

public reprimand; that is, he did not "acquiesce" when the OLR

reduced    the    recommended        sanction,     nor    did      he     stipulate       to

discipline.       The OLR maintains that its costs were incurred in

the normal course of litigating this case.

    ¶21     We    agree.        We   find   no   reason       to   depart        from   our

general practice of imposing full costs on attorneys found to

have committed misconduct.            See SCR 22.25.           While Attorney Rice

did admit his misconduct and ultimately stipulated to certain

facts, disagreement regarding the appropriate sanction resulted

in the parties litigating this matter for some time and required

the preparation of a referee's report.

    ¶22     Finally,       we    impose     no    restitution           obligation        on

Attorney Rice.      The OLR has not sought restitution and we accede

to its determination that restitution is not appropriate in this
case.    See SCR 21.16(1m)(em) and (2m)(a)1.

    ¶23     IT IS ORDERED that the license of Shawn G. Rice to

practice law in Wisconsin is suspended for a period of 60 days,

effective February 17, 2017.

    ¶24     IT IS FURTHER ORDERED that Shawn G. Rice 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.

                                            9
                                                     No.    2014AP2307-D

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

of this order, Shawn G. Rice shall pay to the Office of Lawyer

Regulation the costs of this proceeding, which are $14,064.72 as

of August 29, 2016.

    ¶26   IT   IS   FURTHER   ORDERED   that   compliance   with    all

conditions of this order is required for reinstatement.        See SCR

22.29(4)(c).

                                 10
                                                                       No.   2014AP2307-D.ssa

       ¶27       SHIRLEY S. ABRAHAMSON, J.                     (dissenting).        I cannot

join   this          per   curiam   because      the     stipulation,        the   referee's

report, and this per curiam do not make clear the nature and

extent of Attorney Rice's conduct that is charged as a violation

of SCR 20:8.4(c).               Without knowing the nature and extent of the

conduct      I       cannot     determine    whether       a    violation     of    the   Code

occurred         and,      if    there   was         a   violation,     the     appropriate

discipline.           Accordingly, I dissent.

       ¶28       I    am   authorized       to   state         that   Justice      ANN    WALSH

BRADLEY joins this dissent.

                                                 1
    No.   2014AP2307-D.ssa

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