Court Opinion

ID: 4448702
Source: CourtListenerOpinion
Date Created: 2019-10-22 13:16:50.508878+00
Date Added: 2024-06-11T14:45:09.478698
License: Public Domain

2019 WI 93

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:               19AP543-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against Courtney Kathleen Kelbel, Attorney at
                        Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        Courtney Kathleen Kelbel,
                                  Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST KELBEL

OPINION FILED:          October 22, 2019
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:

ATTORNEYS:
                                                                 2019 WI 93
                                                         NOTICE
                                           This opinion is subject to further
                                           editing and modification.   The final
                                           version will appear in the bound
                                           volume of the official reports.
No.    2019AP543-D

STATE OF WISCONSIN                     :            IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Courtney Kathleen Kelbel,
Attorney at Law:

Office of Lawyer Regulation,
                                                              FILED
           Complainant,                                  OCT 22, 2019

      v.                                                    Sheila T. Reiff
                                                         Clerk of Supreme Court

Courtney Kathleen Kelbel,

           Respondent.

      ATTORNEY   disciplinary   proceeding.       Attorney's         license

suspended.

      ¶1   PER CURIAM.    We review Referee James W. Mohr, Jr.'s,

recommendation that the court declare Attorney Courtney Kathleen

Kelbel in default and suspend her license to practice law in

Wisconsin for a period of six months for professional misconduct

in connection with her representation of five clients.                     The

referee also recommended that Attorney Kelbel make restitution

to the Wisconsin Lawyers' Fund for Client Protection (the Fund)
                                                                        No.     2019AP543-D

and that she pay the full costs of this proceeding, which are

$1,037.25 as of July 24, 2019.

    ¶2        Since    no     appeal     has      been     filed,      we     review    the

referee's report pursuant to Supreme Court Rule (SCR) 22.17(2).

After review of the matter, we agree with the referee that,

based   on    Attorney       Kelbel's    failure      to      answer    the    Office    of

Lawyer Regulation's (OLR) complaint, the OLR is entitled to a

default judgment.           We further agree with the referee that a six-

month suspension of Attorney Kelbel's license is an appropriate

sanction for her professional misconduct.                          Finally, we agree

that Attorney Kelbel should be required to make restitution to

the Fund and that she should be assessed the full costs of this

proceeding.

    ¶3        Attorney      Kelbel     was       admitted     to     practice     law    in

Wisconsin in 2009.           Her last known address is in Milwaukee.                    On

October 9, 2018, Attorney Kelbel's Wisconsin law license was

temporarily suspended by this court for non-cooperation with the

OLR's   investigations.            Her   license         is   also     administratively
suspended for failure to pay state bar dues and failure to file

a trust account certification.

    ¶4        The OLR filed a complaint against Attorney Kelbel on

March   19,    2019.         The   first     client       matter     detailed     in    the

complaint concerned Attorney Kelbel's representation of D.U.,

who hired Attorney Kelbel to assist him with the short sale of

his home.      The short sale was completed on or around October 20,

2017.

                                             2
                                                                   No.    2019AP543-D

      ¶5    In February of 2018, D.U.'s mortgage lender sent him a

1099-C (cancellation of debt) form related to the short sale.

D.U. believed the 1099-C listed the wrong amount of mortgage

relief.     He sent Attorney Kelbel multiple emails requesting her

to contact him.        Attorney Kelbel called D.U. in late February

2018 and agreed to write to D.U's lender requesting a breakdown

of the amount shown on the 1099-C.

      ¶6    D.U. sent three emails to Attorney Kelbel in early

March 2018 asking if and when the letter had been sent and how

long the mortgage lender had to respond to the letter.                     Attorney

Kelbel wrote to D.U. on April 2, 2018, claiming she had sent a

letter to the lender on March 9, 2018.                     D.U. asked Attorney

Kelbel for a copy of the letter, but he never received one.

D.U.'s lender denied receiving a letter from Attorney Kelbel.

      ¶7    D.U. filed a grievance with the OLR against Attorney

Kelbel on April 2, 2018.           On May 10, 2018, the OLR wrote to

Attorney Kelbel via regular and certified mail, asking her to

respond to D.U.'s grievance by June 4, 2018.                   Attorney Kelbel
did   not   respond.     The    letter       sent   by   regular   mail       was   not

returned.

      ¶8    On June 22, 2018, the OLR moved this court for an

order to show cause as to why Attorney Kelbel's license should

not    be    suspended    for     failing           to   cooperate       in     three

investigations, including D.U.'s.              On August 1, 2018, this court

ordered Attorney Kelbel to show cause, in writing, to the court

within 20 days as to why the OLR's motion should not be granted.
Attorney Kelbel failed to respond.                  On October 9, 2018, this
                                         3
                                                           No.   2019AP543-D

court   temporarily    suspended   Attorney    Kelbel's    Wisconsin     law

license   for   her   willful   failure   to   cooperate   in    the   OLR's

grievance investigations.

    ¶9     The OLR's complaint alleged the following counts of

misconduct with respect to Attorney Kelbel's representation of

D.U.:

    Count 1: By failing to act on D.U.'s behalf in
    seeking clarification of the amount of mortgage relief
    obtained from his mortgage lender, Attorney Kelbel
    violated SCR 20:1.3.1

    Count 2: By willfully failing to timely provide the
    OLR with a written response to the grievance in the
    D.U. matter, Attorney Kelbel violated SCR 22.03(2)2 and
    SCR 22.03(6),3 enforceable via SCR 20:8.4(h).4

    1  SCR 20:1.3 provides: "A lawyer shall act with reasonable
diligence and promptness in representing a client."
    2   SCR 22.03(2) provides:

         Upon commencing an investigation, the director
    shall notify the respondent of the matter being
    investigated unless in the opinion of the director the
    investigation of the matter requires otherwise.     The
    respondent shall fully and fairly disclose all facts
    and circumstances pertaining to the alleged misconduct
    within 20 days after being served by ordinary mail a
    request for a written response.      The director may
    allow additional time to respond.     Following receipt
    of the response, the director may conduct further
    investigation and may compel the respondent to answer
    questions,   furnish   documents,   and   present   any
    information deemed relevant to the investigation.
    3  SCR  22.03(6)   provides:     "In  the   course  of   the
investigation, the respondent's wilful failure to provide
relevant information, to answer questions fully, or to furnish
documents and the respondent's misrepresentation in a disclosure
are misconduct, regardless of the merits of the matters asserted
in the grievance."

                                    4
                                                                   No.    2019AP543-D

    ¶10     The    second   client       matter       detailed    in     the   OLR's

complaint involved Attorney Kelbel's representation of V.L-C.,

who hired Attorney Kelbel to defend against the foreclosure of a

Milwaukee condominium.         As part of the representation, Attorney

Kelbel agreed to work with the Wisconsin Housing and Economic

Development Authority (WHEDA) to arrange for approval of a short

sale of the property including listing, showing, and selling the

property.    Attorney Kelbel requested V.L-C. to provide her with

specific financial documents which Attorney Kelbel would then

submit to WHEDA as part of a short sale package.

    ¶11     On     September       11,        2017,     V.L-C.'s         condominium

association filed a foreclosure action against her.                         Attorney

Kelbel had agreed to defend V.L-C. in the foreclosure case;

however, Attorney Kelbel never filed a notice of appearance in

the case.

    ¶12     In    late   October     or       early    November     2017,      V.L-C.

provided Attorney Kelbel with the documents needed for WHEDA,

but Attorney Kelbel never sent a short sale package to WHEDA.
In December 2017, V.L-C. paid Attorney Kelbel the agreed upon

advanced fee of $1,250.            In early January 2018, V.L-C. sent

Attorney Kelbel documents allowing Attorney Kelbel to list the

condominium for sale.

    4  SCR 20:8.4(h) provides:   "It is professional misconduct
for a lawyer to fail to cooperate in the investigation of a
grievance filed with the office of lawyer regulation as required
by SCR 21.15(4), SCR 22.001(9)(b), SCR 22.03(2), SCR 22.03(6),
or SCR 22.04(1)."

                                          5
                                                                No.   2019AP543-D

      ¶13   On February 12, 2018, the attorney for the condominium

association moved for default judgment against V.L-C. and sent

notice of the motion to both V.L-C. and Attorney Kelbel.                    When

V.L-C received notice of the default motion, she asked Attorney

Kelbel to contact the association's attorney.                  Attorney Kelbel

apparently did not do so.

      ¶14   A hearing on the default motion was held on February

19, 2018.       Neither V.L-C. nor Attorney Kelbel appeared at the

hearing, and V.L-C. was found to be in default.

      ¶15   In June 2018, V.L-C. met with Attorney Kelbel at a

library and signed new listing documents.                After that meeting,

Attorney Kelbel did not list V.L-C.'s condominium for sale and

never communicated with V.L-C. again.              Attorney Kelbel never

gave V.L-C. an itemized statement documenting any work she had

performed on V.L-C.'s behalf, nor did she refund any fees.

      ¶16   V.L-C. filed a grievance with the OLR against Attorney

Kelbel on June 27, 2018.         On August 28, 2018, the OLR wrote to

Attorney Kelbel asking her to respond to the grievance, sending
the letter to Attorney Kelbel's last known address via regular

mail.   The OLR also asked a process server to serve the letter

on Attorney Kelbel.       The OLR asked Attorney Kelbel to respond to

V.L-C.'s    grievance    by   September    20,   2018.      The   post   office

returned the OLR's letter and the process server was unable to

effect service on Attorney Kelbel.            On September 18, 2018, the

OLR   emailed    its    August   28,   2018   letter     and    enclosures    to

Attorney Kelbel's email address listed with the State Bar of
Wisconsin.      Attorney Kelbel failed to respond.
                                       6
                                                                   No.    2019AP543-D

     ¶17    In    January    2019,       the   Fund    approved    payment     of   a

portion ($625) of V.L-C.'s reimbursement request and indicated

it   may     further       review        V.L-C.'s      claim      for    additional

reimbursement.

     ¶18    The OLR's complaint alleged the following counts of

misconduct    with     respect      to   Attorney      Kelbel's    representation

V.L-C.:

     Count 3:   By failing to submit a complete short sale
     package to WHEDA, and by failing to represent V.L-C.
     in the foreclosure matter, Attorney Kelbel violated
     SCR 20:1.3.

     Count 4: By failing to refund any unearned portion of
     V.L-C.'s advanced fee payment of $1,250, Attorney
     Kelbel violated SCR 20:1.16(d).5

     Count 5: By failing to provide the OLR with a written
     response to the grievance in the V.L-C. matter,
     Attorney Kelbel violated SCR 22.03(2), enforceable via
     SCR 20:8.4(h).
     ¶19    The    third    client        matter      detailed     in    the   OLR's

complaint arose out of Attorney Kelbel's representation of K.H.

and R.S., an unmarried couple who hired Attorney Kelbel to file

     5   SCR 20:1.16(d) provides:

          Upon termination of representation, a lawyer
     shall take steps to the extent reasonably practicable
     to protect a client's interests, such as giving
     reasonable notice to the client, allowing time for
     employment of other counsel, surrendering papers and
     property to which the client is entitled and refunding
     any advance payment of fee or expense that has not
     been earned or incurred. The lawyer may retain papers
     relating to the client to the extent permitted by
     other law.

                                           7
                                                                    No.      2019AP543-D

individual Chapter 7 or Chapter 13 bankruptcies.                      K.H. and R.S.

agreed   to    pay   Attorney    Kelbel       $3,000   in   legal     fees    for   the

bankruptcies, as well as the filing fees.                     In November 2017,

K.H. and R.S. emailed Attorney Kelbel financial information that

she had requested.         By December 22, 2017, K.H. and R.S. had paid

Attorney Kelbel the $3,000 in legal fees.

    ¶20       On   March   10,   2018,    K.H.     and      R.S.    mailed     updated

financial information needed to draft bankruptcy petitions to

Attorney Kelbel's office.          The post office returned their letter

as undeliverable in late March 2018.                   Attorney Kelbel has not

communicated with K.H. or R.S. since March 19, 2018.

    ¶21       Attorney Kelbel never filed bankruptcy petitions for

K.H. or R.S. and would not have been able to draft bankruptcy

petitions without the updated financial information.                          Attorney

Kelbel never notified K.H. or R.S. that she was terminating the

representation.        She   did   not    provide      them    with    an     itemized

statement documenting any work performed on their behalf, nor

did she refund any unearned fees.
    ¶22       On June 11, 2018, K.H. and R.S. filed a claim with the

Fund asking for the reimbursement of their $3,000 advanced fee.

The Fund approved the claim on October 4, 2018.

    ¶23       On July 28, 2018, K.H. and R.S. filed a grievance with

the OLR against Attorney Kelbel.               On September 14, 2018, the OLR

mailed certified and first class letters to Attorney Kelbel,

requiring her to respond to the grievance by October 10, 2018.

The letters were mailed to the address on file with the State

                                          8
                                                             No.    2019AP543-D

Bar as well as Attorney Kelbel's last known residential address.

The post office returned the letters as undeliverable.

    ¶24     The OLR's complaint alleged the following counts of

misconduct with respect to Attorney Kelbel's representation of

K.H. and R.S.:

    Count 6: By failing to advance the interests of K.H.
    and R.S., Attorney Kelbel violated SCR 20:1.3.

    Count 7: By failing to refund the entire unearned fee
    of $3,000, Attorney Kelbel violated SCR 20:1.16(d).

    Count 8: By failing to provide the OLR with a written
    response to the grievance in the K.H. and R.S. matter,
    Attorney    Kelbel   violated   SCR    22.03(2),   via
    SCR 20:8.4(h).
    ¶25     The   fourth   client    matter    detailed      in    the   OLR's

complaint arose out of Attorney Kelbel's representation of L.W.,

who hired Attorney Kelbel to prepare a bankruptcy petition in

December 2017.     L.W. paid Attorney Kelbel $1,835.               In January

2018, Attorney Kelbel offered to refund $300 to L.W. but never

did so.

    ¶26     On January 30, 2018, L.W. sent Attorney Kelbel some

financial    information,    which       Attorney   Kelbel        acknowledged

receiving the following day.         On February 20, 2018, Attorney

Kelbel dropped L.W.'s file off at the offices of an unrelated

law firm.

    ¶27     L.W. filed a grievance with the OLR against Attorney

Kelbel on March 7, 2018.     On March 9, 2018, Attorney Kelbel paid

$835 to the unrelated law firm for L.W.'s representation.

                                     9
                                                                  No.    2019AP543-D

    ¶28    On March 12, 2018, an attorney at the unrelated law

firm informed L.W. of Attorney Kelbel's actions and offered to

continue   the   representation.          L.W.    agreed.        Attorney   Kelbel

never provided L.W. with any statement or documentation of work

she had performed on L.W.'s behalf.

    ¶29    On April 4, 2018, the OLR mailed certified and first

class letters to Attorney Kelbel requiring her to respond to

L.W.'s grievance by April 27, 2018.                The post office did not

return either letter.        Attorney Kelbel did not respond.

    ¶30    On May 10, 2018, the OLR mailed certified and first

class letters to Attorney Kelbel requiring her to respond to

L.W.'s grievance by May 21, 2018.                 The post office did not

return the letter sent via regular mail.                   Attorney Kelbel did

not respond.     L.W.'s grievance was one of the three matters that

formed   the    basis   of   this   court's      October    9,   2018    temporary

suspension of Attorney Kelbel's Wisconsin law license, due to

her willful failure to cooperate with the OLR's investigations.

    ¶31    On    October     4,   2018,   the    Fund   approved        payment   of
$1,000 to L.W. for Attorney Kelbel's actions.

    ¶32    The OLR's complaint alleged the following counts of

misconduct with respect to Attorney Kelbel's representation of

L.W.:

    Count 9:   By retaining $1,000 of L.W.'s advanced but
    unearned fee on termination of the representation,
    Attorney Kelbel violated SCR 20:1.16(d).

    Count 10: By willfully failing to timely provide the
    OLR with a written response to the grievance in the
    L.W. matter, Attorney Kelbel violated SCR 22.03(2) and
    SCR 22.03(6), via SCR 20:8.4(h).
                                      10
                                                                         No.    2019AP543-D

    ¶33     The     final       client        matter      detailed       in    the        OLR's

complaint concerned Attorney Kelbel's representation of S.Z.                                On

September 25, 2017, S.Z. filed a grievance with the OLR against

Attorney Kelbel related to her representation of him in a real

estate    matter.      Attorney          Kelbel      communicated        with       the    OLR

several    times    via        email     in     January     of    2018      about    S.Z.'s

grievance.

    ¶34     On March 7, 2018, the OLR wrote to Attorney Kelbel

requiring her to respond to questions about the grievance by

March 30, 2018.      Attorney Kelbel did not respond.

    ¶35     On April 2, 2018, the OLR mailed certified and first

class letters to Attorney Kelbel requiring her to respond to

S.Z.'s    grievance       by     April        12,   2018.         Neither      letter       was

returned, but Attorney Kelbel did not respond.

    ¶36     In May 2018, the OLR attempted to personally serve

Attorney Kelbel with copies of its previous letters at her last

known office and personal addresses, without success.                               Attorney

Kelbel's failure to cooperate with the OLR's investigation of
S.Z.'s grievance was one of the matters forming the basis for

this court's October 9, 2018 temporary suspension of Attorney

Kelbel's Wisconsin law license.

    ¶37     The    OLR's       complaint       alleged      the   following      count       of

misconduct with respect to S.Z.'s grievance:

    Count 11: By willfully failing to timely provide the
    OLR with a written response to the grievance in the
    S.Z. matter, Attorney Kelbel violated SCR 22.03(2) and
    SCR 22.03(6), enforceable via SCR 20:8.4(h).

                                               11
                                                                             No.     2019AP543-D

       ¶38    The referee was appointed on May 9, 2019.                             On May 20,

2019, the referee notified Attorney Kelbel and counsel for the

OLR by email of a scheduling conference to be held on May 30,

2019 by telephone conference call.                         Neither that email nor any

subsequent         emails     from       the     referee     to    Attorney      Kelbel          were

rejected      or     returned       to    the     referee     or       identified      as    being

undeliverable.           Attorney Kelbel failed to appear or participate

in any fashion at the telephone scheduling conference.

       ¶39    On June 14, 2019, the OLR filed a notice of motion and

motion for default judgment, serving it upon Attorney Kelbel at

her    last    known       addresses.             On   June      21,     2019,   the    referee

notified Attorney Kelbel via email and U.S. mail, at the same

addresses, that the motion for default judgment would be heard

at    10   a.m.     on     July     1,    2019     via    telephone        conference        call.

Attorney      Kelbel       failed        to    file    any    written      response         to    the

motion and did participate in the conference call.

       ¶40    On     July      5,        2019,     the     referee        issued    a       report

recommending that this court grant the OLR's motion for default
judgment.          The referee noted that SCR 22.13(1) provides that

service       of     the      complaint          and     order     to     answer    shall          be

accomplished "in the same manner as a summons under section

801.11(1)      of    the      statutes."           If,    with     reasonable       diligence,

service cannot be made in that fashion, SCR 22.13 provides that

"service       may       be    made       by     sending      by        certified      mail        an

authenticated copy of the complaint and order to answer to the

most recent address furnished by the respondent to the state

                                                  12
                                                                No.     2019AP543-D

bar."    The referee found service in accordance with SCR 22.13

was accomplished in this case.

      ¶41   Based upon Attorney Kelbel's failure to file an answer

or appear in the proceeding, the referee recommended that she be

declared to be in default.         The referee found that the factual

allegations of the OLR's complaint should be taken as true and

proven by clear, satisfactory, and convincing evidence.                        The

referee recommended a six-month suspension of Attorney Kelbel's

Wisconsin law license, the imposition of the full costs of the

proceeding, and the imposition of restitution to the Fund in the

amount of $4,625.

      ¶42   Attorney   Kelbel     did    not   appeal    from   the     referee's

report and recommendation, so we proceed with our review of the

matter pursuant to SCR 22.17(2).             We review a referee's findings

of fact subject to the clearly erroneous standard.                      See In re

Disciplinary Proceedings Against Eisenberg, 2004 WI 14, ¶5, 269
Wis. 2d 43, 675 N.W.2d 747.        We review the referee's conclusions

of law de novo.        Id.      We determine the appropriate level of
discipline independent 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.

      ¶43   We agree with the referee that Attorney Kelbel should

be   declared   in   default.      In    addition,      the   referee    properly

relied on the allegations of the complaint, which were deemed

admitted by Attorney Kelbel's failure to answer.                  We therefore

agree with the referee that the factual allegations of the OLR's
complaint may be taken as true and prove by clear, satisfactory,
                                        13
                                                                                 No.    2019AP543-D

and convincing evidence that Attorney Kelbel committed all of

the counts of misconduct alleged in the complaint.

       ¶44    With respect to the appropriate level of discipline,

upon careful review of the matter, we agree with the referee's

recommendation for a six-month suspension of Attorney Kelbel's

license      to     practice        law     in     Wisconsin.            Although            no    two

disciplinary proceedings are identical, a six-month suspension

is    generally         consistent     with       the       sanction     imposed        in    In    re

Disciplinary            Proceedings       Against        Templin,        2016 WI 18,       367
Wis. 2d 351, 877 N.W.2d 107 (attorney's license suspended for

six    months       for    multiple       counts       of     misconduct     involving            four

clients.          The misconduct in Templin included failing to provide

competent representation to a client, failing to respond to a

client's request for information, and failing to cooperate in

the    investigation           of     grievances);            and   In      re     Disciplinary

Proceedings Against Hartigan 2005 WI 3, 277 Wis. 2d 341, 690
N.W.2d 831 (attorney's license suspended for six months for six

counts       of     misconduct        involving         two     client      matters.               The
misconduct         in     Hartigan     included          failing       to    keep       a     client

reasonably informed about the status of a matter and promptly

comply with reasonable requests for information).

       ¶45    We     further        agree    with       the    referee's         recommendation

that Attorney Kelbel be required to make restitution to the Fund

in    the    amount       of   $4,625,      and    we       agree   that    Attorney          Kelbel

should be required to pay the full costs of this proceeding.

                                                  14
                                                                 No.    2019AP543-D

      ¶46   IT IS ORDERED that the license of Courtney Kathleen

Kelbel to practice law in Wisconsin is suspended for a period of

six months, effective the date of this order.

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

of   this   order,     Courtney    Kathleen       Kelbel   shall     pay   to    the

Wisconsin   Lawyers'     Fund     for    Client     Protection   the    amount    of

$4,625.

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

of this order, Courtney Kathleen Kelbel shall pay to the Office

of Lawyer Regulation the costs of this proceeding, which are

$1,037.25 as of July 24, 2019.

      ¶49   IT IS FURTHER ORDERED that, to the extent she has not

already done so, Courtney Kathleen Kelbel shall comply with the

provisions of SCR 22.26 concerning the duties of an attorney

whose license to practice law has been suspended.

      ¶50   IT IS FURTHER ORDERED that the restitution specified

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

Lawyer Regulation.
      ¶51   IT   IS    FURTHER     ORDERED        that   compliance     with     all

conditions with this order is required for reinstatement.                        See

SCR 22.29(4).

      ¶52   IT IS FURTHER ORDERED that the temporary suspension of

Courtney    Kathleen    Kelbel's        Wisconsin    law   license     imposed    on

October 9, 2018, is hereby lifted.

                                         15
    No.   2019AP543-D

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