Thursday, May 28, 2009

Not Knowingly Frivolous

The Wisconsin Supreme Court affirmed a referee's findings of misconduct in two of four charged instances but reduced the proposed 60 day suspension to a public reprimand with costs. The attorney had represented a bridal shop owner in a conversion action brought against a bank and its lawyer that had seized assets of the client's prior business in a replevin action. The lawyer had missed a court appearance, leading to dismissal of the case. He thereafter appeared and claimed that a health issue had prevented him from appearing. The judge found that he had not established good cause and refused to reinstate the matter.

The referee rejected charges that the conversion claim was frivolous. The court agreed:

The tests that we apply in this disciplinary matter are whether there was clear, satisfactory, and convincing evidence that Attorney Osicka knowingly advanced a claim or defense that was unwarranted under existing law or could not be supported by a good-faith argument for an extension, modification or reversal of existing law, and whether there was clear, satisfactory, and convincing evidence that Attorney Osicka knowingly advanced a factual position without a basis for doing so that was not frivolous. In other words, the OLR was obligated to show that Attorney Osicka, in fact, knew the claim or factual position he was advancing was unwarranted.

The referee concluded that the OLR had not met these standards.  This is supported by the referee's finding that the OLR, through the testimony of the attorneys for the Bank, never disproved that the Bank had improperly seized L.A.'s personal property and records that were not subject to its security interest.  Similarly, the referee made no finding that Attorney Osicka knew that L.A.had not started a new, legally separate business, but nonetheless went forward with his claim that the Bank had improperly seized assets belonging to the new business.  To the contrary, the referee pointed out that L.A. had stated in her affidavit that she had created a new business entity with separate inventory.  Moreover, the referee found that Attorney Kostka may have had personal knowledge before the execution of the replevin order that L.A. had separated inventory items between her two business entities, but nonetheless participated as an agent of the Bank in the execution of a replevin order that resulted in a seizure of assets without consideration of which entity owned the assets.  We agree with the referee that the evidence presented in this proceeding simply did not meet the rather high burden of showing that Attorney Osicka subjectively knew he did not have a good-faith basis for advancing his factual assertions or claims, but nonetheless went forward with those factual assertions and claims.

The court agreed with the referee that, in an unrelated matter, the lawyer had failed to fully respond to the bar's request for information. The lawyer's actions in providing the information on the day before a proposed interim suspension for failure to respond violated the duty to cooperate.

In another matter, the attorney had failed to return an unearned fee. The attorney had made a late-blooming assertion that the fee was non-refundable. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2009/05/the-wisconsin-supreme-court-affirmed-a-referees-findings-of-misconduct-in-two-of-four-charged-instances-but-reduced-the-propo.html

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