2018 WI 58
SUPREME COURT OF WISCONSIN CASE NO.: 2011AP48-D & 2015AP275-D COMPLETE TITLE: In the Matter of Disciplinary Proceedings Against James M. Schoenecker, Attorney at Law:
Office of Lawyer Regulation, Complainant, v. James M. Schoenecker, Respondent. ------------------------------------------------ In the Matter of Disciplinary Proceedings Against James M. Schoenecker, Attorney at Law:
Office of Lawyer Regulation, Complainant-Respondent, v. James M. Schoenecker, Respondent-Appellant.
ON THE PETITION FOR REINSTATEMENT OF SCHOENECKER
OPINION FILED: May 25, 2018 SUBMITTED ON BRIEFS: ORAL ARGUMENT: March 12, 2018
SOURCE OF APPEAL: COURT: COUNTY: JUDGE:
JUSTICES: CONCURRED: ABRAHAMSON, J., concurs (opinion filed). ZIEGLER, J., concurs, joined by ABRAHAMSON, J., (opinion filed). DISSENTED: NOT PARTICIPATING:
ATTORNEYS:
For the respondent-appellant, there were briefs filed by Richard J. Cayo, Stacie H. Rosenzweig, and Halling & Cayo, S.C., Milwaukee. There was an oral argument by Richard J. Cayo. For the complainant-respondent, there was a brief filed by Julie M. Spoke, William J. Weigel, and Office of Lawyer Regulation, Madison. There was an oral argument by William J. Weigel.
2 2018 WI 58 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. Nos. 2011AP48-D, 2015AP275-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings Against James M. Schoenecker, Attorney at Law:
Office of Lawyer Regulation, FILED Complainant-Respondent, May 25, 2018 v. Sheila T. Reiff Clerk of Supreme Court James M. Schoenecker,
Respondent-Appellant.
ATTORNEY reinstatement proceeding. Reinstatement denied.
¶1 PER CURIAM. Attorney James M. Schoenecker has
appealed Referee James W. Mohr Jr.'s recommendation that
Attorney Schoenecker's petition for the reinstatement of his
license to practice law in Wisconsin be denied. Upon careful
review, we agree with the referee that Attorney Schoenecker has
failed to meet his burden of proof to establish the requirements
for reinstatement at this time. Accordingly, we accept the
referee's recommendation that the petition for reinstatement be denied. However, we determine that Attorney Schoenecker can Nos. 2011AP48-D, 2015AP275-D
again petition for reinstatement six months after the date of
this opinion. As is our usual practice, we further conclude
that Attorney Schoenecker should be required to pay the full
costs of this reinstatement proceeding, which are $6,809.66 as
of March 23, 2018.
¶2 Attorney Schoenecker was admitted to practice law in
Wisconsin in 2004. He is a graduate of Boston College and
Columbia Law School. He practiced briefly in New York,
practiced at Quarles & Brady in Milwaukee for a time, and then
went to a small law firm in Delavan called the Clair Law
Offices. In 2011, Attorney Schoenecker's license was suspended
for three years. See In re Disciplinary Proceedings Against
Schoenecker, 2011 WI 76, 336 Wis. 2d 253, 804 N.W.2d 686. Much
of the misconduct in that case arose out of Attorney
Schoenecker's personal and professional relationship with his
former fiancé, M.F. In December 2007, Attorney Schoenecker and
M.F. opened a joint checking account. M.F. also obtained a home
equity line of credit and made a loan of $48,500 to Attorney Schoenecker. Attorney Schoenecker executed a promissory note
whereby he promised to repay the loan with interest. Two days
after making the loan, M.F. learned that Attorney Schoenecker
had made cash withdrawals from her checking account at a casino,
resulting in a $1,500 negative balance in her account.
Thereafter, M.F. closed the joint checking account and ended her
engagement to Attorney Schoenecker.
¶3 Attorney Schoenecker repaid some of the loan balance. At some point, M.F. filed a collection action against Attorney 2 Nos. 2011AP48-D, 2015AP275-D
Schoenecker. The parties reached a settlement and Attorney
Schoenecker paid M.F. some $32,000 as part of a full resolution
of the financial issues between them.
¶4 In December 2008 Attorney Schoenecker used M.F.'s
personal information to enter her business account without her
permission and make checks payable to himself. He was able to
cash a $950 check, but an attempt to cash two more checks was
apparently unsuccessful. As a result of those actions, Attorney
Schoenecker was charged in two separate criminal proceedings.
In a Walworth County case, he pled guilty to one felony count of
identity theft and was placed on two years of probation and
ordered to make restitution and pay court costs. In a separate
Waukesha County case, he pled guilty to a misdemeanor charge of
theft-moveable property. The Waukesha court imposed and stayed
a sentence of four months in jail and placed Attorney
Schoenecker on probation for one year. He was also required to
pay M.F. restitution as well as pay court costs.
¶5 In 2008, Attorney Schoenecker became an associate at the Clair Law Offices. He informed the law firm he was
representing M.F., so she was considered a client of the firm.
Contrary to Clair Law Offices' policy, Attorney Schoenecker sent
invoices to M.F. in the fall of 2008 showing that she owed over
$13,000. A substantial number of the entries on the invoices
were fraudulent.
¶6 In addition to the misconduct involving M.F., Attorney
Schoenecker also set up his own separate law firm on the side
3 Nos. 2011AP48-D, 2015AP275-D
while he was working as an associate attorney for the Clair Law
Office and did not inform the firm of this fact.
¶7 The final part of Attorney Schoenecker's misconduct
giving rise to the three-year suspension involved fraudulent
statements on his own personal bankruptcy proceeding.
¶8 In 2016, Attorney Schoenecker received an additional
one-year license suspension. See In re Disciplinary Proceedings
Against Schoenecker (Schoenecker II), 2016 WI 27, 368
Wis. 2d 57, 878 N.W.2d 163. The misconduct in that case
concerned his involvement in a business partnership he entered
into in 2012 with M.M. and T.H. The men established a limited
liability company called GameMaster, LLC. T.H. gave Attorney
Schoenecker $25,000 in cash as his capital contribution, and
M.M. contributed $20,000. Instead of immediately depositing
T.H.'s $25,000 into a GameMaster account, Attorney Schoenecker
deposited the bulk of the money into his own personal checking
account. He also used company funds to pay his personal credit
card bills without preapproval from his partners, and he withdrew funds from company accounts in order to gamble at
Potawatomi Casino in Milwaukee.
¶9 Attorney Schoenecker filed a petition for the
reinstatement of his law license on January 30, 2017. The Board
of Bar Examiners filed a report saying Attorney Schoenecker had
complied with all continuing legal education requirements for
reinstatement. The Office of Lawyer Regulation (OLR)
recommended against reinstatement. A public hearing was held before Referee Mohr on July 18, 2017. 4 Nos. 2011AP48-D, 2015AP275-D
¶10 Attorney Schoenecker testified at the hearing that he
is employed by a landscape maintenance, snow removal, and
condominium property maintenance company. The owner of the
company submitted a letter saying that he would feel comfortable
with Attorney Schoenecker returning to the legal profession and
that he trusts Attorney Schoenecker with company trucks and
credit cards.
¶11 Attorney Schoenecker also testified that during the
term of his suspension he has volunteered at his church, set up
a chess club at a middle school, and assisted elderly neighbors
with household tasks.
¶12 Attorney Schoenecker testified that in 2015 he started
seeing a mental health professional who specializes in gambling
addictions, James Harrison. Attorney Schoenecker said with Mr.
Harrison's help he has been able to abstain from gambling.
Attorney Schoenecker also explained that he banned himself from
the Potawatomi Casino, and he also attends Gamblers Anonymous
meetings. Mr. Harrison wrote a letter saying "if [Attorney Schoenecker] continues with his treatment plan, utilizes his
support system, makes the changes that are necessary in his
life, and continues to act and live responsibly, the chance for
the situation to re-occur is minimal." Mr. Harrison went on to
state that in his professional opinion, if Attorney
Schoenecker's law license were reinstated, "he would continue to
perform his duties as an attorney in an extremely professional
manner. His prognosis is excellent."
5 Nos. 2011AP48-D, 2015AP275-D
¶13 T.H., one of the GameMaster partners, testified
against Attorney Schoenecker's reinstatement petition. He said
he did not feel his dispute with Attorney Schoenecker was
resolved fairly, and he said he did not believe Attorney
Schoenecker has the moral character to practice law in
Wisconsin. T.H. said, "In my personal opinion anyone who can
treat a lifelong friend the way I have been treated, you can get
as much as help as you want for gambling problems, that doesn't
change the core person in my opinion."
¶14 Edward Thompson, an attorney at Clair Law Offices,
also testified in opposition to Attorney Schoenecker's
reinstatement. He said Attorney Schoenecker was employed at the
law offices in 2008 and 2009. When asked if Attorney
Schoenecker would be trustworthy and have the moral character to
practice law after having been treated for a gambling addiction,
Attorney Thompson replied:
I have some concern about that in regard to how he treated his employment relationship with Clair Law Offices, how he treated his ex-fiancée, and then how I read – with regard to the bankruptcy filings and with regard to GameMaster, the gentleman who was here earlier, I have some concerns that he's breaching trust with people he is closest to. So yeah, I have a concern whether he would do that with clients. ¶15 M.F. also testified in opposition to Attorney
Schoenecker's reinstatement. She said she was reimbursed the
money that Attorney Schoenecker took from her, but she said she
did not believe he had ever expressed sincere or genuine remorse for his misconduct. When asked if, assuming Attorney
6 Nos. 2011AP48-D, 2015AP275-D
Schoenecker has been treated for a gambling problem, she would
deem him to be trustworthy and having the moral character to
practice law, her response was "Certainly not . . . I'm scared
for the public if he keeps his law license." She went on to
say:
He's an opportunist. He's shown to be an opportunist. [He] will take advantage at any point he can. He has taken advantage of his next of kin, myself being his fiancée, two best friends, and the gentleman from Clair Law Office. ¶16 On cross-examination, M.F. said that the opinions she
expressed came from "information or experiences I had over ten
years ago."
¶17 Attorney Schoenecker's father and his sister both
testified on Attorney Schoenecker's behalf. Attorney
Schoenecker's sister said he has overcome his gambling
addiction. A childhood friend of Attorney Schoenecker's also
testified on Attorney Schoenecker's behalf. In addition,
Attorney Schoenecker submitted a number of letters from
acquaintances who supported his reinstatement petition.
¶18 The referee issued his report on August 18, 2017. The
referee termed the case "a difficult matter" since on one hand
it was quite clear Attorney Schoenecker desires his law license
back and wishes he could atone for his past misconduct, but on
the other hand, "the gravity and extent of his past conduct is
troubling." The referee said all of Attorney Schoenecker's
misconduct amounted to "selfish and either illegal or immoral acts." The referee said while Attorney Schoenecker blamed all
7 Nos. 2011AP48-D, 2015AP275-D
of the misconduct on his gambling addiction, clearly a number of
the instances of misconduct have nothing to do with gambling,
i.e., "lying to the partners of the law firm, improperly
obtaining the firm's financial records, setting up a separate,
undisclosed business operation, and lying under oath in
bankruptcy court." The referee said all three of the OLR's
witnesses testified they have serious doubts about Attorney
Schoenecker's trustworthiness, and all said he never expressed
any sense of apology or remorse to them for his conduct.
¶19 The referee said reinstatement hearings are not only
an examination of what has taken place from the time of the
original discipline until reinstatement is sought, but also an
attempt to predict the future. The referee noted that this
court has admonished referees that the primary focus of a
reinstatement hearing should be on the petitioner's conduct
between the suspension and the hearing. See In re Disciplinary
Proceedings Against Carroll, 2004 WI 19, ¶16, 269 Wis. 2d 172,
675 N.W.2d 792. However, the referee said the facts of the original misconduct must also be taken in to account to help
predict whether, going forward, the petitioner will satisfy the
requirements of moral character. The referee said:
It is my considered opinion that given the seriousness of his past conduct; given his failure to account for moral lapses other than blaming a gambling addiction; given his failure to explain how moral lapses unrelated to the gambling addiction have been cured; and given his failure to present any significant testimony necessary to overcome the strong testimony of three of his victims, I cannot in good conscience
8 Nos. 2011AP48-D, 2015AP275-D
say that Schoenecker has met the high burden of proof imposed on him by SCR 22.31. ¶20 Schoenecker's appeal argues that the OLR, in opposing
reinstatement, has submitted only the testimony of individuals
who were harmed by conduct that has already been accounted for
and who have no first hand knowledge of anything of substance
that has occurred since the suspensions. Attorney Schoenecker
argues that in essence what the OLR is now saying is that it
regrets its decision to stipulate to the level of discipline in
the two underlying cases, and it believes the suspensions should
have been longer.
¶21 Attorney Schoenecker argues that the referee's
recommendation against reinstatement is not supported by the
evidence. He says that the referee's findings about him were,
overall, favorable, and he points out that the referee found
Attorney Schoenecker's testimony to be sincere; that he admitted
engaging in some "really bad behavior;" that he sought
counseling; he paid restitution; he has been working as a
laborer and was promoted to supervisor; and that he never realized "how privileged he was to have been a lawyer."
¶22 Attorney Schoenecker argues the only testimony in
opposition to his reinstatement was based on outdated
information and hearsay. He says while past conduct can be
relevant to a determination as to whether a petitioner has the
moral character to resume the practice of law, this court has
said that a hearing "should not amount to a retrial of the
9 Nos. 2011AP48-D, 2015AP275-D
original disciplinary case." See In re Disciplinary Proceedings
Against Penn, 2002 WI 5, ¶7, 249 Wis. 2d 667, 673 N.W.2d 287.
¶23 Attorney Schoenecker says all three OLR witnesses were
clearly still upset and all had formed subjective beliefs based
on old or second hand information. Attorney Schoenecker says
that while it is understandable those witnesses would still be
upset, they each testified they had no useful knowledge of his
conduct since the time of his suspensions and instead based
their conclusions about his current fitness to practice law on
their prior experience with him and on what they learned from
other OLR witnesses. Attorney Schoenecker argues that the OLR
did not offer a single piece of competent evidence that
contradicted Attorney Schoenecker's evidence about his conduct
and character since the time of his offenses, and he says the
fact people aggrieved by his prior conduct are still aggrieved
by it is not a reasonable basis to oppose his reinstatement.
¶24 Attorney Schoenecker argues he has met his burden of
proof to show that he can safely be reinstated to the practice of law. He says his witnesses have first-hand, recent
information about his character, fitness, and abilities. He
says he has taken steps to learn what was driving his negative
behavior and how to avoid repeating it, including attending
Gamblers Anonymous meetings and seeking counseling from a
licensed professional. He says he intends to remain in
treatment, and he says he has taken responsibility for his
actions and is truly sorry for the harm he has caused others. Attorney Schoenecker argues that denying him reinstatement at 10 Nos. 2011AP48-D, 2015AP275-D
this point would serve only to punish him, not to protect the
public.
¶25 The OLR argues that the referee correctly concluded
that Attorney Schoenecker failed to meet his burden of proof for
reinstatement. Specifically, the OLR says the referee
appropriately found that Attorney Schoenecker failed to show the
requisite moral character for reinstatement and failed to
present adequate evidence or testimony that his moral lapses
have been cured. The OLR also says the referee properly found
that Attorney Schoenecker continued to blame his behavior on his
gambling addiction and failed to explain that the moral lapses
unrelated to gambling have been addressed. The OLR says Mr.
Harrison's report, which says that Attorney Schoenecker's
prognosis with regard to relapsing with respect to his gambling
problem is excellent if he continues with his treatment plan, is
insufficient to support a finding of fitness for reinstatement
because "Harrison's report is only as good as the information
provided to him by Schoenecker. If Schoenecker was not truthful with his therapist or did not provide him with all the necessary
background information, then this court should not rely solely
on the report as a sufficient basis for reinstatement."
¶26 The OLR says contrary to Attorney Schoenecker's
claims, the OLR did not present Attorney Schoenecker's victims
as witnesses in order to retry the prior disciplinary matters,
but rather to rebut Attorney Schoenecker's claim that he has the
current moral character to practice law in Wisconsin. The OLR
11 Nos. 2011AP48-D, 2015AP275-D
also argues that Attorney Schoenecker's reinstatement
presentation exhibited a lack of remorse for his victims.
¶27 Supreme Court Rule 22.31(1)1 provides the standard to
be met for reinstatement. Specifically, the petitioner 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 of the public interest,
and that he or she has complied with SCR 22.262 and the terms of
1 SCR 22.31(1) provides:
The petitioner has the burden of demonstrating, by clear, satisfactory, and convincing evidence, all of the following:
(a) That he or she has the moral character to practice law in Wisconsin.
(b) That his or her resumption of the practice of law will not be detrimental to the administration of justice or subversive of the public interest.
(c) That his or her representations in the petition, including the representations required by SCR 22.29(4)(a) to (m) and 22.29(5) are substantiated.
(d) That he or she has complied fully with the terms of the order of suspension or revocation and with the requirements of SCR 22.26. 2 SCR 22.26 provides:
(1) On or before the effective date of license suspension or revocation, an attorney whose license is suspended or revoked shall do all of the following:
(a) Notify by certified mail all clients being represented in pending matters of the suspension or revocation and of the attorney's consequent inability (continued) 12 Nos. 2011AP48-D, 2015AP275-D
to act as an attorney following the effective date of the suspension or revocation.
(b) Advise the clients to seek legal advice of their choice elsewhere.
(c) Promptly provide written notification to the court of administrative agency and the attorney for each party in a matter pending before a court or administrative agency of the suspension or revocation and of the attorney's consequent inability to act as an attorney following the effective date of the suspension or revocation. The notice shall identify the successor attorney of the attorney's client or, if there is none at the time notice is given, shall state the client's place of residence.
(d) Within the first 15 days after the effective date of suspension or revocation, make all arrangements for the temporary or permanent closing or winding up of the attorney's practice. The attorney may assist in having others take over client's work in progress.
(e) Within 25 days after the effective date of suspension or revocation, file with the director an affidavit showing all of the following:
(i) Full compliance with the provisions of the suspension or revocation order and with the rules and procedures regarding the closing of the attorney's practice.
(ii) A list of all jurisdictions, including the state, federal and administrative bodies, before which the attorney is admitted to practice.
(iii) A list of clients in all pending matters and a list of all matters pending before any court or administrative agency, together with the case number of each matter.
(f) Maintain records of the various steps taken under this rule in order that, in any court or administrative agency, together with the case number of each matter. (continued) 13 Nos. 2011AP48-D, 2015AP275-D
the suspension. In addition to these requirements, SCR 22.29(4)3
states related requirements that the petition for reinstatement
(2) 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.
(3) Proof of compliance with this rule is a condition precedent to reinstatement of the attorney's license to practice law. 3 SCR 22.29(4) provides:
The petition shall 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 (continued) 14 Nos. 2011AP48-D, 2015AP275-D
"shall show." All of these additional requirements are also
effectively incorporated into SCR 22.31(1).
¶28 This court will adopt the referee's findings of fact
unless they are clearly erroneous. Conclusions of law are
reviewed de novo. See In re Disciplinary Proceedings Against
Jennings, 2009 WI 26, ¶22, 316 Wis. 2d 6, 762 N.W.2d 648.
¶29 Upon careful review of the matter, we adopt the
referee's findings and conclusions and agree with the referee
that at this time Attorney Schoenecker has failed to meet his
burden of demonstrating that he has met the high burden of proof
imposed upon him by SCR 22.31. We do not reach this decision
lightly. Attorney Schoenecker has not practiced law since 2011.
The record demonstrates that he has made progress toward
addressing the root causes of the behavior that led to his two
suspensions. He is to be commended for attending Gamblers
Anonymous meetings and continuing to seek treatment from Mr.
Harrison. His volunteer efforts in the community are also
commendable. However, we share the referee's concern that Attorney Schoenecker has failed to fully account for moral
lapses other than his gambling addiction, and he has failed to
explain how the moral lapses unrelated to the gambling addiction
have been addressed to insure they will not recur in the future.
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.
15 Nos. 2011AP48-D, 2015AP275-D
In addition, we concur with the referee that Attorney
Schoenecker's failure to present live testimony, either from Mr.
Harrison or other character witnesses who could speak to whether
Attorney Schoenecker has the current moral character to practice
law in Wisconsin, impeded him in demonstrating that he has met
his burden of proof under SCR 22.31.
¶30 Pursuant to SCR 22.33(4), a petitioner normally may
again file a petition for reinstatement nine months after
denial. However, we have the discretion to effectively reduce
that period. See, e.g., In re Disciplinary Proceedings Against
Carroll, 2004 WI 19, 269 Wis. 2d 172, 675 N.W.2d 792. In this
case we conclude that Attorney Schoenecker should be permitted
to file a new petition for reinstatement six months after the
date of this opinion. In the new reinstatement proceeding he
may be able to present himself in a better light and demonstrate
through live testimony and specific examples that he is fit to
resume the practice of law without danger to the public. As is
our normal practice, we deem it appropriate to impose the full costs of this reinstatement proceeding on Attorney Schoenecker,
which are $6,809.66 as of March 23, 2018.
¶31 IT IS ORDERED that the petition of James M.
Schoenecker for the reinstatement of his license to practice law
in Wisconsin is denied.
¶32 IT IS FURTHER ORDERED that Attorney Schoenecker may
again file a petition for reinstatement six months after the
date of this decision.
16 Nos. 2011AP48-D, 2015AP275-D
¶33 IT IS FURTHER ORDERED that within 60 days of the date
of this order, James M. Schoenecker shall pay to the Office of
Lawyer Regulation the costs of this reinstatement proceeding,
17 No. 2011AP48-D, 2015AP275-D.ssa
¶34 SHIRLEY S. ABRAHAMSON, J. (concurring). As I wrote
in dissent in In re Disciplinary Proceedings Against Mandelman,
2018 WI 56, ___ Wis. 2d ___, ___ N.W.2d ___, the court is not
consistent in its rulings on reinstatement.
¶35 I join the concurrence of Justice Annette Kingsland
Ziegler with regard to the reinstatement of Attorney
Schoenecker.
1 Nos. 2011AP48-D & 2015AP275-D.akz
¶36 ANNETTE KINGSLAND ZIEGLER, J. (concurring). I agree
with the court that at this time Attorney Schoenecker has failed
to establish the requirements for the reinstatement of his
license to practice law in Wisconsin. I write separately
because I have concern that the court may appear to be
suggesting that if certain things are done, Attorney Schoenecker
will be reinstated. See majority op., ¶30. The majority's
comments about what Attorney Schoenecker might do differently
the next time around should not, in my view, be read as
prophesying what the court's decision will be in a subsequent
reinstatement proceeding. At a subsequent proceeding Attorney
Schoenecker bears the burden of demonstrating to the court that
he should be reinstated. The criteria the court today suggests
may or may not prove to be sufficient.
¶37 For the foregoing reason, I respectfully concur.
¶38 I am authorized to state that Justice SHIRLEY S.
ABRAHAMSON joins this concurrence.