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In re Disciplinary Proceedings Against Schoenecker

Supreme Court of Wisconsin

May 25, 2018

In the Matter of Disciplinary Proceedings Against James M. Schoenecker, Attorney at Law:
v.
James M. Schoenecker, Respondent-Appellant. Office of Lawyer Regulation, Complainant-Respondent, In the Matter of Disciplinary Proceedings Against James M. Schoenecker, Attorney at Law: Office of Lawyer Regulation, Complainant-Respondent,
v.
James M. Schoenecker, Respondent-Appellant.

          Submitted on Briefs: oral argument: March 12, 2018

          ON THE PETITION FOR REINSTATEMENT OF SCHOENECKER

         ATTORNEY reinstatement proceeding. Reinstatement denied.

          For the respondent-appellant, there were briefs filed by Richard J. Cayo, Stacie H. Rosenzweig, and Hailing & Cayo, S.C., Milwaukee. There was an oral argument by Richard J. Cayo.

          For the complainant-respondent, there was a brief filed by Julie M. Spoke, William J. Weigel, and Office of Lawyer Regulation, Madison. There was an oral argument by William J. Weigel.

          PER CURIAM.

         ¶1 Attorney James M. Schoenecker has appealed Referee James W. Mohr Jr.'s recommendation that Attorney Schoenecker's petition for the reinstatement of his license to practice law in Wisconsin be denied. Upon careful review, we agree with the referee that Attorney Schoenecker has failed to meet his burden of proof to establish the requirements for reinstatement at this time. Accordingly, we accept the referee's recommendation that the petition for reinstatement be denied. However, we determine that Attorney Schoenecker can again petition for reinstatement six months after the date of this opinion. As is our usual practice, we further conclude that Attorney Schoenecker should be required to pay the full costs of this reinstatement proceeding, which are $6, 809.66 as of March 23, 2018.

         ¶2 Attorney Schoenecker was admitted to practice law in Wisconsin in 2004. He is a graduate of Boston College and Columbia Law School. He practiced briefly in New York, practiced at Quarles & Brady in Milwaukee for a time, and then went to a small law firm in Delavan called the Clair Law Offices. In 2011, Attorney Schoenecker's license was suspended for three years. See In re Disciplinary Proceedings Against Schoenecker, 2011 WI 76, 336 Wis.2d 253, 804 N.W.2d 686. Much of the misconduct in that case arose out of Attorney Schoenecker's personal and professional relationship with his former fiance, M.F. In December 2007, Attorney Schoenecker and M.F. opened a joint checking account. M.F. also obtained a home equity line of credit and made a loan of $48, 500 to Attorney Schoenecker. Attorney Schoenecker executed a promissory note whereby he promised to repay the loan with interest. Two days after making the loan, M.F. learned that Attorney Schoenecker had made cash withdrawals from her checking account at a casino, resulting in a $1, 500 negative balance in her account. Thereafter, M.F. closed the joint checking account and ended her engagement to Attorney Schoenecker.

         ¶3 Attorney Schoenecker repaid some of the loan balance. At some point, M.F. filed a collection action against Attorney Schoenecker. The parties reached a settlement and Attorney Schoenecker paid M.F. some $32, 000 as part of a full resolution of the financial issues between them.

         ¶4 In December 2008 Attorney Schoenecker used M.F.'s personal information to enter her business account without her permission and make checks payable to himself. He was able to cash a $950 check, but an attempt to cash two more checks was apparently unsuccessful. As a result of those actions, Attorney Schoenecker was charged in two separate criminal proceedings. In a Walworth County case, he pled guilty to one felony count of identity theft and was placed on two years of probation and ordered to make restitution and pay court costs. In a separate Waukesha County case, he pled guilty to a misdemeanor charge of theft-moveable property. The Waukesha court imposed and stayed a sentence of four months in jail and placed Attorney Schoenecker on probation for one year. He was also required to pay M.F. restitution as well as pay court costs.

         ¶5 In 2008, Attorney Schoenecker became an associate at the Clair Law Offices. He informed the law firm he was representing M.F., so she was considered a client of the firm. Contrary to Clair Law Offices' policy, Attorney Schoenecker sent invoices to M.F. in the fall of 2008 showing that she owed over $13, 000. A substantial number of the entries on the invoices were fraudulent.

         ¶6 In addition to the misconduct involving M.F., Attorney Schoenecker also set up his own separate law firm on the side while he was working as an associate attorney for the Clair Law Office and did not inform the firm of this fact.

         ¶7 The final part of Attorney Schoenecker's misconduct giving rise to the three-year suspension involved fraudulent statements on his own personal bankruptcy proceeding.

         ¶8 In 2016, Attorney Schoenecker received an additional one-year license suspension. See In re Disciplinary Proceedings Against Schoenecker (Schoenecker II), 2016 WI 27, 368 Wis.2d 57, 878 N.W.2d 163. The misconduct in that case concerned his involvement in a business partnership he entered into in 2012 with M.M. and T.H. The men established a limited liability company called GameMaster, LLC. T.H. gave Attorney Schoenecker $25, 000 in cash as his capital contribution, and M.M. contributed $20, 000. Instead of immediately depositing T.H.'s $25, 000 into a GameMaster account, Attorney Schoenecker deposited the bulk of the money into his own personal checking account. He also used company funds to pay his personal credit card bills without preapproval from his partners, and he withdrew funds from company accounts in order to gamble at Potawatomi Casino in Milwaukee.

         ¶9 Attorney Schoenecker filed a petition for the reinstatement of his law license on January 30, 2017. The Board of Bar Examiners filed a report saying Attorney Schoenecker had complied with all continuing legal education requirements for reinstatement. The Office of Lawyer Regulation (OLR) recommended against reinstatement. A public hearing was held before Referee Mohr on July 18, 2017.

         ¶10 Attorney Schoenecker testified at the hearing that he is employed by a landscape maintenance, snow removal, and condominium property maintenance company. The owner of the company submitted a letter saying that he would feel comfortable with Attorney Schoenecker returning to the legal profession and that he trusts Attorney Schoenecker with company trucks and credit cards.

         ¶11 Attorney Schoenecker also testified that during the term of his suspension he has volunteered at his church, set up a chess club at a middle school, and assisted elderly neighbors with household tasks.

         ¶12 Attorney Schoenecker testified that in 2015 he started seeing a mental health professional who specializes in gambling addictions, James Harrison. Attorney Schoenecker said with Mr. Harrison's help he has been able to abstain from gambling. Attorney Schoenecker also explained that he banned himself from the Potawatomi Casino, and he also attends Gamblers Anonymous meetings. Mr. Harrison wrote a letter saying "if [Attorney Schoenecker] continues with his treatment plan, utilizes his support system, makes the changes that are necessary in his life, and continues to act and live responsibly, the chance for the situation to re-occur is minimal." Mr. Harrison went on to state that in his professional opinion, if Attorney Schoenecker's law license were reinstated, "he would continue to perform his duties as an attorney in an extremely professional manner. His prognosis is excellent."

         ¶13 T.H., one of the GameMaster partners, testified against Attorney Schoenecker's reinstatement petition. He said he did not feel his dispute with Attorney Schoenecker was resolved fairly, and he said he did not believe Attorney Schoenecker has the moral character to practice law in Wisconsin. T.H. said, "In my personal opinion anyone who can treat a lifelong friend the way I have been treated, you can get as much as help as you want for gambling problems, that doesn't change the core person in my opinion."

         ¶14 Edward Thompson, an attorney at Clair Law Offices, also testified in opposition to Attorney Schoenecker's reinstatement. He said Attorney Schoenecker was employed at the law offices in 2008 and 2009. When asked if Attorney Schoenecker would be trustworthy and have the moral character to practice law after having been treated for a gambling addiction, Attorney Thompson replied:

I have some concern about that in regard to how he treated his employment relationship with Clair Law Offices, how he treated his ex-fiancee, and then how I read - with regard to the bankruptcy filings and with regard to GameMaster, the gentleman who was here earlier, I have some concerns that he's breaching trust with people he is closest to. So yeah, I have a concern whether he would do that with clients.

         ¶15 M.F. also testified in opposition to Attorney Schoenecker's reinstatement. She said she was reimbursed the money that Attorney Schoenecker took from her, but she said she did not believe he had ever expressed sincere or genuine remorse for his misconduct. When asked if, assuming Attorney Schoenecker has been treated for a gambling problem, she would deem him to be trustworthy and having the moral character to practice law, her response was "Certainly not . . .I'm scared for the public if he keeps his law license." She went on to say:

He's an opportunist. He's shown to be an opportunist. [He] will take advantage at any point he can. He has taken advantage of his next of kin, myself being his fiancee, two best ...

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