Office of Lawyer Regulation v. Michael R. Bauer

2020 WI 86

• Court: Wisconsin Supreme Court
• Decided: November 24, 2020
• Docket: 2016AP001259-D
• Status: Published

Opinion

2020 WI 86

SUPREME COURT OF WISCONSIN CASE NO.: 2016AP1259-D

COMPLETE TITLE: In the Matter of Disciplinary Proceedings Against Michael R. Bauer, Attorney at Law:

Office of Lawyer Regulation, Complainant-Respondent, v. Michael R. Bauer, Respondent-Appellant.

DISCIPLINARY PROCEEDINGS AGAINST BAUER

OPINION FILED: November 24, 2020 SUBMITTED ON BRIEFS: ORAL ARGUMENT:

SOURCE OF APPEAL: COURT: COUNTY: JUDGE:

JUSTICES: Per Curiam. NOT PARTICIPATING:

ATTORNEYS: 2020 WI 86 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2016AP1259-D

STATE OF WISCONSIN : IN SUPREME COURT

In the Matter of Disciplinary Proceedings Against Michael R. Bauer, Attorney at Law:

Office of Lawyer Regulation, FILED Complainant-Respondent, NOV 24, 2020 v. Sheila T. Reiff Clerk of Supreme Court Michael R. Bauer,

Respondent-Appellant.

ATTORNEY reinstatement proceeding. Reinstatement granted

upon conditions.

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

James C. Boll recommending that the court reinstate the license

of Michael R. Bauer to practice law in Wisconsin with certain

conditions. No appeal has been filed from the referee's report

and recommendation. Accordingly, our review proceeds pursuant

to Supreme Court Rule (SCR) 22.33(3).1 Upon careful review of

1SCR 22.33(3) provides: "If no appeal is timely filed, the 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." No. 2016AP1259-D

the matter we adopt the referee's findings and conclusions and

agree that Attorney Bauer's petition for reinstatement should be

granted upon the recommended conditions as described below. We

also direct that the costs of this current reinstatement

proceeding, totaling $4,093.40, be paid by Attorney Bauer.

¶2 Attorney Bauer was admitted to practice law in

Wisconsin in 1988. He practiced law in Madison. He also owned

a business, Sports Advisors, Inc., which related to his work as

an agent for several National Football League players. Before

the complaint giving rise to his current license suspension

Attorney Bauer had not previously been subject to professional

discipline.

¶3 On June 24, 2016, the Office of Lawyer Regulation

(OLR) filed a disciplinary complaint against Attorney Bauer

alleging 28 counts of professional misconduct. The complaint

alleged that between December 2013 and October 2014, Attorney

Bauer mishandled client funds held in trust, comingled personal

funds in his trust account, failed to keep proper trust account records, exercised a lack of diligence, failed to properly

communicate with clients, failed to promptly refund unearned

fees and repeatedly failed to cooperate with the OLR's

investigations. Ultimately, following litigation, it was

determined that Attorney Bauer committed 22 counts of misconduct

and converted $376,818.63. In re Disciplinary Proceedings

Against Bauer, 2018 WI 49, 381 Wis. 2d 474, 912 N.W.2d 108.

Although the dollar amount is staggeringly high, it bears noting

2 No. 2016AP1259-D

that it was undisputed that Attorney Bauer's clients received

all monies due to them.

¶4 On April 5, 2019, Attorney Bauer filed a petition

seeking the reinstatement of his Wisconsin law license. The OLR

conducted an investigation and initially opposed the petition.

The court appointed Referee Boll, who conducted an evidentiary

hearing on November 12, 2019, in Madison. Attorney Bauer

testified and presented several character witnesses who voiced

support for his reinstatement.

¶5 On December 12, 2019, the referee issued a report

concluding that Attorney Bauer had satisfied his burden of proof

and had met the requirements for reinstatement set forth in

SCR 22.31.2 The referee recommends reinstatement with certain

conditions, and the imposition of costs.

2 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.

3 No. 2016AP1259-D

¶6 When we review a referee's report and recommendation,

we 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 Eisenberg, 2004 WI

14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747.

¶7 During review, the court ascertained that Attorney

Bauer had commenced a voluntary Chapter 7 bankruptcy proceeding

in the United States Bankruptcy Court for the Western District

of Wisconsin. Michael R. Bauer and Kathleen R. LaRocque, 3-19-

13610-bhl. On January 23, 2020, Attorney Bauer's former law

partner, Attorney Daniel P. Bach, filed in that bankruptcy

proceeding a "complaint to determine dischargeability of a debt"

seeking an order excepting the debt owed to Attorney Bach from

discharge under 11 U.S.C. § 523(a)(2)(B), 11 U.S.C. § 523(a)(4)

and 11 U.S.C. § 523(a)(6), and for a judgment in the amount of

$678,900.87 "representing treble damages . . . on the

$226,300.29 paid by [Attorney Bach] due to Bauer's actions."

Attorney Bach's claim clearly related to this disciplinary proceeding. Accordingly, on February 18, 2020, the court

ordered the parties to advise the court why the reinstatement

petition should not be held in abeyance pending resolution of

the bankruptcy proceeding.

¶8 On February 26, 2020, the OLR filed a statement

agreeing that the matter should be held. On March 3, 2020,

Attorney Bauer filed a two-page statement asking the court to

decide the reinstatement "based upon the facts found by the Referee in its decision dated December 9, 2019." On May 19, 4 No. 2016AP1259-D

2020 we held the reinstatement petition in abeyance pending

resolution of the bankruptcy proceeding. On September 15, 2020,

Attorney Bauer advised the court that the dispute involving

Attorney Bach had been resolved. The OLR confirmed this

statement in a report filed on October 1, 2020. The parties

agree the court may proceed with Attorney Bauer's reinstatement

petition.

¶9 Supreme Court Rule 22.31(1) sets forth the standards

to be met for reinstatement. 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 to the public interest,

and that he or she has complied with SCR 22.26 and the terms of

the order of suspension. In addition, SCR 22.31(1)(c)

incorporates the statements that a petition for reinstatement

must contain pursuant to SCR 22.29(4)(a)-(k) and (4m).3 Thus,

3 SCR 22.29(4)(a)-(k) and (4m) provides that a petition for reinstatement 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. 5 No. 2016AP1259-D

the petitioning attorney must demonstrate that the required

representations in the reinstatement petition are substantiated.

¶10 The referee found that Attorney Bauer: desires to

have his license reinstated, 22.29(4)(a); has not practiced law

in Wisconsin during the period of his suspension,

SCR 22.29(4)(b); has complied fully with the terms of the order

of suspension or revocation and will continue to comp1y with

(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 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.

(4m) The petitioner has made restitution to or settled all claims of persons injured or harmed by petitioner's misconduct, including reimbursement to the Wisconsin lawyers' fund for client protection for all payments made from that fund, or, if not, the petitioner's explanation of the failure or inability to do so.

6 No. 2016AP1259-D

them unti1 his 1icense is reinstated, SCR 22.29(4)(c); and has

maintained competence and learning in the law by attending

identified educational activities, SCR 22.29(4)(d).4 The referee

further found that Attorney Bauer's conduct since the suspension

has been exemp1ary and above reproach, SCR 22.29(4)(e); he 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, SCR 22.29(4)(f); and that he 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

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). The

referee found that Attorney Bauer has fully complied with the

requirements set forth in SCR 22.26, SCR 22.29(4)(h); he has

explained the proposed use of his law license if reinstated,

SCR 22.29(4)(j);5 and he has offered a full description of all of

his business activities during the period of suspension,

4By memo dated May 6, 2019, the Board of Bar Examiners, based on the information that has been submitted by the petitioner, concluded the petitioner was currently in compliance with the court's CLE and EPR requirements for reinstatement. In addition, the petitioner voluntarily attended a seminar entitled Trust Account Management on April 26, 2018, conducted by the OLR. 5Attorney Bauer indicated that he will practice law in Wisconsin and focus on consumer and immigration matters. He may also seek training to mediate eminent domain disputes.

7 No. 2016AP1259-D

satisfying SCR 22.29(4)(k).6 The referee specifically found that

Attorney Bauer has the moral character to practice law.

¶11 The referee observed that no restitution was ordered

in the underlying disciplinary proceedings and noted that no

claims were made to the Wisconsin Lawyers' Fund for Client

Protection against Attorney Bauer. Accordingly, the referee

determined that Attorney Bauer has satisfied SCR 22.29(4m). See

also ¶¶7-8 (addressing resolution of Attorney Bach's claims

against Attorney Bauer in the bankruptcy proceeding).

¶12 The referee addressed two particular concerns raised

by the OLR: his access to client trust accounts in light of his

financial condition, namely a high level of debt, and the

serious nature of Attorney Bauer's underlying misconduct. The

referee observed that debt alone is not a disqualifying factor

for reinstatement. However, where previous misconduct coupled

with strained personal finances creates an enhanced risk to the

public, high debt levels may be a valid concern. Here, the

referee noted that Attorney Bauer had filed for bankruptcy which the referee accepted as evidence that Attorney Bauer had a

viable plan to address his personal finances. After the

referee's report was filed, the bankruptcy court discharged most

of Attorney Bauer's debts.

Attorney Bauer testified that he engaged in no income 6

producing business activities during the time period of his suspension. He cared for his family and volunteered in the community.

8 No. 2016AP1259-D

¶13 In addition, the referee observed that Attorney Bauer

testified that he would not object to reasonable conditions

being placed on his reinstatement as it relates to his use of or

access to client trust funds. The recommended conditions are

designed, in part, to address these concerns.

¶14 The referee then considered the OLR's stated concern

about the seriousness of the underlying misconduct. The referee

acknowledged that Attorney Bauer's underlying misconduct was not

the result of an honest mistake or sloppy bookkeeping. It was

intentional and dishonest. Without discounting the seriousness

of the underlying misconduct, the referee noted that Attorney

Bauer has served the suspension imposed by this court and the

referee was persuaded that Attorney Bauer's resumption of the

practice of law will not be detrimental to the administration of

justice or subversive of the public interest.

¶15 We agree with the referee that Attorney Bauer has met

his burden of proof with respect to all elements needed to

justify his reinstatement. Moreover, his period of suspension has been over six months longer than ordered by this court

because of the delays resulting from his underlying bankruptcy

proceeding.

¶16 As stated by the referee in the underlying proceeding,

for some reason, the "wheels came off" Attorney Bauer's trust

account management practices in 2014. The conversions occurred

between December 2013 and October 2014 and consisted of

"labyrinthine transfers" that "seemed to constantly be in the process of 'robbing Peter to pay Paul' and, in some cases, to 9 No. 2016AP1259-D

pay Michael Bauer." However, once confronted, Attorney Bauer

admitted guilt as to many of the allegations; no clients lost

funds; he fully cooperated with the OLR investigation; and he

expressed remorse for his misbehavior. He had no prior

discipline over what had been an otherwise distinguished 20-year

legal career.

¶17 The referee in this reinstatement proceeding observed

that Attorney Bauer has expressed regret for his conduct and

found that Attorney Bauer's testimony and the evidence adduced

through the testimony of his character witnesses demonstrated

that he has taken responsibility for his actions. He completed

the OLR's Trust Account Management Seminar in 2018. We accept

the referee's conclusion that Attorney Bauer's resumption of the

practice of law will not be detrimental to the administration of

justice or subversive of the public interest and that he has met

justify his reinstatement.

¶18 We agree, however that it is appropriate to impose certain conditions on Attorney Bauer's practice of law. We

require Attorney Bauer to provide quarterly trust account and

business accounting records to the OLR for a period of two years

after the date of his reinstatement. As the referee observed,

this requirement is consistent with conditions we have imposed

in other attorney reinstatement proceedings where we sought to

address concerns about trust account management. See, e.g., In

re Disciplinary Proceedings Against Malloy, 2019 WI 16, 385 Wis. 2d 554, 923 N.W.2d 876; In re Disciplinary Proceedings 10 No. 2016AP1259-D

Against Mulligan, 2017 WI 50, 375 Wis. 2d 133, 895 N.W.2d 34;

and In re Disciplinary Proceedings Against Curtis, 2018 WI 13,

379 Wis. 2d 521, 907 N.W.2d 91.

¶19 IT IS ORDERED that the license of Michael R. Bauer to

practice law in Wisconsin is reinstated, effective the date of

this order.

¶20 IT IS FURTHER ORDERED that, as a condition of the

reinstatement of his license to practice law in Wisconsin,

Michael R. Bauer is required to provide quarterly trust account

and business accounting records to the Office of Lawyer

Regulation for a period of two years after the date of this

reinstatement.

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

of this order, Michael R. Bauer shall pay to the Office of

Lawyer Regulation the costs of this proceeding, which are

$4,093.40 as of December 23, 2019, or enter into a payment

agreement plan with the Office of Lawyer Regulation for the full

payment of costs over a period of time. ¶22 IT IS FURTHER ORDERED that compliance with all of the

terms of this order remains a condition of Michael R. Bauer's

license to practice law in Wisconsin.

11 No. 2016AP1259-D