PS: Pay The Lien

An attorney who failed to protect the interests of a company that had loaned his client money in exchange for payment from the proceeds of a personal-injury settlement has been reprimanded by the Wisconsin Supreme Court.

The client was the attorney’s first cousin

In July 2006, [client/cousin] M.F. sought financial advice from Attorney Mitz.  Attorney Mitz arranged for two loans totaling $2,500 each from Attorney Mitz’s father and uncle, respectively.  The loan proceeds were put into Attorney Mitz’s trust account.  M.F. also applied for a loan from PS Finance for the amount of $8,000.  Attorney Mitz helped M.F. with those loan documents and notarized a number of documents, including an “Attorney Acknowledgement of Explanation of Terms to Plaintiff, of Revocable Lien and Assignment to Pre-Settlement Finance, LLC.”

In May 2007, a settlement was reached with J.J.’s insurer, Badger Mutual Insurance, in the amount of $100,000.  Attorney Mitz promptly used a portion of the settlement proceeds to repay M.F.’s loans from Attorney Mitz’s father and uncle.  Attorney Mitz failed to notify PS Finance of the settlement.

Between May 2007 and November 2008, Attorney Mitz distributed the remainder of the settlement proceeds, without any payment to PS Finance.

In February 2009, PS Finance learned that M.F.’s personal injury case had settled.  Through a series of conversations and emails made part of the underlying record, Attorney Mitz claimed that he hadn’t received the settlement proceeds and that he was still trying to put numbers to the proper disbursements from the settlement, among various other excuses.  In October 2011, Attorney Mitz informed PS Finance that settlement proceeds were in his trust account but that no one had yet been paid.  Attorney Mitz claimed he would fax a letter to PS Finance confirming that the settlement funds were still in his trust account.  PS Finance never received the promised letter.

Eventually, in February 2012, PS Finance filed a grievance with the OLR.  In response to the OLR’s inquiries, Attorney Mitz stated that he “first became aware that the loan had in fact been closed and the existence of PS Finance’s claimed lien in 2008, after the settlement with Badger Mutual.”  In August 2013, Attorney Mitz sent PS Finance a check in the amount of $11,637, the full balance due on the loan. 

The attorney was admitted in 1973 and has no record of prior discipline. (Mike Frisch)