Court suspends Ozaukee attorney for 2 years, citing ‘callous disregard’ of court orders

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The Wisconsin Supreme Court is suspending an Ozaukee County attorney’s law license for two years, citing his “callous disregard” of  an opposing party’s rights and a circuit court’s orders.

The court released its opinion in the disciplinary case against Carl Robert Scholz, a solo practitioner, on Nov. 10.

In 2017, the Office of Lawyer Regulation filed a 10-count complaint against Scholz, accusing him of using more than $60,000 worth of client money for his own benefit or to benefit clients and third parties. Scholz denied the misconduct allegations and asked the court to dismiss the entire complaint.

At the disciplinary hearing, Scholz said one of the clients had agreed to “loan” him the remainder of the disputed funds, which would allow her to continue her legal fight against the other party. The opinion said Scholz had not informed the Ozaukee County Circuit Court that he borrowed the money at the time of the proceeding.

When the circuit court directed him to submit a record of his disbursement of the money, he submitted a one-page document and a receipt “purportedly signed” by the client stating that she had received $50,975.94. The opinion said the document was a misrepresentation, Scholz had not made any paymecarnts to the client, and he had no funds in trust.

The OLR sought a two-year suspension of his law license and restitution of $60,975.92 paid to either the Ozaukee County Circuit Court or to the opposing counsel’s trust account, pending the resolution of a foreclosure and partition action between the clients involved.

A referee recommended a one-year suspension of Scholz’s law license and costs, calling Scholz “careless and negligent” in his actions. However, the high court’s opinion said the referee had “apparently accepted many of Attorney Scholz’s explanations.” The referee said Scholz’s conduct did not injure his client and said it appeared that he “took an improper loan.”

Scholz challenged the suspension, arguing it was excessive. He asked for leniency because of the “extraordinary nature of this case, the good work that was done, and the result that was ultimately obtained for a very special lady,” according to the state Supreme Court’s opinion. He didn’t challenge the case’s factual findings, but he took exception to “certain inferences.”

The state Supreme Court sided with the OLR and imposed a two-year suspension effective Dec. 22.

“Attorney Scholz … committed ten counts of misconduct, converted tens of thousands of dollars via a ‘loan’ of funds that he knew or should have known his client was not entitled to make, ignored court orders, and then systematically misrepresented what he did to hide his misconduct, resulting in a significant loss,” the opinion said.

The referee did not discuss restitution in her recommendation. The justices ordered that the court reserved the question of restitution pending consideration of a court-ordered briefing.

“Attorney Scholz’s misconduct reflects a callous disregard for the rights of the opposing party, and his fundamental obligation as an officer of the court to honor and obey circuit court orders,” the opinion said.

Scholz must also pay costs of the proceeding, which had come to $16,804.30 by March 17. Scholz said he didn’t want to comment on the decision until he had filed his supplemental brief on the outstanding matters. He said he has until Dec. 8 to respond and plans to do so.

Scholz was admitted to practice law in Wisconsin in 1994. He was privately reprimanded in 2011 for trust-account violations.

Justice Brian Hagedorn did not take part in the decision. Follow @WLJReporter