In the Matter of Disciplinary Proceedings v. Jennings

334 Wis.2d 335

801 N.W.2d 304

2011 WI 45

In the Matter of DISCIPLINARY PROCEEDINGS AGAINST David

v. JENNINGS, III, Attorney at Law:Board of Attorneys Professional Responsibility n/k/a Office of Lawyer Regulation, Complainant–Respondent,

v.David

v. Jennings, III, Respondent–Appellant.

No. 1992AP3208–D.

Supreme Court of Wisconsin.

Argued April 19, 2011.Decided June 23, 2011.

For the respondent-appellant there were briefs by David V. Jennings, III, Cedarburg and oral argument by David V. Jennings.For the complainant-respondent there were briefs by Keith L. Sellen and Julie M. Spoke and Office of Lawyer Regulation, Madison and oral argument by Julie M. Spoke.PER CURIAM.ATTORNEY reinstatement proceeding. Reinstatement granted subject to conditions.

[334 Wis.2d 337] ¶ 1 We review the recommendation of Referee Christine Harris Taylor to deny David V. Jennings III's petition for reinstatement of his license to practice law in Wisconsin. While finding that Attorney Jennings' employment history during the term of his license revocation has been exemplary and that he has maintained competence and learning in the law, the referee concluded, nevertheless, that Attorney Jennings failed to satisfy by clear, satisfactory, and convincing evidence all of the reinstatement standards. See SCR 22.29(4) and (4m).¹

[334 Wis.2d 338] ¶ 2 Referee Taylor questioned Attorney Jennings' moral character, his attitude and understanding of the standards imposed on members of the bar, and whether he proved he would act in conformity with those standards. SCR 22.29(4)(f). She determined he failed to prove he can be safely recommended to represent others and he failed to establish his resumption of a legal practice would not be detrimental to the administration of justice or subversive to the public interest. See SCR 22.29(4)(g); see also SCR 22.31(1).² She also found that he failed to make full restitution to those harmed by his misconduct. SCR 22.29(4m).

[334 Wis.2d 339] ¶ 3 Although we approve and adopt the referee's findings of fact, which are undisputed, we do not agree with her legal conclusions that Attorney Jennings failed to satisfy all the requirements of SCR 22.29 and we do not adopt her recommendation. We conclude the record establishes clear, satisfactory, and convincing evidence that Attorney Jennings has satisfied all of the requisites for reinstatement of his license to practice law in Wisconsin, subject to conditions relating to his continuing obligations of restitution. Therefore, we grant his petition subject to conditions. We also direct that Attorney Jennings bear the costs of these reinstatement proceedings.

I. BACKGROUND

¶ 4 The background is lengthy. Attorney Jennings, who had been admitted to practice law in Wisconsin in 1975, filed a petition for voluntary revocation of his law license in December 1992. Attorney Jennings acknowledged he could not successfully defend against allegations he had converted $550,000 from Milwaukee Cheese Wisconsin, Inc., and Sheboygan Sausage, Inc., whom he had been appointed to represent in bankruptcy proceedings.

¶ 5 In addition, Attorney Jennings admitted to embezzling between $85,000 and $100,000 from his mother's living trust, of which he was the trustee, during the same time frame he had been embezzling funds from Milwaukee Cheese and Sheboygan Sausage. This court revoked Attorney Jennings' law license in January 1993. In re Disciplinary Proceedings Against Jennings, 172 Wis.2d 638, 493 N.W.2d 375 (1993) (“ Jennings I ”).

¶ 6 Shortly after his thefts were discovered, Attorney Jennings executed a mortgage in 1992 on his real estate in Mequon in favor of both his parents, ostensibly to secure his existing indebtedness to them as well as to secure new money his parents were contemplating advancing to him to resolve his embezzlements. However, after learning of the extent of his thefts, his parents did not advance him any funds.

¶ 7 In August 1993 Attorney Jennings pled guilty and was convicted in federal court of two counts of embezzlement and two counts of making false entries in bankruptcy estates.³ He was sentenced to 27 months in prison followed by three years of supervised release. He was incarcerated from 1993 to 1995. He was ordered to make restitution of $590,200 in installment payments established by the probation office. See In re Disciplinary Proceedings Against Jennings, 2009 WI 26, ¶ 5, 316 Wis.2d 6, 762 N.W.2d 648 (“ Jennings II ”).

¶ 8 In 1997 Attorney Jennings sold his Mequon property. Attorney Jennings' father and his late mother's estate received approximately $93,000 of the sale proceeds. His former law firm, its malpractice insurance carrier, and Development Specialists, Inc. (DSI),⁴ who had paid the bulk of the restitution to Milwaukee Cheese and Sheboygan Sausage, received as partial restitution the remaining proceeds amounting to $152,520.⁵ “The mortgage favored Attorney Jennings' parents over other victims of his embezzlement and resulted in his parents receiving 43 cents on each dollar of debt while his former law firm, its insurance carrier, and [DSI] received 28 cents on the dollar.” Jennings II, 316 Wis.2d 6, ¶ 7, 762 N.W.2d 648.

¶ 9 In 1998 the federal court revoked Attorney Jennings' probation due to his failure to make court-ordered restitution payments. He spent five days in jail and his probation term was extended for an additional 35 months. Id., ¶ 6. In October 2001 he was discharged from supervision.

¶ 10 Attorney Jennings was ordered to pay $39,760 to the Employee Stock Ownership Trust of Milwaukee Cheese (ESOT). Id., ¶ 10. On June 11, 2002, the federal court ordered garnishment requiring Attorney Jennings to continue with payments of $120 per paycheck towards the balance of the court-ordered restitution. As of October 2010, the total balance of the court-ordered restitution had been reduced to $3,010.

¶ 11 After his law license revocation but before his release from prison, Attorney Jennings' wife filed a petition to compel support and maintenance but did not seek a divorce or legal separation. In May 1993 Attorney Jennings was ordered to pay $1,000 per month in maintenance and $510 per month in child support. While Attorney Jennings was incarcerated, substantial arrearages of approximately $10,000 accrued in his support and maintenance obligations. Although his former law firm sought to intervene in the action, as did Milwaukee Cheese, Sheboygan Sausage and DSI, they were unsuccessful in challenging the support petitions.

¶ 12 In 1997 Attorney Jennings entered into a stipulation with his wife establishing a monthly child support obligation of $460, which was slightly in excess of the 17 percent required under Wisconsin law for one child, and repayment of arrearages at $1,040 per month. Although he paid support, Attorney Jennings remained married and continued to live with his wife at their property in Mequon.⁶ “These support payments served to shield more of Attorney Jennings' income from his creditors when he was released from prison since he had to make payments toward his current support and maintenance obligations as well as the arrearages that accrued during his incarceration.” Jennings II, 316 Wis.2d 6, ¶ 9, 762 N.W.2d 648. The parties were granted a divorce in 2010.

¶ 13 From March 1995 through December 1999, Attorney Jennings was employed by the Heilig–Meyers Furniture Company in its Milwaukee stores as store manager and credit manager with fiduciary responsibilities for daily cash receipts, bank deposits, and inventory. During this time, he was licensed by the Wisconsin Commissioner of Insurance and was responsible for credit insurance sold in Wisconsin by his employer. Also, from July 1997 when Attorney Jennings obtained reinstatement of his Wisconsin Real Estate Broker's license, he has been affiliated with three real estate firms and worked as an independent broker.

¶ 14 On October 6, 1999, Attorney Jennings filed his first reinstatement petition. After an investigation conducted by the Board of Attorneys Professional Responsibility (BAPR), the predecessor to the Office of Lawyer Regulation (OLR), and following a public hearing , Attorney Jennings asked to withdraw his petition. His request was granted.

¶ 15 From January 2000 through 2010, Attorney Jennings was employed by the Furniture Clearance Center, a division of the Porter Furniture Company, at various Racine and Milwaukee locations as store manager with fiduciary responsibilities for cash receipts, bank deposits, and inventory of significant value, as well as responsibilities for human resource management.⁷

¶ 16 In September 2005 Attorney Jennings entered a no contest plea to operating while under the influence of alcohol, first offense, in Ozaukee County. In April 2006 his driver's license was suspended due to his failure to pay the forfeiture assessed as a result of the OWI conviction. Jennings II, 316 Wis.2d 6, ¶ 11, 762 N.W.2d 648. Upon payment of the fine, his driver's license was reinstated.

¶ 17 On November 12, 2007, Attorney Jennings filed a second reinstatement petition, which this court denied March 24, 2009. Despite having taken significant steps with respect to restitution, Attorney Jennings' former law firm and DSI were still owed large sums of money. Recognizing Attorney Jennings' claimed lack of financial resources, this court observed, “What we find far more troubling than his failure to make restitution is his apparent failure not to have ever tried to determine exactly how much he owes his former law firm.” Id., ¶ 25. Because of his failure to face up completely to his restitution obligations, this court denied reinstatement. Id.

¶ 18 On March 15, 2010, Attorney Jennings filed a third reinstatement petition, which is now before the court. In response to the petition, the OLR noted its concern that in the wake of his misconduct, Attorney Jennings attempted to protect his personal interests and those of his family over those whom he...