2017 WI 98
SUPREME COURT OF WISCONSIN
CASE NO.: 2015AP1285
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Tiffany T. Luther, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Tiffany T. Luther,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST LUTHER
OPINION FILED: November 28, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED: ABRAHAMSON, J. dissents.
NOT PARTICIPATING: A.W. BRADLEY, J. did not participate.
ATTORNEYS:
2017 WI 98
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2015AP1285-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Tiffany T. Luther, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
NOV 28, 2017
v.
Diane M. Fremgen
Clerk of Supreme Court
Tiffany T. Luther,
Respondent.
ATTORNEY disciplinary proceeding. Attorney publicly
reprimanded.
¶1 PER CURIAM. We review the report and recommendation
of Referee Jonathan V. Goodman, approving a stipulation filed by
the Office of Lawyer Regulation (OLR) and Attorney Tiffany T.
Luther and concluding that Attorney Luther committed the
professional misconduct alleged by the OLR, as stipulated by the
parties. The referee determined that a public reprimand of
Attorney Luther's license to practice law is appropriate.
No. 2015AP1285-D
¶2 Upon careful review of this matter, we uphold the
referee's findings of fact and conclusions of law and agree that
a public reprimand is an appropriate sanction for Attorney
Luther's misconduct. We also find it appropriate to impose the
full costs of this proceeding, which are $7,414.04 as of July
18, 2017. The OLR has confirmed that Attorney Luther paid
restitution and that no additional restitution order is
warranted.
¶3 Attorney Luther was admitted to the practice of law
in Wisconsin on January 19, 2000 as Tiffany T. Stockinger.
She practiced in Green Bay, but now lives in Las Vegas,
Nevada. She has not previously been the subject of
professional discipline.
¶4 The facts giving rise to this proceeding stem from
Attorney Luther's involvement with Morgan Drexen, Inc. (MDI), a
now defunct debt settlement company.
¶5 In June 2009, MDI and Attorney Luther agreed that she
would serve as "engagement counsel" for MDI in Wisconsin.
Attorney Luther was the attorney providing services to Wisconsin
residents in MDI's program.
¶6 In August 2012, M.M. contacted MDI for assistance
paying her debts so she could avoid bankruptcy. She had
approximately $14,000 in debts, including amounts owed to GE
Capital Retail Bank (GE Capital). MDI offered to help M.M. pay
her debts in three years if she paid MDI $100, followed by $185
per month. Under this plan, M.M.'s payments would not be used
to pay off her debts until they covered MDI's engagement fee of
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No. 2015AP1285-D
$1,295, plus 20 percent of M.M.'s debt. Before M.M. enrolled in
MDI's plan, the company read her disclosures that Attorney
Luther had approved. These disclosures did not adequately
inform M.M. that it was unlikely the proposed plan could pay her
debts. M.M. completed the MDI forms online, including two fee
agreements with Attorney Luther. Attorney Luther's agreements
with M.M. also charged her $50 per month for various services
such as review of a document, a simple will, responding to
email, and file maintenance. M.M. was charged for these
services even if she did not use them. Attorney Luther had no
contact with M.M. prior to M.M. signing the fee agreements.
Attorney Luther was aware of MDI's practices, and that her
client M.M. was using MDI's system. Attorney Luther did not
give M.M. information reasonably necessary for her to understand
the material advantages and disadvantages of MDI's plan or
discuss with M.M. options and alternatives to it. MDI and
Attorney Luther's letters to M.M. were form letters that
provided little substantive information.
¶7 In August 2012, MDI started automated monthly
withdrawals from M.M.'s checking account. MDI sent M.M.'s
creditors form letters notifying them of Attorney Luther's
representation and requested all correspondence should be sent
to Attorney Luther, via MDI. MDI did not send copies of these
letters to M.M.
¶8 In November 2012, GE Capital's attorneys sent Attorney
Luther, through MDI, a letter informing her that M.M.'s account
was in default. The letter offered to cure M.M.'s default for
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$716 by December 21, 2012. Neither Attorney Luther nor MDI gave
a copy of this letter to M.M. or informed her of this offer at
the time.
¶9 On February 14, 2013, GE Capital filed a small claims
suit against M.M. In April 2013, M.M. received the summons and
complaint in the GE Capital lawsuit, and notice of a May 13,
2013 hearing. She contacted MDI. MDI informed her that because
she had not yet covered the engagement fee, it had taken no
action to resolve her debts. As of April 22, 2013, M.M. had
paid MDI and Attorney Luther $1,665.
¶10 MDI showed that M.M.'s account with them had a balance
of -$115. MDI directed M.M. to contact Attorney Luther for
advice about the lawsuit and sent her a limited scope
representation agreement for that purpose.
¶11 Attorney Luther's limited scope representation
agreement charged M.M. $550 for her assistance with M.M.'s self-
representation in the GE Capital case. It also listed various
charges M.M. would incur, such as $65 for a "Phone Consult with
Counsel." M.M. signed the agreement, and on April 23, 2013,
spoke with Attorney Luther on the phone. Attorney Luther told
M.M. that she would not appear in court for a May 13, 2013
hearing, or otherwise represent her in the matter. Attorney
Luther advised M.M. to request a 90-day extension by which time
she would have enough funds in her MDI account to pay Attorney
Luther's fee and file for bankruptcy. Attorney Luther charged
M.M. $35 for this conversation as a "rush job."
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No. 2015AP1285-D
¶12 On or about April 30, 2013, M.M. spoke with MDI. MDI
recorded her agreement to file for bankruptcy. In May 2013,
Attorney Luther and MDI sent M.M. two letters informing her that
they had not received either the necessary paperwork or fee to
proceed with bankruptcy.
¶13 On May 13, 2013, M.M. appeared at the GE Capital small
claims hearing, pro se. In May 2013, M.M. consulted another
attorney and also closed her checking account to stop the
automated payments to MDI.
¶14 On May 31, 2013, M.M.'s new attorney wrote to MDI,
asking it stop the automated withdrawals and requesting a refund
from MDI and Attorney Luther.
¶15 On June 23, 2013, M.M. filed a grievance against MDI
and Attorney Luther with DFI. In July 2013, M.M.'s new attorney
filed a Chapter 7 bankruptcy petition for M.M., and on August 9,
2013, GE Capital dismissed its small claims action against M.M.
¶16 On October 18, 2013, the bankruptcy court discharged
M.M.'s debts, including those included in MDI's debt settlement
program.
¶17 In November 2013, DFI forwarded M.M.'s grievance to
the OLR, which commenced an investigation. This disciplinary
proceeding ensued. In January 2014, Attorney Luther refunded
$800 to M.M.
¶18 The remaining counts of misconduct involve Attorney
Luther's representation of J.B. on behalf of MDI. In January
2013, in response to a television advertisement, J.B. sought
assistance consolidating approximately $22,000 in debt. MDI
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No. 2015AP1285-D
offered J.B. a plan to assist with his debts if he paid MDI $260
per month. J.B.'s payments would not be used to pay off his
debts until they covered MDI's engagement fee of $1,750, plus 20
percent of J.B.'s debt.
¶19 Before J.B. enrolled in MDI's plan, the company read
him disclosures that Attorney Luther had approved. These
disclosures did not adequately inform J.B. that it was unlikely
that the proposed plan could pay his debts. J.B. completed MDI
forms online, including two fee agreements with Attorney Luther.
Attorney Luther's agreements with J.B. charged him $50 per month
for various services such as review of a document, a simple
will, responding to email, and file maintenance. MDI charged
J.B. for these services, even if he did not use them.
¶20 Attorney Luther had no contact with J.B. prior to J.B.
signing the fee agreements. Attorney Luther was aware of MDI's
practices, and that her client J.B. was using MDI's system.
Attorney Luther did not give J.B. information reasonably
necessary for him to understand the material advantages and
disadvantages of MDI's plan, nor did she discuss alternatives to
it.
¶21 On January 28, 2013, Attorney Luther called J.B. to
welcome him to the MDI program. This was their only personal
contact during the representation. In January 2013, MDI started
automated monthly account withdrawals from J.B.'s checking
account.
¶22 In March 2013, MDI sent J.B.'s creditors form letters
notifying them of Attorney Luther's representation and requested
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No. 2015AP1285-D
all correspondence should be sent to Attorney Luther, via MDI.
MDI did not send copies of these letters to J.B.
¶23 In April, August, and October of 2013, MDI rejected
settlement offers from J.B.'s creditors. Neither Attorney
Luther nor MDI informed J.B. of the settlement offers.
¶24 In January 2014, J.B. learned that MDI was not paying
his creditors. On February 5, 2014, J.B. spoke with Attorney
Luther's paralegal, requesting a full refund or full payment of
his debts enrolled in the MDI program. While this conversation
was ongoing, MDI generated a settlement offer regarding one of
J.B.'s debts for Attorney Luther's consideration. Attorney
Luther approved the offer that day, but did not discuss it with
J.B. On March 6, 2014, J.B. wrote to Attorney Luther requesting
a full refund.
¶25 In April, Attorney Luther requested that MDI refund
all of J.B.'s payments, less $1,000. On May 16, 2014, Attorney
Luther's paralegal sent J.B. a refund check for $3,060.
¶26 On June 30, 2015, the OLR filed a disciplinary
complaint against Attorney Luther alleging thirteen (13) counts
of misconduct and seeking an 18-month suspension and
restitution. Attorney Luther retained counsel and filed an
Answer. On August 25, 2015, Jonathan V. Goodman was appointed
referee.
¶27 On November 1, 2016, the OLR filed an Amended Complaint
alleging ten (10) counts of misconduct and seeking a public
reprimand. Attorney Luther filed an Amended Answer.
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No. 2015AP1285-D
¶28 On May 17, 2017, the OLR and Attorney Luther filed a
Stipulation whereby Attorney Luther withdrew her Amended Answer
and stipulated that she did not contest the alleged misconduct.
The Stipulation states that "Luther and OLR agree that the
appropriate level of discipline to impose for Luther's
misconduct is a public reprimand." It acknowledged that
restitution had been paid.
¶29 The OLR's amended complaint alleged, and Attorney
Luther stipulated that, by failing to provide M.M. information
reasonably necessary to inform her of the results of accepting
MDI's debt settlement plan, the advisability of paying fees
which would not be used to achieve her objectives, or to discuss
with M.M. other options to achieve her goal of paying her debts
and avoiding bankruptcy, Attorney Luther violated
SCR 20:1.4(a)(2)1 and(b).2
¶30 The amended complaint alleged, and Attorney Luther
stipulated that, by failing to provide M.M. copies of the
letters sent to her creditors or accurately inform M.M. of the
actions taken on her behalf, thereby failing to keep M.M.
1
SCR 20:1.4(a)(2) provides: "A lawyer shall reasonably
consult with the client about the means by which the client's
objectives are to be accomplished."
2
SCR 20:1.4(b) provides: " A lawyer shall explain a matter
to the extent reasonably necessary to permit the client to make
informed decisions regarding the representation."
8
No. 2015AP1285-D
reasonably informed about the status of her matter, Attorney
Luther violated SCR 20:1.4(a)(3).3
¶31 The amended complaint alleged, and Attorney Luther
stipulated that, by failing to inform M.M. of the default/right
to cure notice from GE Capital, Attorney Luther violated
SCR 20:1.4(a)(3), and thereby preventing M.M. from making an
informed decision regarding the representation, Attorney Luther
violated SCR 20:1.4(b).
¶32 The amended complaint alleged, and Attorney Luther
stipulated that, by charging M.M. a $50 monthly fee for which
M.M. received no meaningful services, and which was not used for
any expenses specifically related to the representation,
Attorney Luther violated SCR 20:1.5(a).4
3
SCR 20:1.4(a)(3) provides: "A lawyer shall keep the
client reasonably informed about the status of the matter."
4
SCR 20:1.5(a) provides:
(a) A lawyer shall not make an agreement for,
charge, or collect an unreasonable fee or an
unreasonable amount for expenses. The factors to be
considered in determining the reasonableness of a fee
include the following:
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client,
that the acceptance of the particular employment will
preclude other employment by the lawyer;
(3) the fee customarily charged in the locality
for similar legal services;
(4) the amount involved and the results obtained;
(continued)
9
No. 2015AP1285-D
¶33 The amended complaint alleged, and Attorney Luther
stipulated that, by failing to explain to M.M. the purpose and
effect of the advanced payments M.M. was making, Attorney Luther
violated SCR 20:1.5(b)(1).5
¶34 The amended complaint alleged, and Attorney Luther
stipulated that, by failing upon termination of the
representation in May of 2013 to refund the entire amount M.M.
paid to Attorney Luther, when Attorney Luther had provided no
meaningful legal services to earn the fee, Attorney Luther
violated SCR 20:1.16(d).6
(5) the time limitations imposed by the client or
by the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of
the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
5
SCR 20:1.5(b)(1) provides:
The scope of the representation and the basis or
rate of the fee and expenses for which the client will
be responsible shall be communicated to the client in
writing, before or within a reasonable time after
commencing the representation, except when the lawyer
will charge a regularly represented client on the same
basis or rate as in the past. If it is reasonably
foreseeable that the total cost of representation to
the client, including attorney's fees, will be $1000
or less, the communication may be oral or in writing.
Any changes in the basis or rate of the fee or
expenses shall also be communicated in writing to the
client.
6
SCR 20:1.16(d) provides:
(continued)
10
No. 2015AP1285-D
¶35 The amended complaint alleged and Attorney Luther
stipulated that, by failing to give J.B. information reasonably
necessary to evaluate the material advantages and disadvantages
of MDI's proposed course of action, the advisability of paying
fees which would not be used to achieve his objectives, or to
discuss with J.B. other options and alternatives which could
achieve his goal of paying his debts in full in order to
maintain his credit, Attorney Luther violated SCR 20:1.4(a)(2)
and (b).
¶36 The amended complaint alleged and Attorney Luther
stipulated that, by failing to provide J.B. copies of the
letters sent to his creditors or otherwise accurately inform
him of the status of his debts, thereby failing to keep J.B.
reasonably informed about the status of his matter, Attorney
Luther violated SCR 20:1.4(a)(3).
¶37 The amended complaint alleged and Attorney Luther
stipulated that, by entering into an agreement for and charging
J.B. a $50 monthly fee for which he received no meaningful
services in furtherance of his objectives, and which was not
Upon termination of representation, a lawyer
shall take steps to the extent reasonably practicable
to protect a client's interests, such as giving
reasonable notice to the client, allowing time for
employment of other counsel, surrendering papers and
property to which the client is entitled and refunding
any advance payment of fee or expense that has not
been earned or incurred. The lawyer may retain papers
relating to the client to the extent permitted by
other law.
11
No. 2015AP1285-D
used for any expenses incurred by Attorney Luther or
specifically related to her representation of J.B., Attorney
Luther charged an unreasonable fee and an unreasonable amount
for expenses in violation of SCR 20:1.5(a).
¶38 The amended complaint alleged and Attorney Luther
stipulated that, by failing to explain to J.B. the purpose and
effect of the advanced payments he was making, Attorney Luther
violated SCR 20:1.5(b)(1).
¶39 Attorney Luther affirms that the stipulation did not
result from plea bargaining; she fully understands the
misconduct allegations; she fully understands her right to
contest this matter; she fully understands her right to consult
with counsel; her entry into this stipulation is made knowingly
and voluntarily; and, her entry into this stipulation represents
her decision not to contest the misconduct alleged in the
amended complaint.
¶40 On June 28, 2017, the referee issued a report stating
that "based upon the Stipulation and the fact that the pleadings
involved herein indicate that Luther had no prior misconduct,
the Referee recommends a Public Reprimand." He recommended the
court impose the costs of the proceeding on Attorney Luther.
¶41 On July 18, 2017, the OLR filed its statement of costs
in the amount of $7,414.04. In this statement, the OLR noted
that it agreed to a reduction in the proposed discipline because
the OLR determined that Attorney Luther had paid restitution and
that her involvement with MDI was limited to overall debt
12
No. 2015AP1285-D
reduction services, and was not as egregious as initially
believed.
¶42 On August 8, 2017, Attorney Luther filed an objection
to costs, seeking an unspecified reduction. Essentially, she
argued that the OLR initially, but wrongly, thought that she was
heavily involved in MDI's business. Attorney Luther asserted
that she shouldn't be expected to pay the costs for the OLR's
"overzealous approach."
¶43 On August 17, 2017, the OLR filed a reply to Attorney
Luther's objection to costs. The OLR maintained that full costs
were warranted.
¶44 No appeal was filed so we review this matter pursuant
to SCR 22.17(2). 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 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.
¶45 On September 11, 2017, this court remanded the matter
to the referee with directions to file a supplemental report
justifying the recommendation for a public reprimand and for a
recommendation on the costs dispute. The referee permitted the
parties to submit supplemental memoranda on these issues and, on
October 2, 2017, filed a supplemental report. In it, the
referee states that "[w]here parties have come to an agreement,
13
No. 2015AP1285-D
the referee must find some factor which would shock the
conscience for the referee to recommend a discipline other than
that agreed to by the parties." No case is cited for this
assertion, probably because there is none. This is a
misstatement of the applicable legal standard.
¶46 We note our recent observation in In re Disciplinary
Proceedings Against Ruppelt, 2017 WI 80, ¶30, 377 Wis. 2d 441,
898 N.W.2d 473:
[I]n lawyer disciplinary cases, this court is
obligated to act as a protector of the public, the
court system, and the integrity of the bar——not as a
scribe charged with formalizing the parties' mutual
wishes. Although this court fully appreciates the
efficiency attained through stipulations, we will not
allow the goal of efficiency to take precedence over
the necessity of effecting the core functions of the
lawyer disciplinary system. Sometimes, then, a
departure from a joint stipulation is necessary.
¶47 Just as this court is free to reject a stipulated
disciplinary sanction as circumstances require, so too, are
referees. See, e.g., id., (adopting the referee's
recommendation for a 15-month suspension, as opposed to the one-
year suspension to which the parties had stipulated).
¶48 As no two disciplinary cases are precisely the same,
there is no standard sanction for any particular misconduct.
For that reason, it is particularly important that referees
identify and consider the factors relevant to determining an
appropriate sanction, which include:
[T]he seriousness, nature and extent of misconduct,
the level of discipline needed to protect the public,
the courts, and the legal system from repetition of
the attorney's misconduct, the need to impress upon
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No. 2015AP1285-D
the attorney the seriousness of the misconduct and the
need to deter other attorneys from committing similar
misconduct.
In re Disciplinary Proceedings Against Scanlan, 2006 WI 38, ¶72,
290 Wis. 2d 30, 712 N.W.2d 877. In determining an appropriate
sanction recommendation referees should consider whether the
lawyer has previously been disciplined and whether any
aggravating and or mitigating factors are present. See ABA
Standards for Imposing Lawyer Sanctions. Typically, the referee
will consider factually similar cases. Stipulated discipline is
entitled to no special deference.
¶49 To be sure, the parties' opinions on disciplinary
sanctions are informative but they are just that – opinions, not
authorities to which the referee must defer. We, in turn,
"remain the ultimate arbiter of the appropriate level of
discipline, owing no deference on this subject to either the
parties or the referee." See Ruppelt, 377 Wis. 2d 441, ¶34.
¶50 Here, the referee has provided case law in the
supplemental report that supports the recommended discipline.
We agree that In re Disciplinary Proceedings Against Shepherd,
2017 WI 66, 376 Wis. 2d 129, 897 N.W.2d 44 is instructive and
that the nature of the misconduct is sufficiently analogous to
this case, that imposing similar discipline is not unreasonable.
There, we imposed a public reprimand on a lawyer with no prior
disciplinary history, who committed ten counts of misconduct,
including violations of the rules regarding fee agreements,
trust accounts, failure to respond to clients, and failure to
cooperate with the OLR's investigation. See also In re
15
No. 2015AP1285-D
Disciplinary Proceedings Against Trudgeon, 2009 WI 96, 321
Wis. 2d 560, 774 N.W.2d 469 (public reprimand imposed on lawyer
with no prior discipline who committed eight counts of
professional misconduct including failing to appear at a court
hearing, failing to properly explain the basis of his fee,
failing to adequately communicate with his client, and failing
to respond to reasonable requests for information); In re
Disciplinary Proceedings Against D'Arruda, 2013 WI 90, 351
Wis. 2d 227, 839 N.W.2d 575 (public reprimand imposed on lawyer
with one previous private reprimand who committed 12 counts of
misconduct, including failing to explain the basis or rate of
his fee, failing to refund unearned fees, failing to provide a
client's file to successor counsel, failing to respond to
reasonable requests for information, and repeatedly failing to
cooperate with the OLR's investigation); and In re Disciplinary
Proceedings Against Hicks, 2012 WI 11, 338 Wis. 2d 558, 809
N.W.2d 33 (public reprimand imposed on lawyer with no prior
disciplinary history who committed eight counts of misconduct
including failing to timely pursue clients' postconviction or
appellate interests, failing to communicate with clients, and
failing to respond to the OLR's requests for information).
¶51 On balance, we will adopt the referee's findings of
fact and conclusions of law that, based on the parties'
stipulation, Attorney Luther violated the supreme court rules as
alleged in the ten counts of the amended complaint. We further
agree with the referee that a public reprimand of Attorney
Luther's license to practice law in Wisconsin is sufficient
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No. 2015AP1285-D
discipline. We agree, further, that notwithstanding Attorney
Luther's objections, it is appropriate to impose the full costs
of this disciplinary proceeding on her. We accept the OLR's
representation that there is no need for a restitution order in
this matter.
¶52 IT IS ORDERED that Tiffany T. Luther is publicly
reprimanded.
¶53 IT IS FURTHER ORDERED that within 60 days of the date
of this order Tiffany T. Luther shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$7,414.04 as of July 18, 2017.
¶54 Ann Walsh Bradley, J., did not participate.
17
No. 2015AP1285-D.ssa
¶55 SHIRLEY S. ABRAHAMSON, J. (dissenting). A public
reprimand is an insufficient sanction for the serious misconduct
to which Attorney Luther stipulated.
1
No. 2015AP1285-D.ssa
1