                                                         2017 WI 85

                  SUPREME COURT          OF   WISCONSIN
CASE NO.:               2014AP754-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against
                        Michael M. Rajek, Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        Michael M. Rajek,
                                  Respondent.
                             DISCIPLINARY PROCEEDINGS AGAINST RAJEK

OPINION FILED:          September 15, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:


ATTORNEYS:
                                                                              2017 WI 85
                                                                       NOTICE
                                                        This opinion is subject to further
                                                        editing and modification.   The final
                                                        version will appear in the bound
                                                        volume of the official reports.
No.    2014AP754-D


STATE OF WISCONSIN                                  :            IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Michael M. Rajek, Attorney at Law:


Office of Lawyer Regulation,                                               FILED
           Complainant,                                                SEP 15, 2017
      v.                                                                 Diane M. Fremgen
                                                                      Clerk of Supreme Court
Michael M. Rajek,

           Respondent.




      ATTORNEY disciplinary proceeding.                  Complaint dismissed.



      ¶1   PER CURIAM.           We review Referee             James R. Erickson's

report recommending, consistent with a stipulation executed by

the Office of Lawyer Regulation (OLR) and Attorney Michael M.

Rajek, that we dismiss a pending disciplinary complaint against

Attorney     Rajek.        We    agree     with         the    OLR's      discretionary

determination that the alleged rule violations do not warrant

discipline    in   light    of    our    decision         in   In    re    Disciplinary
Proceedings    Against     Rajek,       2015   WI       18,    361   Wis. 2d 60,        859
                                                                                No.   2014AP754-D



N.W.2d 439.        (Rajek I.)        We therefore dismiss the complaint.                          No

costs will be imposed.

       ¶2    Attorney Rajek was admitted to the practice of law in

Wisconsin in 1974.              In 1986, he received a consensual private

reprimand for engaging in conduct involving dishonesty, fraud,

deceit or misrepresentation.                 Private Reprimand No. 1986-5.                        In

2006, he received a consensual public reprimand for misconduct

consisting of committing a criminal act that reflected adversely

on his honesty, trustworthiness or fitness as a lawyer in other

respects, and engaging in conduct involving dishonesty, fraud,

deceit or misrepresentation.                   Public Reprimand of Michael J.

Rajek        No.      2006-4          (electronic           copy            available             at

https://compendium.wicourts.gov/app/raw/001848.html).

       ¶3    On    April       7,    2014,    the    OLR    filed          the    disciplinary

complaint presently before this court.                       It alleged four counts

of    misconduct     involving        two    clients       and    it       sought     a    60-day

license suspension and costs.                     Two of the counts of alleged

misconduct involved deficiencies in the fee agreement Attorney
Rajek    used.       The       fee   agreement      required      a    client         to    pay    a

specified amount of money up-front before Attorney Rajek would

commence     work.         Although      characterized           as    a    "non-refundable

retainer" the payment was actually an "advanced fee" as defined

in SCR 20:1.0(ag).             The fee agreement stated that the fee would

not     be    held        in    trust,       thus    rendering             it     subject         to

SCR 20:1.15(b)(4m) ("Alternative protection for advanced fees.")

This rule provides that an attorney electing not to hold an
advanced     fee     in    trust     must     provide      certain          notices        to   the
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client, in writing, upon accepting the advanced fee payment.1

Attorney Rajek's fee agreement did not include several of these

required   notices,   nor   did   any   other    document   provide     these

required   notices    to    the   client    at     the   outset    of     the


    1
       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.

         Former SCR 20:1.15(b)(4m) provided: A lawyer who
    accepts advanced payments of fees may deposit the
    funds in the lawyer's business account, provided that
    review of the lawyer's fee by a court of competent
    jurisdiction is available in the proceeding to which
    the fee relates, or provided that the lawyer complies
    with each of the following requirements:

         a. Upon accepting any advanced payment of fees
    pursuant to this subsection, the lawyer shall deliver
    to the client a notice in writing containing all of
    the following information:

            . . .

         4. that the lawyer has an obligation to refund
    any unearned advanced fee, along with an accounting,
    at the termination of the representation;

         5. that the lawyer is required to submit any
    unresolved   dispute   about  the   fee   to   binding
    arbitration within 30 days of receiving written notice
    of such dispute; and

         6. the ability of the client to file a claim with
    the Wisconsin lawyers' fund for client protection if
    the lawyer fails to provide a refund of unearned
    advanced fees.




                                    3
                                                                           No.        2014AP754-D



representation.            As   such,    by    failing      to    include        in    his   fee

agreement the notices required by SCR 20:1.15(b)(4m)a.4., 5.,

and 6., Attorney Rajek allegedly violated those subsections of

SCR 20:1.15(b)(4m) with respect to two clients, T.L. and M.J.

      ¶4    The other two counts of alleged misconduct pertained

to an unresolved fee dispute with one of these clients and to

Attorney    Rajek's        delay    in    cooperating           with    the     ensuing      OLR

investigation.         In August 2011, M.J. hired Attorney Rajek to

represent      her    on    a   non-criminal           traffic        charge.          The   fee

agreement required M.J. to pay Attorney Rajek an initial $2,500.

M.J.'s case proceeded to a jury trial at which M.J. was found

guilty.     Attorney        Rajek      filed       a   Notice    of     Appeal    on     M.J.'s

behalf but M.J. opted to terminate representation and proceed

pro se.     On April 26, 2012, Attorney Rajek sent M.J. a final

bill reflecting a balance due of $8,250.                        M.J. formally disputed

the   amount    due    and      M.J.     and   Attorney         Rajek    were     unable      to

resolve their disagreement regarding the fee.

      ¶5    Former SCR 20:1.15(b)(4m)c provided that when a fee
dispute cannot be resolved upon termination of representation:

      Upon timely receipt of written notice of a dispute
      from the client, the lawyer shall attempt to resolve
      that dispute with the client, and if the dispute is
      not resolved, the lawyer shall submit the dispute to
      binding arbitration with the State Bar Fee Arbitration
      Program or a similar local bar association program
      within 30 days of the lawyer's receipt of the written
      notice of dispute from the client.
(Emphasis added.)




                                               4
                                                                       No.   2014AP754-D



      ¶6    On May 11, 2012, Attorney Rajek wrote to M.J., stating

in part:

      I am in receipt of your letter disputing the bill that
      was sent to you regarding trial expenses followed by a
      notice informing the court that I will no longer be
      representing you.   It is mandatory that your dispute
      be subject to binding arbitration.    I have scheduled
      this matter with Judge Proctor for June 5, 2012, at
      11:00 a.m. at Proctor ADR, LLC located at 116 West
      Grand Ave, Eau Claire, W1 54703.
Although Judge Proctor is a former Eau Claire County circuit

court   judge,    who     now    provides        alternative   dispute       resolution

services,    he     was    not        affiliated     with    the    State     Bar     Fee

Arbitration Program or a similar local bar association program.

Attorney Rajek's selection of Judge Proctor was unilateral.

      ¶7    M.J. objected to this choice and contacted the State

Bar   of   Wisconsin      Fee    Arbitration        Program,   requesting      binding

arbitration.      The State Bar, in turn, contacted Attorney Rajek

to coordinate arbitration but, as of the date the disciplinary

complaint was filed, Attorney Rajek had not agreed to submit to

arbitration through the State Bar's arbitration program.                              The

OLR alleged this violated SCR 20:1.15(b)(4m)c.

      ¶8    Attorney Rajek also delayed approximately two months

before responding to the OLR's request for information regarding

these matters.      The OLR alleged this violated SCR 22.03(2).

      ¶9    While    the        OLR    and   Attorney       Rajek   litigated       this

disciplinary      proceeding,         we   issued    our    decision    in    Rajek    I.

That matter also involved several counts of misconduct related
to Attorney Rajek's fee agreement.                   We concluded that Attorney


                                             5
                                                                    No.   2014AP754-D



Rajak had committed five of the six alleged violations of the

Rules     of    Professional        Conduct    but   we   opted     to    impose   no

discipline and we reduced the costs he was required to pay.                        In

re Disciplinary Proceedings Against Rajek, 2015 WI 18, ¶3, 361

Wis. 2d 60, 859 N.W.2d 439.            We stated:

      [W]e conclude that Attorney Rajek committed the rule
      violations on five counts as found by the referee. The
      violations,   however,   involved    relatively   minor
      failures of communication, including failures in some
      instances to provide certain notices or pieces of
      information to clients under Supreme Court Rule (SCR)
      20:1.15(b)(4m), which sets forth the alternative
      procedure for handling advanced fees. They did not
      involve the sufficiency or quality of the legal
      representation provided by Attorney Rajek to his
      clients. Given the particular facts of this case and
      the nature of the violations, we determine that it is
      not necessary to impose any discipline on Attorney
      Rajek and that there is no basis for a restitution
      award. We do require Attorney Rajek to pay costs, but
      we reduce the amount of costs he must pay to $8,500.
      ¶10      The Rajek I decision prompted the OLR to reconsider

its position in this matter.              Eventually, on September 12, 2016,

the parties executed and filed a stipulation providing that the
referee could recommend dismissal of this disciplinary case if

and   when     Attorney     Rajek    agreed    to    submit   to,   and    complete,

binding arbitration in the fee dispute with his former client.

      ¶11      On   March   15,   2017,    the   parties      executed    a   revised

stipulation.         Attorney Rajek agreed to revise the form of his

fee agreement to comply with the current SCR 20:1.5(g),2 and he

      2
          SCR 20:1.5(g) provides:

           (g) A lawyer who accepts advanced payments of
      fees may deposit the funds in the lawyer's business
                                                   (continued)
                                           6
                                                                   No.    2014AP754-D



executed an affidavit averring that he will, in the future, use

a   fee     agreement     that      contains   the       notices      required    by

SCR 20:1.5(g) and will, upon termination of representation of a

client,     who   has   paid   an   advanced   fee,      abide   by    the   written

accounting and notice requirements of SCR 20:1.15(g)(2).3

     account, provided that review of the lawyer's fee by a
     court of competent jurisdiction is available in the
     proceeding to which the fee relates, or provided that
     the lawyer complies with each of the following
     requirements:

          (1) Upon accepting any advanced payment of fees
     pursuant to this subsection, the lawyer shall deliver
     to the client a notice in writing containing all of
     the following information:

             a. The amount of the advanced payment.

             b. The basis or rate of the lawyer's fee.

          c. Any expenses            for   which   the    client      will   be
     responsible.

          d. The lawyer's obligation to refund any unearned
     advanced fee, along with an accounting, at the
     termination of the representation.

          e.   The   lawyer's   obligation   to submit   any
     unresolved    dispute   about   the   fee  to   binding
     arbitration within 30 days of receiving written notice
     of the dispute.

          f. The ability of the client to file a claim with
     the Wisconsin Lawyers' Fund for Client Protection if
     the lawyer fails to provide a refund of unearned
     advanced fees.
     3
          SCR 20:1.15(g)(2) provides:

          (2) Upon termination of the representation, the
     lawyer shall deliver to the client in writing all of
     the following:

                                                                         (continued)
                                           7
                                                            No.    2014AP754-D



    ¶12    On   April   10,   2017,   Referee   Erickson   filed    a    brief

report    recommending,       consistent   with    the     terms    of    the

stipulation, the court dismiss the complaint.

    ¶13    On April 21, 2017, the OLR filed a detailed statement

of costs but noted that costs should not be imposed if the

complaint was dismissed. In its statement of costs, the OLR

described the stipulation:

    [ ], the parties stipulated that OLR's disciplinary
    complaint can be dismissed without any findings of
    miscount, [sic] if Attorney Rajek first met certain
    conditions. It toke [sic] quite a while – years – but
    Attorney Rajek finally submitted the attorney fee
    dispute he had with his former client to binding
    arbitration with the State Bar of Wisconsin Fee
    Arbitration Program, and he has provided a new Flat
    Fee Agreement, compliant with current rules, which he
    will use in his law office for clients who pay an
    advanced fee.   It is under those circumstances that
    OLR asked the referee to dismiss the complaint.


         a. A final accounting, or an accounting from the
    date of the lawyer's most recent statement to the end
    of the representation, regarding the client's advanced
    fee payment.

         b. A refund of any unearned advanced fees and
    costs.

         c. Notice that, if the client disputes the amount
    of the fee and wants that dispute to be submitted to
    binding arbitration, the client must provide written
    notice of the dispute to the lawyer within 30 days of
    the mailing of the accounting.

         d. Notice that, if the lawyer is unable to
    resolve the dispute to the satisfaction of the client
    within 30 days after receiving notice of the dispute
    from the client, the lawyer shall submit the dispute
    to binding arbitration.


                                      8
                                                                           No.    2014AP754-D



No appeal was filed and the matter was submitted to this court

under SCR 22.17(2).

     ¶14    Upon review, the court observed that the stipulation

did not expressly set forth the rationale for the OLR's decision

to dismiss the complaint.           Pursuant to long-standing policy, the

court does not allow plea bargaining in attorney disciplinary

cases.     See,    e.g.,    In    re    Disciplinary              Proceedings       Against

Inglimo, 2007 WI 126, ¶85, 305 Wis. 2d 71, 740 N.W.2d 125 ("[W]e

note that the OLR is not authorized to plea bargain disciplinary

matters…").        In   addition,       the       stipulation         did    not    contain

assurances that typically appear in a stipulation.4

     ¶15    We    directed   the       OLR       to   file    a     supplemental         brief

addressing:       (1)   whether     the      stipulation            comports      with     the

prohibition       against    plea      bargaining            and,     if    so,     if    the

stipulation should be amended to say so, and (2) the legal basis

and rationale for dismissal of the pending charges in exchange



     4
       Typically, stipulations executed in disciplinary matters
state that the stipulation: did not result from plea bargaining;
the lawyer avers that he or she fully understands the misconduct
allegations; the lawyer understands the ramifications should
this court impose the stipulated level of discipline; the lawyer
understands his or her right to contest the matter; the lawyer
understands his or her right to consult with counsel; the lawyer
states that his or her entry into the stipulation is made
knowingly and voluntarily; the lawyer states that he or she has
read the OLR's complaint and the stipulation and that entry into
the stipulation represents a decision not to contest the
misconduct alleged in the complaint or the level and type of
discipline sought by the OLR director. None of these assurances
appear in this stipulation.


                                             9
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for the attorney's compliance with supreme court rules.                         The OLR

filed its response on July 3, 2017.

      ¶16     The OLR explains that in the wake of this court's

decision in Rajek I, in which this court indicated that the fee

agreement      violations      did    not       warrant    discipline,         the    OLR

determined that it would be inappropriate to continue to seek a

60-day suspension in this case.                 It opted to focus on resolving

the existing concerns by inducing Attorney Rajek to comply with

the applicable rules and obtaining some assurance that he would

comply   in    the   future.         The    OLR   states    that   its    change       in

position "was a unilateral decision on the part of OLR, made

following an assessment of the court's decision in [Rajek I]

2015 WI 18 [and] was not the result of plea bargaining."

      ¶17     The OLR asserts that the stipulation does not require

amendment.      The OLR states that it is "entirely satisfied" that

Attorney Rajek fully understood his rights and that to further

amend the stipulation would only result in additional delay.

The OLR adds that it believes the course it chose "aligns with
the   spirit    of   the   court's     more       recent   adoption      of    what    is




                                           10
                                                   No.   2014AP754-D



commonly called the 'discretion petition.'"5   Attorney Rajek did

not submit a response although he was permitted to do so.

     ¶18   Our decision in Rajek I is certainly relevant to the

two alleged counts of misconduct involving Attorney Rajek's fee

agreement.    Reasonable minds could differ as to whether the


     5
       The OLR's mention of the "discretion" rule refers to the
court's decision to amend SCR 22.001(2) (the definition of
"cause to proceed"); SCR 22.02(6) (intake); SCR 22.03(1)
(investigation);    and    SCR     22.25(3)-(4)     (closing  an
investigation).   These rule changes confirm that the OLR has
discretion   at  the   pre-charging   stage,   with   respect to
investigating grievances and disposing of grievances upon
completion of an investigation. See S. Ct. Order 14-06, 2016 WI
28 (issued Apr. 21, 2016, eff. July 1, 2016).

     As amended, one of the criteria for finding "cause to
proceed" is that the alleged misconduct "warrants discipline."
The court also added a policy statement in SCR 21.02(1).       The
language added by the court is underlined, so it now provides:

          The Office of Lawyer Regulation consists of the
     director, investigative and support staff, and staff
     counsel and retained counsel. The office receives and
     responds to inquiries and grievances relating to
     attorneys licensed to practice law or practicing law
     in Wisconsin and, when appropriate, investigates
     allegations   of    attorney   misconduct   or   medical
     incapacity, and may divert a matter to an alternatives
     to discipline program.    The office is responsible for
     the prosecution of disciplinary proceedings alleging
     attorney misconduct and proceedings alleging attorney
     medical incapacity and the investigation of license
     reinstatement petitions.     The office has discretion
     whether to investigate and to prosecute de minimus
     violations.      Discretion   permits   the  office   to
     prioritize resources on matters where there is harm
     and to complete them more promptly.




                               11
                                                                     No.        2014AP754-D



other     two    counts       involving     refusal    to    submit        to     binding

arbitration      for      a    lengthy      period    of    time     and     delay      in

cooperating       with        the   OLR     could    warrant       prosecution         and

discipline.       However, we acknowledge that the OLR may, in its

discretion, cease prosecution if, as here, the OLR determines

that the charges at issue are de minimus.                   We are satisfied with

the OLR's explanation for its decision to stipulate to dismissal

of the pending complaint and its exercise of discretion in this

matter.     Accordingly, we adopt the referee's report, accept the

stipulation, and dismiss the complaint.                     The OLR did not seek

restitution      and     we    do   not   order     restitution      in    this     case.

Finally, because there is no finding of misconduct, we do not

impose costs upon Attorney Rajek.

    ¶19     IT    IS     ORDERED     that    the    complaint      against       Attorney

Michael M. Rajek is dismissed.

    ¶20     IT IS FURTHER ORDERED no costs will be imposed.




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