Case Title: Board of Attorneys Professional Responsibility v. Karl Grunewald

Citation: 2000 WI 115

Docket Number: 2000AP001212-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2000-10-26T00:00:00Z

Document:
2000 WI 115 
 
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
00-1212-D 
 
 
Complete Title 
of Case: 
 
In the Matter of Disciplinary Proceedings 
Against Karl Grunewald, Attorney at Law. 
 
Board of Attorneys Professional Responsibility,  
 
Complainant, 
 
v. 
Karl Grunewald,  
 
Respondent.  
 
 
DISCIPLINARY PROCEEDINGS AGAINST GRUNEWALD 
 
 
Opinion Filed: 
October 26, 2000 
Submitted on Briefs: 
      
Oral Argument: 
      
 
 
Source of APPEAL 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
JUSTICES: 
 
Concurred: 
      
 
Dissented: 
      
 
Not Participating:       
 
 
ATTORNEYS: 
      
 
2000 WI 115 
 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
No. 00-1212-D 
 
STATE OF WISCONSIN               :        
        
 
 
 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Karl Grunewald, Attorney at Law. 
 
Board of Attorneys Professional  
Responsibility,  
 
          Complainant, 
 
     v. 
 
Karl Grunewald,  
 
          Respondent.  
 
FILED 
 
OCT 26, 2000  
 
Cornelia G. Clark 
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 Attorney Karl Grunewald be suspended 
for one year as discipline for professional misconduct. That 
misconduct consisted of the following:  (1) failing to act with 
reasonable 
diligence 
and 
promptness 
in 
client 
matters, 
(2) failing to keep clients informed of the status of those 
matters, comply with their reasonable requests for information, 
and explain matters to them to the extent reasonably necessary 
to permit them to make informed decisions regarding the 
representation, (3) revealing information relating to clients' 
No. 
00-1212-D 
 
2 
representation 
without 
their 
consent, 
(4) making 
misrepresentations to clients, (5) failing to return client 
property upon termination of representation, and (6) failing to 
communicate to clients the basis of his fee.  The referee also 
recommended 
that 
Attorney 
Grunewald 
be 
required 
to 
make 
restitution to the clients harmed by his misconduct and pay the 
costs of this proceeding. 
¶2 
We determine that Attorney Grunewald's professional 
misconduct 
established 
in 
this 
proceeding 
warrants 
the 
suspension of his license to practice law for one year.  This is 
the third time he will have been disciplined for misconduct.  By 
his handling of client matters considered in the instant 
proceeding, as well as the nature of the misconduct itself, 
Attorney Grunewald has continued to demonstrate an inability or 
unwillingness to meet his professional responsibilities to those 
who retain him to represent them and their interests and that 
serious discipline is necessary to protect other clients, the 
public, and the legal system from his continued failure to meet 
those responsibilities.   
¶3 
Attorney Grunewald was admitted to the practice of law 
in Wisconsin in 1976 and practices in Milwaukee.  He has been 
disciplined twice previously for professional misconduct.  The 
court suspended his license for six months in 1988 for neglect 
of four legal matters and failure to cooperate with the Board of 
Attorneys 
Professional 
Responsibility 
(Board) 
in 
its 
investigation. Disciplinary Proceedings Against Gruenwald, 141 
Wis. 2d 691, 416 N.W.2d 289.  In December 1988, he consented to 
No. 
00-1212-D 
 
3 
a private reprimand from the Board for his failure to file state 
and federal income tax returns.  The referee in the instant 
proceeding, Attorney Stanley Hack, made findings of fact based 
on the Board's complaint, as Attorney Grunewald did not file an 
answer or otherwise appear in the proceeding. 
¶4 
In 1990, Attorney Grunewald was retained to pursue a 
claim regarding the restoration of an automobile, for which the 
clients gave him money to pay the fee for a jury trial.  
Attorney Grunewald did not file that lawsuit until 1992, and 
over the next five years the clients received little or no 
information from him in response to their numerous inquiries of 
him about its status. When he failed to follow the court's 
instructions to draft a pretrial order, the judge removed the 
case from the trial calendar and said it would be replaced on 
the calendar when the parties evidenced readiness for trial.   
¶5 
Attorney Grunewald billed the clients for a number of 
services asserted to have been performed from mid-1990 to 
November 1992, but there was no further action in the clients' 
matter until early 1998.  At some time prior to late 1997, 
Attorney Grunewald discussed the lawsuit with another attorney 
and provided her documents from the clients' file without their 
knowledge or consent.  He misrepresented to that attorney that 
he had contacted the clients to obtain permission to transfer 
the matter to her.   
¶6 
When that attorney appeared at Attorney Grunewald's 
request on behalf of the clients at a hearing in October 1997 on 
a motion to dismiss, without a substitution of counsel having 
No. 
00-1212-D 
 
4 
been obtained, the court sanctioned the clients for Attorney 
Grunewald's failure to prosecute the lawsuit by precluding a 
jury trial, barring witnesses other than the parties themselves, 
and ordering the clients to pay the defendant's attorney fees.  
The clients were not present at the hearing and did not learn of 
the motion, the hearing, or the purported substitution of 
counsel until two weeks later, when Attorney Grunewald told them 
he was reducing his law practice and gave them an envelope with 
the name of an attorney who could handle their lawsuit.  It was 
then the clients learned that the court had sanctioned them for 
Attorney Grunewald's failure to prosecute the action.   
¶7 
Attorney Grunewald at first told the clients he would 
pay the defendant's attorney fees, but when he learned they were 
approximately $3400, he said that they were too high and agreed 
to pay only $1000.  However, he never paid the clients any 
amount.  The lawsuit ultimately was resolved, but the resolution 
reduced the clients' recovery by $3000 -- the amount agreed upon 
as the defendant's attorney fees. 
¶8 
Attorney Grunewald and his clients never agreed to a 
method by which his fees for representing them in their lawsuit 
would be calculated.  After the clients filed a grievance with 
the Board in August 1998, he sent them 10 separate bills, all 
dated October 6, 1998, covering a variety of matters and listing 
services dating back to 1990.  None of those bills, which 
totaled $27,300,  previously had been sent to the clients, and 
Attorney 
Grunewald 
never 
had 
requested 
payment 
of 
them 
previously. 
No. 
00-1212-D 
 
5 
¶9 
Attorney Grunewald had been preparing income tax 
returns for those same clients since 1989, and they retained him 
to complete their 1994 and 1995 state and federal personal and 
corporate returns.  Attorney Grunewald did not respond to most 
of their numerous telephone and written requests for information 
regarding the status of those tax returns.  At times, he told 
them that they were almost finished and could be picked up or 
that he would be sending them to the clients.  However, he never 
provided completed tax returns, nor did he complete those 
returns, despite many promises to do so and excuses for not 
doing so.   
¶10 The clients hired a certified public accountant in 
November 1997 to prepare those returns, and they and the 
accountant made numerous requests to Attorney Grunewald for his 
file in the matter.  Notwithstanding his representation to the 
accountant in early 1998 that he had the returns almost 
completed, when he delivered the file September 8, 1998, it 
contained no returns that were even partially completed.  As a 
result of Attorney Grunewald's failure to complete the returns 
timely, the clients were penalized $9799 by the federal and 
state tax authorities.  
¶11 Based on the foregoing facts, the referee concluded 
that Attorney Grunewald engaged in the following professional 
misconduct:   
 
(a) His doing almost nothing on the clients' claim and 
the lawsuit he commenced on their behalf for five years 
No. 
00-1212-D 
 
6 
constituted a failure to act with reasonable diligence and 
promptness, in violation of SCR 20:1.3.1 
 
(b) His failure to provide the clients with information 
regarding that lawsuit and respond to their letters and 
phone calls violated SCR 20:1.4(a).2 
 
(c) His failure to keep the clients informed about his 
fees to represent them in the matter, the progress of the 
lawsuit, substitution of counsel in it, motions, and the 
court's sanction constituted a failure to explain the matter 
to the extent reasonably necessary to permit the clients to 
make informed decisions regarding the representation, in 
violation of SCR 20:1.4(b).3 
 
(d) Providing information regarding the representation 
to other counsel without the knowledge or consent of his 
clients violated SCR 20:1.6(a).4 
(e) His misrepresentations to successor counsel about 
having secured the clients' consent to substitution and 
                     
1 SCR 20:1.3 provides:  Diligence. 
A lawyer shall act with reasonable diligence and promptness 
in representing a client.  
2 SCR 20:1.4(a) provides: 
(a) A lawyer shall keep a client reasonably informed about 
the status of a matter and promptly comply with reasonable 
requests for information.  
3 SCR 20:1.4(b) provides: 
 (b) A lawyer shall explain a matter to the extent 
reasonably necessary to permit the client to make informed 
decisions regarding the representation.  
4 SCR 20:1.6(a) provides:  
 
(a) A lawyer shall not reveal information relating to 
representation of a client unless the client consents after 
consultation, 
except 
for 
disclosures 
that 
are 
impliedly 
authorized in order to carry out the representation, and except 
as stated in paragraphs (b), (c) and (d). 
 
No. 
00-1212-D 
 
7 
making misrepresentations to the clients about the status of 
the lawsuit violated SCR 20:8.4(c).5 
 
(f) His failure to complete the clients' income tax 
returns violated SCR 20:1.3. 
 
(g) His failure to answer letters and phone calls from 
the clients and their accountant regarding the tax returns 
violated SCR 20:1.4(a). 
 
(h) His misrepresentations to the clients regarding the 
status of the preparation and completion of the tax returns 
violated SCR 20:8.4(c). 
 
(i) His failure to return the income tax information 
and files to the clients upon their request violated SCR 
20:1.16(d).6 
 
(j) His failure to communicate to the clients the basis 
for his fees in advance of performing services violated SCR 
20:1.5(b).7 
                     
5 SCR 20:8.4(c) provides: 
It is professional misconduct for a lawyer to:  
(c) engage in conduct involving dishonesty, fraud, deceit 
or misrepresentation. 
6 SCR 20:1.16(d) provides: 
(d) Upon termination of representation, a lawyer shall take 
steps to the extent reasonably practicable to protect a client's 
interests, such as giving reasonable notice to the client, 
allowing time for employment of other counsel, surrendering 
papers and property to which the client is entitled and refunding 
any advance payment of fee that has not been earned. The lawyer 
may retain papers relating to the client to the extent permitted 
by other law. 
 
7 SCR 20:1.5(b) provides: 
(b) When the lawyer has not regularly represented the 
client, the basis or rate of the fee shall be communicated to 
the client, preferably in writing, before or within a reasonable 
time after commencing the representation.  
 
No. 
00-1212-D 
 
8 
¶12 As 
discipline 
for 
that 
misconduct, 
the 
referee 
recommended a one-year license suspension, as the Board had 
proposed.  He recommended further that Attorney Grunewald be 
required to make restitution in specified amounts to the clients 
harmed by his misconduct and that he be required to pay the 
costs of this proceeding.   
¶13 IT IS ORDERED that the license of Karl Grunewald to 
practice law in Wisconsin is suspended for one year, commencing 
November 30, 2000, as discipline for professional misconduct.  
¶14 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Karl Grunewald make restitution to his former 
clients as specified in the report of the referee filed in this 
proceeding. 
¶15 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Karl Grunewald pay to the Office of Lawyer 
Regulation 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 Karl Grunewald to practice law in 
Wisconsin shall remain suspended until further order of the 
court.  
¶16 IT IS FURTHER ORDERED that Karl Grunewald comply with 
the provisions of SCR 22.26 concerning the duties of a person 
whose license to practice law in Wisconsin has been suspended.  
 
 
 
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