2016 WI 74
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP385-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Mary K. Biester, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Mary K. Biester,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST BIESTER
OPINION FILED: July 22, 2016
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED: ABRAHAMSON, J. concurs (Opinion filed).
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2016 WI 74
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP385-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Mary K. Biester, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant, JUL 22, 2016
v.
Diane M. Fremgen
Mary K. Biester, Clerk of Supreme Court
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review the report filed by Referee
Dennis J. Flynn recommending the court suspend Attorney Mary K.
Biester's license to practice law in Wisconsin for the maximum
period allowed for multiple violations of supreme court rules,
including converting client funds. Since no appeal has been
filed, we review the referee's report and recommendation
pursuant to Supreme Court Rule (SCR) 22.17(2). Upon careful
review of the matter, we adopt the referee's findings of fact
and conclusions of law. We conclude, however, that rather than
No. 2012AP385-D
suspending Attorney Biester's license for the maximum period
allowed, a three year and six month suspension of her license is
an appropriate sanction. Because we noted in our previous order
imposing a one year suspension that any sanction imposed as a
result of an additional finding of misconduct shall run
consecutive to the one year suspension, we deem it appropriate
to make the three year and six month suspension retroactive to
November 25, 2014, one year after the previous suspension was
imposed. We also agree with the referee that Attorney Biester
should be required to make restitution to the Wisconsin Lawyers'
Fund for Client Protection and that she should pay the full
costs of this proceeding, which were $8,712.86 as of December
18, 2015.
¶2 Attorney Biester was admitted to practice law in
Wisconsin in 1979 and practiced in Beloit. As previously noted,
on November 25, 2013, her license to practice law in Wisconsin
was suspended for one year. The suspension arose out of 30
counts of misconduct involving six clients. The misconduct
included failing to act with reasonable diligence and promptness
in representing a client; failing to keep the client reasonably
informed about the status of the matter; failing to explain a
matter to the extent reasonably necessary to permit the client
to make informed decisions regarding the representation;
engaging in conduct involving dishonesty, fraud, deceit or
misrepresentation; multiple trust account violations; and
failing to cooperate in the investigation of a grievance filed
with the Office of Lawyer Regulation (OLR). In re Disciplinary
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No. 2012AP385-D
Proceedings against Biester, 2013 WI 85, 350 Wis. 2d 707, 838
N.W.2d 79. Her license remains suspended.
¶3 This disciplinary proceeding involves Count Two of the
OLR's amended complaint, the only count that was not addressed
in the 2013 decision. Count Two of the amended complaint
involved Attorney Biester's representation of L.T. L.T. hired
Attorney Biester to represent her in a divorce matter in 2008.
Attorney Biester was experiencing financial problems at that
time, and her home was the subject of a foreclosure action.
L.T. had inherited a large sum of money, and Attorney Biester
advised L.T. she should protect those funds from her husband.
In February 2009, Attorney Biester's nonlawyer assistant, J.M.,
convinced L.T. to transfer $78,000 of her inherited funds into
Attorney Biester's client trust account for safekeeping.
Attorney Biester wire transferred $78,000 from her client trust
account to the bank that held the first mortgage on Attorney
Biester's home. Count Two of the OLR's amended complaint
alleged the following violations of supreme court rules:
COUNT TWO
(Multiple Rule Violations)
24(a). While representing L.T. at the time
Biester deposited and then disbursed funds belonging
to L.T. from her client trust account to pay off her
personal mortgage with Associated Bank, Biester
represented a client when the representation of that
client was materially limited to Biester's
responsibilities to a third person or by her own
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No. 2012AP385-D
personal interest, all in violation of SCR
20:1.7(a)(2).1
24(b). By failing until August 24, 2009, to
inform L.T. that her funds had been deposited and
disbursed from the client trust account and in failing
to keep L.T. reasonably informed about the status of
her legal matter, Biester violated SCR 20:1.4(a)(3).2
24(c). With knowledge of a court order limiting
the transfer of property in the divorce action, and in
failing to inform L.T. and the Court that L.T.'s funds
had been deposited in Biester's client trust account
and then transferred out of the client trust account
to pay Biester's personal mortgage, Biester disobeyed
an obligation under the rules of a tribunal, in
violation of SCR 20:3.4(c).3
24(d). By depositing funds belonging to L.T.
into her client trust account and converting those
funds for the purpose of paying her mortgage
obligation and in failing to inform her client and the
Court of these events, Biester engaged in conduct
involving dishonesty, fraud, deceit, or
misrepresentation, in violation of SCR 20:8.4(c).4
1
SCR 20:1.7(a)(2) provides: "Except as provided in par.
(b), a lawyer shall not represent a client if the representation
involves a concurrent conflict of interest. A concurrent
conflict of interest exists if there is a significant risk that
the representation of one or more clients will be materially
limited by the lawyer's responsibilities to another client, a
former client or a third person or by a personal interest of the
lawyer."
2
SCR 20:1.4(a)(3) provides: "A lawyer shall keep the
client reasonably informed about the status of the matter."
3
SCR 20:3.4(c) provides: "A lawyer shall not knowingly
disobey an obligation under the rules of a tribunal, except for
an open refusal based on an assertion that no valid obligation
exists."
4
SCR 20:8.4(c) provides: "It is professional misconduct
for a lawyer to engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
4
No. 2012AP385-D
24(e). In failing to notify L.T. in writing of
the receipt of funds in which L.T. had an interest, in
failing to promptly deliver to L.T. any funds to which
L.T. was entitled to receive, and in failing to
provide a full accounting regarding the distribution
of L.T.'s funds to L.T., Biester violated SCR
20:1.5(d)(1) and SCR 20:1.15(d)(2).5
¶4 Referee Flynn also presided over the earlier
disciplinary proceeding. When the referee issued his first
report in 2013, there was a possibility that criminal charges
might be filed against Attorney Biester. In order to protect
Attorney Biester's Fifth Amendment right against self-
incrimination, the referee stayed proceedings as to Count Two.
In March of 2015, the OLR notified this court that the Wisconsin
Department of Justice had determined it will not criminally
prosecute Attorney Biester for her conduct involving L.T.
5
Effective July 1, 2016, substantial changes were made to
Supreme Court Rule 20:1.15, the "trust account rule." See S.
Ct. Order 14-07, (issued Apr. 4, 2016, eff. July 1, 2016).
Because the conduct underlying this case arose prior to July 1,
2016, unless otherwise indicated, all references to the supreme
court rules will be to those in effect prior to July 1, 2016.
SCR 20:1.15(d)(1) and SCR 20:1.15(d)(2) provide: "(1) 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) Upon final distribution of any trust property or upon
request by the client or a 3rd party having an ownership
interest in the property, the lawyer shall promptly render a
full written accounting regarding the property."
5
No. 2012AP385-D
Criminal charges are apparently pending against J.M. On May 12,
2015, this court granted the OLR's motion to lift the stay of
proceedings with respect to Count Two and further ordered that
the matter be referred to a referee for additional proceedings
regarding Count Two of the amended complaint. Referee Flynn was
again appointed to preside over the proceedings regarding Count
Two of the amended complaint.
¶5 An evidentiary hearing in this matter was held on
November 16, 2015. The only witnesses to testify at the hearing
were Attorney Biester and Attorney Arthur K. Thexton, the
character witness called by Attorney Biester. Attorney Thexton
stated that Attorney Biester has a reputation for being truthful
and honest. He also said he knows of J.M. from a time in the
1980s when he was a Wisconsin district attorney and he secured a
conviction against J.M. for criminal fraud. The conviction
resulted in a prison sentence for J.M.
¶6 The referee issued his report and recommendation on
Count Two of the amended complaint on December 1, 2015. The
referee noted that in its case in chief, OLR presented the
videotaped deposition of L.T. L.T. testified that her
interaction with Attorney Biester regarding her divorce was
almost exclusively through J.M. L.T. said she was advised by
Attorney Biester, acting through J.M., to transfer $78,000 into
Attorney Biester's client trust account as a way of protecting
those funds from her husband in the divorce proceeding. L.T.
said she learned from J.M. about a month after transferring the
$78,000 that the money had been used to purchase a home that
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No. 2012AP385-D
J.M. was going to remodel and then "flip" it and that J.M. was
going to give L.T. $10,000 to boot within a month. L.T. said
when she heard this she was furious and wanted her money back.
¶7 L.T. testified that in August 2009 Attorney Biester
told L.T. that she had learned J.M. had taken the money from
Attorney Biester's client trust account and had paid off
Attorney Biester's mortgage on the home that was then in
foreclosure. L.T. wrote a letter to the court in the divorce
matter and explained what had happened. The court allowed L.T.
to obtain new counsel. L.T.'s divorce was ultimately finalized
but because of the way the $78,000 had been handled, that amount
was determined to be comingled and viewed as marital property.
L.T. subsequently made a claim to the Wisconsin Lawyers' Fund
for Client Protection, which awarded her a full refund of the
$78,000 due to her being the victim of fraud.
¶8 In his report, the referee noted that Attorney Biester
claimed she did not know that J.M. had a criminal fraud record
and did not know the $78,000 that was deposited into her client
trust account came from L.T. She said J.M. alone made
arrangements for L.T. to put the funds into the trust account
and it was not until later that Attorney Biester learned from
J.M. that the source of the $78,000 was L.T. and some associates
of J.M.
¶9 The referee found L.T.'s testimony to be credible, and
he found that Attorney Biester was not credible when she claimed
she did not know that L.T. was the source of the $78,000. The
referee noted that the $78,000 was the exact same amount of
7
No. 2012AP385-D
money that Attorney Biester believed L.T. had received as an
inheritance and was at issue in the division of the marital
estate in the divorce action. The referee further noted that
Attorney Biester was actually at her client trust account bank
when the $78,000 was wired and received. The referee opined
this suggests that Attorney Biester knew the funds were coming
and she was immediately prepared to use those funds for her own
benefit.
¶10 The referee said a reasonable inference from the
evidence was that Attorney Biester and J.M. were acting together
with full knowledge of what was occurring, and he said Attorney
Biester had full knowledge that her client's funds were being
wrongfully placed into her client trust account and were
thereafter wrongfully converted to Attorney Biester's personal
use. The referee said:
She knew fully what was occurring on 10 February 2009
in terms of obtaining and converting her client's
$78,000. She tried to cover up her wrongful conduct
by placing the entire blame on her legal assistant,
J.M. However, Respondent's failure to notify her
client was intentional under the credible evidence and
no reasonable excuse for Respondent not informing L.T.
was provided.
¶11 For these reasons, the referee found that the OLR
presented clear, satisfactory and convincing evidence of
misconduct by Attorney Biester as alleged in each of the
averments in Count Two of the amended complaint.
¶12 Turning to the appropriate sanction, the referee said
the misconduct at issue here is quite serious. The referee said
8
No. 2012AP385-D
the misconduct was aggravated because Attorney Biester continued
to claim that she was innocent of wrongdoing and that she had
been a victim of fraud by her employee. The referee said
Attorney Biester took advantage of her relationship with L.T.
and worked with her employee to have the $78,000 deposited into
Attorney Biester's client trust account. The referee said, "The
actions of this attorney have brought distain [sic] and dishonor
to the entire legal profession in our State. A client was
seriously harmed when she should have been protected."
¶13 The referee pointed to several mitigating factors. He
noted that prior to her 2013 suspension, Attorney Biester had no
discipline imposed during her 36-year legal career. The referee
further noted that Attorney Biester has various health issues.
He also pointed out that she has fully served the one year
suspension that was previously ordered by this court. He also
noted that Attorney Biester states she is now living on a very
meager monthly Social Security award. The referee also noted
Attorney Biester says she does not know where she would get the
funds to meet her continuing legal education and ethics course
requirements in the event she were to seek reinstatement of her
law license in the future.
¶14 The referee concluded that Attorney Biester's license
to practice law should be suspended for the maximum period
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No. 2012AP385-D
allowed.6 The referee also recommends that Attorney Biester be
ordered to pay the full costs of this proceeding and that she be
ordered to reimburse the Wisconsin Lawyers Fund for Client
Protection for the $78,000 that it paid to L.T.
¶15 A referee's findings of fact are affirmed unless
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. The court may impose
whatever sanction it sees fit, 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.
¶16 There is no showing that any of the referee's findings
of fact are clearly erroneous. According, we adopt them. We
also agree with the referee's conclusions of law that Attorney
Biester violated the supreme court rules set forth above.
¶17 With respect to the appropriate level of discipline,
upon careful review of the matter, we conclude that rather than
suspending Attorney Biester's license for the maximum period
allowed, retroactive to November 25, 2013, Attorney Biester's
license should be suspended for three years and six months
retroactive to November 25, 2014.
6
We are unsure what the referee meant by the term "the
maximum period allowed." The most severe sanction this court
can impose is the revocation of an attorney's license. An
attorney whose license has been revoked may petition for
reinstatement five years after the effective date of revocation.
See SCR 22.29(2). A suspension for "the maximum period allowed"
would presumably be approximately four years and eleven months.
10
No. 2012AP385-D
¶18 As part of its order imposing the one year suspension
of Attorney Biester's Wisconsin law license, this court
specifically ordered that in the event the stay of proceedings
relating to Count Two of the amended complaint was lifted and
there was an additional finding of misconduct as to Count Two,
"any sanction imposed as a result of that misconduct shall run
consecutive to the one year suspension imposed by the terms of
this order." Disciplinary Proceedings Against Biester, 350
Wis. 2d 707, ¶33. In order for the sanction imposed in the
instant case to run consecutive to the prior one year
suspension, the new sanction must be effective November 25,
2014.
¶19 We agree that the misconduct at issue here was very
serious, but we are not convinced that it rises to the level of
warranting a suspension of Attorney Biester's law license that
approaches five years. Although no two disciplinary proceedings
are identical, we find the decision in In re Disciplinary
Proceedings Against Carter, 2014 WI 126, 359 Wis. 2d 70, 856
N.W.2d 595 to be somewhat similar. In Carter, an attorney who
had been in practice for nearly 40 years pled no contest to 11
counts of misconduct, including converting over $72,000 of a
client's funds. Carter's law license was suspended for three
years. Mitigating factors in Carter were the attorney's lack of
previous misconduct and his expression of remorse. Aggravating
factors included the fact that the attorney's conduct was
reckless and highly unprofessional and the attorney initially
accused the client of trying to take advantage of him.
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No. 2012AP385-D
¶20 In this case, Attorney Biester practiced law for over
30 years before being disciplined. Attorney Biester converted a
similar amount of money as Attorney Carter. However, unlike
Attorney Carter, Attorney Biester has still not accepted full
responsibility for her actions and instead continues to blame
her former employee and portray herself as a victim. For all of
these reasons, we conclude that a three year and six month
suspension of Attorney Biester's license, retroactive to
November 25, 2014, is an appropriate sanction.
¶21 We agree with the referee that Attorney Biester should
be required to reimburse the Wisconsin Lawyers' Fund for Client
Protection and that she should also be required to pay the full
costs of this proceeding.
¶22 IT IS ORDERED that the license of Mary K. Biester to
practice law in Wisconsin is suspended for a period of three
years and six months, retroactive to November 25, 2014.
¶23 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Mary K. Biester shall make restitution in the
amount of $78,000 to the Wisconsin Lawyers' Fund for Client
Protection.
¶24 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Mary K. Biester shall pay to the Office of Lawyer
Regulation the costs of this proceeding, which are $8,712.86 or
enter into a payment agreement plan with the Office of Lawyer
Regulation for the full payment of costs over a period of time.
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No. 2012AP385-D
¶25 IT IS FURTHER ORDERED that the restitution specified
above is to be completed prior to paying costs to the Office of
Lawyer Regulation.
¶26 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See SCR
22.29(4)(c).
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No. 2012AP385-D.ssa
¶27 SHIRLEY S. ABRAHAMSON, J. (concurring). I join the
court's decision and order as to the discipline imposed in this
matter. I write separately to address costs and restitution.
¶28 Attorney Biester has been ordered to pay the Office of
Lawyer Regulation $8,712.86 in costs and to make restitution in
the amount of $78,000 to the Wisconsin Lawyers' Fund for Client
Protection. In the event Attorney Biester petitions for the
reinstatement of her license to practice law in Wisconsin, she
will be required to demonstrate that she has complied fully with
the terms of the order of suspension, see SCR 22.29(4)(c), and
that she has made restitution to or settled all claims of
persons injured or harmed by her misconduct or explained the
failure or inability to do so. See SCR 22.29(4m).
¶29 If an attorney has satisfied all of the requirements
set forth in SCRs 22.31(1) and 22.29(4)(a)-(4m), his or her
license to practice law may be reinstated notwithstanding the
failure to pay costs or make restitution provided the attorney
has been unable to do so due to a lack of financial resources.
I write separately to clarify that Attorney Biester's inability
to pay costs or make restitution, standing alone, would not
automatically bar her from regaining her law license. See,
e.g., In re Disciplinary Proceedings Against Widule, 2012 WI 63,
341 Wis. 2d 493, 817 N.W.2d 822; In re Disciplinary Proceedings
Against Gilbert, 2002 WI 102, 255 Wis. 2d 311, 647 N.W.2d 845.
1
No. 2012AP385-D.ssa
1
Office of Lawyer Regulation v. Mary K. Biester
Court: Wisconsin Supreme Court
Date filed: 2016-07-22
Citations: 371 Wis. 2d 577, 2016 WI 74
Copy CitationsCombined Opinion