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In re Disciplinary Proceedings Against Luther

Supreme Court of Wisconsin

November 28, 2017

In the Matter of Disciplinary Proceedings Against Tiffany T. Luther, Attorney at Law:
v.
Tiffany T. Luther, Respondent. Office of Lawyer Regulation, Complainant,

         ATTORNEY disciplinary proceeding. Attorney publicly reprimanded.

          PER CURIAM.

         ¶1 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.

         ¶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 $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 $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."

         ¶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 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 all correspondence should be sent to Attorney Luther, ...


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