Case Title: Office of Lawyer Regulation v. Richard W. Steffes

Citation: 2014 WI 128

Docket Number: 2012AP002350-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2014-12-18T00:00:00Z

Document:
2014 WI 128 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2012AP2350-D 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against Richard W. Steffes, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant-Appellant, 
     v. 
Richard W. Steffes, 
          Respondent-Respondent.   
 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST STEFFES 
 
 
OPINION FILED: 
December 18, 2014 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
      
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
For the Office of Lawyer Regulation, there were briefs by 
Matthew J. Price and Foley & Lardner LLP, Milwaukee.  
 
For the respondent-respondent, there was a brief by Richard 
W. Steffes and the Steffes Law Office, Beaver Dam.  
 
 
 
 
 
 
2014 WI 128
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2012AP2350-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Richard W. Steffes, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Appellant, 
 
     v. 
 
Richard W. Steffes, 
 
          Respondent-Respondent. 
 
FILED 
 
DEC 18, 2014 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.  Attorney 
publicly 
reprimanded.   
 
¶1 
PER CURIAM.   Pending before the court is a referee's 
report recommending, inter alia, that Attorney Richard W. 
Steffes be publicly reprimanded for professional misconduct.  
The Office of Lawyer Regulation (OLR) appeals from that portion 
of the referee's report declining to impose a $10,809.57 
restitution award as recommended by the OLR and instead 
recommending that Attorney Steffes pay $1,000 in restitution to 
the grievant.  The OLR also appeals the referee's recommendation 
No. 
2012AP2350-D   
 
2 
 
that Attorney Steffes's law firm trust account be monitored by 
the OLR for a period of two years.  While the OLR agrees with 
the referee's recommendation that Attorney Steffes attend a 
trust account rules and compliance course, it argues that six 
months is a sufficient length of time to monitor Attorney 
Steffes's trust account compliance.   
¶2 
The OLR does not appeal the referee's recommended 
sanction of a public reprimand, as opposed to the two-year 
suspension originally sought by the OLR, or the imposition of 
full costs. 
¶3 
Upon careful review of this matter, we adopt the 
referee's findings, conclusions, and recommendation for a public 
reprimand.  For the reasons set forth herein, we decline both 
the OLR's request for restitution to the grievant and the 
referee's recommended $1,000 restitution award.  We agree that 
Attorney Steffes should be required to attend a trust account 
rules and compliance course and that his trust account should be 
monitored by the OLR, but we accept the OLR's argument that six 
months is a sufficient length of time for such monitoring.  We 
further determine that Attorney Steffes should pay the costs of 
this proceeding, less the costs of the appeal, totaling 
$7,805.09 as of November 26, 2013. 
¶4 
Attorney Steffes was admitted to the practice of law 
in Wisconsin in May of 1970.  He is a sole practitioner, 
residing and practicing in the Beaver Dam area.  Other than a 
brief 
administrative 
suspension 
several 
years 
ago 
for 
noncompliance with continuing legal education requirements and a 
No. 
2012AP2350-D   
 
3 
 
temporary suspension for noncooperation with the OLR in this 
case, Attorney Steffes has no significant disciplinary history.   
¶5 
The matter now before the court consists of two parts:  
(1) Attorney Steffes permitting his non-lawyer son to use his 
trust account, giving rise to five disciplinary counts, and 
(2) Attorney Steffes's ensuing failure to cooperate with the OLR 
when a grievance was filed, giving rise to two counts.   
¶6 
In 
2003, 
the 
grievant, 
R.W., 
entered 
into 
a 
construction 
contract 
with 
Steffes 
ICF 
Construction, 
LLC 
(Steffes Construction), owned by Attorney Steffes's son, G.S.  
G.S. was retained to build an addition to R.W.'s existing home, 
including construction of a basement and three bedrooms.  R.W. 
gave Steffes Construction five checks totaling $27,228.50 for 
the work. 
¶7 
Steffes Construction commenced the work, but never 
completed it.  In 2004, R.W. himself directed suspension of the 
project due to his then-pending divorce.  In 2005, he requested 
that construction be restarted, but neither G.S. nor any other 
Steffes Construction representative ever returned to R.W.'s home 
to perform additional work.  Apparently no work was performed on 
the bedrooms.  R.W. also claimed that the inside concrete wall 
poured against the house ruptured and, when repoured, was 
defective.  
¶8 
In 2007, R.W. filed a lawsuit in Dodge County against 
Steffes Construction, G.S., and another defendant.  Attorney 
Steffes represented his son.  During litigation, R.W. and his 
attorney discovered that the checks R.W. had written to Steffes 
No. 
2012AP2350-D   
 
4 
 
Construction as advances for the home construction project had 
been deposited into Attorney Steffes's trust account. 
¶9 
R.W., through his attorney, requested an accounting of 
the funds deposited to and disbursed from Attorney Steffes's 
trust account.  Attorney Steffes did not provide an accounting.  
¶10 In December 2008, R.W. reported Attorney Steffes to 
the OLR.  Meanwhile, the parties in the Dodge County lawsuit 
eventually stipulated to entry of a judgment against Steffes 
Construction in the amount of $9,500.  
¶11 In 2011, G.S. filed for Chapter 7 bankruptcy and 
listed R.W. as one of his creditors.  Later that year, G.S. was 
granted an order discharging his debts.   
¶12 Upon receipt of R.W.'s grievance, the OLR's intake 
staff contacted Attorney Steffes and requested a response by 
January 9, 2009.  On January 9, 2009, Attorney Steffes requested 
a one-month extension, followed by another extension request on 
January 29, 2009.  Having received no response, the OLR 
initiated a formal investigation.  
¶13 On February 16, 2009, the OLR formally requested that 
Attorney Steffes respond to R.W.'s grievance by March 11, 2009. 
Attorney Steffes failed to respond.  On April 23, 2009, the OLR 
again advised Attorney Steffes of his obligation under supreme 
court rules to comply, this time by May 4, 2009.  No response 
was received. 
¶14 On July 1, 2009, the OLR sought a temporary suspension 
of Attorney Steffes's law license for his failure to cooperate 
with the OLR's investigation.  Attorney Steffes sought and 
No. 
2012AP2350-D   
 
5 
 
received several extensions to respond to the court's order to 
show cause, but never filed a response.  This court temporarily 
suspended Attorney Steffes's law license on November 3, 2009.  
His license was reinstated on January 12, 2010.  
¶15 On 
December 
22, 
2009, 
Attorney 
Steffes 
finally 
provided a preliminary response to R.W.'s grievance.  In his 
letter, he admits he allowed his son to use his law firm trust 
account as a business checking account for Steffes Construction.  
He acknowledges that R.W.'s payments to Steffes Construction of 
$27,228.50 were deposited into his law firm's trust account.  He 
claims he traced expenditures related to the R.W. project in 
excess of $26,000.  Attorney Steffes admits he did not notify 
R.W., in writing, that R.W.'s funds were deposited into his 
trust account and he did not maintain a separate trust account 
ledger for R.W.'s funds. 
¶16 Attorney Steffes explained that he allowed his son to 
use his law firm trust account for Steffes Construction because 
his son was having financial trouble.  When his son wanted trust 
funds issued, Attorney Steffes would provide him with a blank, 
signed check from the trust account, which his son would 
complete.  His son would subsequently report the name of the 
payee and the amount to Attorney Steffes and/or his secretary 
for recording.  Attorney Steffes admitted that he "very 
sporadically" questioned the payees to those trust account 
checks, even when it was obvious that the checks were not 
related to construction projects, such as a $7,500 check issued 
to his son's girlfriend.   
No. 
2012AP2350-D   
 
6 
 
¶17 R.W. 
disputed 
certain 
expenses 
Attorney 
Steffes 
claimed were related to the R.W. project.  In an effort to 
resolve the discrepancy, the OLR subpoenaed bank records 
pertaining to Attorney Steffes's law firm trust account.  The 
OLR's ensuing audit of the bank records showed that only 
$16,418.93 disbursed from Attorney Steffes's law firm trust 
account was clearly attributable to the R.W. project.  The 
$10,809.57 discrepancy triggered a series of supplemental 
requests by the OLR to Attorney Steffes for trust account 
information and documentation.  
¶18 On October 29, 2012, the OLR filed a seven-count 
disciplinary complaint against Attorney Steffes.  The OLR sought 
a two-year suspension of Attorney Steffes's license to practice 
law, restitution to R.W. in the amount of $10,809.57, and 
assessment of costs against Attorney Steffes.  
¶19 Attorney Steffes filed an answer, followed by an 
amended answer.  The court appointed Attorney Catherine M. 
Rottier as referee.  She conducted an evidentiary hearing on 
September 18, 2013, and issued a report on November 8, 2013.  
Briefly, she concluded that Attorney Steffes had committed three 
and one-half of the alleged counts of misconduct but declined to 
find violations of the other three and one-half counts. 
¶20 Count One alleged that Attorney Steffes's failure to 
timely respond to the OLR's requests for information, with such 
failure resulting in the temporary suspension of his law 
No. 
2012AP2350-D   
 
7 
 
license, violates Supreme Court Rule (SCR) 22.03(2) and (6),1 
enforced via SCR 20:8.4(h).2  
¶21 The referee found that the OLR had sustained its 
burden of proof as to Count One.   
¶22 Count Two alleged that Attorney Steffes's failure to 
notify R.W. of the receipt of funds in his trust account and his 
                                                 
1 SCR 22.03(2) and (6) provide:  
(2)  Upon 
commencing 
an 
investigation, 
the 
director shall notify the respondent of the matter 
being investigated unless in the opinion of the 
director the investigation of the matter requires 
otherwise.  The respondent shall fully and fairly 
disclose all facts and circumstances pertaining to the 
alleged misconduct within 20 days after being served 
by ordinary mail a request for a written response.  
The director may allow additional time to respond.  
Following receipt of the response, the director may 
conduct further investigation and may compel the 
respondent to answer questions, furnish documents, and 
present 
any 
information 
deemed 
relevant 
to 
the 
investigation. 
. . . . 
(6)  In the course of the investigation, the 
respondent's 
wilful 
failure 
to 
provide 
relevant 
information, to answer questions fully, or to furnish 
documents and the respondent's misrepresentation in a 
disclosure are misconduct, regardless of the merits of 
the matters asserted in the grievance. 
2 SCR 20:8.4(h) provides that it is professional misconduct 
for a lawyer to "fail to cooperate in the investigation of a 
grievance filed with the office of lawyer regulation as required 
by SCR 21.15(4), SCR 22.001(9)(b), SCR 22.03(2), SCR 22.03(6), 
or SCR 22.04(1)." 
No. 
2012AP2350-D   
 
8 
 
failure to render a full accounting upon request violate former 
SCR 20:1.15(b).3   
¶23 The referee found that the OLR had sustained its 
burden of proof as to Count Two. 
¶24 Count Three alleged that by allowing his son to 
utilize client trust account checks to make disbursements from 
his client trust account and by allowing his son to fill in the 
payees and the amounts for various disbursements for both 
personal and business purposes, Attorney Steffes failed to 
protect client funds on deposit in his client trust account in 
violation of former SCR 20:1.15(a).4  Count Three also alleged 
                                                 
3 Former SCR 20:1.15(b), as in effect prior to July 1, 2004, 
provided:  
Upon receiving funds or other property in which a 
client or third person has an interest, a lawyer shall 
promptly notify the client or third person in writing.  
Except as stated in this rule or otherwise permitted 
by law or by agreement with the client, a lawyer shall 
promptly deliver to the client or third person any 
funds or other property that the client or third 
person is entitled to receive and, upon request by the 
client or third person, shall render a full accounting 
regarding such property. 
4 Former SCR 20:1.15(a), as in effect prior to July 1, 2004, 
provided:  
A lawyer shall hold in trust, separate from the 
lawyer's own property, that property of clients and 
third persons that is in the lawyer's possession in 
connection with a representation or when acting in a 
fiduciary capacity.  Funds held in connection with a 
representation or in a fiduciary capacity include 
funds held as trustee, agent, guardian, personal 
representative of an estate, or otherwise.  All funds 
of clients and third persons paid to a lawyer or law 
(continued) 
No. 
2012AP2350-D   
 
9 
 
that Attorney Steffes engaged in conduct involving fraud, 
deceit, 
dishonesty, 
or 
misrepresentation 
in 
violation 
of 
SCR 20:8.4(c).5   
¶25 The referee found that the OLR had established the 
first rule violation of Count Three (former SCR 20:1.15(a)) but 
rejected the more serious allegation that Attorney Steffes 
engaged in conduct involving fraud, deceit, dishonesty, or 
misrepresentation (SCR 20:8.4(c)). 
                                                                                                                                                             
firm shall be deposited in one or more identifiable 
trust accounts as provided in paragraph (c).  The 
trust account shall be maintained in a bank, savings 
bank, trust company, credit union, savings and loan 
association or other investment institution authorized 
to do business and located in Wisconsin.  The trust 
account shall be clearly designated as "Client's 
Account" or "Trust Account" or words of similar 
import.  No funds belonging to the lawyer or law firm, 
except funds reasonable sufficient to pay or avoid 
imposition 
of 
account 
service 
charges, 
may 
be 
deposited in such an account.  Unless the client 
otherwise directs in writing, securities in bearer 
form shall be kept by the attorney in a safe deposit 
box in a bank, savings bank, trust company, credit 
union, 
savings 
and 
loan 
association 
or 
other 
investment institution authorized to do business and 
located in Wisconsin.  The safe deposit box shall be 
clearly designated as "Client's Account" or "Trust 
Account" or words of similar import.  Other property 
of a client or third person shall be identified as 
such and appropriately safeguarded.  If a lawyer also 
licensed in another state is entrusted with funds or 
property 
in 
connection 
with 
an 
out-of-state 
representation, this provision shall not supersede the 
trust account rules of the other state. 
5 SCR 20:8.4(c) provides that it is professional misconduct 
to "engage in conduct involving dishonesty, fraud, deceit or 
misrepresentation." 
No. 
2012AP2350-D   
 
10 
 
¶26 Count Four alleged that by stating to the OLR that he 
allowed his son to temporarily make deposits to and take 
disbursements from his client trust account in connection with 
Steffes Construction during the period of May 1, 2003, until 
November 4, 2004, when bank records disclosed that deposits and 
disbursements relating to his son and Steffes Construction were 
being made to and from his client trust account prior to May 1, 
2003, Attorney Steffes violated SCR 22.03(6), enforced via 
SCR 20:8.4(h).   
¶27 The referee determined that the temporal discrepancy 
disclosed to the OLR was not willful and thus rejected the 
allegations in Count Four. 
¶28 Count Five alleged that by allowing his son to deposit 
and disburse money to and from his client trust account when he 
knew his son and his son's business were experiencing financial 
difficulties which limited his son's abilities to utilize other 
banks 
or 
accounts 
to 
conduct 
his 
personal 
and 
business 
transactions, and without disclosing the existence of those 
funds being deposited to and disbursed from his client trust 
account to other potential creditors or customers of his son or 
his son's business, Attorney Steffes violated SCR 20:1.2(d)6 and 
SCR 20:8.4(c).  
                                                 
6 SCR 20:1.2(d) provides: 
A lawyer shall not counsel a client to engage, or 
assist a client, in conduct that the lawyer knows is 
criminal or fraudulent, but a lawyer may discuss the 
legal consequences of any proposed course of conduct 
(continued) 
No. 
2012AP2350-D   
 
11 
 
¶29 The referee was not persuaded that Attorney Steffes's 
behavior reflected fraud or deceit and rejected the allegations 
in Count Five. 
¶30 Count Six alleged that by failing to keep complete 
records of his trust account funds and other trust property, 
Attorney Steffes violated former SCR 20:1.15(e).7   
                                                                                                                                                             
with a client and may counsel or assist a client to 
make a good faith effort to determine the validity, 
scope, meaning or application of the law. 
7 Former SCR 20:1.15(e), as in effect prior to July 1, 2004, 
provided: 
 
Complete records of trust account funds and other 
trust property shall be kept by the lawyer and shall 
be preserved for a period of at least six years after 
termination of the representation.  Complete records 
shall include:  (i) a cash receipts journal, listing 
the 
sources 
and 
date 
of 
each 
receipt, 
(ii) a 
disbursements journal, listing the date and payee of 
each disbursement, with all disbursements being paid 
by check, (iii) a subsidiary ledger containing a 
separate page for each person or company for whom 
funds have been received in trust, showing the date 
and amount of each receipt, the date and amount of 
each disbursement, and any unexpended balance, (iv) a 
monthly schedule of the subsidiary ledger, indicating 
the balance of each client's account at the end of 
each month, (v) a determination of the cash balance 
(checkbook balance) at the end of each month, taken 
from the cash receipts and cash disbursement journals 
and a reconciliation of the cash balance (checkbook 
balance) with the balance indicated in the bank 
statement, 
and 
(vi) monthly 
statements, 
including 
canceled 
checks, 
vouchers 
or 
share 
drafts, 
and 
duplicate deposit slips.  A record of all property 
other than cash which is held in trust for clients or 
third persons, as required by paragraph (a) hereof, 
shall also be maintained.  All trust account records 
shall be deemed to have public aspects as related to 
the lawyer's fitness to practice. 
No. 
2012AP2350-D   
 
12 
 
¶31 The referee found that the OLR had met its burden of 
proof as to Count Six. 
¶32 Count Seven alleged that by failing to submit trust 
account records to the OLR as requested on multiple occasions, 
including pursuant to an investigative notice to appear, 
Attorney Steffes violated SCR 20:1.15(f).8  
                                                 
8 The referee noted that the supreme court rule cited in the 
OLR's complaint as to Count Seven appears to be incorrect.  In 
reviewing the matter, we find that SCR 20:1.15(f) as quoted in 
the complaint was in effect only until July 1, 2004, prior to 
the time period in which the allegations of Count Seven 
occurred.  For reference, former SCR 20:1.15(f) provided: 
 
Upon request of the office of lawyer regulation, 
or upon direction of the Supreme Court, the records 
shall be submitted to the office for its inspection, 
audit, use, and evidence under such conditions to 
protect the privilege of clients as the court may 
provide.  The records, or an audit thereof, shall be 
produced at any disciplinary proceeding involving the 
attorney wherever material.  Failure to produce the 
records shall constitute unprofessional conduct and 
grounds for disciplinary action. 
The applicable rule in effect during the relevant time 
period appears to be current SCR 20:1.15(j)(7), which provides: 
All fiduciary account records have public aspects 
related to a lawyer's fitness to practice.  Upon 
request of the office of lawyer regulation, or upon 
direction of the supreme court, the records shall be 
submitted to the office of lawyer regulation for its 
inspection, 
audit, 
use, 
and 
evidence 
under 
any 
conditions to protect the privilege of clients that 
the court may provide.  The records, or an audit of 
the records, shall be produced at any disciplinary 
proceeding involving the lawyer, whenever material.  
Failure 
to 
produce 
the 
records 
constitutes 
unprofessional conduct and grounds for disciplinary 
action. 
No. 
2012AP2350-D   
 
13 
 
¶33 The referee deemed the allegation in Count Seven 
duplicative of Count One and declined to find a violation. 
¶34 The referee recommends a public reprimand.  She 
explicitly stated in her report that the OLR's recommended two-
year suspension "seems entirely too harsh for the circumstances 
of this case," based on her determination that Attorney 
Steffes's conduct was careless but not fraudulent.  The referee 
concluded, however, that it was "absolutely clear" that Attorney 
Steffes did not understand the trust account rules or appreciate 
their significance.  She stated: 
He allowed his client trust account to be used as a de 
facto bank for his financially compromised son.  There 
is no evidence that respondent benefited personally 
from allowing his son to make deposits and take 
withdrawals from the client trust account, but that is 
no excuse for allowing respondent's client trust 
account to be used for purposes for which it was never 
intended.  
¶35 The 
referee 
also 
had 
harsh 
words 
for 
Attorney 
Steffes's disregard of the OLR's requests for information.  She 
noted that his reference to the OLR's requests as "a bother" is 
offensive to all attorneys who take their obligations to the OLR 
seriously.  
¶36 To justify the recommended public reprimand, the 
referee cited as persuasive several cases she deemed relevant, 
including Public Reprimand of J.E. Nugent, 2010-OLR-3 (attorney 
had substantial disciplinary history, along with trust account 
violations, and was guilty of unauthorized practice of law 
during times when his license was suspended) and Public 
No. 
2012AP2350-D   
 
14 
 
Reprimand of Ronald J. Thompson, 2012-OLR-18 (attorney used his 
trust account as a personal account to pay business and personal 
expenses, commingled funds in the trust account, and failed to 
keep adequate trust account records; attorney had also practiced 
law while his license was suspended).  
¶37 The referee distinguished the cases cited by the OLR 
in its trial brief in support of a more severe sanction, noting 
that each involved more egregious conduct than is at issue here 
and/or a lawyer with a previous disciplinary history.   
¶38 Attorney Steffes made a half-hearted claim that less 
discipline, namely a private reprimand, is warranted, but he 
failed to cross-appeal on the question of discipline and we deem 
his argument undeveloped and unpersuasive.   
¶39 In an attorney disciplinary proceeding, a referee's 
findings of fact are upheld on appeal unless they are clearly 
erroneous.  In re Disciplinary Proceedings Against Hahnfeld, 
2013 WI 14, ¶44, 345 Wis. 2d 462, 826 N.W.2d 47.  A referee's 
conclusions of law are reviewed de novo.  Id.  This court 
determines 
discipline 
independent 
of 
the 
referee's 
recommendation, based upon the particular facts of each case.  
Id.  And although the court may consider the referee's 
recommendation 
as 
to 
discipline, 
it 
is 
not 
entitled 
to 
conclusive or great weight.  In re Disciplinary Proceedings 
Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. 
¶40 The OLR appeals neither the referee's findings and 
conclusions regarding the alleged counts of misconduct, nor her 
recommendation for a public reprimand.  The record here supports 
No. 
2012AP2350-D   
 
15 
 
the referee's findings and conclusions and the referee has 
substantiated her recommendation for a public reprimand.  The 
court therefore accepts and adopts the referee's findings, 
conclusions, and recommendation for a public reprimand.   
¶41 This brings us to the disputed aspects of the 
referee's report.  The OLR challenges on appeal both of the 
referee's restitution recommendations:  (1) the referee rejected 
the OLR's claim that the grievant, R.W., is entitled to 
$10,809.57 in restitution, and (2) she recommends that the court 
award R.W. $1,000 in restitution.  The OLR contends that the 
referee is wrong on both counts.  
¶42 The referee was not persuaded that Attorney Steffes 
should be ordered to reimburse R.W. $10,809.57 for his alleged 
losses on the construction project.  The referee was troubled by 
what she deemed inconclusive evidence of whether R.W. was ever 
compensated for his losses in another venue.  She found that the 
evidence at the hearing was not clear as to whether R.W. was 
paid the settlement amount.  She observed further that "[w]hile 
it is undisputed that [R.W.] did not get the information and 
accounting to which he was entitled, it is less clear whether he 
suffered a financial loss as a result."  The referee stated: 
[R.W.] testified at the hearing that his lawsuit 
against respondent's son ended in a settlement.  
Later, [G.S.] filed bankruptcy, listing [R.W.] as a 
creditor.  Perhaps [R.W.] never received the amount 
for which he and his attorney decided to settle the 
Dodge County lawsuit.  If that is so, however, it is 
not clear from the evidence presented. 
No. 
2012AP2350-D   
 
16 
 
¶43 The referee further stated: 
The 
inadequacy 
of 
the 
evidence 
makes 
a 
restitution award problematic.  It is not clear that 
the trust account machinations made [R.W.'s] financial 
circumstances worse than they would have been had 
there been no trust account violations.  At bottom, 
[R.W.] had a claim against [G.S.] which he settled and 
then may have lost to the bankruptcy, though that 
conclusion is far from clear.  
¶44 The OLR challenges the referee’s finding, noting that 
"Steffes conceded at trial that he had no reason to doubt the 
attribution of expenses to the [R.W.] project set forth on trust 
account records OLR subpoenaed from Steffes' bank, which totaled 
$16,418.93.  Accordingly, [R.W.] is due restitution from Steffes 
of $10,809.57 ($27,228.50 - $16,418.93)." 
¶45 While Attorney Steffes himself did not necessarily 
dispute the OLR's accounting, the referee noted that Attorney 
Steffes reported that some of his law firm's computer records 
had been lost, and with them details of client trust account 
transactions during the relevant period of time.  Without 
specifically stating that she accepted Attorney Steffes's 
explanation for his inability to account for the trust account 
discrepancy, the referee did observe that the hearing in this 
case occurred nearly a full decade after some of the key 
underlying events occurred, a fact that likely impeded any 
defense Attorney Steffes might offer.   
¶46 The referee was also influenced by the fact that 
although Attorney Steffes was utterly lacking in understanding 
of the requirements of the trust account rules, his conduct did 
No. 
2012AP2350-D   
 
17 
 
not amount to fraud and she was mindful that he did not 
personally benefit from the misconduct.   
¶47 The OLR maintains that Attorney Steffes should have to 
reimburse R.W.  The OLR contends: 
Once [R.W.'s] funds were deposited into Steffes' 
law firm trust account, Steffes became obligated to 
protect them.  SCR 20:1.15(d).  Steffes' failure to 
properly safekeep [R.W.'s] project funds subjects 
Steffes to a claim for restitution to the extent he 
did not properly protect those funds, independent of 
any compromise settlement [R.W.] reached regarding 
those same funds with another party (here, [G.S.]) 
that may have been subsequently discharged in that 
other party's bankruptcy or even fully satisfied. 
¶48 The OLR cites SCR 20:1.15(d) for the proposition that 
Attorney 
Steffes 
was 
obligated 
to 
protect 
R.W.'s 
funds.  
SCR 20:1.15(d) (as in effect prior to July 1, 2004, when the 
funds were placed in Attorney Steffes's trust account) provided:  
When, in the representation, a lawyer is in 
possession of property, in which both the lawyer and 
another person claim interests, the property shall be 
treated by the lawyer as trust property until there is 
an accounting and severance of their interests.  If a 
dispute arises concerning their respective interests, 
the portion in dispute shall continue to be treated as 
trust property until the dispute is resolved. 
¶49 The 
OLR 
argues 
"[t]hat 
[R.W.’s] 
claim 
endures 
independently from any claims or potential claims [R.W.] 
asserted or could have asserted against [G.S.] that were 
subsequently compromised and/or discharged in bankruptcy."  The 
OLR chides Attorney Steffes for "his failure to appreciate 
[R.W.'s] financial loss."   
No. 
2012AP2350-D   
 
18 
 
¶50 There is no question that Attorney Steffes violated 
the trust account rules by allowing his son to use his trust 
account as a clearing house for his construction business.  
However, we are not convinced that this ethical failure per se 
obligates Attorney Steffes to reimburse his son's business 
client, R.W., for the loss R.W. incurred in his business 
dealings with G.S. and Steffes Construction.  R.W. had a remedy 
for that loss and indeed availed himself of that remedy:  R.W. 
sought and obtained a civil monetary judgment for $9,500 
directly from Steffes Construction.   
¶51 We reiterate that Attorney Steffes should not have 
permitted his son to deposit funds into Attorney Steffes's trust 
account.  This conduct violated the ethics rules and warrants 
discipline.  However, we are not persuaded under the facts of 
this case that the rules go so far as to require Attorney 
Steffes to essentially serve as guarantor for funds of his son's 
business client, R.W.  While the court can appreciate that R.W. 
is aggrieved because he lost over $10,000 due to G.S.'s failure 
to complete a construction project, it remains true that R.W. 
obtained a judgment against G.S. in civil court.   
¶52 As 
such, 
the 
court 
agrees 
with 
the 
referee's 
conclusion that the facts of this case do not adequately 
establish a basis for granting the full restitution award to 
R.W. simply because the construction fees improperly passed 
through Attorney Steffes's trust account.  We thus deny the 
OLR's request for full restitution to the grievant in this 
matter.    
No. 
2012AP2350-D   
 
19 
 
¶53 The referee then proposed a $1,000 restitution award 
to R.W.  She said that, "[b]ecause [R.W.] performed a service in 
filing his grievance and bringing to light the inadequacies of 
the trust account recordkeeping of respondent's law firm, some 
payment to [R.W.] may be justified."  The referee explained that 
she made this recommendation because the evidence did not 
clearly prove his entitlement to a greater award, but some 
payment to him nonetheless seems "fair and equitable" and would 
be at least some recompense for Attorney Steffes's failure to 
provide a timely accounting of trust account funds.  
¶54 The OLR opposes this recommendation.  It characterizes 
the proposed $1,000 as a "whistleblower-type" payment.  The OLR 
asserts: 
[D]espite the good intentions of the referee to employ 
a whistleblower-type payment mechanism to at least 
nominally compensate [R.W.] when she believed the 
record failed to support restitution, there is no 
authority to award payments to a grievant in attorney 
disciplinary matters other than in the form of 
restitution to compensate for an actual loss.  OLR 
submits that there is no factual or legal basis for 
such an award. 
¶55 The court agrees with the OLR’s assessment of the 
$1,000 recommended restitution award.  The OLR's oft-stated 
policy 
is 
to 
seek 
restitution 
only 
under 
the 
following 
circumstances:  (1) there is a reasonably ascertainable amount; 
(2) the funds to be restored were in the respondent lawyer's 
direct control; (3) the funds to be restored do not constitute 
incidental or consequential damages; and (4) the grievant's or 
respondent's rights in a collateral proceeding will not likely 
No. 
2012AP2350-D   
 
20 
 
be prejudiced.  The proposed $1,000 award "for his trouble" is 
not based on any specific loss and is more akin to incidental 
damages.  The court therefore rejects the $1,000 restitution 
award recommended by the referee. 
¶56 The OLR also challenges the referee's proposal that 
the OLR monitor Attorney Steffes's law firm trust account for 
two years. 
¶57 The OLR agrees with the referee's recommendation that 
Attorney Steffes attend a trust account rules and compliance 
course, as well as the need for some monitoring of Attorney 
Steffes's trust account.  However, the OLR suggests that six 
months is a sufficient length of time to monitor Attorney 
Steffes's trust account compliance.  The OLR explains:  
Without question, Steffes negligently supervised 
and managed his law firm trust account.  In doing so, 
he displayed either an ignorance of and/or unabashed 
disregard for important trust account rules.  That 
said, Steffes admits that he now possesses a far 
greater understanding of his trust account obligations 
than he did during the time of the violations charged 
in this matter[.]  
¶58 The OLR adds that it cannot foresee that an additional 
18 months of monitoring beyond the six it proposes here would 
meaningfully improve the likelihood of Attorney Steffes's 
compliance.  
¶59 The court finds the OLR's argument reasonable.  The 
court therefore orders Attorney Steffes to:  (a) attend the 
OLR's next available trust account seminar and pay the related 
No. 
2012AP2350-D   
 
21 
 
participation fees, and (b) provide his trust account records to 
the OLR every two months for a period of six months. 
¶60 Finally, Attorney Steffes does not challenge the 
referee’s recommendation that he be required to pay the costs of 
the underlying disciplinary proceeding.  In his appellate brief, 
however, he asks to be excused from the costs of the appeal.9  As 
the OLR, not Attorney Steffes, pursued this appeal and did not 
prevail on its primary issue pertaining to restitution, we 
impose upon the respondent the costs of this proceeding, less 
the appeal costs, a balance of $7,805.09.   
¶61 IT IS ORDERED that Richard W. Steffes is publicly 
reprimanded for his professional misconduct. 
¶62 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Richard W. Steffes shall pay to the Office of 
Lawyer Regulation $7,805.09, reflecting the full costs of this 
proceeding ($9,676.51) less the costs of the appeal ($1,871.42).   
¶63 IT IS FURTHER ORDERED that Richard W. Steffes shall 
attend an Office of Lawyer Regulation trust account seminar at 
the earliest possible opportunity following the date of this 
opinion, and shall pay the related participation fees. 
¶64 IT IS FURTHER ORDERED that Richard W. Steffes shall 
provide his trust account records to the Office of Lawyer 
Regulation every two months over a period of six months, 
                                                 
9 The OLR's amended supplemental statement of costs, filed 
April 10, 2014, shows total costs of $9,676.51, with $1,871.42 
of the total cost contributable to appellate fees and costs. 
No. 
2012AP2350-D   
 
22 
 
commencing upon the first deposit or disbursement of funds from 
his trust account following the date of this opinion. 
¶65 IT IS FURTHER ORDERED that the director of the Office 
of Lawyer Regulation shall advise the court if there has not 
been full compliance with all conditions of this order. 
 
 
No. 
2012AP2350-D   
 
 
 
1