2018 WI 71
SUPREME COURT OF WISCONSIN
CASE NO.: 2017AP1887-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Suzanne E. Kitto, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Suzanne E. Kitto,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST KITTO
OPINION FILED: June 19, 2018
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2018 WI 71
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2017AP1887-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Suzanne E. Kitto, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
JUN 19, 2018
v.
Sheila T. Reiff
Clerk of Supreme Court
Suzanne E. Kitto,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review a referee's report and
recommendation concluding that Attorney Suzanne E. Kitto
violated the rules of professional conduct in connection with
her representation of W.C. and C.C. The referee recommended
that this court impose a 60-day suspension of Attorney Kitto's
law license. We adopt the referee's findings of fact,
conclusions of law, and recommendation regarding discipline.
We impose the full costs in this matter, which total $1,310.32
No. 2017AP1887-D
as of April 17, 2018. We do not impose restitution, as the
Office of Lawyer Regulation (OLR) has confirmed that Attorney
Kitto has made full restitution to W.C. and C.C.
¶2 Attorney Kitto was admitted to practice law in
Wisconsin in 1972. She has no disciplinary history.
¶3 On September 27, 2017, the OLR filed a complaint
against Attorney Kitto alleging five counts of professional
misconduct arising out of her representation of W.C. and C.C.
Attorney Kitto filed an answer by which she admitted all but one
of the OLR's factual allegations, affirmatively alleged certain
additional facts, and admitted all five counts of misconduct.
This court appointed William Eich to serve as the referee in the
matter.
¶4 Attorney Kitto later entered into a stipulation by
which she agreed that the referee could use the allegations of
the complaint as a factual basis for the referee's determination
of misconduct. The parties agreed to brief the issue of the
appropriate level of discipline to be imposed for Attorney
Kitto's misconduct.
¶5 After receiving briefing on the issue of discipline,
the referee filed a report recommending a 60-day suspension of
Attorney Kitto's law license. In noting that the parties had
stipulated that the OLR complaint provided an adequate factual
basis for a misconduct determination, the referee implicitly
incorporated by reference the undisputed allegations in the
OLR's complaint and deemed them established. The facts before
us are, then, as follows.
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No. 2017AP1887-D
¶6 Starting in July 2013, Attorney Kitto represented W.C.
and C.C with regard to collection work on a land contract. The
other party to the land contract made the land contract payments
to W.C. and C.C. through Attorney Kitto's office. W.C. and C.C.
agreed that Attorney Kitto would collect ten percent of the land
contract payments for her fees, and would apply the remainder of
the payments to real estate taxes, the mortgage on the property,
and property insurance.
¶7 Attorney Kitto erred in her caretaking of W.C. and
C.C.'s funds. She failed to hold in trust the land contract
payments that she received on W.C. and C.C.'s behalf. She also
converted approximately $10,000 of these payments to her
personal use.
¶8 Attorney Kitto made other trust fund-related
violations. She deposited personal funds into her client trust
account, ostensibly for later use in paying her own personal
debts. Attorney Kitto also disbursed funds from her trust
account when there were insufficient funds in the account to
cover the disbursement.
¶9 Based on the stipulated facts set forth above,
Attorney Kitto conceded the following five counts of misconduct:
Count 1: By failing to promptly deliver funds,
which she collected in connection with her
representation of W.C. and C.C., to W.C. and C.C. or
to third parties for W.C. and C.C.'s benefit,
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No. 2017AP1887-D
Attorney Kitto violated former SCR 20:1.15(d)(1)1
and current SCR 20:1.15(e)(1).2
Count 2: By failing to hold in trust W.C. and
C.C.'s funds that she collected in connection with
her representation of W.C. and C.C., Attorney Kitto
violated SCR 20:1.15(b)(1).3
1
Former SCR 20:1.15(d)(1), effective prior to July 1, 2016,
provided:
Upon receiving funds or other property in which a
client has an interest, or in which the 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.
2
Current 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.
3
SCR 20:1.15(b)(1) provides:
A lawyer shall hold in trust, separate from the
lawyer's own property, that property of clients and
3rd parties that is in the lawyer's possession in
connection with a representation. All funds of
clients and 3rd parties paid to a lawyer or law firm
in connection with a representation shall be deposited
in one or more identifiable trust accounts.
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No. 2017AP1887-D
Count 3: By converting funds belonging to W.C. and
C.C. for her own personal use, Attorney Kitto
violated SCR 20:8.4(c).4
Count 4: By depositing and retaining funds
belonging to her in her client trust account,
Attorney Kitto violated former SCR 20:1.15(b)(3).5
Count 5: By disbursing funds from her trust account
without the funds being available for disbursement,
Attorney Kitto violated SCR 20:1.15(f)(4)(a).6
¶10 In its brief on sanctions to the referee, the OLR
argued that a 60-day suspension is called for by certain of our
prior cases. See, e.g., In re Disciplinary Proceedings Against
Sarbacker, 2017 WI 86, 377 Wis. 2d 484, 901 N.W.2d 373 (lawyer
with two previous private reprimands suspended for 60 days based
on six counts of misconduct, including failing to hold
garnishment funds belonging to clients in a trust account and
misappropriating approximately $2,000 of those funds); In re
Disciplinary Proceedings Against Lunde, 2016 WI 84, 372
Wis. 2d 1, 886 N.W.2d 87 (lawyer with previous public reprimand
suspended for 60 days based on five counts of misconduct,
4
SCR 20:8.4(c) provides: "It is professional misconduct
for a lawyer to engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
5
Former SCR 20:1.15(b)(3), effective prior to July 1, 2016,
provided: "No funds belonging to the lawyer or law firm, except
funds reasonably sufficient to pay monthly account service
charges, may be deposited or retained in a trust account."
6
SCR 20:1.15(f)(4)(a) provides: "A lawyer shall not
disburse funds from any trust account unless the deposit from
which those funds will be disbursed has cleared, and the funds
are available for disbursement."
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No. 2017AP1887-D
including failing to hold funds due to a beneficiary of a life
insurance policy in a trust account, and maintaining a trust
account balance that fell below the amount of funds received and
to be held on behalf of the beneficiary); In re Disciplinary
Proceedings Against Bartz, 2015 WI 61, 362 Wis. 2d 752, 864
N.W.2d 881 (lawyer with previous private reprimand suspended for
60 days based on five counts of misconduct, including failing to
disburse settlement funds and failing to cooperate with an OLR
investigation).
¶11 In her brief to the referee, Attorney Kitto requested
a public reprimand. She emphasized that she had experienced
health difficulties during the time period in question, and that
she had relied on her former assistant to ensure that client
funds were being properly handled.
¶12 The referee recommended a 60-day suspension of
Attorney Kitto's license in his report. The referee wrote that
other cases involving analogous misconduct "have had little
trouble imposing a 60-day suspension, often . . . noting that
harsh sanctions should be expected to follow as a warning to
other lawyers that this type of conduct cannot be tolerated."
The referee characterized Attorney Kitto's misconduct as serious
indeed: W.C. and C.C. were individual clients, and Attorney
Kitto converted a significant sum of their funds——over $10,000.
The referee dismissed as factually unsupported Attorney Kitto's
attempt to assign blame for her trust account-related problems
to her former assistant. The referee also noted that, according
to the OLR's brief on sanctions, it had taken Attorney Kitto's
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No. 2017AP1887-D
medical issues into account in formulating its recommendation
for a 60-day suspension; thus, the referee did not assign
additional weight to that factor. As mitigating factors, the
referee noted that Attorney Kitto has not been previously
disciplined; she has fully reimbursed W.C. and C.C.; and she
cooperated with the OLR's investigation of the charges. Given
these facts and the applicable precedent, the referee concluded
that a 60-day suspension would be appropriate.
¶13 Neither party appealed the referee's report, so this
matter is submitted to the court for review pursuant to
SCR 22.17(2). We review a referee's findings of fact subject to
the clearly erroneous standard. See In re Disciplinary
Proceedings Against Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43,
675 N.W.2d 747. We review the referee's conclusions of law de
novo. Id. We determine the appropriate level of discipline
independent 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.
¶14 We agree with the referee that a 60-day suspension is
appropriate. We find our recent decision in Sarbacker, 377
Wis. 2d 484, to be particularly instructive. Attorney
Sarbacker's clients hired him to collect on a money judgment
they had obtained against a tenant. Id., ¶¶5-6. After Attorney
Sarbacker arranged for the debtor's wages to be garnished, he
began receiving weekly garnishment checks on behalf of his
clients. Id., ¶6. He deposited some of the checks, totaling
$892.23, into his trust account, but then disbursed almost all
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No. 2017AP1887-D
of those funds to himself or his law office rather than to his
clients. Id., ¶13. He deposited other checks, totaling
$1,273.49, directly into his operating account rather than
disbursing the funds to his clients. Id. Attorney Sarbacker
committed other misdeeds: he represented the clients pursuant
to an unwritten contingent fee agreement; he failed to timely
cooperate with the OLR; and he faced one count of misconduct
based on his plea of no contest to unrelated misdemeanor charges
filed against him. Id., ¶14. Focusing heavily on the
conversion allegations, we imposed a 60-day suspension. Id.,
¶¶23-24.
¶15 Sarbacker and this case are alike in important ways.
Both Attorney Kitto and Attorney Sarbacker regularly received
funds on behalf of their clients, and they regularly mishandled
the funds in similar fashion, failing to faithfully hold them in
trust and misappropriating some portion of them.
¶16 To be sure, the two cases are not exactly alike.
Attorney Sarbacker had a disciplinary history (two private
reprimands), whereas Attorney Kitto does not. Attorney Kitto
converted a significantly larger amount of funds than did
Attorney Sarbacker. Attorney Sarbacker committed certain forms
of misconduct that Attorney Kitto did not, and vice versa.
¶17 In the end, however, we find the misconduct here to be
sufficiently analogous to that in Sarbacker to justify the same
suspension length: 60 days. This suspension length is also
generally supported by other cases cited by the OLR to the
referee. See, e.g., In re Disciplinary Proccedings Against
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No. 2017AP1887-D
Lunde, 372 Wis. 2d 1; In re Disciplinary Proceedings Against
Bartz, 362 Wis. 2d 752.
¶18 We also deem it appropriate, as is our usual custom,
to impose the full costs of this disciplinary proceeding on
Attorney Kitto.
¶19 Finally, because Attorney Kitto has made full
restitution to W.C. and C.C., the OLR does not seek restitution,
and we do not impose it.
¶20 IT IS ORDERED that Suzanne E. Kitto's license to
practice law in Wisconsin is suspended for a period of 60 days,
effective July 31, 2018.
¶21 IT IS FURTHER ORDERED that within 60 days of the date
of this order Suzanne E. Kitto shall pay to the Office of Lawyer
Regulation the costs of this proceeding, which are $1,310.32 as
of April 17, 2018.
¶22 IT IS FURTHER ORDERED that, to the extent that she has
not already done so, Suzanne E. Kitto 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.
¶23 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. 2017AP1887-D
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