Case Title: Board of Attorneys Professional Responsibility v. Gaar W. Steiner

Citation: 

Docket Number: 1998AP001283-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 1999-05-06T00:00:00Z

Document:
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
98-1283-D 
 
 
Complete Title 
of Case: 
 
 
In the Matter of Disciplinary Proceedings 
Against Gaar W. Steiner, Attorney at  
Law. 
 
Board of Attorneys Professional  
Responsibility,  
 
Complainant, 
 
v. 
Gaar W. Steiner,  
 
Respondent.  
 
DISCIPLINARY PROCEEDINGS AGAINST STEINER 
 
 
Opinion Filed: 
May 6, 1999 
Submitted on Briefs: 
 
Oral Argument: 
 
 
 
Source of APPEAL 
 
COURT: 
 
 
COUNTY: 
 
 
JUDGE: 
 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
 
 
No. 
98-1283-D 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 98-1283-D 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Gaar W. Steiner, Attorney at Law. 
Board of Attorneys Professional 
Responsibility,  
 
 
Complainant,  
 
v.  
Gaar W. Steiner,  
 
 
Respondent.  
FILED 
 
MAY 6, 1999 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
ATTORNEY 
disciplinary 
proceeding.  Attorney’s 
license 
suspended.  
¶1 
PER CURIAM   We review the recommendation of the 
referee that the license of Gaar W. Steiner to practice law in 
Wisconsin 
be 
suspended 
for 
60 
days 
as 
discipline 
for 
professional 
misconduct. 
That 
misconduct 
consisted 
of 
commingling 
his 
own 
funds 
in 
his 
client 
trust 
account, 
disbursing funds belonging to other clients with the effect of 
benefiting two of his clients, failing to have a safe deposit 
box in which he held a client’s funds clearly designated as a 
client’s account, lending a client money without written 
documentation of the terms of the loan and without advising the 
No. 
98-1283-D 
 
2 
client to obtain the advice of independent counsel and obtaining 
the client’s written consent to the transaction, and knowingly 
and fraudulently receiving legal fees for bankruptcy work out of 
the assets of the bankrupt’s estate without prior application to 
and approval of the bankruptcy court.  
¶2 
We determine that the recommended 60-day license 
suspension, to which the parties had stipulated, is the 
appropriate 
discipline 
to 
impose 
for 
Attorney 
Steiner’s 
professional misconduct considered in this proceeding. A number 
of circumstances mitigate the seriousness of that misconduct and 
the degree of discipline it calls for. Most significant among 
them are that Attorney Steiner’s use of other clients’ funds to 
benefit certain clients resulted from inadvertent overdrafts of 
Attorney 
Steiner’s 
trust 
accounts 
caused 
by 
his 
staff’s 
arithmetical and posting errors and that his receipt of fees for 
bankruptcy work without application to and approval of the 
bankruptcy court was not deliberate but the result of poor 
accounting practices. Nonetheless, the seriousness of Attorney 
Steiner’s misconduct warrants the minimum suspension of his 
license to practice law.  
¶3 
This matter initially was submitted to the court on a 
stipulation of the parties pursuant to SCR 21.09(3m)1. The 
                     
1  SCR 21.09 provides, in pertinent part: Procedure. 
 . . .  
No. 
98-1283-D 
 
3 
parties agreed to the facts concerning Attorney Steiner’s 
conduct, the provisions of the Rules of Professional Conduct for 
Attorneys the conduct violated, and a 60-day license suspension 
as discipline for it. We rejected the stipulation and directed 
the matter to proceed before a referee. In that proceeding, the 
parties submitted a stipulation that differed in only minor, 
nonsubstantial 
respects 
from 
the 
stipulation 
previously 
submitted, and after holding a hearing, the referee, Attorney 
Charles Herro, made findings of fact and conclusions of law 
identical to those set forth in the stipulation.  
¶4 
While a member of large Milwaukee law firm, Attorney 
Steiner began representing Frank Crivello, a Milwaukee real 
estate developer, in 1991. In May of that year he established 
his own firm, with his primary clientele being Frank Crivello, 
Frank Crivello’s cousin and business associate, Joseph Crivello, 
and 
numerous 
Crivello-related 
business 
entities. 
Attorney 
Steiner had both business and personal relationships with the 
Crivellos.  
                                                                  
(3m) The board may file with a complaint a stipulation by 
the board and the respondent attorney to the facts, conclusions 
of law and discipline to be imposed. The supreme court may 
consider the complaint and stipulation without appointing a 
referee. If the supreme court approves the stipulation, it shall 
adopt the stipulated facts and conclusions of law and impose the 
stipulated 
discipline. 
If 
the 
supreme 
court 
rejects 
the 
stipulation, a referee shall be appointed pursuant to sub. (4) 
and the matter shall proceed pursuant to SCR chapter 22. A 
stipulation that is rejected has no evidentiary value and is 
without prejudice to the respondent’s defense of the proceeding 
or the board’s prosecution of the complaint.  
No. 
98-1283-D 
 
4 
¶5 
In the fall of 1992, Frank Crivello was negotiating 
with the mortgagee of a commercial property in Minnesota that 
one of his entities, Plaza 14, had purchased to resolve problems 
concerning the loan for that property and other loans involving 
Plaza 14. The mortgage on the Minnesota property was secured by 
rental payments from the property that exceeded the amount 
necessary to amortize the industrial revenue bond by which the 
purchase had been financed, and in mid-February 1993 Plaza 14 
requested and received from the bond trustee some $107,000 in 
excess rents and deposited it in an out-of-state bank account in 
Plaza 14’s name. The mortgagee knew in April of 1993 that the 
distribution of excess rents had been made, but it took no steps 
to obtain them at that time.  
¶6 
When negotiations between Plaza 14 and the mortgagee 
began to break down in the early fall of 1993 and it appeared to 
Attorney Steiner that litigation was imminent, he and Frank 
Crivello executed a contract for legal services on October 1, 
1993, but dated as of July 14, 1993, by which Plaza 14 
transferred $108,000 –- the excess rents plus accrued interest -
– from the out-of-state account to Attorney Steiner’s client 
trust account.  
¶7 
Under the terms of the retainer agreement, Attorney 
Steiner was to receive a flat fee of $50,000 for a legal audit, 
other specified services, and services previously rendered, and 
Plaza 14 was to deposit a retainer of not less than $100,000 in 
Attorney Steiner’s trust account by October 31, 1993. The 
agreement provided further that Attorney Steiner had the right 
No. 
98-1283-D 
 
5 
of immediate payment from those funds for the legal audit, with 
any excess to be held and disbursed as provided in the 
agreement. Notwithstanding those terms, Attorney Steiner did not 
transfer $50,000 from the trust account to his business account 
when he received the $108,000. He also did not transfer a 
nonrefundable $25,000 from the $50,000 retainer specified for 
“standby 
availability 
to 
perform 
services 
and 
for 
the 
performance of services in addition to the legal audit and 
review.”  
¶8 
When the retainer agreement was executed, Attorney 
Steiner expected it to provide a defense against any attempt by 
the mortgagee to obtain the $108,000 of excess rents and to pay 
the defense costs expected to be incurred in anticipated 
disputes and litigation with the mortgagee. He did not expect or 
intend to enforce the terms of the retainer agreement against 
Frank Crivello or Plaza 14 except to the extent Plaza 14 was 
unable to pay fees he actually earned. The parties understood 
that Crivello-related entities and individuals would have access 
to and could withdraw those funds from Attorney Steiner’s trust 
account as long as Attorney Steiner was guaranteed their return 
to the extent necessary to pay the mortgagee, if required, and 
to pay his legal fees. In fact, some of those funds were 
disbursed for Crivello-related entities and to pay Attorney 
Steiner’s fees for services to entities controlled by Frank 
Crivello that were unrelated to Plaza 14.  
¶9 
The referee concluded that by having the $108,000 
deposited into his client trust account under a retainer 
No. 
98-1283-D 
 
6 
agreement he had drafted with the intent of protecting funds of 
his client from a creditor and by characterizing and claiming 
the funds in part as his own, while retaining them in his trust 
account and disbursing a portion of them to Joseph Crivello or 
on behalf of various Crivello entities as requested, Attorney 
Steiner commingled funds in his client trust account and failed 
to hold his own funds separate from those of his client, in 
violation of SCR 20:1.15(a).2  
¶10 From May 1993 until mid-1995, Attorney Steiner’s trust 
account record keeping was done manually by a secretary. After 
Attorney Steiner discovered various accounting problems in his 
business account in late 1994 and hired an accountant to review 
the law firm’s records, including the client trust account, it 
became apparent to him that he had disbursed funds from his 
trust account on behalf of the Crivellos when there were 
insufficient funds belonging to them on deposit in that account 
                     
2 At the time relevant here, SCR 20:1.15 provided, in 
pertinent part: Safekeeping property.  
(a) A lawyer shall hold in trust, separate from the 
lawyer’s own property, that property of clients or third persons 
that is in the lawyer’s possession in connection with a 
representation. All funds of clients paid to a lawyer or law 
firm shall be deposited in one or more identifiable trust 
accounts as provided in paragraph (c) maintained in a bank, 
trust company, credit union or savings and loan association 
authorized to do business and located in Wisconsin, which 
account shall be clearly designated as “Client’s Account” or 
“Trust Account” or words of similar import, and no funds 
belonging to the lawyer or law firm except funds reasonably 
sufficient to pay account service charges may be deposited in 
such an account.  . . .  
No. 
98-1283-D 
 
7 
to cover those disbursements. For example, he disbursed $7,000 
to his law firm for Crivello legal fees when the trust account 
balance of funds belonging to the Crivellos was just under 
$3,000. As a result, in that instance some $4,000 that had been 
disbursed in payment of his legal fees belonged to clients other 
than the Crivellos.  
¶11 In addition, the manually maintained Crivello trust 
account ledger contained a number of accounting errors, as a 
result of which the account erroneously appeared to have a 
positive balance sufficient to cover almost all of the Crivello-
related disbursements. In 1994 and 1995, at least 23 payments of 
trust account funds were made on behalf of the Crivellos when 
they had insufficient funds on deposit to make those payments. 
Thus, Attorney Steiner disbursed funds belonging to other 
clients with a resulting benefit to the Crivellos, and his trust 
account was out of trust, even though there was only one 
occasion when the total funds in the trust account were 
insufficient to pay a check written on it in disbursement of a 
Crivello-related matter. Following the audit, the trust account 
was reconciled and appropriate funds were deposited prior to the 
initiation 
of 
the 
Board 
of 
Attorneys 
Professional 
Responsibility’s (Board) investigation into this matter.  
¶12 In early 1994, Joseph Crivello asked Attorney Steiner 
to place $45,000 in cash in a safe deposit box to be opened at 
Attorney Steiner’s bank, directing him to take $5,000 of that 
amount as payment for legal fees. Attorney Steiner placed the 
$40,000 cash in a safe deposit box at his bank, but on 
No. 
98-1283-D 
 
8 
instructions from Joseph Crivello, that box was in Attorney 
Steiner’s name and was not identified as a depository for the 
property of clients.  
¶13 The referee concluded that by disbursing on numerous 
occasions funds belonging to other clients with the effect of 
benefiting the Crivellos and by failing to hold the $40,000 in a 
safe deposit box clearly designated as a client’s account or a 
trust account, Attorney Steiner failed to hold the property of 
clients appropriately, in violation of SCR 20:1.15(a).  
¶14 On 
September 
7, 
1993, 
Attorney 
Steiner 
wire 
transferred $35,000 from his personal account to his client 
trust account. Almost all of those funds were used to settle a 
lawsuit between Joseph Crivello and another. That transfer 
constituted a loan from Attorney Steiner to Joseph Crivello, 
made at his request, but it was not evidenced by a promissory 
note, and the terms of the transaction had not been provided to 
Mr. Crivello in writing. Also, there was no evidence suggesting 
that Mr. Crivello had been advised to seek the advice of 
independent counsel in the transaction, and Attorney Steiner did 
not obtain his written consent to the transaction. The loan was 
satisfied, and Joseph Crivello did not complain about it. The 
referee concluded, as the parties had stipulated, that by 
lending money to his client without any written terms or other 
documentation, without advising his client to obtain the advice 
No. 
98-1283-D 
 
9 
of independent counsel, and without obtaining his client’s 
written consent, Attorney Steiner violated SCR 20:1.8(a).3  
¶15 In late 1993, after the mortgagee of Plaza 14’s 
property in Minnesota had filed a foreclosure action, Attorney 
Steiner filed a Chapter 11 bankruptcy petition on behalf of 
Plaza 14 the day before the scheduled foreclosure sale. In the 
attorney’s statement he filed under the bankruptcy rules, 
Attorney Steiner stated that he had not received “a retainer 
toward legal services rendered or to be rendered in connection 
with [the bankruptcy] case” and had not received a “transfer, 
assignment or pledge of property from the Debtor.” When Plaza 
14’s president was questioned under oath in Attorney Steiner’s 
presence at a meeting of creditors concerning the corporation’s 
assets, liabilities, and expenditures, he answered in the 
negative when asked if Attorney Steiner had been paid a 
retainer. Attorney Steiner understood the attorney’s statement 
                     
3  SCR 20:1.8 provides, in pertinent part: Conflict of 
interest; prohibited transactions 
(a) A lawyer shall not enter into a business transaction 
with a client or knowingly acquire an ownership, possessory, 
security or other pecuniary interest adverse to a client unless:  
(1) the transaction and terms on which the lawyer acquires 
the interest are fair and reasonable to the client and are fully 
disclosed and transmitted in writing to the client in a manner 
which can be reasonably understood by the client;  
(2) the client is given a reasonable opportunity to seek 
the advice of independent counsel in the transaction; and 
(3) the client consents in writing thereto.  
No. 
98-1283-D 
 
10
and the creditors’ question to relate specifically to the 
bankruptcy representation.  
¶16 During 
the 
course 
of 
the 
bankruptcy, 
Plaza 
14 
disclosed on a monthly basis the accrual of legal fees earned by 
Attorney Steiner in the bankruptcy. By August of 1994 the 
accrued and disclosed fees totaled $17,004. Attorney Steiner 
subsequently was charged in federal court with two misdemeanor 
counts of knowingly and fraudulently entering into an agreement 
to be paid legal fees for bankruptcy work out of the assets of 
the debtor without disclosing those payments to the bankruptcy 
court, based on two undisclosed payments to him in August 1994 
totaling $11,532.50, the source of which was stipulated to have 
been the $108,000 he received under the contract for legal 
services with Frank Crivello and Plaza 14 six months prior to 
the bankruptcy filing. Attorney Steiner entered into a plea 
agreement and pleaded guilty to both counts and was convicted, 
placed on three years’ probation, as a condition of which he was 
given 180 days of home confinement with electronic monitoring, 
and fined $10,000.  
¶17 The referee concluded, as the parties stipulated, that 
by 
knowingly 
and 
fraudulently 
receiving 
legal 
fees 
for 
bankruptcy work out of the assets of the estate of Plaza 14 
without prior application to and approval of the bankruptcy 
court, Attorney Steiner committed criminal acts reflecting 
No. 
98-1283-D 
 
11
adversely on his honesty, trustworthiness or fitness as a lawyer 
in other respects, in violation of SCR 20:8.4(b).4  
¶18 As discipline for that professional misconduct, the 
referee recommended that Attorney Steiner’s license to practice 
law be suspended for 60 days -- the discipline to which Attorney 
Steiner and the Board had stipulated throughout this proceeding. 
In recommending that discipline, the referee explicitly took 
into account that the fraudulent acts of Attorney Steiner’s 
clients carried over to him and that the bankruptcy petition 
giving rise to this disciplinary proceeding was dismissed 
shortly after it was filed, thereby returning the parties to 
their former positions. In addition, the record discloses that 
the Board acknowledged it was unable to produce clear and 
satisfactory evidence to establish that Attorney Steiner’s trust 
account was being used to conceal his clients’ assets. Further, 
when Attorney Steiner withdrew funds from his trust account in 
payment of his fees, he inadvertently offset some of them 
against invoices that included services rendered and costs 
incurred in the bankruptcy itself. It appeared that Attorney 
Steiner easily could have received court approval for payment of 
those fees. Moreover, he made no attempt to conceal the payment 
                     
4 SCR 20:8.4 provides, in pertinent part: Misconduct 
It is professional misconduct for a lawyer to:  
 . . .  
(b) commit a criminal act that reflects adversely on the 
lawyer’s honesty, trustworthiness or fitness as a lawyer in 
other respects;  
No. 
98-1283-D 
 
12
of fees and costs from the bankruptcy court; it was disclosed in 
the monthly report he filed with the court.  
¶19 We 
adopt 
the 
referee’s 
findings 
of 
fact 
and 
conclusions of law and determine that the seriousness of 
Attorney Steiner’s professional misconduct, mitigated by the 
circumstances present, warrants the suspension of his license to 
practice law for 60 days. In addition, we require Attorney 
Steiner to pay the costs of this proceeding.  
¶20 IT IS ORDERED that the license of Gaar W. Steiner to 
practice law in Wisconsin is suspended for a period of 60 days, 
commencing June 21, 1999.  
¶21 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Gaar W. Steiner pay to the Board of Attorneys 
Professional Responsibility 
the costs 
of this 
proceeding, 
provided that if the costs are not paid within the time 
specified and absent a showing to this court of his inability to 
pay the costs within that time, the license of Gaar W. Steiner 
to practice law in Wisconsin shall remain suspended until 
further order of the court.  
¶22 IT IS FURTHER ORDERED that Gaar W. Steiner comply with 
the provisions of SCR 22.26 concerning the duties of a person 
whose license to practice law in Wisconsin has been suspended.  
 
 
1