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In re Disciplinary Proceedings Against Vaitys

Supreme Court of Wisconsin

August 22, 2019

In the Matter of Disciplinary Proceedings Against Thomas D. Vaitys, Attorney at Law:
v.
Thomas D. Vaitys, Respondent. Office of Lawyer Regulation, Complainant,

         ATTORNEY disciplinary proceeding. Attorney's license revoked.

          PER CURIAM.

         ¶1 Pending before the court is a report and recommendation filed by Referee Richard M. Esenberg. The report recommends that we accept Attorney Thomas D. Vaitys' petition for consensual license revocation, order him to pay restitution, and revoke his license to practice law in Wisconsin. Attorney Vaitys is the subject of an Office of Lawyer Regulation (OLR) disciplinary complaint alleging that he committed 19 counts of professional misconduct in several client matters. He is also the subject of two pending grievances that have not yet been fully investigated by the OLR.

         ¶2 We agree that both revocation and restitution are appropriate, and we agree that Attorney Vaitys shall pay the costs of this proceeding, which are $4, 703.85 as of July 10, 2019.

         ¶3 Attorney Vaitys was admitted to the practice of law in Wisconsin in 2004. He currently resides in Sonora, California. He has not previously been subject to professional discipline. His law license has been suspended, however, for failure to pay State Bar dues, failure to provide a required trust account certification, and for failure to comply with CLE reporting requirements.

         ¶4 On June 28, 2017, the OLR filed a disciplinary complaint charging Attorney Vaitys with 19 counts of professional misconduct. Referee Esenberg was appointed on July 24, 2017. On September 18, 2018, Attorney Vaitys filed a petition for consensual license revocation pursuant to Supreme Court Rule (SCR) 22.19.[1]

         ¶5 Attorney Vaitys states that he cannot successfully defend himself against the professional misconduct alleged in the complaint or the pending investigations, and states he will make appropriate restitution. On September 18, 2018, the OLR filed a recommendation, supporting Attorney Vaitys' petition.

         ¶6 The referee issued a report on January 8, 2019, recommending revocation and restitution.[2] No appeal has been filed in this matter, so our review proceeds pursuant to SCR 22.17(2). We revoke Attorney Vaitys' Wisconsin law license effective the date of this order.

         ¶7 The first 12 counts of the OLR's disciplinary complaint arise from Attorney Vaitys' representation of T.A. T.A. is an individual with a "wide range of cognitive and comprehension difficulties, including difficulty reading and/or understanding written information." In February 2012, T.A. hired Attorney Vaitys and Attorney Thomas Napierala, a lawyer with another firm, to set aside a mediation agreement and settlement that T.A. had entered in a Milwaukee County Circuit Court case involving the estate of T.J.[3] If they succeeded in setting aside the settlement, the two lawyers would then commence litigation to establish that T.A. was entitled to inherit the T.J. estate. If not, they intended to appeal and, perhaps, seek review in this court. The legal work was to be paid from settlement funds that T.A. had received from the T.J. estate (the Probate Award). Work commenced in February of 2012, but no written fee agreement was signed until November 2012.

         ¶8 The fee agreement limited what the lawyers could charge for appellate work. It established a $25, 000 "Appellate Fund" trust account. Fees and costs related to this appellate work were only to be paid from the Appellate Fund, not from the remainder of the Probate Award. The balance of the Probate Award was to be held in Attorney Vaitys' IOLTA trust account. It was agreed there would be an accounting of any other work previously performed for T.A. Other than the anticipated appeals, the fee agreement covered no other matters or any subsequent work on the T.J. estate matter. With respect to non-appellate work, the fee agreement provided that one-third of all fees would be paid to Attorney Vaitys, and two-thirds would be paid to Attorney Napierala. Work performed by Attorney Napierala was to be billed to and the charges approved by Attorney Vaitys.

         ¶9 On November 26, 2012, Attorney Vaitys received a check for $161, 269.23 representing the settlement funds from the T.J. estate. Attorney Vaitys deposited the funds in his general IOLTA trust account. He then transferred $25, 000 to the Appellate Fund trust account.

         ¶10 Thereafter, Attorney Vaitys failed to keep proper records of disbursements, commingled funds, improperly withdrew funds from both the Probate Award in his general IOLTA trust account and from the Appellate Fund trust account, misrepresented account balances, converted funds, improperly billed, made then-prohibited internet banking transactions, failed to make a proper accounting, and failed to file a timely reply brief. Essentially, Attorney Vaitys improperly took a substantial portion of T.A.'s funds and kept T.A. in the dark about the balance of funds held by Attorney Vaitys and the charges against them.

         ¶11 Based on the forgoing, the OLR alleged that Attorney Vaitys' handling of the T.A. matter violated a number of the rules of professional conduct, as follows:

Count One: By failing, prior to November 12, 2012, to communicate in writing to T.A. the scope of the representation and the rate and basis of Attorney Vaitys' fees and expenses, Attorney Vaitys violated SCR 20:1.5(b) (1) .[4]
Count Two: By failing to clearly and accurately communicate with T.A. about the specific amounts Attorney Vaitys disbursed from T.A.'s funds, the total amount of fees Attorney Vaitys believed were due and owing, and the total amount of T.A.'s funds remaining in the trust accounts, so as to provide T.A. with an accurate understanding of Attorney Vaitys' handling of his funds and the total amount of such funds in Attorney Vaitys' possession, Attorney Vaitys violated SCR 20:1.4(a) (3)[5] and SCR 20:1.4(a) (4) .[6]
Count Three: By converting T.A.'s funds to his own use or benefit, Attorney Vaitys violated SCR 20:8.4(c) .[7]
Count Four: By charging T.A. $275 per hour for services that were not reasonably billable to T.A., Attorney Vaitys violated SCR 20:1.5(a).[8]
Count Five: By using T.A.'s funds to pay obligations to other clients or third parties, thereby failing to safeguard and hold those funds in trust, Attorney Vaitys violated SCR 20:1.15(b)(1).[9]
Count Six: By failing to take reasonable steps to ensure that Attorney Napierala's billing statements were accurate before paying the same from T.A.'s funds, thereby failing to safeguard and hold those funds in trust, Attorney Vaitys violated SCR 20:1.15(b) (1) .
Count Seven: By failing to provide T.A. with accurate, written accountings upon request, Attorney Vaitys violated former SCR 20:1.15(d) (2) .[10]
Count Eight: By making multiple internet banking transactions related to either T.A.'s appellate trust account or his IOLTA trust account, at a time when such transactions were prohibited, Attorney Vaitys violated former SCR 20:1.15(e) (4)c.[11]
Count Nine: By failing to timely file T.A.'s reply brief or to timely file for an extension of time in which to file the reply brief, Attorney Vaitys violated SCR 20:1.3.[12]
Count Ten: By holding himself out as trustee of T.A.'s special needs trust, when no such trust existed and Attorney Vaitys was not trustee of any trust related to T.A., Attorney Vaitys violated SCR 20:8.4(c).
Count Eleven: By failing to cooperate in the OLR's investigation of the grievance, including making misrepresentations to the OLR during the investigation and by willfully failing to fully and fairly disclose all facts and circumstances pertaining to his alleged misconduct after having been notified by the OLR of the matter, Attorney Vaitys violated SCR 22.03 (2)[13] and SCR 22.03(6), [14] enforceable via SCR 20:8.4(h).[15]
Count Twelve: By making misrepresentations to the OLR during the OLR's initial evaluation of these grievances, Attorney Vaitys violated SCR 20:8.4(c).

         ¶12 The remaining seven allegations in the complaint relate to misconduct that the OLR identified in the course of investigating the T.A. grievance. These include accounting anomalies affecting other clients, and misrepresentations that Attorney Vaitys made to the OLR in an effort to hide his misconduct. The OLR audited Attorney Vaitys' banking records during the period he represented T.A. and identified at least seven occasions between February 6, 2013 and February 12, 2014 when Attorney Vaitys made other internet banking transfers from the Appellate Fund trust account or general IOLTA trust account to his business account. These transactions were prohibited at the time.

         ¶13 During the investigation, Attorney Vaitys represented to the OLR that billing statements were supported by contemporaneously created ledgers that he claimed to have gone over with T.A. on a monthly basis. Attorney Vaitys later admitted that these statements and ledgers were fabricated to conceal his misuse of T.A.'s funds.

         ¶14 Attorney Vaitys also misrepresented the terms of the fee agreement, falsely stating that it provided for up to $43, 000 in fees and costs for appellate work, and falsely claiming that he obtained ...


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