Court Opinion

ID: 4692954
Source: CourtListenerOpinion
Date Created: 2021-06-04 14:20:14.271887+00
Date Added: 2024-06-11T08:05:19.524897
License: Public Domain

2021 WI 49

                  SUPREME COURT         OF   WISCONSIN
CASE NO.:              2016AP48-D

COMPLETE TITLE:        In the Matter of Disciplinary Proceedings
                       Against John Hotvedt, Attorney at Law:

                       Office of Lawyer Regulation,
                                 Complainant,
                            v.
                       John Hotvedt,
                                 Respondent.

                          ATTORNEY HOTVEDT REINSTATEMENT PROCEEDINGS
                          Reported at 372 Wis. 2d 68,888 N.W.2d 393
                                PDC No:2016 WI 93 - Published

OPINION FILED:         June 4, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
Per Curiam.
NOT PARTICIPATING:

ATTORNEYS:
                                                                   2021 WI 49
                                                           NOTICE
                                             This opinion is subject to further
                                             editing and modification.   The final
                                             version will appear in the bound
                                             volume of the official reports.
No.   2016AP48-D

STATE OF WISCONSIN                       :              IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against John Hotvedt, Attorney at Law:

Office of Lawyer Regulation,                                     FILED
           Complainant,                                      JUN 4, 2021
      v.                                                        Sheila T. Reiff
                                                            Clerk of Supreme Court
John Hotvedt,

           Respondent.

      ATTORNEY reinstatement proceeding.       Reinstatement granted.

      ¶1   PER CURIAM.    We review a report filed by Referee Kim M.
Peterson, recommending this court reinstate John Hotvedt's license

to practice law in Wisconsin.    After careful review of the matter,

we agree that Attorney Hotvedt's license should be reinstated.                 We

also conclude that Attorney Hotvedt should be required to pay the

full costs of this reinstatement proceeding, which are $4,867.82

as of May 5, 2021.

      ¶2   Attorney Hotvedt was admitted to the practice of law in

Wisconsin on May 21, 2001.      He currently resides in Burlington,
                                                                     No.   2016AP48-D

Wisconsin and is employed as a Vice-President for the Bear Real

Estate Group (BREG) in Kenosha.

     ¶3     On November 18, 2016, this court suspended Attorney

Hotvedt's Wisconsin law license for 18 months, effective December

30, 2016, and ordered Attorney Hotvedt to pay the costs of the

disciplinary proceeding.             In Re Disciplinary Proceedings Against

Hotvedt, 2016 WI 93, ¶17, 372 Wis. 2d 68, 888 N.W.2d 393.                   In that

matter, the referee recommended the disciplinary suspension after

Attorney    Hotvedt      stipulated       to   the    facts     alleged     in     the

disciplinary complaint filed by the Office of Lawyer Regulation

(OLR), and agreed with the OLR that an 18-month suspension of his

law license was merited.

     ¶4     Specifically,        Attorney      Hotvedt      stipulated     that     he

committed       five   counts   of    professional        misconduct   related      to

actions he took while associated with his former law firm as well

as actions during his withdrawal from that firm.                Attorney Hotvedt

converted to his own use client funds belonging to the firm in

excess     of    $173,000,      in     violation     of    Supreme     Court      Rule
(SCR) 20:8.4(c); wrote off client fees owed to the firm, in

violation of SCR 20:8.4(c); established a consulting firm to

convert client fees while still employed by his firm, in violation

of SCR 20:8.4(c); breached his fiduciary duty to his firm by

misrepresenting to his firm that he would not bill or otherwise

recover client fees from firm clients, converting client funds

owed to his law firm, writing off client billings, and establishing

a consulting firm for the purpose of converting client fees owed
to the firm, all in violation of SCR 20:8.4(f); and failed to
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                                                                       No.    2016AP48-D

disclose to the OLR during its investigation the full extent of

funds     he     converted      from       his    firm     and    otherwise     making

misrepresentations         to      the    OLR    during    its    investigation,     in

violation of SCRs 20:8.4(h), 22.03(2) and (6).                     See Hotvedt, 2016

WI 93, ¶11.

     ¶5        Attorney Hotvedt filed a petition for reinstatement of

his license to practice law on November 12, 2019.                            After an

investigation,       the     OLR     initially      opposed      Attorney    Hotvedt's

reinstatement      because      it       appeared   that    Attorney    Hotvedt     had

continued to practice law despite his law license suspension.                       See

SCR 22.29(4)(b).           The OLR observed that,                during his license

suspension, Attorney Hotvedt worked for BREG, a former firm client

for which he worked prior to his suspension, and his duties

appeared to include law-related work.

     ¶6        Admittedly, SCR 22.26(2) permits a suspended attorney to

engage in "law related work" if the lawyer's efforts are engaged

"for a commercial employer itself not engaged in the practice of

law." Id. In other words, while suspended lawyers cannot practice
law and cannot perform law student, law clerk, or other paralegal

personnel work for entities engaged in the practice of law, they

can perform law student, law clerk, or other paralegal personnel

work for commercial employers who are not engaged in the practice

of law.    Id.

     ¶7        The OLR acknowledged that BREG "is obviously not a law

firm; it is a commercial employer in the real estate industry."

However, it initially appeared that Attorney Hotvedt's employment
with BREG exceeded the limited scope allowed by SCR 22.26(2).                       His
                                             3
                                                                        No.    2016AP48-D

work as an employee of BREG appeared "largely indistinguishable

from his work as their outside counsel."                      So, the OLR expressed

concern that Attorney Hotvedt's work for BREG constituted "the

improper practice of law during his period of suspension."                                If

true, this concern would implicate several other reinstatement

criteria, so the OLR questioned whether Attorney Hotvedt could

satisfactorily fulfill other reinstatement criteria, as well.

       ¶8     The referee conducted a public evidentiary hearing on

Attorney Hotvedt's reinstatement petition on December 15, 2020.

The   question     of    his    work    during      his     license    suspension        was

thoroughly explored.            Both parties filed post-hearing briefs.

After the hearing, the OLR withdrew its objection to Attorney

Hotvedt's reinstatement.

       ¶9     On   January      21,    2021,      the     referee     filed    a    report

recommending       that        this     court       grant      Attorney        Hotvedt's

reinstatement petition.           Critical to the referee's recommendation

is    the    referee's    conclusion         that    Attorney        Hotvedt       did   not

impermissibly practice law during his license suspension.
       ¶10    Neither     party        has       appealed     from     the     referee's

recommendation, so the court considers this matter pursuant to

SCR 22.33(3).1      On review, we accept a referee's findings of fact

unless they are clearly erroneous.                   We review a referee's legal

conclusions, including whether the attorney has satisfied the

       SCR 22.33(3) provides: "If no appeal is timely filed, the
       1

supreme   court  shall   review  the   referee's  report,   order
reinstatement, with or without conditions, deny reinstatement, or
order the parties to file briefs in the matter."

                                             4
                                                                 No.    2016AP48-D

criteria   for   reinstatement,      on    a    de    novo   basis.    See In   re

Disciplinary Proceedings Against Jennings, 2011 WI 45, ¶39, 334

Wis. 2d 335,     801   N.W.2d 304;    In       re    Disciplinary     Proceedings

Against Gral, 2010 WI 14, ¶22, 323 Wis. 2d 280, 779 N.W.2d 168.

     ¶11   Supreme Court Rule 22.29(4)2 provides that a petition

for reinstatement must show all of the following:

     (a) The petitioner desires to have the petitioner's
     license reinstated.

     (b) The petitioner has not practiced law during the
     period of suspension or revocation.

     (c) The petitioner has complied fully with the terms of
     the order of suspension or revocation and will continue
     to comply with them until the petitioner's license is
     reinstated.

     (d) The petitioner has maintained competence and
     learning in the law by attendance at identified
     educational activities.

     (e) The petitioner's conduct since the suspension or
     revocation has been exemplary and above reproach.

     (f) The petitioner has a proper understanding of and
     attitude toward the standards that are imposed upon
     members of the bar and will act in conformity with the
     standards.

     (g) The petitioner can safely be recommended to the
     legal profession, the courts and the public as a person
     fit to be consulted by others and to represent them and
     otherwise act in matters of trust and confidence and in

     2 Effective January 1, 2021, substantial changes were made to
the rules pertaining to lawyer disciplinary procedures, including
the reinstatement rules, SCR 22.29 through 22.33. See S. Ct. Order
19-06, 19-07, 19-08, 19-09, 19-10, 19-11, and 19-12, 2020 WI
62 (issued June 30, 2020, eff. Jan. 1, 2021).        Because this
reinstatement proceeding commenced prior to January 1, 2021,
unless otherwise indicated, all references to the supreme court
rules will be to those in effect prior to January 1, 2021.

                                      5
                                                                       No.        2016AP48-D

      general to aid in the administration of justice as a
      member of the bar and as an officer of the courts.

      (h) The petitioner has fully complied                         with          the
      requirements set forth in SCR 22.26.

      (j) The petitioner's proposed use of the license if
      reinstated.

      (k) A full description of all of the petitioner's
      business activities during the period of suspension or
      revocation.
      ¶12    In addition, SCR 22.29(4m) requires the petitioner to

show that he or she has made restitution to or settled all claims
of persons injured or harmed by the petitioner's misconduct,

including reimbursement to the Wisconsin Lawyers' Fund for Client

Protection for all payments made from that fund, or explained the

failure or inability to do so.                 Supreme Court Rule 22.31(1)(c)

provides that an attorney seeking reinstatement has the burden of

demonstrating       all     of     the     above        requirements         by     clear,

satisfactory, and convincing evidence.

      ¶13    Supreme      Court   Rule     22.31(1)      also    provides         that   an

attorney seeking reinstatement must show by clear, satisfactory,

and convincing evidence that he or she has the moral character to
practice law; that his or her resumption of the practice of law

will not be detrimental to the administration of justice or

subversive to the public interest; and that he or she has complied

with SCR 22.26 and the terms of the underlying disciplinary order.

See SCR 22.31(1)(a), (b), and (d).

      ¶14 The referee's report focuses on what the referee viewed

as   the    most   significant         challenge    facing      Attorney      Hotvedt's
reinstatement:      whether       he    failed     to   satisfy    SCR   22.29(4)(b)

                                           6
                                                              No.     2016AP48-D

because he practiced law during his license suspension.                       The

relevant rule provides:

     An attorney whose license to practice law is suspended
     or revoked or who is suspended from the practice of law
     may not engage in this state in the practice of law or
     in any law work activity customarily done by law
     students, law clerks, or other paralegal personnel,
     except that the attorney may engage in law related work
     in this state for a commercial employer itself not
     engaged in the practice of law.
SCR 22.26(2)(Emphasis added.)

     ¶15   As    the   referee   explained,    "[t]here   has       been     some

question   about   whether   Mr.   Hotvedt    practiced   law       during    his

suspension, while working at Bear Real Estate Group."             The referee

examined   SCR   22.26(2),   noting   when    working   for   a     commercial

employer, "law related work" has been defined as work of a type

done by non-lawyers.      The referee considered In re Disciplinary

Proceedings Against Hyndman, 2002 WI 6, 249 Wis. 2d 650, 638

N.W.2d 293, a case concluding that a lawyer who represented his

commercial employer in small claims court and made appearances at

creditors' meetings in federal bankruptcy proceedings while under

revocation was working within the permitted scope of SCR 22.26(2).

The referee definitively concluded that given the specifics of

Attorney Hotvedt's employment he "has not engaged in the practice

of law."   The referee explains:

     First, Bear Real Estate Group is a commercial employer
     that is not itself engaged in the practice of law. Mr.
     Hotvedt was not involved in work that would normally be
     performed by a lawyer. In fact, both Mr. Mills and Mr.
     Hotvedt testified that Bear hired outside counsel for
     its legal work and spent a considerable amount of money
     on outside lawyers. (Tr. 24:19-27:11).

                                      7
                                                               No.   2016AP48-D

     Moreover, work that could be considered "law related"
     was work that is routinely performed by non-lawyers.
     (Tr. 22:2-24:14). For example, Mr. Mills testified that
     Mr. Hotvedt sometimes drafted various real estate
     documents or contracts, but that work was the same type
     of work that other non-lawyer employees at the company
     also performed. (Tr. 23:1-24:6). Mr. Hotvedt testified
     similarly, that there were other employees, who were not
     lawyers, performed the same type of law related work
     that he did, like drafting contracts, dealing with
     commercial leases, engaging in real estate transactions,
     and similar work. (Tr. 85:22-87:12).

     Finally, Mr. Hotvedt took many steps to ensure that he
     did not engage in the practice of law while at Bear,
     such as hiring counsel to help him determine what he
     could and could not do while working at Bear.     Also,
     after hearing the testimony presented the OLR has
     withdrawn any objection to Mr. Hotvedt's reinstatement.
     ¶16    We agree with the referee's conclusion that Attorney

Hotvedt's activities on behalf of his employer while he was under

suspension did not constitute the practice of law within the

proscription   of   SCR   22.26(2),       such   that   he   has   established

SCR 22.29(4)(b).    The testimony at the public hearing indicates

that Attorney Hotvedt consulted with counsel in deciding which

tasks to undertake, and that he did not hold himself out as lawyer.

A review of the testimony and statements in the post-hearing briefs

support the referee's finding and conclusion. As the OLR observed,

Attorney Hotvedt "took a conservative, measured approach to what

work he did for [BREG]."       Accordingly, we accept the referee's

findings and conclusions as they pertain to Attorney Hotvedt's

satisfactory compliance with SCR 22.29(4)(b).

     ¶17    Our task, however, is not merely to review, de novo, the

referee's    conclusion    that   Attorney        Hotvedt     satisfied    the
reinstatement requirements of SCR 22.29(4)(b).               Rather, we must

                                      8
                                                               No.   2016AP48-D

consider more broadly whether Attorney Hotvedt met his burden with

respect to all the applicable reinstatement criteria.                In this,

our review is hindered by a very cursory report, which lacks

detailed factual findings and conclusions regarding the various

other reinstatement criteria.       The referee simply lists bare bones

findings and conclusions, without analysis, and announces that

reinstatement is appropriate.         However, by parsing through the

record before us we are able to discern that Attorney Hotvedt has

satisfactorily met the reinstatement criteria delineated above,

thereby avoiding the costly delay that a remand for further

proceedings would entail.

     ¶18    Several of the reinstatement criteria are not disputed.

Attorney Hotvedt's reinstatement petition states that he desires

to have his license reinstated, SCR 22.29(a).            See also Referee

Finding    2.   The   record   indicates     that   Attorney     Hotvedt   has

maintained competence and learning in the law by attendance at

identified      educational    activities,    SCR   22.29(d).3       Attorney

Hotvedt's reinstatement petition indicates that, if reinstated, he
intends to continue his employment with BREG, thereby satisfying

SCR 22.29(4)(j).      The reinstatement petition recounted Attorney

Hotvedt's business activities during his period of suspension, SCR

22.29(4)(k), a factor that was thoroughly explored as it is

     3 In his reinstatement petition Attorney Hotvedt itemized the
continuing legal education classes he has completed. Pet. at 5.
By memorandum dated August 12, 2020, the Board of Bar Examiners
confirmed that Attorney Hotvedt had attended sufficient seminars
and is in compliance with the court's CLE and EPR requirements.

                                     9
                                                          No.    2016AP48-D

ancillary to the question of whether he practiced law during his

license suspension.    See also Referee Findings 9-10.4         The record

supports the referee's finding that Attorney Hotvedt has made

restitution to or settled all claims of persons injured or harmed

by his misconduct, or explained the failure or inability to do so,

SCR 22.29(4m); see also Referee Finding 11.5

     ¶19   Determining whether Attorney Hotvedt established the

remaining criteria requires some inferences on our part, but we

deem them permissible inferences based on the available facts of

record.    For example, the referee found that Attorney Hotvedt

complied with the terms of the order of revocation and will

continue to comply with them until his license is reinstated, as

required by SCR 22.29(4)(c).      See Referee Finding 4.        Similarly,

the referee determined that Attorney Hotvedt has complied with

SCR 22.29(4)(h).      See   Referee    Finding   5.   Presumably,    these

determinations derive from the referee's reasoned conclusion that

Attorney Hotvedt did not engage in unauthorized practice of law,

so we accept them.
     ¶20   The basis for the referee's remaining conclusions is

less clear.   The referee determined, without explanation, that

Attorney Hotvedt's conduct since the suspension has been exemplary

     4 If reinstated, Attorney Hotvedt intends to use his license
to practice law as an adjunct to his activities for his current
employer, BREG.
     5 The record indicates that Attorney Hotvedt has acknowledged
that his misconduct resulted in financial loss to his former law
firm, and avers that he had resolved that loss before his license
suspension, by a mutual settlement and release.

                                      10
                                                                   No.   2016AP48-D

and above reproach, as required by SCR 22.29(4)(e), see Referee

Finding 6; that he has a proper understanding of and attitude

towards the standards that are imposed upon members of the bar and

will       act    in   conformity   with    the   standards   as    required    by

SCR 22.29(4)(f), see Referee Finding 7; and that he can be safely

recommended to the legal profession, the courts and the public as

a person fit to be consulted by others and to represent them and

otherwise act in matters of trust and confidence and in general to

aid in the administration of justice as a member of the bar and as

an officer of the courts, SCR 22.29(4)(g), see Referee Finding 8.

The referee did not explicitly find or conclude that Attorney

Hotvedt has the moral character to practice law, as required by

SCR 22.31(1)(a), although the referee's assessment that he has

satisfied this factor is implicit in her other                     findings and

conclusions and given the evidence in the record.6

       ¶21       In concluding these factors are indeed satisfied, we are

guided by positive character references submitted by Attorney

Hotvedt;7 by statements made by witnesses regarding his character

       During the evidentiary hearing, counsel questioned Mr.
       6

Stephen R. Mills, Attorney Hotvedt's employer, and Attorney Todd
A. Terry, his colleague, as to whether they believe that Attorney
Hotvedt has the moral character to practice law.             Both
unequivocally opined that he does.

       Attorney J. Michael McTernan commented favorably on Attorney
       7

Hotvedt's "high moral character." Attorney Thomas M. Santarelli
stated that he believes Attorney Hotvedt is "honest" and "ethical"
and states he has never observed him "compromise moral character
for anything." Attorney Katherine R. Rist states that she believes
Attorney Hotvedt "has sound character and fitness to practice law."

                                           11
                                                                         No.    2016AP48-D

during      the    evidentiary     hearing;8          by    statements    in     Attorney

Hotvedt's         response   to    the        OLR     reinstatement      questionnaire

acknowledging        that    his    previous          misconduct    was        wrong   and

expressing remorse; by statements Attorney Hotvedt made during the

evidentiary hearing;9 by the OLR's statements confirming that it

uncovered, "no direct objective evidence that Attorney Hotvedt's

resumption of the practice of law would be detrimental to the

administration of justice or subversive of the public interest";

and, finally, the OLR's post-hearing brief, confirming that it

does not oppose his reinstatement.                   Therefore, on balance, we are

persuaded that Attorney Hotvedt is entitled to reinstatement of

his license to practice law in Wisconsin.

      ¶22     With     respect     to    the        costs   of   this    reinstatement

proceeding, it is our general practice to assess the full costs of

the       proceeding     against        the        petitioning     attorney.           See

SCR 22.24(1m).         The OLR's statement of costs indicates that the

costs of this proceeding, as of May 5, 2021, were $4,867.82.

Attorney Hotvedt has not filed an objection to the OLR's statement
of costs, and we find no basis to depart from our general policy

      8Mr. Stephen R. Mills, Attorney Hotvedt's employer, and
Attorney Todd D. Terry both testified favorably as to Attorney
Hotvedt's conduct since his suspension, his moral character, and
as to whether Attorney Hotvedt can be safely recommended to the
legal profession, the courts, and the public as a person fit to be
consulted and to act in matters of trust and confidence.
      9Attorney Hotvedt testified about his volunteer efforts in
the community and testified that he has worked very hard to re-
establish his character and that he intends to "continue to do
everything in my power to be . . . a good lawyer . . . and
somebody that the [State] bar can be proud of despite my mistakes."

                                              12
                                                              No.    2016AP48-D

in this matter.        Accordingly, we impose the full costs of the

reinstatement proceeding on Attorney Hotvedt.

       ¶23   IT IS ORDERED that the license of John Hotvedt to

practice law in Wisconsin is reinstated, effective the date of

this order.

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

this   order,   John   Hotvedt   shall   pay   to   the   Office    of   Lawyer

Regulation the costs of this proceeding, which are $4,867.82 as of

May 5, 2021, or enter into a payment agreement plan with the Office

of Lawyer Regulation for the full payment of costs over a period

of time.

                                    13
    No.   2016AP48-D

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