Court Opinion

ID: 4585150
Source: CourtListenerOpinion
Date Created: 2020-11-10 15:09:29.184599+00
Date Added: 2024-06-11T13:47:31.955080
License: Public Domain

2020 WI 84

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:              2017AP2530-D

COMPLETE TITLE:        In the Matter Disciplinary Proceedings Against
                       Carl Robert Scholz, Attorney at Law:

                       Office of Lawyer Regulation,
                                 Complainant-Respondent,
                            v.
                       Carl Robert Scholz,
                                 Respondent-Appellant.

                           DISCIPLINARY PROCEEDINGS AGAINST SCHOLZ

OPINION FILED:         November 10, 2020
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
Per Curiam.
NOT PARTICIPATING:
BRIAN HAGEDORN, J., did not participate.

ATTORNEYS:
       For the respondent-appellant, there was a brief filed by
Carl R. Scholz, Mequon.

       For the complainant-respondent, there was a brief filed by
John T. Payette and Office of Lawyer Regulation.
                                                                      2020 WI 84
                                                              NOTICE
                                                This opinion is subject to further
                                                editing and modification.   The final
                                                version will appear in the bound
                                                volume of the official reports.
No.    2017AP2530-D

STATE OF WISCONSIN                          :            IN SUPREME COURT

In the Matter Disciplinary Proceedings
Against Carl Robert Scholz,
Attorney at Law:

Office of Lawyer Regulation,
                                                                    FILED
           Complainant-Respondent,                            NOV 10, 2020

      v.                                                         Sheila T. Reiff
                                                              Clerk of Supreme Court

Carl Robert Scholz,

           Respondent-Appellant.

      ATTORNEY    disciplinary      proceeding.        Attorney's         license

suspended.

      ¶1   PER CURIAM.         This disciplinary matter comes to the

court on Attorney Scholz's appeal of a report and recommendation

filed by Referee Kim M. Peterson.           The referee concluded that

Attorney Scholz committed ten counts of professional misconduct

in connection with his representation of A.B., and recommended a

one-year suspension of Attorney Scholz's law license.                    Attorney

Scholz challenges the recommended suspension; he argues that it
is    excessive   in   light   of   the   totality      of    the     facts     and
                                                                            No.    2017AP2530-D

circumstances       surrounding          his    representation          of    A.B.      and    he

seeks a more lenient sanction.

       ¶2     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,

and 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 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.

       ¶3     After reviewing this matter and considering Attorney

Scholz's appeal, we accept the referee's factual findings and

legal conclusions.         However, we have determined that a two-year

suspension,      as    originally         sought        by     the    Office       of    Lawyer

Regulation (OLR), is appropriate.                      We reserve the question of

restitution, pending receipt of supplemental briefing requested
by separate order of this court, and we impose the costs of this

proceeding on Attorney Scholz.

       ¶4     Attorney    Scholz         was        admitted    to     practice         law    in

Wisconsin in 1994.            He practices in Mequon.                    In 2011, he was

privately reprimanded for failing to hold client funds in trust

when he deposited a client's advance fee payment directly into

his business account without giving the requisite alternative

fee notices and then he used the funds to pay a personal tax
obligation, and for transferring client funds from his trust
                                                2
                                                                               No.       2017AP2530-D

account to his business account without giving notice to the

client at the time of the transfer that the funds represented a

fee payment.            Private Reprimand, No. 2011-21.1

       ¶5        On     December     27,    2017,         the    OLR    filed        a    ten-count

disciplinary complaint relating to his representation of A.B. in

a   foreclosure/partition               action        between        A.B.     and     her      former

daughter-in-law,             K.D.       The      complaint        alleged       that          Attorney

Scholz      converted        funds    that       were     to    be    held     in    trust,       then

engaged in various misrepresentations to hide his misconduct.

The    complaint            sought     a      two-year          license        suspension         and

restitution            of   $60,975.94     paid       either     to     the    Ozaukee         County

Circuit Court or to opposing counsel's trust account, pending

resolution of the foreclosure/partition action between Attorney

Scholz's client, A.B., and K.D.

       ¶6        The    referee      conducted        a   two-day       hearing          in    January

2019       and    concluded      that      the    OLR      had       proved,    by       clear    and

convincing evidence, all ten counts of misconduct.                                    The referee

recommended we impose a one-year suspension and costs, but did
not address restitution.                Attorney Scholz appeals.

       ¶7        This matter has a long history that will be greatly

abridged         for    purposes     of    this       opinion.         In     1985,       A.B.,    her

husband, and their son, D.B., purchased a partially constructed

home on almost 80 acres of land in Ozaukee County.                                            Several

years later, D.B. married K.D.                          The two couples co-owned the

       Electronic copy available at https://compendium.wicourts.
       1

gov/app/raw/002454.html.

                                                  3
                                                                        No.    2017AP2530-D

property until K.D. filed for divorce from D.B. in 2008.                                D.B.

had been in prison since 1994.                   Attorney Scholz represented D.B.

in the divorce.

       ¶8     The primary issue in the divorce was the division of

the jointly owned residence and surrounding real estate.                                A.B.

hired Attorney Donald Fraker, who filed a separate lawsuit to

assert       her     interests      in     the       shared    property.       Months     of

collateral litigation ensued.                    During this time, A.B.'s husband

passed away.             The court ruled that D.B. and K.D. (whose divorce

was still pending) jointly owned a one-half interest in the

property       and         A.B.     owned    the           other   one-half     interest.

Eventually, in the divorce action, K.D. was awarded the one-half

interest in the property and was assigned responsibility for the

outstanding mortgage.

       ¶9     In May 2012, a foreclosure action was filed against

the property.             A.B. and K.D. litigated who was responsible for

the unpaid mortgage.               Then, the Department of Natural Resources

(DNR) purchased most of the jointly owned acreage.                             After the
mortgagee          was    paid     along    with       some    other   expenses,    there

remained approximately $180,000, plus the house and a five-acre

lot.        A.B.     and    K.D.    proceeded         to    litigate   their   respective

rights to this property.

       ¶10    In February 2013 A.B. and K.D. reached a stipulation

providing that their lawyers would each hold half the disputed

funds in their respective trust accounts pending the outcome of

the lawsuit to partition the property.                         The stipulation stated,
"Such funds shall continue to be held in such trust accounts, to
                                                 4
                                                                         No.     2017AP2530-D

be disbursed as later may be agreed upon in writing by the

parties or ordered by the Court."                   The stipulation was approved

by court order issued on February 22, 2013.

      ¶11    This brings us to Attorney Scholz's involvement in the

matters giving rise to this disciplinary proceeding.                                In June

2013,      Attorney    Scholz       assumed       representation         of     A.B.     from

Attorney Fraker.            At the time, Attorney Fraker held in trust

$91,545.64     in     disputed      funds,       pursuant   to     the    terms     of    the

stipulation.          Attorney       Fraker      had   "earmarked"         approximately

$30,000 of these funds for his own attorney fees but offered to

disburse the remaining two-thirds to Attorney Scholz as part of

the substitution of attorneys.                   When this occurred, in Attorney

Scholz's own words, "[A.B.] and [Attorney Scholz] struck a deal

that would enable her to continue the fight [against K.D.]."

      ¶12    At the ensuing disciplinary hearing Attorney Scholz

revealed     that     he   and     A.B.   had     agreed    that   she     would       "loan"

Attorney Scholz the balance of the disputed funds.                             In exchange,

Attorney Scholz promised to represent A.B. for the duration of
her case against K.D. for a $5,000 fee payable at some future

date plus 10 percent of any recovery obtained for her.                                   This

"deal" was memorialized in a pair of written agreements.

      ¶13    On July 8, 2013, Attorney Fraker disbursed $60,975.94

of   the    disputed       funds    to    Attorney     Scholz.       Attorney          Scholz

deposited the disputed funds into his business account – not a

trust account.         Attorney Scholz then began spending the money,

mostly for his own benefit, and by mid-August, it was gone.                                We
will not recount all the transactions.                        Summarized, the OLR
                                             5
                                                                         No.     2017AP2530-D

alleged that Attorney Scholz disbursed at least $60,343.40 of

the $60,975.94 for his own purposes, or for the benefit of other

clients or third parties, thereby converting at least $60,343.40

as of August 12, 2013.

       ¶14    Meanwhile,         A.B.    and       K.D.       were     still     litigating

ownership of these funds.                 Commencing in August 2013, their

lawyers participated in a mediation and reached a written one-

page "Interim Agreement" whereby K.D.'s lawyer could "release

funds in her trust account to her client [K.D.]."                              There was no

written agreement that A.B.'s lawyers could disburse any of the

disputed funds.           During this mediation Attorney Scholz did not

disclose      that   he    had     already         disbursed      nearly       all   of   the

disputed funds he was supposed to be holding in trust.

       ¶15    In December 2013, following another mediation session,

Attorney Scholz told Attorney Fraker that he could disburse to

himself the $29,069.73 he had earmarked for attorney fees, and

Attorney Fraker did so.

       ¶16    In   February      2014,    Attorney           Scholz    filed    an    amended
cross-claim in the civil property/partition dispute on behalf of

A.B.    The pleading states that $183,091.29 of disputed funds had

not    been   divided      and    remained         to   be    partitioned.           Attorney

Scholz did not advise the court that these funds were no longer

in trust.

       ¶17    On   January       29,    2015,      mediation         having    failed,    the

court appointed a Special Master to decide A.B.'s and K.D.'s

rights and interests in the disputed funds and property.                                   In
June 2015, the Special Master advised the attorneys that he was
                                               6
                                                                       No.     2017AP2530-D

awaiting more information from K.D.'s attorney and that he had

received "no information or accounting" from Attorney Scholz.

The Special Master informed both attorneys that he expected that

"full accountings with supporting documents would be in [his]

office no later than July 1, 2015."                        Attorney Scholz did not

provide the accounting.              On July 1, 2015, the Special Master

wrote to the attorneys, stating, as relevant here:                           "As to Mr.

Scholz I have heard nothing further regarding documentation."

Attorney Scholz asked for more time to respond but then failed

to do so.

       ¶18   On July 15, 2015, the Special Master issued a report

determining that K.D. was entitled to 97 percent of the proceeds

of any sale of the home and property.                     K.D.'s lawyer then asked

the Special Master to explicitly resolve the allocation of the

disputed funds.          The Special Master forwarded this email to

Attorney     Scholz     and   requested          a    response   by   July     30,     2015.

Attorney Scholz did not respond.                     On August 4, 2015, the Special

Master sent a follow-up letter asking if Attorney Scholz had any
response     or   disagreement.          Again,          Attorney     Scholz     did    not

respond.

       ¶19   On August 6, 2015, the Special Master filed an amended

report   with     the    court,      which       allocated       97   percent     of    the

disputed funds to K.D.            The Special Master added that when the

acreage had been sold, certain expenses had been paid from the

sale   proceeds    that       were   A.B.'s          obligations.       These     amounts

included some $28,034.97 in legal fees paid to Attorney Scholz
for D.B.'s divorce.           The Special Master ordered that K.D. should
                                             7
                                                                      No.   2017AP2530-D

be   reimbursed         for     these    expenditures     before      the    remaining

disputed funds were distributed between A.B. and K.D.

     ¶20       Attorney       Scholz     filed    a   formal    objection       to   the

Special Master's amended report.                 A.B. filed for bankruptcy.

     ¶21       In     January    2016,   Attorney     Scholz    and    K.D.'s    lawyer

told the circuit court that the remaining property had been

sold, subject to bankruptcy court approval, and disclosed that

they no longer held in trust any of the disputed funds from the

DNR sale.           The circuit court expressed consternation, stating:

"You two are going to get in a lot of trouble on this.                          There's

a court order that said that was to be maintained in the trust

accounts, and you cannot just disregard a court order."

     ¶22       K.D.'s lawyer clarified that she had relied on the

written interim agreement prepared by their mediator as "written

agreement by the parties."                The court then addressed Attorney

Scholz:        "[I]t certainly looks like there was an agreement that

[K.D.'s lawyer] could release the funds in her trust account to

her client.            It doesn't say anything about [A.B.] releasing
those funds.          She better find a way to restore them, or there's

going     to     be     contempt    proceedings."         The      court     continued

addressing Attorney Scholz:

     Because you know what?   That is - that is an ethical
     violation, what you did there.        And I have an
     obligation to report that, Mr. Scholz, and I will do
     that.   There was a court order, and there's nothing
     that says you can do what you did.      You just went
     beyond what I said you could do, and that's a problem.
     That's a huge problem.

                                            8
                                                                 No.        2017AP2530-D

       ¶23     Notably, the circuit court assumed Attorney Scholz had

disbursed the funds to A.B.            Attorney Scholz did not inform the

court that he had "borrowed" the money from A.B. or that he had

arranged to reimburse A.B. in part with services-in-kind.                            He

also    told    the     court   that   parts   of    the    mediator's         interim

agreement were missing, implying the missing pages would confirm

his right to disburse funds.            The interim agreement was a one-

page document.

       ¶24     The circuit court directed Attorney Scholz to submit

an   "accounting"       of   his   disbursement     of     the   disputed       funds.

Attorney Scholz submitted a one-page document that the referee

later   found     was    a   misrepresentation      of   what    had       transpired.

Attorney       Scholz    also   provided     the    court    with      a     "receipt"

purportedly signed by A.B. on December 23, 2013, which stated

that she had received $50,975.94 "as the balance of her share of

the proceeds . . . " and purported to authorize Attorney Scholz

to retain $10,000 toward past and future expenses related to the

representation.         As of December 23, 2013, Attorney Scholz had
not made any such payment to A.B. and he was no longer holding

any of the disputed funds in trust.

       ¶25     Following the evidentiary hearing and submission of

post-hearing briefs, the referee determined that the OLR clearly

and convincingly proved that Attorney Scholz committed all ten

counts of misconduct:

       Count One: By converting to his own use or purposes,
       or for the benefit of other clients or third parties,

                                         9
                                                No.   2017AP2530-D

    funds that he was to hold in trust, Attorney Scholz
    violated SCR 20:8.4(c).2

    Count Two: By failing to hold in trust, separate from
    his own property, the proceeds from the sale of the
    parcel    of    land,  Attorney    Scholz    violated
    SCR 20:1.15(b)(1).3

    Count Three:   By failing to hold all of the disputed
    funds in trust until the dispute was resolved,
    Attorney Scholz violated former SCR 20:1.15(d)(3).4

    2  SCR 20:8.4(c) provides:  "It is professional misconduct
for a lawyer to engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
    3   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.
    4  Effective July 1, 2016, substantial changes were made to
Supreme Court Rule 20:1.15, the "trust account rule."    See S.
Ct. Order 14-07, 2016 WI 21 (issued Apr. 4, 2016, eff. July 1,
2016). Because the conduct underlying this case arose prior to
July 1, 2016, unless otherwise indicated, all references to the
supreme court rules will be to those in effect prior to July 1,
2016.

    Former SCR 20:1.15(d)(3) provided:

         When the lawyer and another person or the client
    and another person claim ownership interest in trust
    property identified by a lien, court order, judgment,
    or contract, the lawyer shall hold that property in
    trust until there is an accounting and severance of
    the interests.    If a dispute arises regarding the
    division of the property, the lawyer shall hold the
    disputed portion in trust until the dispute is
    resolved.   Disputes between the lawyer and a client
    are subject to the provisions of sub.(g)(2).

                                10
                                                 No.    2017AP2530-D

    Count Four: By failing to hold the disputed funds in
    trust until there was a written agreement or court
    order permitting the release of the funds, Attorney
    Scholz violated SCR 20:3.4(c).5

    Count Five:    By causing Attorney Fraker to disburse
    the funds he was holding in trust, when there was no
    written agreement or court order authorizing the
    disbursement, Attorney Scholz violated SCR 20:3.4(c),
    via SCR 20:8.4(a).6

    Count Six:     By engaging in communications    with the
    mediator   and   opposing  counsel  regarding     whether
    Attorney Scholz could disburse any of the        disputed
    funds, when Attorney Scholz had already         disbursed
    substantially all of the disputed funds,         Attorney
    Scholz violated SCR 20:8.4(c).

    Count Seven:     By failing to respond to opposing
    counsel's filings with the Special Master or the
    Special Master's requests for [A.B.'s] response to
    opposing counsel's filings, or to clarify whether the
    Special Master had granted Attorney Scholz's request
    for additional time to respond and the deadline to do
    so, Attorney Scholz violated SCR 20:1.3.7

    Count Eight:    By presenting false evidence to the
    court regarding his handling of the disputed funds and
    his client's receipt of funds, by making false
    statements to the court regarding his handling and
    disbursement of the disputed funds, and by failing to

    5  SCR 20:3.4(c) provides:   "A lawyer shall not knowingly
disobey an obligation under the rules of a tribunal, except for
an open refusal based on an assertion that no valid obligation
exists."
    6  SCR 20:8.4(a) provides:    "It is professional misconduct
for a lawyer to violate or attempt to violate the Rules of
Professional Conduct, knowingly assist or induce another to do
so, or do so through the acts of another."
    7  SCR 20:1.3 provides: "A lawyer shall act with reasonable
diligence and promptness in representing a client."

                               11
                                                   No.   2017AP2530-D

    correct false statements he made to the court,
    Attorney Scholz violated SCR 20:3.3(a)(l)8 and (3).9

    Count Nine: By failing to maintain a pooled interest-
    bearing trust account between sometime prior to
    August, 2010, and November 12, 2014, and failing
    during that period of time to participate in the
    Interest on Trust Accounts Program, Attorney Scholz
    violated,     former      SCR 20:1.15(c)(1),  current
    SCR 20:1.15(c)(1),10 and SCR 13.04.11

    8  SCR 20:3.3(a)(l) provides: "A lawyer shall not knowingly
make a false statement of fact or law to a tribunal or fail to
correct a false statement of material fact or law previously
made to the tribunal by the lawyer."
    9    SCR 20:3.3(a)(3) provides:

         A lawyer shall not knowingly offer evidence that
    the lawyer knows to be false.       If a lawyer, the
    lawyer's client, or a witness called by the lawyer,
    has offered material evidence and the lawyer comes to
    know of its falsity, the lawyer shall take reasonable
    remedial measures, including, if necessary, disclosure
    to the tribunal. A lawyer may refuse to offer
    evidence, other than the testimony of a defendant in a
    criminal matter that the lawyer reasonably believes is
    false.
    10   The relevant text of SCR 20:1.15(c)(1) provides:

          A lawyer or law firm who receives client or 3rd-
    party funds that the lawyer or law firm determines to
    be nominal in amount or that are expected to be held
    for a short period of time such that the funds cannot
    earn income for the benefit of the client or 3rd party
    in excess of the costs to secure that income, shall
    maintain a pooled interest-bearing or dividend-paying
    draft   trust   account  in   an  IOLTA  participating
    institution.
    11   SCR 13.04(1) provides:

         (1) An attorney shall participate in the program
    as provided in SCR 20:1.15 unless:

         (a) The attorney certifies on the annual trust
    account statement filed with the state bar that:

                                  12
                                                         No.    2017AP2530-D

      Count Ten:    By making misrepresentations to the OLR
      during the course of the investigation of this matter,
      Attorney Scholz violated SCR 22.03(6),12 enforceable
      via SCR 20:8.4(h).13
      ¶26   The referee found that Attorney Scholz was "careless

and   negligent"   and   described    his   misconduct     as    "serious"

stating:

      In this case, the misconduct Scholz engaged in is
      serious.   Scholz not only improperly converted funds,
      but he covered up his conduct over the course of
      several years with several instances of misleading
      omissions and false representations to the court,
      opposing counsel, the OLR, [the Special Master] and
      [the mediator]. While Scholz's conduct might not have
      harmed his client, it did harm the opposing party, who
      lost out on the funds he improperly distributed to
      himself, and later his client.

           1. Based on the attorney's current annual trust
      account   experience    and   information from   the
      institution in which the attorney deposits trust
      funds, service charges on the account would equal or
      exceed any interest generated; or

           2. Because of the nature of the attorney's
      practice, the attorney does not maintain a trust
      account; or (b) The board, on its own motion or upon
      application from an attorney, grants a waiver from
      participation in the program for good cause.

       SCR
      12     22.03(6)  provides:     "In   the  course  of   the
investigation, the respondent's willful 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."

       SCR 20:8.4(h) provides:
      13                         "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)."

                                 13
                                                                    No.        2017AP2530-D

However,     the       referee     apparently       accepted    many      of     Attorney

Scholz's     explanations,          characterizing        the   conversion         as    an

"improper    loan"       and     finding    that    Attorney    Scholz     "repaid       it

quickly."        The referee observed:               "[i]n this case, Attorney

Scholz's    conduct       did    not   injure      his   client,   and    he     did    not

appear to manipulate or steal from his client, rather he took an

improper loan, and repaid that quickly.                       He did not breach a

client's trust . . .."

    ¶27     The        referee     deemed     a    one-year     license        suspension

sufficient       and     recommended        that    Attorney    Scholz         should   be

required to pay the full costs of this proceeding.                             The OLR's

statement of costs discloses that these costs were $16,804.30 as

of March 17, 2020.         The report does not mention restitution.

    ¶28     We turn to the merits of Attorney Scholz's appeal.                           He

explains that:

    [t]his appeal was not brought for the purpose of
    overturning that decision, but rather, as a plea for
    leniency based on the extraordinary nature of this
    case, the good work that was done, and the result that
    was ultimately obtained for a very special lady, all
    of which was overshadowed by [Scholz's] carelessness,
    neglect and in some instances, disregard for the Rules
    of Professional Conduct.
    ¶29     We     first       consider     the    referee's     factual        findings.

Attorney     Scholz       does     not     challenge      the   referee's         factual

findings, per se, taking issue only with "certain inferences."

There has been no showing that any of the referee's findings are
clearly erroneous and we accept and affirm those findings.

                                             14
                                                                  No.     2017AP2530-D

       ¶30   We turn to the referee's conclusions of law.                     Attorney

Scholz    questions     the   conclusion     that    he    violated      SCR 20:1.3

(Diligence), as alleged in Count 7:

       By failing to respond to opposing counsel's filings
       with the Special Master or the Special Master's
       requests for [A.B.'s] response to opposing counsel's
       filings, or to clarify whether the Special Master had
       granted Attorney Scholz's request for additional time
       to respond and the deadline to do so, Attorney Scholz
       violated SCR 20:1.3.
       ¶31   Attorney    Scholz    maintains   that       he   gave     the   Special

Master adequate information shortly after the Special Master was

appointed.     He argues that his efforts on A.B.'s behalf reflect

his "commitment" and "dedication" and "zeal."                   It is clear from

the record, however, that Attorney Scholz repeatedly failed to

respond to the Special Master's requests for information.                          As

the OLR observed, Attorney Scholz's lack of diligence in in this

regard "deprived [A.B.] of credit for any of the other value she

contributed to the property."          Referee Peterson found that "[i]n

the end, Scholz never filed any substantive written response to

[the     Special   Master's]      report."      We    affirm       the     referee's

determination that Attorney Scholz violated SCR 20:1.3.

       ¶32   Attorney Scholz does not challenge the referee's other

conclusions of law, including her conclusion that he converted

the disputed funds in violation of SCR 20:8.4(c), and the record

supports the referee's conclusions.            We emphasize that Attorney

Scholz's     temporary    use     of   the   disputed          funds     constitutes

conversion    notwithstanding       the   referee's       unchallenged        finding
that he "repaid" A.B.; his use of the funds does not have to be

                                       15
                                                                               No.     2017AP2530-D

a permanent deprival.                 In re Disciplinary Proceedings Against

Mulligan,      2015 WI 96,     ¶36,       365 Wis. 2d 43,          870 N.W.2d 233

(citing In re Disciplinary Proceedings Against Weigel, 2012 WI
124,    ¶41,       345 Wis. 2d 7,         823 N.W.2d 798       (quoting           ABA/BNA

Lawyers' Manual on Professional Conduct § 45:503 (2007)).                                          The

referee's other conclusions are supported by the record and we

affirm them.

       ¶33    We turn to considering the appropriate sanction for

Attorney Scholz's misconduct.                     We are free to impose discipline

more or less severe than that recommended by the referee.                                     In re

Disciplinary Proceedings Against Krill, 2020 WI 20, ¶54, 390
Wis. 2d 466,         938 N.W.2d 589,              (citing     In     re         Disciplinary

Proceedings         Against        Elliott,       133 Wis. 2d 110,         394 N.W.2d 313

(1986); In re Disciplinary Proceedings Against Reitz, 2005 WI
39, 279 Wis. 2d 550, 694 N.W.2d 894).                           The OLR requested a two-

year suspension.            The referee recommended we impose a one-year

suspension.

       ¶34    On    this      appeal,       Attorney       Scholz       asks    the     court       to
impose a still more lenient suspension.                          He emphasizes that A.B.

was not a grievant and maintains that she was "a knowing and

consenting      participant          in     the    transaction."           He        argues    that

certain      disciplinary           cases    support        a    more    lenient        sanction,

citing In re Disciplinary Proceedings Against Tobin, 2007 WI 50,

300 Wis. 2d 250, 730 N.W.2d 896 (imposing four month suspension

for    nine    counts         of    misconduct,           including       converting          funds

belonging      to    a   number       of    third       parties    for    personal          use     in
violation      of    SCR 20:1.15(b)(1)              and    SCR    20:8.4(c))          and     In    re
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Disciplinary        Proceedings        Against     Bartz,     2015 WI 61,    362
Wis. 2d 752, 864 N.W.2d 881 (imposing a 60-day suspension on an

attorney   who      committed        five   counts     of   misconduct,         including

conversion          of        third-party        funds      in       violation          of

SCR 20:1.15(b)(1) and SCR 20:8.4(c), and who failed to cooperate

with the OLR's investigation).

    ¶35        Tobin     is   inapposite.        The   four-month     suspension        we

imposed there reflected "numerous mitigating factors" including

a lack of disciplinary history, Attorney Tobin's admission of

misconduct,         and       Attorney      Tobin's      voluntary         payment      of

restitution to his trust account. Id., ¶33.      We are similarly

unpersuaded by           Bartz.      There, the lawyer stipulated that he

failed to timely disburse a few thousand dollars to one medical

provider, but he ultimately paid the bill.                    Attorney Scholz, by

contrast, committed ten counts of misconduct, converted tens of

thousands of dollars via a "loan" of funds that he knew or

should have known his client was not entitled to make, ignored

court orders, and then systematically misrepresented what he did
to hide his misconduct, resulting in a significant loss to K.D.

    ¶36        We conclude that the facts of this case and our case

law indicate a two-year suspension is appropriate.                           See In re

Disciplinary        Proceedings       Against    Krezminski,     2007 WI 21,   299
Wis. 2d 152, 727 Wis. 2d 492 (imposing two-year suspension for

misconduct that included conversion of $37,094.42 entrusted to

the lawyer as personal representative of an estate, and the

filing    of    a   document      containing      false     information         with   the
probate    court).             The    referee     apparently      considered           the
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Krezminski case distinguishable, noting that Attorney Krezminski

stole from his own client.                    Attorney Scholz may not have stolen

from his client, but the record indicates he colluded with that

client,       making       an       improper        agreement         to   avail         himself       of

disputed      funds        that      were     not    the        client's      to    loan,       at    the

expense of K.D.                As the referee found, while Attorney Scholz's

conduct might not have harmed his client, it did harm K.D.

"who     lost       out    on       the     funds    he        improperly      distributed             to

himself, and later his client."                                See also In re Disciplinary

Proceedings Against Goldstein, 2010 WI 26, 323 Wis. 2d 706, 782
N.W.2d 388         (imposing         two-year        license         suspension          for    various

trust account violations and conversion of approximately $70,000

in   client        funds       despite       the    referee's         finding       of     "no       harm"

because the attorney had reimbursed his clients).

       ¶37        Attorney         Scholz's         misconduct         reflects           a     callous

disregard          for    the       rights     of        the    opposing       party,          and    his

fundamental obligation as an officer of the court to honor and

obey circuit court orders.                         He lied to opposing counsel, the
mediator,         the     circuit      court       judge,       a    court-appointed            special

master    and       to     the       OLR,    all     in        an    effort    to        conceal      his

conversion.             He fabricated documents that he submitted to the

court    to       try     to       conceal    his        misconduct.           Considering            the

precedent cited by the OLR, coupled with a number of aggravating

factors, including his prior discipline, we have no difficulty

concluding         that        a    suspension       of        two    years    is        appropriate.

Indeed,       a    lengthy          suspension       is        necessary      to     impress         upon
Attorney Scholz and other lawyers in this state the seriousness
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                                                                        No.     2017AP2530-D

of the professional misconduct at issue here, and to protect the

public      from   similar       misconduct       in    the    future.         See    In    re

Disciplinary Proceedings Against Roitburd, 2016 WI 12, ¶20, 368
Wis. 2d 595, 882 N.W.2d 317 (stating that "it is ultimately this

court's     responsibility"         to    determine       appropriate         disciplinary

sanctions).

      ¶38     We   turn    next    to    the    issue     of   costs.         Our    general

practice is to impose full costs on attorneys who are found to

have committed misconduct.                See SCR 22.24(1m).            Attorney Scholz

has   not    claimed      that    there     are      reasons   to   depart      from   that

practice in this matter, and we have not found any reason to do

so.   We therefore impose full costs.

      ¶39     Finally,     we     reserve      our     final   ruling    regarding         the

issue of restitution pending receipt of supplemental briefing as

ordered by this court.             Upon receipt of the OLR's memorandum and

any   response      from     Attorney       Scholz,       an   order     resolving         the

restitution question will issue in due course.                      Therefore,

      ¶40     IT IS ORDERED that the license of Carl Robert Scholz
to practice law in Wisconsin is suspended for a period of two

years, effective December 22, 2020.

      ¶41     IT IS FURTHER ORDERED that Carl Robert Scholz shall

comply with the requirements of SCR 22.26 concerning the duties

of a person whose license to practice law in Wisconsin has been

suspended.

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

of this order Carl Robert Scholz shall pay to the Office of

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                                                             No.   2017AP2530-D

Lawyer   Regulation    the     costs   of   this     proceeding,   which    are

$16,804.30 as of March 17, 2020.

    ¶43    IT   IS   FURTHER    ORDERED     that   the   court   reserves   the

question of restitution pending consideration of court ordered

briefing as set forth in this court's order dated November 10,

2020.

    ¶44    IT   IS    FURTHER    ORDERED      that    compliance    with    all

conditions of this order is required for reinstatement.                     See

SCR 22.29(4)(c).

    ¶45    BRIAN HAGEDORN, J., did not participate.

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