Court Opinion

ID: 3133357
Source: CourtListenerOpinion
Date Created: 2015-10-21 01:14:39.731509+00
Date Added: 2024-06-11T11:53:54.962173
License: Public Domain

2015 WI 95

                  SUPREME COURT           OF   WISCONSIN
CASE NO.:               2015AP578-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against James T. Runyon, Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        James T. Runyon,
                                  Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST RUNYON

OPINION FILED:          October 8, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

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

ATTORNEYS:
                                                                           2015 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.        2015AP578-D

STATE OF WISCONSIN                               :              IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against James T. Runyon, Attorney at Law:

Office of Lawyer Regulation,                                            FILED
               Complainant,
                                                                    OCT 8, 2015
       v.
                                                                      Diane M. Fremgen
                                                                   Clerk of Supreme Court
James T. Runyon,

               Respondent.

       ATTORNEY      disciplinary       proceeding.        Attorney's           license

suspended.

       ¶1      PER CURIAM.      We review a stipulation filed pursuant

to    Supreme    Court   Rule   (SCR)   22.121       by   the   Office     of    Lawyer

       1
           SCR 22.12 provides:

             (1) The director may file with the complaint a
       stipulation of the director and the respondent to the
       facts, conclusions of law regarding misconduct, and
       discipline to be imposed.      The supreme court may
       consider the complaint and stipulation without the
       appointment of a referee, in which case the supreme
       court    may  approve  the  stipulation,  reject   the
                                                       (continued)
                                                                No.     2015AP578-D

Regulation      (OLR)   and   Attorney       James   T.     Runyon.       In    the

stipulation,      Attorney     Runyon       admits   that     he      engaged   in

misconduct consisting primarily of a number of trust account

violations.      The parties jointly request that this court impose

a 60-day suspension of Attorney Runyon's license to practice law

in Wisconsin as discipline for his admitted misconduct.

    ¶2     We     approve     the   stipulation      and     suspend     Attorney

Runyon's license to practice law in this state for a period of

60 days.      Because this matter was resolved with a stipulation

    stipulation, or direct the parties to                          consider
    specific modifications to the stipulation.

         (2) If the supreme court approves a stipulation,
    it shall adopt the stipulated facts and conclusions of
    law and impose the stipulated discipline.

         (3) If the supreme court rejects a stipulation, a
    referee shall be appointed and the matter shall
    proceed as a complaint filed without a stipulation.

         (3m) If the supreme court directs the parties to
    consider specific modifications to the stipulation,
    the parties may, within 20 days of the date of the
    order, file a revised stipulation, in which case the
    supreme court may approve the revised stipulation,
    adopt the stipulated facts and conclusions of law, and
    impose the stipulated discipline. If the parties do
    not file a revised stipulation within 20 days of the
    date of the order, a referee shall be appointed and
    the matter shall proceed as a complaint filed without
    a stipulation.

         (4) A stipulation rejected by the supreme court
    has no evidentiary value and is without prejudice to
    the respondent's defense of the proceeding or the
    prosecution of the complaint.

                                        2
                                                                  No.    2015AP578-D

under SCR 22.12, we do not require Attorney Runyon to pay the

costs of this proceeding.           There is no request for restitution.

      ¶3    Attorney Runyon was admitted to the practice of law in

Wisconsin in 1978.          He practices law in the Tomahawk area.                In

1984, Attorney Runyon's law license was suspended for one year

for   conduct    involving     moral   turpitude,     dishonesty,        fraud,    or

deceit and for providing false testimony, violations of former

SCRs 11.01, 20.04(3) and (4), 22.28(4)(b), and 40.13.                        In re

Disciplinary      Proceedings        Against     Runyon,    121       Wis. 2d     37,

357 N.W.2d 545 (1984).              In 2006,     Attorney Runyon        received a

private reprimand for         misconduct involving          dishonesty, fraud,

deceit,    or   misrepresentation,         in   violation   of    SCR    20:8.4(c).

Private Reprimand No. 2006-11.

      ¶4    On March 23, 2015, the OLR filed a complaint alleging

six counts of misconduct relating to trust account violations

that occurred over a period of several months in 2013 and early

2014.      On   May   12,   2015,    the   parties   executed     a     stipulation

pursuant to SCR 22.12.
      ¶5    Attorney Runyon maintained an IOLTA trust account at

First Merit Bank in Kaukauna, Wisconsin.               Between September and

October 2013, a series of overdrafts occurred.                     At the OLR's

request, Attorney Runyon provided the OLR with his transaction

register, client ledger, and bank statements.                Attorney Runyon's

transaction register consisted of handwritten check stubs, which

did not show a consistent, accurate running balance, did not

include the source and client matter for all deposits, and did
not include the purpose for all disbursements.                   Attorney Runyon
                                           3
                                                                 No.    2015AP578-D

did     not     perform       complete     and     accurate   monthly      account

reconciliations.             For   example,    Attorney   Runyon's     handwritten

check stubs indicate that the balance in his trust account as of

June 27, 2013,             should have been $134,924.09.         However, bank

records show that Attorney Runyon's actual trust account balance

on June 27, 2013, was only $5,944.86.

      ¶6       Because the OLR was unable to determine the cause of

the overdrafts based solely upon records provided by Attorney

Runyon,       the    OLR    obtained    Attorney   Runyon's   bank     statements,

checks, and deposit records for 2013 directly from the bank and

conducted an audit.

      ¶7       The OLR's reconstructed records indicate that Attorney

Runyon's trust account first became overdrawn (on the books, as

opposed to the bank balance) by a total of $16,651.33 at the end

of the day on September 16, 2013.                  On September 19, 2013, the

largest overdraft occurred, in the amount of $24,151.33.

      ¶8       On November 4, 2013, in the wake of these overdrafts,

Attorney Runyon opened a new trust account at River Valley Bank
and made an initial deposit of $20,000.

      ¶9       On November 12 and 14, 2013, River Valley Bank charged

Attorney Runyon miscellaneous fees associated with opening the

new account.          Attorney Runyon did not account for such fees and

did not keep any firm funds designated to cover account fees and

charges in the trust account.

      ¶10      On December 2, 2013, Attorney Runyon closed the First

Merit    Bank       trust    account,   withdrew    its   remaining    balance   of
$8,072.60, and deposited it into his River Valley Bank trust
                                           4
                                                                        No.     2015AP578-D

account.          The $8,072.62 belonged to Attorney Runyon either as

earned fees or as personal funds.

       ¶11        On December 31, 2013, there was an overdraft in the

amount of $1,518.75 on Attorney Runyon's River Valley Bank trust

account.           A trust account check in the amount of $2,500 was

presented and returned unpaid.

       ¶12        In    response     to   the       December   31,     2013   overdraft,

Attorney Runyon provided copies of various records requested by

the OLR, including his transaction register, bank statements,

images of the canceled checks, deposit slips, and copies of the

client ledgers at issue.                  A number of the canceled checks did

not include the client matter and purpose of the check on the

memo line.             In addition, a number of the original deposit slips

that       were    submitted    to    the   bank      by   Attorney    Runyon    did   not

include client information.                 Attorney Runyon stipulated to his

commission of the misconduct charged as follows:

       ¶13        By failing to hold in trust and account for at least

$19,053.61 and as much as $86,850.68 in client and third-party
funds       between      June   27,   2013,     and     October   1,    2013,    Attorney

Runyon violated SCR 20:1.15(b)(1)2 (Count One).

       2
           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
                                                                         No.     2015AP578-D

     ¶14    By failing to hold in trust and account for at least

$19,053.61 and as much as $86,850.68 in client and third-party

funds    between     June   27,    2013,       and    October     1,     2013,    and,    on

numerous occasions, by converting funds from client matters in

order to cover checks he issued in other client matters for

which there was not sufficient funds on deposit in the trust

account, Attorney Runyon violated SCR 20:8.4(c)3 (Count Two).

     ¶15    By     depositing      eight    checks      into      his    trust     account

totaling    $18,550     that    were   drawn         upon   his   business        account,

Attorney Runyon violated SCR 20:1.15(b)(3)4 (Count Three).

     ¶16    By    failing     to   maintain      a    transaction        register       that

accurately reflected the activity in his trust account and that

included    the     balance    after   each      transaction,           the    source    and

client     matter    for    all    deposits,         and    the    purpose        for    all

disbursements,       Attorney      Runyon       violated     SCR        20:1.15(f)(l)a.5

     3
       SCR 20:8.4(c) provides that it is professional misconduct
for a lawyer to "engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
     4
       SCR 20:1.15(b)(3) provides that "[n]o funds belonging to
the lawyer or law firm, except funds reasonably sufficient to
pay monthly account service charges, may be deposited or
retained in a trust account."
     5
         SCR 20:1.15(f)(1)a. provides:

          The   transaction   register   shall contain   a
     chronological record of all account transactions, and
     shall include all of the following:

            1. the date, source, and amount of all deposits;

                                                                               (continued)
                                           6
                                                                 No.    2015AP578-D

Further, by failing to maintain client ledgers that accurately

reflected    the   activity   in   his      trust    account,    and    by   making

disbursements of funds from his trust account that created final

total negative balances of $53,772.73 in 14 client ledgers as of

October 1, 2013, and by allowing five client ledgers to become

overdrawn temporarily in July and August 2013 by a total amount

of   $6,759.36,    Attorney   Runyon        violated     SCR    20:1.15(f)(l)b.6

(Count Four).

     ¶17    By   depositing   $8,072.60       of    personal    funds    into   his

River Valley Bank trust account on December 2, 2013, Attorney

Runyon violated SCR 20:1.15(b)(3) (Count Five).

          2. the date, check or transaction number, payee
     and amount of all disbursements, whether by check,
     wire transfer, or other means;

          3. the date and amount of every other deposit or
     deduction of whatever nature;

          4. the identity of the client for whom funds were
     deposited or disbursed; and

          5. the       balance     in       the     account    after    each
     transaction.
     6
         SCR 20:1.15(f)(1)b. provides:

          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.

                                        7
                                                       No.   2015AP578-D

     ¶18    By failing to identify the client matter on his trust

account deposit slips submitted to the bank, Attorney Runyon

violated 20:1.15(f)(l)d.7     Further, by issuing checks from his

River Valley Bank trust account without including the client

matter and purpose on the memo lines of such checks, Attorney

Runyon violated 20:1.15(f)(l)e.l.8       Lastly, by failing to obtain,

and maintain with his trust account records, imaged checks or

copies of the canceled checks issued from his trust account,

Attorney Runyon violated 20:1.15(f)(l)e.2.9 (Count Six).

     7
         SCR 20:1.15(f)(1)d. provides:

          Deposit slips shall identify the name of the
     lawyer or law firm, and the name of the account. The
     deposit slip shall identify the amount of each deposit
     item, the client or matter associated with each
     deposit item, and the date of the deposit. The lawyer
     shall maintain a copy or duplicate of each deposit
     slip. All deposits shall be made intact. No cash, or
     other form of disbursement, shall be deducted from a
     deposit. Deposits of wired funds shall be documented
     in the account's monthly statement.
     8
         SCR 20:1.15(f)(1)e.1. provides:

           Checks shall be pre-printed and pre-numbered.
     The name and address of the lawyer or law firm, and
     the name of the account shall be printed in the upper
     left corner of the check. Trust account checks shall
     include    the words   "Client   Account," or  "Trust
     Account," or words of similar import in the account
     name.    Each check disbursed from the trust account
     shall identify the client matter and the reason for
     the disbursement on the memo line.
     9
       SCR 20:1.15(f)(1)e.2. provides that "[c]anceled checks
shall be obtained from the financial institution. Imaged checks
may be substituted for canceled checks."

                                  8
                                                                         No.    2015AP578-D

       ¶19    The stipulation clearly states that it was not the

result of plea bargaining.                 Attorney Runyon states that he fully

understands the allegations of misconduct against him and his

right to contest those allegations.                     He nonetheless admits his

misconduct and assents to the discipline sought by the OLR.                               He

further states that he fully understands the ramifications that

will follow if this court accepts the stipulation and imposes

the     requested   level       of        discipline.         Attorney     Runyon       also

represents that he understands his right to consult with counsel

in this matter.          Finally, he asserts that his entry into the

stipulation is made knowingly and voluntarily.

       ¶20    The only real issue here is whether the stipulated

level    of   discipline       (a    60-day       suspension)    is   an       appropriate

level of discipline.           Precedent in the area of failing to hold

funds in trust is clustered on two extremes.                      The most egregious

trust account misconduct, misappropriation, can merit revocation

or a lengthy suspension.                  Other cases, however, warrant a much

less severe level of discipline, such as a reprimand or short
suspension.      Attorney Runyon's conduct lies closer to the lower

end of the two extremes.

       ¶21    Although    it        was    improper     for    Attorney        Runyon     to

deposit personal funds into his trust account, his motive was to

make the trust account whole.

       ¶22    The OLR states that it considered several cases, as

well     as    aggravating           factors—including           Attorney         Runyon's

disciplinary history—and mitigating factors, when analyzing what
level of discipline it would seek in this matter.                              See, e.g.,
                                              9
                                                                              No.        2015AP578-D

In re     Disciplinary         Proceeding           Against      Grogan,          2011        WI    7,

331 Wis. 2d 341, 795 N.W.2d 745 (imposing 60-day suspension on

attorney with previous reprimand who engaged in various trust

account      violations,       including        commingling           funds       in    the     trust

account and paying for office rent, groceries, and prepaid cash

cards from the trust account); In re Disciplinary Proceedings

Against Molinaro, 2009 WI 61, 318 Wis. 2d 375, 769 N.W.2d 458

(imposing      60-day      suspension           for      trust        account           anomalies,

including      inappropriate           transfers      of    funds       between          personal,

trust, and business accounts).

       ¶23    The   OLR      deems      suspension          warranted         in        this       case

because Attorney Runyon was, at the least, extremely reckless

with    managing     his       trust    account.            In    a    four-month          period,

Attorney Runyon's trust account was repeatedly out of balance.

Attorney Runyon knew or should have known that he did not have

sufficient     funds      in    his     trust    account         to    cover       many    of      the

disbursements he made to clients.                     Indeed, Attorney Runyon made

$18,550 in deposits of personal funds to the account between
June 29 and September 19, 2013, prior to the bank issuing its

first    overdraft      notice         on     September       20,      2013.            After       the

overdrafts occurred, Attorney Runyon then deposited additional

personal funds to make the account whole.                             So, while no clients

were    ultimately      harmed,        that     is    due    only       to    the       fact       that

Attorney Runyon had sufficient personal funds available to make

up for his overextension.

       ¶24    On    review      of      the     entire      record,          we        accept      the
stipulation and impose the jointly requested sanction of a 60-
                                               10
                                                               No.   2015AP578-D

day suspension of Attorney Runyon's license to practice law in

this state.      No restitution was sought so we do not impose

restitution.    Because this matter was resolved with the filing

of a stipulation under SCR 22.12 and without the appointment of

a referee, the OLR does not seek costs and we will not require

Attorney Runyon to pay any costs.

    ¶25   IT IS ORDERED that the license of James T. Runyon to

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

effective November 7, 2015.

    ¶26   IT    IS   FURTHER   ORDERED    that    James   T.    Runyon      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.

    ¶27   IT    IS   FURTHER    ORDERED    that     compliance       with    all

conditions of this order is required for reinstatement.                       See

SCR 22.28(2).

                                   11
                                                                   No.   2015AP578-D.ssa

    ¶28     SHIRLEY S. ABRAHAMSON, J.                  (concurring).        I write to

express   concern        that    the   per       curiam    does    not   sufficiently

justify     the   60-day        suspension       the   court      approves    in     this

stipulated matter.             Attorney Runyon and the OLR stipulated to

the violation of the trust accounting rules and to a 60-day

suspension.

    ¶29     Attorney Runyon has had two prior brushes with OLR.

In 1988, his license was suspended for one year.                           In 2006, he

received a private reprimand.

    ¶30     In    contrast,       Attorney        Thomas    Mulligan       receives     a

9-month suspension for violating trust accounting rules.                           OLR v.

Mulligan, 2015 WI 96, ___ Wis. 2d ___, ___ N.W.2d ___.                         Attorney

Mulligan contested the OLR complaint and proposed discipline.

Attorney Mulligan has had three prior brushes with OLR.                                In

1997, Attorney Mulligan received a private reprimand. In 2005,

Mulligan received a private reprimand.                     In 2009, he received a

public reprimand.

    ¶31     I     have     difficulty        reconciling          the    significantly

different    levels       of    discipline        imposed    in    these     two    trust

accounting violation cases.

                                             1
    No.   2015AP578-D.ssa

1