Wednesday, November 29, 2017

Lawyer Reprimanded For Limited Scope Debt Relief Representation

The Wisconsin Supreme Court reprimanded a former Green Bay attorney now residing in Las Vegas

The facts giving rise to this proceeding stem from Attorney Luther's involvement with Morgan Drexen, Inc. (MDI), a now defunct debt settlement company.

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.

MM retained her

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.

A creditor sued MM

Attorney Luther's limited scope representation agreement charged M.M. $550 for her assistance with M.M.'s selfrepresentation 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."

MM retained new counsel and the debt was discharged in bankruptcy.

There was also misconduct in a second MDI matter.

The court described the role of the referee where, as here, the matter comes on stipulation 

In determining an appropriate sanction recommendation referees should consider whether the lawyer has previously been disciplined and whether any aggravating and or mitigating factors are present. See ABA Standards for Imposing Lawyer Sanctions. Typically, the referee will consider factually similar cases. Stipulated discipline is entitled to no special deference.

To be sure, the parties' opinions on disciplinary sanctions are informative but they are just that – opinions, not authorities to which the referee must defer. We, in turn, "remain the ultimate arbiter of the appropriate level of discipline, owing no deference on this subject to either the parties or the referee." See Ruppelt, 377 Wis. 2d 441, ¶34.

Here, the referee has provided case law in the supplemental report that supports the recommended discipline.


On balance, we will adopt the referee's findings of fact and conclusions of law that, based on the parties' stipulation, Attorney Luther violated the supreme court rules as alleged in the ten counts of the amended complaint. We further agree with the referee that a public reprimand of Attorney Luther's license to practice law in Wisconsin is sufficient.

A dissent of Justice Abrahamson

A public reprimand is an insufficient sanction for the serious misconduct to which Attorney Luther stipulated.

(Mike Frisch)

Bar Discipline & Process | Permalink


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