Court Opinion

ID: 5128720
Source: CourtListenerOpinion
Date Created: 2021-11-23 15:19:43.240476+00
Date Added: 2024-06-11T08:23:08.122716
License: Public Domain

2021 WI 84

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:              2020AP201-D

COMPLETE TITLE:        In the Matter of Disciplinary Proceedings
                       Against Walter W. Stern, III, Attorney at Law:

                       Office of Lawyer Regulation,
                                 Complainant,
                            v.
                       Walter W. Stern, III,
                                 Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST STERN

OPINION FILED:         November 23, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
Per Curiam.
NOT PARTICIPATING:

ATTORNEYS:
                                                                      2021 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.   2020AP201-D

STATE OF WISCONSIN                          :              IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Walter W. Stern, III,
Attorney at Law:

Office of Lawyer Regulation,
                                                                    FILED
               Complainant,                                    NOV 23, 2021

          v.                                                       Sheila T. Reiff
                                                               Clerk of Supreme Court

Walter W. Stern, III,

               Respondent.

      ATTORNEY      disciplinary    proceeding.        Attorney's         license

suspended.

      ¶1       PER CURIAM.    We review a report filed by Referee Jean

A. DiMotto, recommending the court suspend Attorney Walter W.

Stern, III's license to practice law for a period of 45 days for

three counts of professional misconduct.          No appeal has been filed

so we consider this matter pursuant to Supreme Court Rule (SCR)

22.17(2).1

      1   SCR 22.17(2) provides:
                                                                       No.      2020AP201-D

      ¶2      We approve and adopt the referee's findings of fact and

conclusions of law.         We conclude that the seriousness of Attorney

Stern's misconduct warrants a 60-day license suspension and we

impose the full costs of this proceeding on Attorney Stern.                              The

OLR did not seek restitution in this matter and no restitution is

ordered.

      ¶3      Attorney Stern has been licensed to practice law in

Wisconsin since 1974 and has been the subject of five previous

disciplinary     proceedings.          In       August   of    1988,      the    Board    of

Attorneys Professional Responsibility (BAPR), the predecessor to

the   OLR,    imposed   a    private    reprimand         on   Attorney         Stern    for

professional misconduct consisting of communicating on the subject

of the representation with a party he knew to be represented by a

lawyer without the consent of that lawyer.

      ¶4      In September of 1992, BAPR publicly reprimanded Attorney

Stern   for    professional     misconduct          consisting       of    advancing       a

factual position without a basis; failing to maintain the respect

due   courts    of   justice    and     judicial         officers;     violating         the
Attorney's Oath; and engaging in offensive personality.                            Public

Reprimand of Walter W. Stern, III, No. 1992-11 (electronic copy

           If no appeal is filed timely, the supreme court
      shall review the referee's report; adopt, reject or
      modify the referee's findings and conclusions or remand
      the matter to the referee for additional findings; and
      determine and impose appropriate discipline. The court,
      on its own motion, may order the parties to file briefs
      in the matter.

                                            2
                                                                         No.       2020AP201-D

available                                                                                  at

https://compendium.wicourts.gov/app/raw/000305.html).

     ¶5        In November of 1993, Attorney Stern consented to a

private    reprimand       for     professional        misconduct        consisting        of

failing to pay a third-party lien from settlement proceeds after

receiving notice of the lien.              BAPR Private Reprimand, No. 1993-25

(electronic           copy         available           at      https://compendium.

wicourts.gov/app/raw/000111.html).

     ¶6        In March of 2008, Attorney Stern consented to a private

reprimand for professional misconduct consisting of committing

criminal       acts    that       reflected      adversely         on        his    honesty,

trustworthiness, or fitness as a lawyer.                     The discipline was a

result of Attorney Stern pleading no contest to a second and third

offense of operating a motor vehicle while under the influence.

OLR Private Reprimand, No. 2008-08.

     ¶7        In 2013, Attorney Stern's license was suspended for two

years    for    professional       misconduct         consisting        of    engaging     in

conduct     resulting        in    his    federal      criminal         conviction        for
conspiring      to    commit      money    laundering.        In        re    Disciplinary

Proceedings      Against      Stern,      2013   WI    46,   347    Wis. 2d 552,          830

N.W.2d 674.      Two months later, his conviction was reversed by the

United States Circuit Court for the Seventh Circuit.                                  He was

released from prison and pled guilty to misdemeanor contempt of

court.    Attorney Stern's license to practice law was reinstated on

February 4, 2016.        In re Reinstatement of Stern, 2016 WI 6, 366

Wis. 2d 431, 847 N.W.2d 93.

                                            3
                                                                  No.   2020AP201-D

       ¶8    On January 30, 2020, the OLR filed a complaint alleging

that   Attorney     Stern   committed       three   counts       of   professional

misconduct involving his representation of two clients.                    The OLR

later amended its complaint to add a fourth count, alleging that

Attorney Stern violated SCR 20:1.18(b) by having a discussion with

a prospective client and thereafter by using or revealing to other

parties information he learned in the consultation.                   However, the

OLR dismissed this fourth count on March 22, 2021.

       ¶9    In April 2021, Attorney Stern executed a no contest plea

to the three remaining counts of misconduct alleged in the amended

complaint and the parties executed a stipulation that added some

additional context for the allegations.             The parties disputed the

appropriate    sanction.       The   OLR    recommended      a    90-day   license

suspension and Attorney Stern sought a public reprimand.

       ¶10   On August 6, 2021, the referee filed findings of fact,

conclusions of law, and a recommendation.                    She accepted the

parties' stipulation and Attorney Stern's no contest plea and,

based on admissions in Attorney Stern's Answer to the Amended
Complaint as well as the stipulation and no contest plea, she

determined that there was clear, satisfactory, and convincing

evidence     that   Attorney   Stern    violated      the    three      counts   of

professional conduct, as alleged.             The referee recommended this

court suspend Attorney Stern's license to practice law for 45 days

and impose full costs upon him.

       ¶11   We will affirm a referee's findings of fact unless they

are clearly erroneous; conclusions of law are reviewed de novo.
See In re Disciplinary Proceedings Against Eisenberg, 2004 WI 14,
                                        4
                                                               No.   2020AP201-D

¶5, 269 Wis. 2d 43, 675 N.W.2d 747.            This court is free to impose

whatever      discipline    it    deems    appropriate,    regardless   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.

       ¶12    The first two counts of misconduct pertain to Attorney

Stern's representation of F.J.            Attorney Stern first met with F.J.

and F.J.'s mother (who had a power of attorney for F.J.) on

February 11, 2016, shortly after his law license was reinstated

following his 2013 license suspension.              F.J. was seeking legal

representation in a pending child support action, a dog bite injury

case, and regarding potential claims against a neighbor and the

Wauwatosa Police Department.              As Attorney Stern was aware, F.J.

suffers      some   cognitive    challenges    resulting    from   injuries    he

sustained when he was the victim of a serious beating several years

ago.

       ¶13    Daniel Storm, f/k/a Daniel Slaughter, an associate of

Attorney Stern, also attended this meeting.           Daniel Storm had been

working as an investigator for Attorney Stern for several months
at the time of this meeting, including while Attorney Stern's law

license was suspended.          The parties stipulated that Attorney Stern

believed that F.J. had a prior, lengthy relationship with Daniel

Storm, because Storm had posted bond for F.J. when F.J. was held

in the county jail.        Attorney Stern also believed that F.J. and/or

his mother acknowledged that they owed Storm $17,000 for work that

Storm had performed on F.J.'s behalf.

       ¶14    During that meeting, F.J. agreed to pay $4,000 in fees
for representation in each of the child support and dog bite cases.
                                           5
                                                         No.     2020AP201-D

At the meeting, Attorney Stern provided F.J. and his mother with

a document entitled "Promissory Note With Payment on Demand" which

stated that F.J. was to pay Attorney Stern $25,000 by February 29,

2016 toward the child support and dog bite matters ($8,000) and

for the work performed by Storm ($17,000).         Attorney Stern also

asked F.J. and his mother to sign an "Irrevocable Assignment" which

purported to give Attorney Stern the right to ask for $20,000 upon

demand toward the Promissory Note.

     ¶15   Critically,   Attorney   Stern   did   not   notify    F.J.   in

writing of the desirability of seeking independent counsel, give

F.J. a reasonable opportunity to seek the advice of independent

counsel on the transaction, or obtain informed written consent

from F.J. regarding the essential terms of the transaction and

Attorney Stern's role in the transaction and whether Attorney Stern

was representing F.J. in the transaction.

     ¶16   F.J. and his mother signed the Promissory Note and the

"Assignment" that day. F.J. also signed a contingent fee agreement

for his representation for potential claims against his neighbor,
as well as a contingent fee agreement for his potential claims

against the Wauwatosa Police Department.

     ¶17   The OLR alleged, the parties stipulated, and the referee

concluded that by having F.J. and his mother sign a promissory

note and assignment for $25,000 without notifying them in writing

of the desirability of seeking, and giving them a reasonable

opportunity to seek, the advice of independent counsel, and without

informing them and obtaining written consent from them about the
essential terms of the transaction and Attorney Stern's role in
                                    6
                                                       No.   2020AP201-D

the transaction including whether he was representing them in the

transaction, Attorney Stern violated SCR 20:1.8(a).2

     ¶18    On February 16, 2016, Attorney Stern appeared for F.J.

in the child support, termination of parental rights and adoption

case in Winnebago County Circuit Court and moved the court to

appoint a guardian ad litem for F.J. to provide the court with

information about F.J.'s competency.       Eventually, the court also

approved a stipulation allowing Attorney Stern to expend $2,000 of

funds retained in his trust account to hire Dr. Terry Bruett to

conduct a psychological evaluation of F.J.

     ¶19    There was a significant delay in paying Dr. Bruett for

the services he provided.          Accordingly, the OLR alleged, the

parties stipulated, and the referee concluded that, by failing to

     2   SCR 20:1.8(a) 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 in a manner that can be reasonably understood by
     the client;

          (2) the client is advised in writing of the
     desirability of seeking and is given a reasonable
     opportunity to seek the advice of independent legal
     counsel on the transaction; and

          (3) the client gives informed consent, in a writing
     signed by the client, to the essential terms of the
     transaction and the lawyer's role in the transaction,
     including whether the lawyer is representing the client
     in the transaction.

                                     7
                                                     No.   2020AP201-D

promptly deliver $2,000 directly to Dr. Bruett from funds held in

trust for services rendered by Dr. Bruett, Attorney Stern violated

SCR 20:1.15(e)(l).3    It is not disputed that Dr. Bruett has since

been paid in full.

     ¶20    The third count of professional misconduct relates to

Attorney Stern's actions in the matter of the Estate of T.T.       In

April 2016, T.T. died while in custody at the Milwaukee County

jail.     T.T. was survived by two adult sons, and other family

members.    A Seattle law firm agreed to provide the family with

legal guidance and subsequently contacted local Milwaukee counsel

to assist them.    The family was advised to establish an estate for

T.T. so the estate could pursue claims against Milwaukee County.

     ¶21    Initially, T.R., was the family's main contact person

and she offered to be the estate's representative.    Local counsel

prepared the estate paperwork, including a Petition for Special

Administration naming T.R. as Special Administrator of the T.T.

Estate.    T.T.'s adult children both consented to this petition and

T.R. was appointed Special Administrator.     On November 25, 2016,

     3   SCR 20:1.15(e)(1) provides:

          Upon receiving funds or other property in which a
     client has an interest, or in which a 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.

                                  8
                                                                   No.   2020AP201-D

T.R. signed a fee agreement to have the Seattle firm represent the

estate in potential civil claims.

     ¶22    Meanwhile,     T.T.'s    adult    sons   had    elected      to   retain

Attorney Stern.     On January 3, 2017, Attorney Stern wrote to the

Seattle firm, advising them that T.T.'s adult son had retained

Attorney Stern "to represent him and [T.T.'s] estate in proposed

litigation against Milwaukee County and those responsible for this

tragic event."    He received no reply.        On January 5, 2017, Attorney

Stern wrote a similar letter to local Wisconsin counsel.

     ¶23    On January 9, 2017, one of T.T.'s adult sons advised

local counsel that he intended to have T.R. removed as Special

Administrator. On January 12, 2017, local counsel emailed Attorney

Stern informing Attorney Stern that T.R. was still the Estate's

Special Administrator, and that she had retained counsel.

     ¶24    On   January    12,     2017,    Attorney      Stern    emailed     T.R.

directly, indicating that he intended to have her replaced as

Special Administrator.       On January 14, 2017, Attorney Stern again

emailed T.R. directly about the T.T. matter.
     ¶25    The OLR alleged, the parties stipulated, and the referee

concluded, that by communicating directly with T.R. concerning the

T.T. matter, Attorney Stern violated SCR 20:4.2(a).4

     4   SCR 20:4.2(a) provides:

          In representing a client, a lawyer shall not
     communicate about the subject of the representation with
     a person the lawyer knows to be represented by another
     lawyer in the matter, unless the lawyer has the consent
     of the other lawyer or is authorized to do so by law or
     a court order.

                                        9
                                                                   No.   2020AP201-D

     ¶26    Having accepted the stipulation and no contest plea, the

primary issue for the referee was the appropriate sanction for

Attorney   Stern's     admitted    misconduct.     Again,      Attorney       Stern

sought a public reprimand while the OLR sought a 90-day license

suspension.

     ¶27    As aggravating factors, the OLR pointed to Attorney

Stern's    prior    disciplinary    history,5    the    multiple         misconduct

violations,    and    F.J.'s   vulnerability.          The   OLR     acknowledged

several mitigating factors including an absence of a dishonest

motive,    Attorney     Stern's    cooperation    with       the     disciplinary

process, and his remorse.

     ¶28    In addition, the parties' stipulation indicates that

Attorney Stern's associate, Daniel Storm, played a role in the

F.J. matter.       Attorney Stern says that before the initial meeting

with F.J., Storm had already prepared the documents to be given to

F.J. and he insisted those documents were essential.                      Attorney

Stern explains that he         added the   handwritten notes              to those

documents (indicating that the Promissory Note would be replaced
or followed by written retainer agreements) and this, in fact, was

     5 Attorney Stern argues that the 2013 disciplinary matter was
predicated on a criminal conviction that was subsequently reversed
on appeal, so he maintains that "there should have been no license
suspension." The referee was not persuaded, noting correctly that
Attorney Stern stipulated to that two-year license suspension and
did not appeal the referee's report and recommendation.
Additionally, the standards and burden of proof for lawyer
misconduct are not synonymous with those required for a criminal
conviction.

                                      10
                                                           No.   2020AP201-D

done.     Attorney Stern never executed the Promissory Note and it

was not enforced.

      ¶29   In addition, when Attorney Stern indicated he would pay

Dr. Bruett, Storm apparently "coaxed and influenced" Attorney

Stern into allowing him to act as agent for the payment.          Attorney

Stern gave Storm the $2,000 payment from his trust account but

Storm made only two partial payments to Dr. Bruett totaling only

60 percent of the amount owed to Dr. Bruett.        Attorney Stern later

paid Dr. Bruett the balance from his personal funds.

      ¶30   The referee acknowledged that Storm may have exercised

a coercive influence on Attorney Stern, but emphasized that it was

nonetheless    Attorney   Stern      who   impermissibly   presented    the

Promissory Note and Irrevocable Assignment to F.J. and his mother

for     signature,   without   the    required   written   explanations.6

However, the referee noted a number of mitigating factors, stating:

"Attorney Stern did ameliorate the situation by his handwritten

note on the last page of the Promissory Note, and his declination

to sign the Note."     In addition, Attorney Stern did follow through
and provided F.J. with the appropriate documents for establishing

their attorney-client relationship, and shortly after Attorney

Stern's initial meeting with F.J., Attorney Stern asked the circuit

court to appoint a guardian ad litem for F.J. and requested the

      6In his response brief, Attorney Stern states that "Daniel
Storm . . . turned out to not only be untrustworthy, but
dangerous." The referee's report quotes at some length from the
response brief, which expands on this assertion. These assertions
are not supported by record citations or specific findings made in
this matter and we will not discuss them further.

                                      11
                                                                    No.    2020AP201-D

psychological evaluation that apparently helped resolve that case.

The referee also considered it "strongly mitigating" that Attorney

Stern provided pro bono representation to F.J. in several other

matters and she acknowledged that "Attorney Stern has absolutely

expressed his sincere remorse for his errors."

      ¶31     However, the referee concluded that a public reprimand

would    be    insufficient        to    impress      upon    Attorney    Stern   the

seriousness of his misconduct.                  The referee specifically noted

that although his prior incidents of misconduct were somewhat

remote in time, this is now the second time that Attorney Stern

has been disciplined for communicating with a party he knew to be

represented by a lawyer without the consent of the person's lawyer.

      ¶32     Still, the referee was not persuaded that a 90-day

suspension was necessary, explaining that the numerous mitigating

factors dictated a shorter suspension.                  The referee opined that

the cases cited by the OLR in support of a 90-day suspension

involved more serious misconduct than that committed by Attorney

Stern.        See,    e.g.,   In    re    Disciplinary        Proceedings     Against
Alfredson, 2019 WI 17, 385 Wis. 2d 565, 923 N.W.2d 869 (imposing

90-day suspension for, inter alia, failing to hold client funds in

trust, failing to promptly deliver funds, converting client funds,

and   failure    to    cooperate        with    the   OLR);   In   re    Disciplinary

Proceedings Against Brey, 171 Wis. 2d 65, 490 N.W.2d 15 (1992)

(imposing 60-day suspension on district attorney with no prior

discipline for meeting with a represented defendant in jail without

his lawyer and discussing a plea deal with him then misrepresenting
his conduct to the OLR); Public Reprimand of Stephen W. Carpenter,
                                           12
                                                                      No.    2020AP201-D

No.          1992-9           (electronic            copy           available        at

https://compendium.wicourts.gov/app/raw/

000303.html)        (attorney       met   with   inmate      three    times     without

counsel's consent). On balance, the referee recommended this court

suspend Attorney Stern's license to practice law for 45 days and

that he be required to pay the full costs of this disciplinary

proceeding.

       ¶33    There is no showing that any of the referee's findings

of fact, based on the parties' stipulation, are clearly erroneous,

so    we    adopt    them.     We    also    agree   with     the    referee's    legal

conclusions that Attorney Stern violated the Supreme Court Rules

noted above and that Attorney Stern's misconduct merits a license

suspension.         The cases cited by Attorney Stern in support of his

request for a public reprimand are not persuasive. Several involve

lawyers who had no previous discipline.                     See In re Disciplinary

Proceedings Against Preloznik, 169 Wis. 2d 137, 485 N.W.2d 249

(1992)      (imposing    public      reprimand   on     attorney      not    previously

disciplined who entered into a business transaction with a client
with       potentially       differing      interests       without    the    client's

consent); In re Disciplinary Proceedings Against Luther, 2017 WI

98, 378 Wis. 2d 330, 903 N.W.2d 791 (imposing public reprimand on

attorney with no previous discipline for her role in in a fee based

debt settlement plan).

       ¶34    With respect to the appropriate sanction, after careful

consideration, we agree with the referee's reasoning, but while

the referee recommended a 45-day license suspension, a 60-day
license suspension is, generally, our minimum suspension length.
                                            13
                                                                No.   2020AP201-D

We are not persuaded that we should diverge from this practice in

this case.      See In re Disciplinary Proceedings Against Grady, 188

Wis. 2d 98, 108–09, 523 N.W.2d 564 (1994); In re Disciplinary

Proceedings Against Gray, 2018 WI 39, ¶14, 381 Wis. 2d 56, 910

N.W.2d 923.        This   is     Attorney   Stern's     sixth     disciplinary

proceeding and it is concerning that Attorney Stern committed the

initial misconduct in the F.J. matter a mere week after his law

license was reinstated.        We determine that a 60-day suspension is

appropriate discipline.          As is our normal practice, we deem it

appropriate to impose the full costs of this proceeding on Attorney

Stern.

     ¶35   IT IS ORDERED that the license of Walter W. Stern, III,

to practice law in Wisconsin is suspended for a period of 60 days,

effective January 4, 2022.

     ¶36   IT IS FURTHER ORDERED that Walter W. Stern, III, shall

comply with the provisions of SCR 22.26 concerning the duties of

an attorney whose license to practice law has been suspended.

     ¶37   IT     IS   FURTHER    ORDERED   that      compliance      with   all
conditions of this order is required for reinstatement.                      See

SCR 22.29(4)(c).

     ¶38   IT IS FURTHER ORDERED that no restitution is imposed

upon Walter W. Stern, III, in this matter.

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

this order, Walter W. Stern, III, shall pay to the Office of Lawyer

Regulation the full costs of this proceeding, which are $5,515.41

as of August 27, 2021.

                                      14
    No.   2020AP201-D

1