Court Opinion

ID: 3150897
Source: CourtListenerOpinion
Date Created: 2015-10-30 13:20:25.548449+00
Date Added: 2024-06-11T07:38:34.561910
License: Public Domain

2015 WI 97

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:               2014AP804-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against
                        Pamela J. Smoler, f/k/a Pamela J. Smelzer,
                        Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        Pamela J. Smoler f/k/a Pamela J. Smelzer,
                                  Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST SMOLER

OPINION FILED:          October 30, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:

ATTORNEYS:
                                                                 2015 WI 97
                                                         NOTICE
                                           This opinion is subject to further
                                           editing and modification.   The final
                                           version will appear in the bound
                                           volume of the official reports.
No.    2014AP804-D

STATE OF WISCONSIN                     :            IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Pamela J. Smoler, f/k/a Pamela J.
Smelzer, Attorney at Law:

Office of Lawyer Regulation,                                  FILED
           Complainant,                                  OCT 30, 2015
      v.                                                    Diane M. Fremgen
                                                         Clerk of Supreme Court
Pamela J. Smoler f/k/a Pamela J. Smelzer,

           Respondent.

      ATTORNEY    disciplinary   proceeding.     Attorney's          license

suspended.

      ¶1   PER CURIAM.    We review the report and recommendation

of Referee Lisa C. Goldman that the license of Attorney Pamela

J. Smoler, formerly known as Pamela J. Smelzer, be suspended for

a period of nine months for professional misconduct and that she

pay the full costs of this proceeding, which are $2,869.61 as of

March 18, 2015.      The referee also recommended that Attorney

Smoler be required to make restitution of $45,059.35 to one
client.
                                                                                        No.    2014AP804-D

       ¶2     Attorney Smoler failed to file an answer to the OLR's

complaint,         and    she       failed        to       appear       or    participate         in    the

proceedings in any way.                    Accordingly, we find it appropriate to

declare      her    to        be    in    default.           Upon       careful         review    of    the

matter,      we     agree          with     the        referee      that          Attorney       Smoler's

professional             misconduct            warrants             a         nine-month          license

suspension.         We further agree that she should be ordered to pay

the full costs of this proceeding.                                  We also agree with the

referee that a restitution award in the amount of $45,059.35 is

appropriate.         Although the Office of Lawyer Regulation (OLR) has

informed the court that there is no reasonably ascertainable

amount for which a restitution award would be appropriate, the

referee made findings of fact supporting a restitution award.

There is no indication that those findings of fact are clearly

erroneous.

       ¶3     Attorney             Smoler     was          admitted          to   practice       law     in

Wisconsin     in     1988.           She      currently        resides            in    Florida.        Her

license to practice law in Wisconsin was temporarily suspended
on    July    11,    2011,          as    a   result         of     her       willful         failure    to

cooperate      in        an    OLR       investigation             concerning           her     conduct.1

Attorney Smoler's law license is also administratively suspended

for   failure       to        pay    State     Bar         dues,    failure            to   comply     with

continuing legal education requirements, and failure to file a

       1
       The OLR investigation at issue concerns the first client
matter detailed in the complaint filed by the OLR in this case.

                                                       2
                                                                          No.       2014AP804-D

trust    account         certification.           Attorney     Smoler     has       no   prior

disciplinary history in Wisconsin.

       ¶4     On April 11, 2014, the OLR filed a complaint alleging

that Attorney Smoler had engaged in seven counts of misconduct

involving two client matters.                 As noted, Attorney Smoler failed

to file an answer to the complaint and failed to participate in

the matter in any way.                   On October 23, 2014, the OLR filed a

motion      for     default        judgment.         The      referee's         report     and

recommendation was filed on February 27, 2015.

       ¶5     The        first     client    matter        detailed     in       the     OLR's

complaint involved Attorney Smoler's representation of D.S. and

K.S. (collectively, the S.s).                 The S.s hired Attorney Smoler to

represent them in a medical malpractice claim for injuries K.S.

suffered following surgery and treatment at the University of

Wisconsin (UW) Hospital and Clinics.                       Attorney Smoler filed a

lawsuit on the S.s' behalf in October 2001, and in late 2003, a

jury returned a verdict in their favor.

       ¶6     In 2005, Attorney Smoler asked the S.s if they would
loan her $50,000 so that she could pursue a medical malpractice

lawsuit on behalf of another client, C.J., that would be brought

against one of the same doctors involved in the S.s' case.                                 The

S.s     agreed      to    loan     the     $50,000    to     Attorney      Smoler.          To

memorialize         the        loan,   Attorney      Smoler     drafted         a    document

entitled "Loan/Promissory Note" which set forth the terms of the

loan.       The loan called for five and one-half percent interest

annually or statutory interest as awarded by the court.                                    The
loan    was   for        two    years.      Attorney       Smoler   did      not     put   any
                                              3
                                                                         No.    2014AP804-D

language in the note providing the S.s with an opportunity to

speak   with    alternate       counsel    about     the     loan.        The    loan   was

signed by the parties on August 31, 2005.                        Attorney Smoler was

paid $50,000 on September 13, 2005.                     She deposited the money

into her business checking account.

      ¶7    Two       years   passed     without    Attorney           Smoler   making    a

payment to the S.s on the loan.                 The S.s agreed to extend the

terms of the note one more year at Attorney Smoler's request.

By October 2009, no payments had been made on the loan.                           The S.s

hired an attorney who demanded payment.                    Attorney Smoler failed

to pay the loan in response to a demand letter from the S.s'

counsel.

      ¶8    The S.s filed a grievance with the OLR.                               Attorney

Smoler apologized for her inability to repay the loan, saying

that her representation of the plaintiffs on a contingent fee

basis had resulted in financial disaster for both her clients

and herself.

      ¶9    On October 29, 2010, Attorney Smoler filed a voluntary
petition    for       Chapter     7     bankruptcy      in       the     United    States

Bankruptcy Court for the Western District of Wisconsin.                                 She

listed the S.s as creditors.                   Attorney Smoler was granted a

bankruptcy discharge on March 28, 2012.                    The discharge included

the debt she owed to the S.s.

      ¶10   As part of its investigation into the S.s' grievance,

the   OLR   wrote      to    Attorney    Smoler    on   December         15,    2010,   and

requested      that    she    provide     copies   of      her    state    and     federal
income tax returns for the years 2005 through 2009.                               Attorney
                                           4
                                                         No.    2014AP804-D

Smoler failed to respond.          On April 1, 2011, the OLR filed a

notice of motion and motion requesting an order to show cause

why Attorney Smoler's license should not be suspended for her

willful failure to cooperate with the OLR's investigation of the

S.s'       grievance.   Attorney   Smoler's   license   was    temporarily

suspended on July 11, 2011.

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

misconduct with respect to Attorney Smoler's representation of

the S.s:

            [Count   One]     By  entering   into  the   Loan
       transaction with the [S.s] without providing the [S.s]
       a reasonable opportunity to seek the advice of counsel
       in the transaction and without the [S.s] consenting in
       writing to the Loan, Smoler violated former [Supreme
       Court Rule (SCR)] 20:1.8(a),2 effective prior to
       July 1, 2007.

       2
       Former SCR 20:1.8(a) (in effect prior to July 1, 2007)
provides:

            A lawyer shall not enter into a business
       transaction with a client or knowingly acquire an
       ownership, possessory, security or other pecuniary
       interest adverse to a client unless:

            (1) the transaction and terms on which the lawyer
       acquires the interest are fair and reasonable to the
       client and are fully disclosed and transmitted in
       writing to the client in a manner which can be
       reasonably understood by the client;

            (2) the client is given a reasonable opportunity
       to seek the advice of independent counsel in the
       transaction; and

               (3) the client consents in writing thereto.

                                     5
                                                                      No.     2014AP804-D

           [Count Two]    By failing to fully cooperate in
      OLR's investigation in the [S.] grievance matter,
      Smoler violated SCR 22.03(6).3
      ¶12   The    other       client      matter    detailed         in     the    OLR's

complaint involved Attorney Smoler's representation of C.J. and

her sister, C.H.             During the spring of 2005, C.J. and C.H.

contacted Attorney Smoler regarding potential representation of

C.J. in a medical malpractice claim against UW Hospital and

Clinics.    Attorney Smoler requested an upfront fee concerning

the initial risks of the suit, including to determine whether a
notice of claim was timely filed and to find an expert witness

willing to testify.            Attorney Smoler asked for $50,000, to be

paid over six months.               She indicated that the money would be

placed into her trust account.                 The fee agreement provided that

the client would be billed a flat fee of $50,000, which would

cover, in part, attorneys fees and costs, to be paid in the

following    manner:          $10,000      prior    to    the     start        of    the

investigation,         and    the     remainder     $40,000      no         later   than

December 15, 2005.            C.J.'s father paid the $50,000 fee in two

installments.      Both checks were deposited into Attorney Smoler's
business account rather than her trust account.

      ¶13   On October 25, 2005, C.J. gave her sister, C.H., power

of   attorney     to    act    as    her   guardian      and    the    authority      to

      3
       SCR 22.03(6) provides that "[i]n 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."

                                           6
                                                                        No.    2014AP804-D

negotiate, manage, and make decisions related to the claims of

C.J. against UW Hospital and Clinics and the treating physician.

In   January        2006,    C.H.   requested     an    update    on    the    case    from

Attorney       Smoler.        She    again     requested    an     update      during     a

February 9, 2006 telephone conversation.

      ¶14      On    March    2,    2006,    Attorney    Smoler    sent       an    invoice

indicating that $4,940.65 had been spent in time and expenses.

She failed to provide any other invoices regarding the case.

Attorney Smoler filed a medical malpractice action on behalf of

C.J. on March 8, 2007, in Dane County Circuit Court.                               In early

September 2007, C.H. tried to communicate with Attorney Smoler

about    the    case.        Attorney       Smoler   updated     C.H.    by    email    and

included a copy of an amended complaint.

      ¶15      In September 2008, the case was dismissed on summary

judgment against all defendants except one physician, who was

ordered to pay $226.34.               The decision was later corrected and

that doctor was also dismissed on summary judgment.                                Attorney

Smoler    apparently         did    not   immediately     notify       C.H.    about    the
dismissal of her sister's lawsuit.                     The trial court's decision

was appealed, and the court of appeals affirmed the dismissal.

Attorney Smoler failed to provide copies of filed documents when

requested to do so.            She also failed to produce any statement of

expenses or time billed on the file after the first and only

bill was produced.            She failed to refund any of the $50,000 that

C.J.'s family had paid as an advanced fee toward expenses and

hourly billing.

                                              7
                                                                 No.    2014AP804-D

     ¶16   C.J.    filed    a   grievance    with   the   OLR,    and    Attorney

Smoler was asked to respond but failed to do so.

     ¶17   The    OLR's    complaint   set   forth   the   following       counts

with respect to Attorney Smoler's representation of C.J. and

C.H.:

          [Count Three]    By failing to provide copies of
     relevant documentation to [C.J.] or [C.H.], and by
     failing to respond to various requests for information
     received from [C.J.] or [C.H.] concerning the status
     of her case, Smoler violated [former] SCR 20:1.4(a),4
     effective   prior  to   July  1,  2007,   and  current
     SCR 20:1.4(a)(3) and (4).5

          [Count Four]   By failing to respond to [C.J.'s]
     or [C.H.'s] requests for information concerning fees
     and expenses and by failing to provide periodic
     written statements or accountings concerning fees and
     expenses   to  [C.J.]   or   [C.H.],   Smoler   violated
                       6
     SCR 20:1.5(b)(3),      [former]      SCR 20:1.15(d)(1),7

     4
       Former SCR 20:1.4(a) (in effect prior to July 1, 2007)
provides that "[a] lawyer shall keep a client reasonably
informed about the status of a matter and promptly comply with
reasonable requests for information."
     5
       SCR 20:1.4(a)(3) and (4) provide that a lawyer shall "keep
the client reasonably informed about the status of the matter"
and "promptly comply with reasonable requests by the client for
information."
     6
       SCR 20:1.5(b)(3) provides that "[a] lawyer shall promptly
respond to a client's request for information concerning fees
and expenses."
     7
       Former SCR 20:1.15(d)(1) (in effect prior to July 1, 2007)
provides:

          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
                                                     (continued)
                                       8
                                                       No.   2014AP804-D

    effective    prior       to         July   1,   2007,     and
    SCR 20:1.15(d)(2).8

         [Count Five]     By failing upon termination of
    representation, to surrender papers and property to
    which [C.J.] was entitled and by failing to refund any
    advanced payment of fee or expense that had not been
    earned or incurred, Smoler violated SCR 20:1.16(d).9

         [Count Six]   By failing to deposit a portion of
    the $50,000 received for [C.J.'s] malpractice claim to
    cover costs associated with the representation into a
    client   trust   account,   Smoler   violated   [former]
    SCR 20:1.15(b)(4),10 effective prior to July 1, 2007.

    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.
    8
       SCR 20:1.15(d)(2) provides that "[u]pon 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."
    9
         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.
    10
       Former SCR 20:1.15(b)(4) (in effect prior to July 1,
2007) provides, "Unearned fees and advanced payments of fees
shall be held in trust until earned by the lawyer, and withdrawn
pursuant to SCR 20:1.15 (g). Funds advanced by a client or 3rd
party for payment of costs shall be held in trust until the
costs are incurred."

                                    9
                                                                        No.   2014AP804-D

            [Count Seven]    By failing to respond to OLR's
       requests for a written response to the investigation,
       Smoler violated SCR 22.03(2).11
       ¶18    Referee Goldman was appointed on July 28, 2014.                          In

her report and recommendation, the referee concluded that the

OLR    proved     all   seven    counts     in    its    complaint      by    clear   and

convincing evidence.             In discussing the appropriate sanction,

the referee noted that Attorney Smoler apparently practiced at a

very    competent       and   accomplished       level    for    many    years.       The

referee said, "No facts of record explain her sad story.                          It is
as though she imploded all at once, without warning, and without

reason."       The referee went on to comment, "For an attorney with

an otherwise unblemished record, Smoler's slide into the dark

side seems incredibly unfortunate.                 . . . .      Smoler's failure in

general      to   supply      information    to    OLR    in    the   course    of    the

investigation       into      both   client       matters      does     not   help    the

situation and only further indicates her inability to function

at a very basic level."

       11
            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.

                                            10
                                                                               No.   2014AP804-D

       ¶19     The      referee        concluded            that       Attorney         Smoler's

combination of multiple violations involving a failure to return

client       money     and     her     unwillingness           to    participate        in    the

investigation into her misconduct warranted a suspension longer

than    six     months.          The   referee        concluded        that     a    nine-month

suspension would impress upon Attorney Smoler the seriousness of

her misconduct and would deter other attorneys from committing

similar        misconduct.           The    referee         further      recommended          that

Attorney       Smoler     be     required       to    pay      the    full     costs     of   the

proceeding.

       ¶20     With respect to restitution, the referee noted that

the     S.s'     loan    was     discharged          by     the      Western     District      of

Wisconsin        bankruptcy          court,      so       no      restitution        would     be

appropriate regarding the loan that the S.s made to Attorney

Smoler.        With respect to the $50,000 paid to Attorney Smoler by

C.J.'s family, the referee said that requiring Attorney Smoler

to pay restitution would further safeguard the public and would

further      impress      upon    Attorney       Smoler        the    seriousness        of   her
misconduct.           The referee noted that Attorney Smoler failed to

account for any of the funds paid by C.J.'s family except the

$4,940.65 indicated in the March 2, 2006 invoice.                                Accordingly,

the referee recommended that Attorney Smoler be required to pay

$45,059.35       in     restitution        to   C.J.        The      referee     said    it   was

unclear whether the OLR intended to seek restitution for C.J.

and the referee said that the OLR should be afforded discretion

to reduce the amount of restitution based on information it may
have.
                                                11
                                                                            No.   2014AP804-D

      ¶21     On March 18, 2015, the OLR submitted a restitution

statement saying it was not seeking restitution in either the S.

matter or the C.J. matter.               With respect to the S. matter, the

OLR   noted       that   the    S.s'   loan       to    Attorney         Smoler   was     fully

discharged by a bankruptcy court.                           With respect to the C.J.

matter, the OLR said its director determined that there was no

reasonably ascertainable amount for which a restitution award

would be appropriate.

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

clearly erroneous.             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.

      ¶23     We conclude that Attorney Smoler should be declared in

default.         Although she was personally served with the complaint

and was given notice of all other proceedings, she failed to
appear      or     present     a     defense.               Accordingly,     we     deem    it

appropriate to declare her in default.

      ¶24     We agree with the referee that the allegations in the

OLR's complaint have been established and that Attorney Smoler

engaged     in     the   seven      counts    of        misconduct        alleged    in    the

complaint.        We further agree with the referee that a nine-month

suspension of Attorney Smoler's license to practice law is an

appropriate sanction for her misconduct.                           Although no two fact
situations are identical, a nine-month suspension is generally
                                             12
                                                                          No.     2014AP804-D

consistent      with      the    sanctions        imposed     in    somewhat      analogous

cases.       For example, in In re Disciplinary Proceedings Against

Pitts,    2007 WI 112,       304 Wis. 2d   556,      735 N.W.2d 917,    an

attorney's license was suspended for six months for ten counts

of    misconduct     including         entering      into     a    business     transaction

with a client without giving her a reasonable opportunity to

seek the advice of independent counsel, reducing the loan to

writing, or obtaining the client's written consent to the loan.

The attorney in Pitts loaned $1,000 to his client.                            By contrast,

Attorney Smoler borrowed large sums of money from her clients.

In In re Disciplinary Proceedings Against Phillips, 2006 WI 43,

290 Wis. 2d    87,    713 N.W.2d 629,       an   attorney's      license     was

suspended for one year for seven counts of misconduct including

borrowing $145,000 from a client without giving the client a

reasonable       opportunity          to     seek    the      advice     of     independent

counsel, failing to provide the terms of the loan to the client

in an understandable writing, and failing to obtain the client's

written consent to the transaction.                      The conduct at issue in the
instant      case   seems       to    fall    somewhere       between     the     Pitts   and

Phillips cases.           Accordingly, we find it appropriate to suspend

Attorney Smoler's license for nine months.

       ¶25    We also agree with the referee that Attorney Smoler

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

With respect to restitution, we agree with the referee that

Attorney Smoler should be required to pay $45,059.35 to C.J.

Although the OLR said that there was not presently a reasonably
ascertainable amount of restitution owed to C.J., the referee
                                              13
                                                              No.   2014AP804-D

made explicit factual findings showing that Attorney Smoler owes

C.J. $45,059.35.        Those findings of fact have not been shown to

be clearly erroneous and, accordingly, we adopt them.                      Since

Attorney Smoler's debt to the S.s was discharged in bankruptcy,

we make no restitution award in that matter.

    ¶26     IT IS ORDERED that the license of Pamela J. Smoler to

practice law in Wisconsin is suspended for a period of nine

months, effective the date of this order.

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

of this order, Pamela J. Smoler shall pay restitution to C.J. in

the amount of $45,059.35.

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

of this order, Pamela J. Smoler shall pay to the Office of

Lawyer    Regulation     the   costs   of   this    proceeding,     which    are

$2,869.61.

    ¶29     IT IS FURTHER ORDERED that the restitution specified

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

Lawyer Regulation.
    ¶30     IT IS FURTHER ORDERED that, to the extent she has not

already    done   so,    Pamela   J.    Smoler     shall   comply   with     the

provisions of SCR 22.26 concerning the duties of an attorney

whose license to practice law has been suspended.

    ¶31     IT    IS    FURTHER   ORDERED    that    compliance     with     all

conditions of this order is required for reinstatement.                      See

SCR 22.29(4)(c).

                                       14
                                                  No.   2014AP804-D

    ¶32   IT IS FURTHER ORDERED that the temporary suspension of

Pamela J. Smoler's license to practice law in Wisconsin issued

on July 11, 2011, is hereby lifted.

    All work on this opinion was completed prior to Justice

Rebecca G. Bradley joining the court.

                               15
    No.   2014AP804-D

1