2015 WI 29
SUPREME COURT OF WISCONSIN
CASE NO.: 2013AP1137-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against
Tina M. Dahle, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Tina M. Dahle,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST DAHLE
OPINION FILED: March 18, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2015 WI 29
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2013AP1137-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Tina M. Dahle, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
MAR 18, 2015
v.
Diane M. Fremgen
Clerk of Supreme Court
Tina M. Dahle,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review a report filed by referee
Robert E. Kinney recommending that the court suspend the
Wisconsin law license of Attorney Tina M. Dahle for two years
and six months; require Attorney Dahle to pay restitution as
described herein; and require Attorney Dahle to pay the full
costs of this disciplinary proceeding, which total $11,911.68 as
of December 8, 2014. No appeal has been filed in this matter,
No. 2013AP1137-D
so our review proceeds pursuant to Supreme Court Rule
(SCR) 22.17(2).
¶2 We adopt the referee's findings of fact and
conclusions of law and we agree that Attorney Dahle's license to
practice law in Wisconsin should be suspended for two years and
six months. We also agree with the referee that Attorney Dahle
should be required to pay the full costs of this proceeding.
For the reasons explained in this opinion, we accept part of the
recommendation regarding restitution.
¶3 Attorney Dahle was admitted to the Wisconsin State Bar
in 2002 and practiced in the Green Bay area. On April 24, 2012,
her law license was suspended for failure to cooperate with the
Office of Lawyer Regulation's (OLR) investigation into some of
the grievances giving rise to this disciplinary proceeding. Her
license is also subject to an administrative suspension for
failure to pay Wisconsin State Bar dues, failure to file a trust
account certification, and noncompliance with continuing legal
education requirements. She has no other prior disciplinary
history. Her license remains suspended.
¶4 In May 2013, the OLR filed a complaint alleging 50
counts of professional misconduct. Over the ensuing months, the
OLR investigated several additional grievances filed against
Attorney Dahle. As a result, the OLR amended its disciplinary
complaint several times, culminating in the filing of a third
amended complaint on June 4, 2014, alleging 55 counts of
professional misconduct.
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No. 2013AP1137-D
¶5 Attorney Dahle briefly contested some of the charges
but ultimately entered pleas of "no contest" to all 55 charged
counts of misconduct. She opted to forego an evidentiary
hearing and to address the issue of sanctions in writing.
¶6 The referee proceeded to find misconduct as to each of
the 55 counts charged. Specifically, the referee incorporated
by reference key portions of the original complaint, second
amended complaint, and third amended complaint, and, based on
the uncontested facts contained in those paragraphs, the referee
determined that there was an adequate factual basis for each of
the 55 charges alleged in the complaint and amendments thereto.
We wholly agree with the referee that the facts alleged by the
OLR support a conclusion of professional misconduct on each of
the 55 counts of misconduct set forth in the complaint, as
amended.
¶7 The allegations of misconduct at issue are varied and
numerous. Attorney Dahle failed to commence actions prior to
the expiration of statutes of limitations, failed to appear in
court on several cases, and missed filing deadlines for briefs,
discovery, and witness disclosures. She essentially abandoned
her law practice and her clients in 2012 when she closed her
office without notice. Her clients were left with cases in a
state of neglect with no way to contact their attorney. In
addition, she borrowed or took some $400,000 from clients
without regard to conflict of interest restrictions and
requirements. Attorney Dahle also repeatedly failed to respond
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No. 2013AP1137-D
to inquiries from the OLR, resulting in her temporary suspension
from the practice of law.
¶8 In sum, Attorney Dahle does not contest, the referee
concluded, and we agree that Attorney Dahle committed the
following ethical violations:
seven violations of SCR 20:1.3 (failure to act with
reasonable diligence and promptness);
ten violations of SCR 20:1.4(a)(3) and (4) (failure to
keep the client reasonably informed and comply with
requests for information);
one violation of SCR 20:1.5(a) (collecting an
unreasonable fee);
one violation of SCR 20:1.5(b)(1) and (2) (failure to
have a written fee agreement);
two violations of SCR 20:1.8(a) (entering into a
business transaction with a client without proper
prior disclosure and consent of terms and lawyer's
role in transaction);
11 violations of various SCR 20:1.15 trust account
rules (failure to promptly deliver funds to which a
client or third party is entitled to receive;
disbursing funds from trust account before the deposit
from which those funds are to be disbursed has
cleared; failure to provide written notice to client
at least five days prior to disbursing funds in trust
for payment of fees; failure to provide written
accounting to client upon final distribution of trust
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No. 2013AP1137-D
property; and disbursing funds from trust account via
telephone transfer);
seven violations of SCR 20:1.16(d) (failure to notify
clients of termination of representation and return
client files and other property);
one violation of SCR 20:3.4(c) (knowingly disobeying
an order of a tribunal);
three violations of SCR 20:8.4(c) (engaging in
dishonesty, fraud, deceit, or misrepresentation); and
12 violations of SCR 22.03(2) and (6), enforced via
SCR 20:8.4(h) (failure to promptly and fully cooperate
with an OLR investigation).
¶9 The OLR sought a three-year suspension of Attorney
Dahle's license to practice law in Wisconsin. Attorney Dahle
asked that her law license be suspended "for no more than one
year," noting that her law license has been suspended since
April 24, 2012. She suggests there was some delay by the OLR in
prosecuting the matter. She asked that her suspension be
imposed retroactive to the date of her temporary license
suspension.
¶10 The referee stated and considered the factors that
must be evaluated when considering discipline, noting that the
"seriousness, nature and extent of the misconduct here is
nothing short of breathtaking." The referee observed that
misappropriation or conversion of client funds is one of the
most serious acts of lawyer misconduct because it violates the
fundamental principle of the lawyer-client relationship and
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No. 2013AP1137-D
places the lawyer's pecuniary interest above the client's
interest. Misappropriation of client funds frequently warrants
revocation. See In re Disciplinary Proceedings Against Bult,
142 Wis. 2d 885, 890, 419 N.W. 2d 246 (1988). Indeed, the
referee considered whether Attorney Dahle's license should be
revoked, but was mindful that license revocation is not always
appropriate for misappropriation or conversion of client funds.
Id. at 890-91.
¶11 Ultimately, the referee considered the mitigating
facts of Attorney Dahle's lack of previous misconduct and her
eventual cooperation with the OLR and determined that a
suspension of two years and six months was sufficient discipline
for the misconduct committed in this case. See In re
Disciplinary Proceedings Against Cooper, 2007 WI 37,
300 Wis. 2d 61, 729 N.W.2d 206; In re Disciplinary Proceeding
Against Tully, 2005 WI 100, 283 Wis. 2d 124, 699 N.W. 2d 882.
The referee rejected Attorney Dahle's request to make her
suspension retroactive to the date of her temporary license
suspension, observing, correctly, that any "delay" in
prosecuting this matter is likely due to Attorney Dahle's
initial failure to cooperate with the OLR's efforts to
investigate the many grievances filed against her.
¶12 The undisputed facts show a clear pattern of neglect
by Attorney Dahle of her clients' needs and objectives and
disregard of her obligations as an attorney. We agree with the
referee's observation that the recommended suspension of two
years and six months both recognizes Attorney Dahle's eventual
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No. 2013AP1137-D
full cooperation with the disciplinary process and does not
unduly depreciate the seriousness of her professional
misconduct.
¶13 We further agree that full costs shall be imposed on
Attorney Dahle. Attorney Dahle has not alleged any factors that
would justify a reduction in costs.
¶14 We now consider the question of restitution. First,
the OLR has advised the court that no restitution is warranted
in a number of the client matters implicated in this proceeding
and we accept that assessment. The parties agreed and the
referee recommended that Attorney Dahle should be ordered to
comply with any final monetary order or judgment issued in
Jane C. Kelley v. Tina M. Dahle, et al., United States District
Court, Eastern District of Wisconsin, Case No. 11-CV-600. We
agree with this recommendation as well.
¶15 The OLR declined to seek restitution in the matter of
J.P., who loaned Attorney Dahle money that she failed to repay.
J.P. obtained a judgment of $116,684.02 against Attorney Dahle
in Brown County Circuit Court Case No. 11-CV-1237, but Attorney
Dahle then filed for bankruptcy and identified J.P. as a
creditor. The record before the court indicates that the client
did not avail himself of the procedures for challenging
discharge under federal law and this debt was discharged. The
referee declined to make a formal recommendation regarding
restitution to J.P. but observed that "[e]very lender assumes
the risk that a loan may not be repaid, and/or that the loan
obligation may be discharged in bankruptcy." We accede to the
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No. 2013AP1137-D
parties' assertion that no restitution order should issue with
respect to this client matter.
¶16 We next consider whether Attorney Dahle's bankruptcy
should preclude this court from ordering restitution to two
other former clients. During proceedings before the referee,
the OLR requested that Attorney Dahle be ordered to pay
$7,007.72 in restitution to L.G. and $4,911.51 in restitution to
J.B.
¶17 Shortly before the referee filed his report, Attorney
Dahle objected to restitution in these client matters, stating
that she had identified these individuals as creditors in her
Chapter 7 bankruptcy proceeding, that neither filed an adversary
proceeding or a claim in her bankruptcy proceeding, and that the
debts were discharged.
¶18 The referee was not persuaded. The referee found
that, unlike the matter of J.P., the funds Attorney Dahle had in
her possession relating to L.G. and J.B. "consisted strictly of
trust account property belonging to others" and recommended that
the court order Attorney Dahle to pay restitution to L.G. and
J.B.
¶19 Neither party appealed the referee's report. However,
after the referee filed his report, the OLR provided the court
with a restitution statement, as is standard practice. The OLR
advised the court that it no longer seeks restitution for L.G.
and J.B. based on the fact that these clients were listed and
noticed as creditors in Attorney Dahle's bankruptcy proceeding.
The OLR states:
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No. 2013AP1137-D
Such information . . . brings the circumstances
outside of one of the OLR restitution criteria
factors. That factor is that Attorney Dahle's rights
in a collateral proceeding (e.g., a future
reinstatement proceeding) will likely be prejudiced if
restitution is ordered to be paid to [these clients]
when federal bankruptcy law eradicates the underlying
debt and Attorney Dahle's obligation to pay it.1
The OLR recognized that "assessing this issue delves into
federal preemption issues not previously specifically addressed
in prior Wisconsin attorney discipline or reinstatement
proceedings." The OLR acknowledges the considerations and
rationale discussed by the referee in recommending restitution,
in which the referee questioned Attorney Dahle's "attempt to get
out of repaying [her clients] by discharging these debts in
bankruptcy." Nevertheless, the OLR explains that, "to be
consistent with OLR's existing restitution criteria, OLR's
Director determined to discontinue its restitution request."
¶20 The question is whether a lawyer can trump this
court's ability to order restitution in the context of a
disciplinary proceeding by filing bankruptcy when the lawyer's
misconduct involved conversion of client funds. Attorney Dahle
asserted this position quite late in this disciplinary
proceeding so the issues were not fully developed. The dilemma
1
The OLR's policy is to seek restitution only under the
following circumstances: (1) there is a reasonably
ascertainable amount; (2) the funds to be restored were in the
respondent lawyer's direct control; (3) the funds to be restored
do not constitute incidental or consequential damages; and
(4) the grievant's or respondent's rights in a collateral
proceeding will not likely be prejudiced.
9
No. 2013AP1137-D
identified by the OLR raises questions: (1) whether imposition
of the disputed restitution in this lawyer disciplinary matter
is consistent with state and federal law where, as here, the
underlying subject of the restitution has been discharged in
bankruptcy; and (2) whether such a restitution order is a
permissible rehabilitative condition of any future reinstatement
proceeding.
¶21 In view of these unresolved questions, we will not
order Attorney Dahle to pay restitution to L.G. and J.B. at this
time. However, prior to any reinstatement of Attorney Dahle's
Wisconsin law license, we will revisit the issue. See
SCR 22.29(4m) (any attorney petitioning for reinstatement from a
disciplinary suspension of six months or more is required to
allege and demonstrate that the attorney "has made restitution
to or settled all claims of persons injured or harmed by [the
attorney's] misconduct . . . or, if not, the [attorney's]
explanation of the failure or inability to do so").
¶22 IT IS ORDERED that the license of Tina M. Dahle to
practice law in Wisconsin is suspended for a period of two years
and six months, effective the date of this order.
¶23 IT IS FURTHER ORDERED that Tina M. Dahle shall pay
restitution to Jane Kelley consistent with any final monetary
order or judgment issued in Jane C. Kelley v. Tina M. Dahle,
et al., United States District Court, Eastern District of
Wisconsin, Case No. 11-CV-600.
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No. 2013AP1137-D
¶24 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Tina M. Dahle shall pay to the Office of Lawyer
Regulation the costs of this proceeding.
¶25 IT IS FURTHER ORDERED that the restitution to Jane
Kelley specified above is to be completed prior to paying costs
to the Office of Lawyer Regulation.
¶26 IT IS FURTHER ORDERED that, as a condition of
reinstatement of her license to practice law in Wisconsin,
Tina M. Dahle will be required to demonstrate to this court the
legal and/or factual basis to justify any failure to reimburse
L.G. and J.B. for unearned client fees or funds that she held in
trust for them.
¶27 IT IS FURTHER ORDERED that, to the extent she has not
already done so, Tina M. Dahle shall comply with the provisions
of SCR 22.26 concerning the duties of a person whose license to
practice law in Wisconsin has been suspended.
¶28 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See
SCR 22.28(2).
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No. 2013AP1137-D
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