Court Opinion

ID: 2644037
Source: CourtListenerOpinion
Date Created: 2013-11-26 15:14:19.989196+00
Date Added: 2024-06-11T09:01:53.727401
License: Public Domain

2013 WI 93

                  SUPREME COURT             OF   WISCONSIN
CASE NO.:               2012AP1826-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against Michael W. Steinhafel, Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        Michael W. Steinhafel,
                                  Respondent.

                          DISCIPLINARY PROCEEDINGS AGAINST STEINHAFEL

OPINION FILED:          November 26, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:   ZIEGLER, J., did not participate.

ATTORNEYS:
                                                                                  2013 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.    2012AP1826-D

STATE OF WISCONSIN                                   :             IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Michael W. Steinhafel, Attorney at Law:

Office of Lawyer Regulation,                                                 FILED
             Complainant,
                                                                        NOV 26, 2013
      v.
                                                                           Diane M. Fremgen
                                                                        Clerk of Supreme Court
Michael W. Steinhafel,

             Respondent.

      ATTORNEY        disciplinary         proceeding.            Attorney's        license
suspended.

      ¶1     PER    CURIAM.     On      June   26,   2013,        Referee      Richard      C.
Ninneman issued a report recommending that Attorney Michael W.
Steinhafel    be     declared      in    default,        concluding        that    Attorney
Steinhafel         engaged    in        multiple         counts      of      professional
misconduct, and recommending that his license to practice law in
Wisconsin be suspended for four months.
      ¶2     We conclude that the referee's findings of fact are
supported    by     satisfactory        and    convincing         evidence.         Due     to
                                                                         No.        2012AP1826-D

Attorney      Steinhafel's        repeated         failure       to     appear         for     or
participate in a deposition, rescheduled deposition, and status
conferences,       we   declare    him    to       be    in    default.         We     further
conclude that the seriousness of his misconduct warrants the
suspension of his license to practice law in Wisconsin for a
period of four months.            We also agree with the referee that the
full costs of the proceeding, which are $2,638.99 as of July 16,
2013, should be assessed against Attorney Steinhafel.
       ¶3    Attorney Steinhafel was admitted to practice law in
Wisconsin     in   1989.     He    practiced            in    Milwaukee.        During        the
course of the proceedings, Attorney Steinhafel stated he has not
practiced law in years and has no intention of practicing law

again.
       ¶4    On August 16, 2012, the Office of Lawyer Regulation
(OLR) issued a complaint against Attorney Steinhafel alleging
seven counts of misconduct.              Four of the misconduct counts arose
out    of    Attorney    Steinhafel's             representation        of      S.R.     in     a
Milwaukee     County     divorce    proceeding.               While    the     divorce        was
pending, S.R. wanted to sell one of her two income properties.
In order for the sale to take place, her husband, C.R., had to
execute two affidavits waiving his interests in the property.
In exchange for signing the affidavits, an agreement was reached
between Attorney Steinhafel and C.R.'s attorney, Dana Gimbel,
that   any    proceeds     from    the    sale      would       be    held     in    trust     by

Attorney     Steinhafel     pending       a       determination        of    the      parties'
respective interests.

                                              2
                                                                           No.      2012AP1826-D

        ¶5     The sale of S.R.'s income property closed in September
2006.        Contrary to the agreement regarding disposition of the
sale    proceeds,          the    entire       amount    of    the    sale    was     directly
distributed to S.R. and none of the funds were ever placed in
trust.
        ¶6     In     November      of    2007,       while    the    divorce       was   still
pending,      S.R.     wanted      to    sell    a    second    income       property.       An
agreement similar to the one regarding the sale of the first
property       was     made      between       Attorney       Steinhafel      and     Attorney
Gimbel.        On November 30, 2007, the proceeds of the sale of
S.R.'s       second    income      property       were     deposited     into       the   trust
account of the Schroeder Group Law Firm, the firm that employed

Attorney Steinhafel at the time.                      On December 21, 2007, contrary
to the agreement entered into between Attorney Steinhafel and
Attorney      Gimbel,       the    entire       amount    of    the   sale    proceeds      was
distributed to S.R.
        ¶7     At the divorce hearing, Attorney Gimbel informed the
court the parties had reached a stipulation, and that part of
the stipulation was that the proceeds from the sale of the two
properties          were    being       held     in     Attorney      Steinhafel's        trust
account.       Attorney Steinhafel was present at the trial, but did
not inform the court or Attorney Gimbel that the funds were not
in fact in his trust account and had already been distributed to
S.R.

        ¶8     The OLR's complaint alleged the following counts of
misconduct with respect to Attorney Steinhafel's representation
of S.R.:
                                                 3
                                                 No.   2012AP1826-D

         COUNT ONE.   By failing to provide notice of the
    receipt   of   sale   proceeds  to   adverse   counsel,
    [Attorney] Steinhafel violated SCR 20:1.15(d)(1).1

         COUNT TWO. By failing to hold the sale proceeds
    in     trust,    [Attorney]   Steinhafel    violated
    SCR 20:1.15(d)(3).2

         COUNT THREE.   By disbursing the sale proceeds to
    his client in direct contradiction of an agreement he
    made with adverse counsel, [Attorney] Steinhafel
    violated SCR 20:8.4(c).3

         COUNT FOUR.  By continuing to misrepresent to
    adverse counsel in court that he was holding sale

    1
        SCR 20:1.15(d)(1) states:

         Notice and disbursement. 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 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.
    2
        SCR 20:1.15(d)(3) provides:

         Disputes regarding trust property.      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).
    3
       SCR 20:8.4(c) states it is professional misconduct for a
lawyer to "engage in conduct involving dishonesty, fraud, deceit
or misrepresentation . . . ."

                                    4
                                                             No.    2012AP1826-D

        proceeds in trust,        [Attorney]    Steinhafel       violated
        SCR 20:8.4(c).
        ¶9     The OLR's complaint also alleged that in November of
2006, D.C. hired Attorney Steinhafel to represent him in a small
claims action.         D.C. said he signed a fee agreement and paid
Attorney Steinhafel an advance fee of $1,500.
        ¶10    D.C. filed a grievance with the OLR on March 2, 2011,
saying that Attorney Steinhafel had failed to diligently pursue
his case, failed to communicate with him, and failed to respond

to his request for a refund of the advanced fee and the return
of his documents.         Attorney Steinhafel sent a response to the
OLR saying he had tried to locate D.C.'s file at his former law
firm, but was unable to do so, and that he had lost contact with
D.C. after he left the law firm where he was affiliated in
October 2007 and did not take the file with him to his new law
firm.        Attorney Steinhafel further told OLR that after he became
aware of D.C.'s request for a refund of fees, he promptly sent a
check representing a refund of all fees.              The OLR's complaint
alleged       the   following   count   of   misconduct   with     respect   to

Attorney Steinhafel's representation of D.C.:

             COUNT FIVE. By failing to provide his client
        with notice of his move from one law firm to another,
        by failing to inform his client of his apparent
        termination of his representation and by failing to
        provide his client with a refund of the unearned
        portion of the advance fee more than five years after
        payment, [Attorney] Steinhafel violated of [sic]
        SCR 20:1.16(d).4
        4
            SCR 20:1.16(d) provides as follows:

             Upon termination of representation, a lawyer
        shall take steps to the extent reasonably practicable
                                        5
                                                                     No.    2012AP1826-D

        ¶11       The OLR's complaint also alleged that on October 29,
2009,       Attorney    Steinhafel       was   the   subject   of   a   traffic    stop
which led to a felony charge against him of operating while
under       the    influence   of   an    intoxicant,    third      offense,    with   a
minor child in the vehicle, and misdemeanor charges of operating
with a prohibited blood alcohol concentration, third offense,
and operating a motor vehicle after revocation.                            On July 19,
2010, Attorney Steinhafel pled guilty to the felony charge.                         The
remaining charges were dismissed and read-in at sentencing.
        ¶12       Attorney Steinhafel did not provide written notice of
his conviction to the OLR within five days of the finding of
guilt.        Attorney Steinhafel's counsel in the OWI case did inform

the OLR of Attorney Steinhafel's guilty plea and sentencing in a
letter to the OLR dated September 23, 2010.
        ¶13       The OLR's complaint alleged the following counts of
misconduct with respect to the felony conviction:

             COUNT SIX. By engaging in conduct leading to a
        felony   criminal    traffic   conviction, [Attorney]
                                           5
        Steinhafel violated SCR 20:8.4(b).

        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.
        5
       SCR 20:8.4(b) states it is professional misconduct for a
lawyer to "commit a criminal act that reflects adversely on the
lawyer's honesty, trustworthiness or fitness as a lawyer in
other respects; . . . ."

                                               6
                                                                         No.    2012AP1826-D

             COUNT SEVEN. By failing to provide written
        notice of his finding of guilt in a criminal case
        within five days, [Attorney] Steinhafel violated
        SCR 21:15(5).6
        ¶14      On November 8, 2012, Attorney Jon E. Fredrickson filed
a notice of appearance and an answer to the complaint on behalf
of Attorney Steinhafel.                In March 2013 Attorney Frederickson
moved       to   withdraw     as    counsel    for      Attorney    Steinhafel.          The
referee granted that motion.
        ¶15      Attorney Steinhafel failed to appear for a scheduled

deposition on April 24, 2013.                  He again failed to appear for a
rescheduled deposition on May 14, 2013.                     The OLR filed a motion
for sanctions which was to be heard on May 13, 2013.                              That date
was     changed       to     a     telephone       scheduling/status           conference.
Attorney         Steinhafel      failed   to       be   available       by   telephone    on
May 13.          After     Attorney   Steinhafel        failed     to    appear    for   his
rescheduled deposition on May 14, 2013, the OLR filed a second
motion for sanctions which was scheduled to be heard on June 6,
2013.       Following another telephone conference between the OLR's
retained         counsel,    Attorney     Steinhafel,        and    the      referee,    the

        6
            SCR 21.15(5) provides:

             An attorney found guilty or convicted of any
        crime on or after July 1, 2002, shall notify in
        writing the office of lawyer regulation and the clerk
        of the Supreme Court within 5 days after the finding
        or conviction, whichever first occurs. The notice
        shall include the identity of the attorney, the date
        of finding or conviction, the offenses, and the
        jurisdiction.   An attorney's failure to notify the
        office of lawyer regulation and clerk of the supreme
        court of being found guilty or his or her conviction
        is misconduct.

                                               7
                                                                                No.     2012AP1826-D

June 6      hearing        was      changed        to    another          telephone              status
conference.             Attorney        Steinhafel            again       failed            to        make
arrangements to participate in the June 6 telephone conference.
In an order dated June 6, 2013, the referee set the OLR's second
motion for sanctions to be heard on June 19, 2013.                                           Attorney
Steinhafel        failed    to      appear    in    person,      but      did         call       in    and
participate by telephone.
      ¶16    At the June 19, 2013 hearing, the referee granted the
OLR's motion for sanctions, struck Attorney Steinhafel's answer
to the complaint, and recommended that a default judgment be
entered.          The    referee       found       the    OLR       proved            all    of       the
allegations        in    its      complaint        by    clear,        satisfactory,                  and

convincing        evidence.          The     referee     recommended             that        Attorney
Steinhafel's        license      to    practice         law    be     suspended             for       four
months, as requested in the OLR's complaint, and that all costs
of   the    proceeding         be     assessed      against         Attorney           Steinhafel.
Attorney Steinhafel has not filed an appeal from the referee's
report and recommendation.
      ¶17    In light of Attorney Steinhafel's repeated failure to
appear      for    scheduled          depositions,        status          conferences,                 and
hearings, we deem it appropriate to strike his answer to the
OLR's complaint and declare him in default.
      ¶18    A     referee's        findings       of    fact       are        affirmed          unless
clearly erroneous.               Conclusions of law are reviewed de novo.

See In re Disciplinary Proceedings Against Eisenberg, 2004 WI
14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747.                             The court may impose
whatever     sanction       it      sees     fit    regardless            of     the        referee's
                                               8
                                                                     No.    2012AP1826-D

recommendation.          See   In   re    Disciplinary     Proceedings         Against
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.
      ¶19    There is no showing that any referee's findings of
fact are clearly erroneous.               Accordingly, we adopt them.                  We
also agree with the referee's conclusions of law that Attorney
Steinhafel violated the various rules of professional conduct as
alleged in the OLR's complaint.               We agree with the referee that
a   four-month     suspension       of   Attorney   Steinhafel's           license     to
practice law in Wisconsin is an appropriate sanction for his
misconduct.         Because     this      case   presents       no     extraordinary
circumstances,      we   further      determine     that   Attorney         Steinhafel
should be required to pay the full costs of this matter.                             See
SCR 22.24(1m) (supreme court's general policy upon a finding of
misconduct is to impose all costs upon the respondent attorney).
We note the OLR is not seeking restitution.
      ¶20    IT    IS    ORDERED     that     the   license      of        Michael     W.
Steinhafel    to    practice    law      in   Wisconsin    is   suspended        for    a
period of four months, effective January 6, 2014.
      ¶21    IT IS FURTHER ORDERED that Michael W. Steinhafel shall
comply with the provisions of SCR 22.26 concerning the duties of
a person whose license to practice law in Wisconsin has been
suspended.
      ¶22    IT IS FURTHER ORDERED that within 60 days of the date
of this order, Michael W. Steinhafel shall pay to the Office of
Lawyer Regulation the costs of this proceeding.

                                          9
                                                      No.    2012AP1826-D

     ¶23   IT   IS   FURTHER   ORDERED   that   compliance   with    all
conditions of this order is required for reinstatement.              See
SCR 22.28(2).
     ¶24   ANNETTE KINGSLAND ZIEGLER, J., did not participate.

                                  10
    No.   2012AP1826-D

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