Office of Lawyer Regulation v. Tiffany T. Luther
378 Wis. 2d 330
| Wis. | 2017Background
- Attorney Tiffany T. Luther (admitted 2000) served as "engagement counsel" for debt-settlement company Morgan Drexen, Inc. (MDI) and approved form disclosures and fee agreements used for Wisconsin clients.
- Two clients (M.M. and J.B.) enrolled in MDI programs; MDI withheld client funds from creditors until fees/engagement charges were satisfied, and clients were charged a recurring $50 monthly fee for services they did not meaningfully receive.
- Luther had minimal direct contact with clients, failed to explain material advantages/disadvantages or alternatives to MDI’s plans, and did not timely provide clients copies of correspondence or critical notices (e.g., cure offer from GE Capital).
- Clients suffered default/collection actions; one filed bankruptcy and later received discharge; Luther later refunded some monies after grievance and investigation.
- OLR charged Luther with multiple violations of the Wisconsin Rules of Professional Conduct (communication, fee, and termination/refund rules); parties stipulated to misconduct and agreed a public reprimand was appropriate.
- The referee recommended a public reprimand and full costs ($7,414.04); the Supreme Court reviewed the referee’s report, adopted the findings, imposed a public reprimand, and ordered payment of costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Luther failed to reasonably consult and explain matters to clients (SCR 20:1.4(a)(2), (b)) | OLR: Luther did not provide necessary information on material advantages/disadvantages or alternatives; clients could not make informed decisions. | Luther: Stipulated facts but argued reduced involvement and sought leniency; objected to some characterization of involvement. | Court: Adopted stipulation that Luther violated SCR 20:1.4(a)(2) and (b) as alleged. |
| Whether Luther failed to keep clients reasonably informed (SCR 20:1.4(a)(3)) | OLR: Luther failed to provide copies of correspondence and failed to inform clients of settlement/cure offers and status. | Luther: No contest to stipulated misconduct; argued mitigation based on limited role. | Court: Adopted stipulation that Luther violated SCR 20:1.4(a)(3). |
| Whether Luther charged unreasonable/unexplained fees and failed to disclose fee basis (SCR 20:1.5(a), 1.5(b)(1)) | OLR: Monthly $50 charge and advanced-fee structure were unreasonable and not adequately explained; fees unearned on termination. | Luther: Paid restitution and refunded portions; contended involvement was limited and not as egregious as initially believed. | Court: Adopted stipulation that Luther violated SCR 20:1.5(a) and 1.5(b)(1). |
| Appropriate sanction and allocation of costs | OLR: Agreed to public reprimand given restitution and limited role; sought full costs. | Luther: Agreed to stipulation but objected to paying full costs, arguing OLR was overzealous in initial assessment. | Court: Imposed public reprimand and ordered Luther to pay full costs ($7,414.04). |
Key Cases Cited
- In re Disciplinary Proceedings Against Shepherd, 376 Wis. 2d 129 (2017 WI 66) (public reprimand in multi-count disciplinary case; instructive on sanctioning)
- In re Disciplinary Proceedings Against Trudgeon, 321 Wis. 2d 560 (2009 WI 96) (public reprimand where attorney failed to communicate, explain fees, and appear)
- In re Disciplinary Proceedings Against D'Arruda, 351 Wis. 2d 227 (2013 WI 90) (public reprimand for multiple misconducts including unearned fees and poor communication)
- In re Disciplinary Proceedings Against Hicks, 338 Wis. 2d 558 (2012 WI 11) (public reprimand for failure to communicate and pursue client matters)
- In re Disciplinary Proceedings Against Ruppelt, 377 Wis. 2d 441 (2017 WI 80) (court emphasizes its role as protector of public and willingness to depart from stipulations)
- In re Disciplinary Proceedings Against Scanlan, 290 Wis. 2d 30 (2006 WI 38) (factors to consider when determining sanctions)