Case Title: Office of Lawyer Regulation v. Bruce B. Jacobson

Citation: 2004 WI 152

Docket Number: 2002AP000931-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2004-12-23T00:00:00Z

Document:
2004 WI 152 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
02-0931-D 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings 
Against Bruce B. Jacobson, Attorney at Law: 
 
Office of Lawyer Regulation,  
          Complainant-Respondent-Cross- 
          Appellant, 
 
     v. 
 
Bruce B. Jacobson,  
          Respondent-Appellant-Cross- 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST JACOBSON 
 
 
OPINION FILED: 
December 23, 2004   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 6, 2004   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the respondent-appellant-cross-respondent there were 
briefs by Terry E. Johnson, C. Paul Snyder and Peterson, Johnson 
& Murray, S.C., Milwaukee, and oral argument by Terry E. 
Johnson. 
 
For the complainant-respondent-cross-appellant there were 
briefs by Robert G. Krohn and Roethe, Krohn, Pope, McCarthy, 
Haas & Robinson, LLP, Edgerton, and oral argument by Robert G. 
Krohn. 
 
 
2004 WI 152 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  02-0931-D  
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Bruce B. Jacobson, Attorney at  
Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Respondent-Cross- 
          Appellant, 
 
     v. 
 
Bruce B. Jacobson,  
 
          Respondent-Appellant-Cross- 
          Respondent. 
 
FILED 
 
DEC 23, 2004 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.  Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   We review the original and amended 
findings of fact, conclusions of law, and recommendations of 
Referee Rose Marie Baron for sanctions, pursuant to SCR 
22.17(1).1  Attorney Bruce B. Jacobson was found to have engaged 
                                                 
1 SCR 22.17(1) provides: "(1) Within 20 days after the 
filing of the referee's report, the director or the respondent 
may file with the supreme court an appeal from the referee's 
report."  
No. 
02-0931-D   
 
2 
 
in unprofessional conduct in the course of his practice of law 
in violation of the Rules of Professional Conduct.  The 
referee's amended recommendation was for a 90-day suspension of 
Attorney Jacobson's license to practice law with additional 
conditions.  
¶2 
We 
approve 
the 
original 
and 
amended 
findings, 
conclusions, and recommendations, except that we determine that 
the seriousness of Attorney Jacobson's misconduct warrants the 
imposition of a five-month suspension.  
¶3 
Attorney Jacobson was licensed to practice law in 
Wisconsin in 1971.  He has not been the subject of a prior 
disciplinary proceeding.  
¶4 
This case covers 17 counts involving Client One 
(Counts 1-4 and 12-14), Client Two (Counts 5-6 and 15), Client 
Three (Count 7), Client Four (Counts 8-9), Client Five (Counts 
10-11), and Client Six (Counts 16-17).  The counts generally 
allege failure to communicate with clients and keep them 
informed, trust account discrepancies, misuse of client funds, 
and misrepresentation to and failure to cooperate with the 
Office of Lawyer Regulation (OLR).  
¶5 
The referee concluded that the OLR had not sustained 
its burden on five of the counts.  The OLR has not appealed that 
conclusion.  Of the remaining 12 counts where the referee 
concluded there had been misconduct, Attorney Jacobson has 
appealed on eight.  
¶6 
Both 
parties 
also 
appeal 
the 
referee's 
amended 
recommendation of a 90-day suspension.  Attorney Jacobson 
No. 
02-0931-D   
 
3 
 
submits this as excessive, particularly if he prevails on any of 
the eight counts of misconduct which he challenges, and the OLR 
submits 
the 
referee 
should 
have 
reaffirmed 
her 
initial 
recommendation of an 18-month suspension.2   
¶7 
This court adopts the referee's findings of fact 
unless clearly erroneous.  In re Disciplinary Proceedings 
Against Charlton, 174 Wis. 2d 844, 498 N.W.2d 380 (1993).  No 
deference is granted to the referee's conclusions of law and 
they are reviewed de novo.  In re Disciplinary Proceedings 
Against Norlin, 104 Wis. 2d 117, 310 N.W.2d 789 (1981).  The 
court 
may 
impose 
whatever 
sanction 
it 
deems 
appropriate 
regardless of the referee's recommendation.  In re Disciplinary 
Proceedings Against Widule, 2003 WI 34, 261 Wis. 2d 45, 660 
N.W.2d 686. 
I.  CLIENT ONE 
¶8 
Counts 1-3 alleged three separate violations of SCR 
20:8.4(c)3 
(prohibiting 
dishonesty, 
fraud, 
deceit 
or 
misrepresentation).  
                                                 
2 On July 2, 2003, this court granted Attorney Jacobson's 
motion to reopen this matter for additional evidence consisting 
of: (1) expert testimony relating to his physical, emotional, 
and mental condition during the period involved with this 
misconduct; and (2) testimony and evidence relating to his 
character and reputation in the community. The court directed 
that the referee was to consider this testimony and evidence 
solely as it might constitute a mitigating factor.  The lower 
suspension recommendation resulted after the remand.  
3 SCR 20:8.4(c) provides: "It is professional misconduct for 
a lawyer to: (c) engage in conduct involving dishonesty, fraud, 
deceit or misrepresentation." 
No. 
02-0931-D   
 
4 
 
¶9 
Count 4 alleged violations of former SCR 20:1.15(b)4 (a 
lawyer shall promptly notify a client and interested third 
parties in writing after receiving funds from the client and 
shall promptly deliver on request funds in which they have an 
interest and/or render a full accounting), and SCR 20:1.4(a)5 (a 
lawyer shall keep a client reasonably informed about the status 
of a matter and promptly comply with reasonable requests for 
information).   
¶10 Counts 12 and 13 alleged violations of SCR 20:8.4(c) 
and Count 14 alleged a violation of SCR 20:8.4(f)6 and SCR 
                                                 
4 Former SCR 20:1.15(b) provided: 
 
(b) 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. 
5 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." 
6 SCR 20:8.4(f) provides: "It is professional misconduct for 
a lawyer to: (f) violate a statute, supreme court rule, supreme 
court order or supreme court decision regulating the conduct of 
lawyers." 
No. 
02-0931-D   
 
5 
 
22.03(6)7 (jointly prohibit willful failure to provide OLR with 
information during the course of an investigation). 
¶11 These 
counts 
involve 
Attorney 
Jacobson's 
representation of the client in a criminal failure to pay child 
support matter and a related family court matter.  The client's 
wife initially gave Attorney Jacobson a non-refundable retainer 
of $1000 in October 1999.  The client himself gave Attorney 
Jacobson $4000 in March 2000.  Attorney Jacobson wrote three 
checks to himself from his trust account in the amounts of 
$2000/$1000/$2000 on March 17, 2000, April 25, 2000, and May 2, 
2000, respectively.  Two months after the last check, Attorney 
Jacobson wrote a check from his business account to this 
client's trust account for $1000.   
¶12 Approximately one year later Attorney Jacobson wrote a 
bill for all of the services rendered to the client which 
totaled $9560 less payment received of $5000.  The problem arose 
when, prior to having provided the client with his bill, the 
client's wife asked Attorney Jacobson to apply the funds in her 
husband's trust account (which she apparently thought were 
either $4000 or $5000) to his bail as he had recently been 
incarcerated.  Attorney Jacobson informed her there was nothing 
in the trust account.   
                                                 
7 SCR 
22.03(6) 
provides: "(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." 
No. 
02-0931-D   
 
6 
 
¶13 The client contended that the $4000 he gave Attorney 
Jacobson was supposed to be held by him in escrow as a 
"bargaining chip" in negotiations with the district attorney to 
reduce the pending charges against him (i.e., to show his good 
faith and intent to pay his child support arrearage).  However, 
Attorney Jacobson disputed this, claiming that no amount of 
money would have sufficed to reduce the charges and it was his 
understanding the entire $5000 was to be used as needed to pay 
his attorney's fees.   
¶14 The referee concluded that the OLR had presented 
insufficient facts to sustain a finding of misconduct on Counts 
1-3.  She was particularly influenced by the fact that the 
client was not able to explain how, if indeed the payments were 
to be held in escrow, he still intended to pay Attorney 
Jacobson's fees given the substantial legal work Attorney 
Jacobson had done for him.  The referee stated: 
This is not a case where the attorney is accused of 
falsifying his time records, but rather seems to have 
arisen out of a misunderstanding about the purpose and 
application of funds 
paid by the client. . . .  
Jacobson's failure to explain to his client that he 
would be applying his fees to the amount in the trust 
fund certainly is not commendable.  Nonetheless his 
actions do not rise to the level of conversion of 
those funds since he earned his fees.  Mr. Jacobson's 
admitted practice of not sending regular bills to his 
clients, including [this client] nor keeping him 
reasonably informed about the status of the balance in 
his account gave rise to the problems now confronting 
Mr. Jacobson.   
¶15 However, 
the 
referee 
found 
that 
misconduct 
had 
occurred with respect to Count 4 which arose out of Attorney 
No. 
02-0931-D   
 
7 
 
Jacobson's 
failure 
to 
provide 
the 
client 
with 
requested 
information about the status of his trust account.  The client 
testified that when he asked Attorney Jacobson to apply part of 
the funds to his bail, Attorney Jacobson said, "no, he couldn't 
do that" and when his wife later called Attorney Jacobson on 
several occasions to inquire about the funds, Attorney Jacobson 
failed to provide an accounting.  He testified that Attorney 
Jacobson told her not to "worry about it" and also implied that 
it was not her "standing" to request billing information 
relating to her husband.  The referee believed the version of 
this dispute as related by the client and his wife.  
¶16 The referee also concluded that misconduct occurred 
with respect to Count 12 because Attorney Jacobson never sent a 
bill to his client, contrary to what he represented to the OLR, 
and did not prepare a bill until after the OLR began its 
investigation.  Thus the referee concluded that the OLR had 
adequately proved that Attorney Jacobson misrepresented what he 
told his client about moving the client's funds out of the trust 
account to pay his fees.  
¶17 Finally, the referee found no misconduct relating to 
Counts 13 and 14.  She concluded there was no evidence Attorney 
Jacobson misrepresented to the OLR that the $4000 payment made 
by his client was for attorney's fees, given that he reasonably 
believed that the funds were to be legitimately used for that 
purpose.  She further concluded that Attorney Jacobson may 
simply have not brought up the initial $1000 retainer fee during 
the OLR's investigation, as opposed to misrepresenting that 
No. 
02-0931-D   
 
8 
 
matter, because that initial payment was outside the general 
period that was the subject of the investigation.  
¶18 The OLR accepts the referee's conclusion that there 
was no misconduct involved with Counts 1-3 and 13-14.  However, 
Attorney Jacobson contests the conclusion of misconduct with 
respect to Count 12.  He argues that in the absence of a full 
transcript of the OLR's investigation there is insufficient 
evidence that he misrepresented anything to the agency.  He also 
insists that he did prepare a bill for the client's services 
because at the very least the billing information was on his 
computer which should qualify as a bill.  Finally, he submits 
that any misstatements he may have made to the OLR were 
inadvertent and due only to his lack of information at the time.   
¶19 The 
OLR 
responds 
that 
the 
testimony 
of 
its 
investigator was sufficient to provide the necessary evidence to 
support the misconduct finding.  It further argues there was 
testimony from the client and his wife that they never received 
a bill and that it is disingenuous to contend that something on 
Attorney Jacobson's computer that was never sent to the client 
would qualify as a bill. 
¶20 We adopt the findings of fact and conclusions of law 
of the referee with respect to all of these counts.  Both with 
respect to the counts on which no misconduct was found and the 
single count where there was a violation, we believe the referee 
was best situated to judge the credibility of the witnesses.  
There is no indication that the findings of fact that support 
the referee's conclusions are clearly erroneous.   
No. 
02-0931-D   
 
9 
 
¶21 We reject Attorney Jacobson's contention that the OLR 
had to present a full transcript of its investigatory process, 
rather than simply the testimony of its investigator, to provide 
the necessary evidence to support Count 12.  We also reject his 
contention that billing information on his computer, which was 
never sent to the client, can be characterized as a bill.   
II. CLIENT TWO 
¶22 Count 5 alleged another violation of SCR 20:8.4(c), 
Count 6 alleged another violation of SCR 20:1.15(b), and Count 
15 alleged another violation of SCR 20:8.4(f) and SCR 22.03(6). 
¶23 These 
counts 
arose 
out 
of 
Attorney 
Jacobson's 
representation of a client in a personal injury action.  The 
client agreed to an $8000 settlement that would have provided 
him with a net payment of $3274.84 after attorney's fees of 
$2666.66 to Attorney Jacobson and $2058.50 to six healthcare 
providers.   
¶24 Attorney Jacobson deposited the $8000 in his trust 
account on April 7, 2000, and immediately paid the client and 
himself.  However, he did not pay the providers or provide 
notice that there had been a settlement.  Within a few days, 
however, he disbursed another $2000 from the trust account to 
himself for attorney's fees which, according to the referee's 
findings and conclusions, could only have come from the amount 
in the account that was to have been paid to the providers.  
Over a year later Attorney Jacobson told the OLR that he found 
six checks in his file payable to the providers which apparently 
had not been sent.   
No. 
02-0931-D   
 
10 
 
¶25 The referee concluded there had been a violation of 
Count 5 because of a conversion of funds to Attorney Jacobson 
that were supposed to have gone to the providers.  The referee 
also concluded there had been a violation of Count 6 because 
Attorney Jacobson did not notify the providers that he was 
holding funds on their behalf.  Finally, the referee concluded 
there had been a violation of Count 15 because Attorney Jacobson 
failed to disclose to the OLR that he knew his client was having 
trouble with his credit because the providers had not been paid.  
¶26 The referee refused to accept Attorney Jacobson's 
explanation that he had simply made a mistake in not making the 
payments.   She noted that within a few months of the providers 
not being paid, the client began to receive collection letters 
and 
he 
called 
Attorney 
Jacobson 
several 
times 
for 
an 
explanation.  However, Attorney Jacobson never returned those 
calls.  The referee concluded that even if Attorney Jacobson 
initially made a mistake with respect to paying the providers, 
there was no excuse for his failure to respond to his client's 
inquiries.8   
                                                 
8 The client received $2058.50 from the Client Security Fund 
to pay the bills to which he added another $100 in interest of 
his own funds.  The referee recommended as part of the sanction 
in this case that Attorney Jacobson repay the Client Security 
Fund $2058.50 and his client $100.  Attorney Jacobson neither 
admits nor denies that such repayment has ever been made.  
However, the OLR states that as of the date of oral argument the 
Client Security Fund had not been reimbursed.  The order in this 
case assumes that neither the Fund nor the client have yet been 
reimbursed. 
No. 
02-0931-D   
 
11 
 
¶27 The referee further observed that Attorney Jacobson 
admitted he had not sent written notification to the providers.9 
¶28 Finally, 
the 
referee 
found 
Attorney 
Jacobson's 
contention that he had no knowledge of any of the client's 
problems, such that he could have disclosed such knowledge to 
the OLR during its investigation, to lack credibility.  
¶29 Attorney Jacobson concedes that he violated Count 6.  
¶30 However, he argues that the conclusion with respect to 
Count 5 cannot be sustained because there was no evidence that 
he was attempting to defraud, cheat, deceive or mislead the 
providers.  Rather, he claims that he merely "absent-mindedly, 
sloppily and even perhaps negligently" did not mail the checks.   
¶31 Attorney Jacobson also disputes the conclusion that 
misconduct occurred with respect to Count 15.  He contends he 
never actually knew of any problem with this client until the 
OLR's full investigation.  He basically asserts that the 
client's claims that he tried to call him about this problem 
should not be believed.  Finally, he again claims that the OLR 
failed to keep a full transcript of the questioning during its 
investigation 
and 
this, 
coupled 
with 
this 
"imperfect 
recollections" renders the referee's findings and conclusions on 
Count 15 to be in error.  
                                                 
9 The referee rejected Attorney Jacobson's argument that SCR 
20:1.15(b) was unfair because it had the potential of alerting 
third parties as to funds that could be improperly attached or 
garnished.  The referee correctly stated she did not have 
jurisdiction to overturn a supreme court rule nor was there any 
apparent legitimate fear with notifying these providers.  
No. 
02-0931-D   
 
12 
 
¶32 The OLR submits the referee could reasonably conclude 
there had been a violation of Count 5 because there was evidence 
the client called Attorney Jacobson on several occasions to 
discuss the non-payment to the providers.  The OLR contends that 
the necessary intent can be inferred from the circumstances.   
¶33 The OLR further responds that, once again, it is up to 
the referee to judge the credibility of its investigator and 
investigative process and there does not have to be a verbatim 
transcript of the investigation.  
¶34 We find no basis to overturn the referee's findings 
and conclusions with respect to these counts.  As noted, the 
referee had the benefit of listening to the testimony and 
assessing the credibility of Attorney Jacobson vis-à-vis his 
client.  Further, as previously noted, the OLR investigatory 
process does not have to be memorialized by a transcript.  
No. 
02-0931-D   
 
13 
 
III. CLIENT THREE 
¶35 Count 7 alleged a violation of former SCR 20:1.15(a)10 
(property of clients to be held in trust).    
¶36 This 
count 
arose 
out 
of 
Attorney 
Jacobson's 
representation of a client for which he received an advance fee 
                                                 
10 Former SCR 20:1.15(a) provided:  
(a) 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 
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 reasonably 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. 
No. 
02-0931-D   
 
14 
 
of $3500 which was placed in his trust account on May 4, 2000.  
Attorney Jacobson never actually performed any work for the 
client and issued a refund check to him over two months later.  
But when the $3500 was deposited, there was an overdraft of 
approximately $500 in the trust account which the $3500 helped 
bring back into balance.  When the refund was made, the $500 
overdraft, plus an overdraft charge, had not yet been repaid so 
the refund reinstated the negative balance in the trust account.  
In fact, since there was not enough in the trust account to 
cover the refund Attorney Jacobson quickly had to deposit yet 
more funds from another client to cover it.  
¶37 The referee concluded that Attorney Jacobson did not 
apply basic trust fund standards to the handling of his account 
and thus misconduct occurred.  
¶38 Attorney Jacobson does not dispute the misconduct but 
relies on a mitigating factor that will be discussed later.   
¶39 The findings of fact of the referee with respect to 
this count are not clearly erroneous and we agree with her legal 
conclusion that misconduct occurred.  
IV. CLIENT FOUR 
¶40 Count 8 alleged another violation of SCR 20:8.4(c) and 
Count 9 alleged another violation of SCR 20:1.15(b).   
¶41 These 
counts 
arose 
out 
of 
Attorney 
Jacobson's 
representation of a client in a personal injury action.  He 
received a settlement on her behalf in July 2000 and was 
supposed to pay $890 of it to a healthcare provider but did not 
No. 
02-0931-D   
 
15 
 
actually do so until August 2001 after the OLR began its 
investigation of the following grievance.  
¶42 The 
investigation 
revealed 
that 
shortly 
after 
receiving this settlement, Attorney Jacobson did issue a check 
to the provider but there were insufficient funds to cover it.  
In any event, there was no evidence that the check was ever 
received and that the provider attempted to cash it.  The 
insufficiency was due to the trust account problems resulting 
from the refund check issued to Client Three.  The provider's 
office manager testified that she contacted Attorney Jacobson on 
several occasions about the unpaid bill but never received a 
response. 
¶43 The referee concluded that Attorney Jacobson violated 
Count 8 by using funds owed to the provider to pay Client Three.  
In addition, the referee concluded that misconduct with relation 
to Count 9 was proven by Attorney Jacobson's failure to provide 
written notification to the provider that he had its funds.  The 
referee noted that when the settlement proceeds came in, 
Attorney Jacobson issued checks both to the client and to 
himself for attorney's fees, thereby implying there was no 
excuse for his failure to follow through on his obligation to 
the provider.11 
¶44 Attorney Jacobson argues that although the supreme 
court rule does not specify an intent requirement in order to 
                                                 
11 The referee again refused to consider the argument that 
SCR 20:1.15(b) unfairly demanded notice to third persons with an 
interest in funds.  
No. 
02-0931-D   
 
16 
 
find dishonesty, fraud, deceit or misrepresentation, this is 
implicit.  However, he concedes that intent can be inferred from 
the circumstances.  But he again argues there is no evidence 
other than that he unknowingly wrote a check when the trust 
account was overdrawn. 
¶45 Further, 
Attorney 
Jacobson 
argues 
it 
was 
the 
provider's fault that the initial check, even though overdrawn, 
was not, according to his version of the incident, logged in as 
received and then cashed.   
¶46 Finally, Attorney Jacobson claims in general that the 
"tepid nature" of the OLR's proof on these counts is evident and 
the referee's findings and conclusions should be overturned.  
¶47 In response, the OLR notes that Attorney Jacobson 
apparently concedes there were insufficient funds in his trust 
account to cover the initial check to the provider even if the 
provider failed to properly log and cash it.   
¶48 Further, the OLR contends that the referee had the 
benefit of considering all of the evidence and could reasonably 
conclude that Attorney Jacobson never even sent the initial 
check and that the provider was not somehow at fault.  The OLR 
submits it was proper for the referee to judge the credibility 
of determinations involved with this matter.  
¶49 Finally, the OLR argues pursuant to In re Disciplinary 
Proceedings Against Marks, 2003 WI 114, 265 Wis. 2d 1, 665 
N.W.2d 836 that the lack of actual knowledge or proof of purpose 
for intent is not a defense to SCR 20:8.4(c). 
No. 
02-0931-D   
 
17 
 
¶50 We conclude that there is no basis to overturn the 
referee's findings and conclusions with respect to these two 
counts.  Attorney Jacobson clearly used the funds of others to 
cover a trust account shortfall and failed to issue the proper 
notice to the providers.  It is unnecessary to prove the tort of 
misrepresentation in order to establish that an attorney has 
violated a rule of professional conduct involving dishonesty, 
fraud, deceit, or misrepresentation.  Id. at ¶50;  In re 
Disciplinary Proceedings Against Schalow, 131 Wis. 2d 1, 388 
N.W.2d 176 (1986).  Nonetheless, it was the referee's role to 
judge Attorney Jacobson's credibility with respect to intent, 
and the inference to be drawn from the evidence, and we cannot 
conclude that the findings in this regard are clearly erroneous 
or that the legal conclusions drawn from those findings are in 
error.   
V. CLIENT FIVE 
¶51 Count 10 alleged another violation of former SCR 
20:1.15(b).  Count 11 alleged a violation of former SCR 
20:1.15(e)12 (requires preservation of complete trust account 
records for all six years). 
                                                 
12 Former SCR 20:1.15(e) provided: 
(e) 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 
No. 
02-0931-D   
 
18 
 
¶52 These 
counts 
arose 
out 
of 
Attorney 
Jacobson's 
representation of a client and his wife in a personal injury and 
worker's compensation action.  He received a settlement check 
for $78,000 in December 2000, $20,000 of which was to go to the 
subrogated worker's compensation carrier.  Attorney Jacobson 
failed to notify the carrier of the settlement and did not pay 
the $20,000 until over three months later.  Further, there was 
no evidence that Attorney Jacobson reconciled his trust account 
in the year prior to the $20,000 payment. 
¶53 The referee concluded that these violations occurred 
and Attorney Jacobson does not challenge that conclusion.   
¶54 We do not find any basis under the controlling 
standards to overturn the referee's findings and conclusions 
with respect to these counts.   
VI. CLIENT SIX 
                                                                                                                                                             
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. 
02-0931-D   
 
19 
 
¶55 Count 16 alleged a violation of SCR 20:1.5(b)13 (the 
basis/rate of fees shall be communicated to the client within a 
reasonable time after commencing representation).  Count 17 
alleged another violation of SCR 20:1.4(a) (the client shall be 
reasonably informed about the status of a matter).   
¶56 These 
counts 
arise 
out 
of 
Attorney 
Jacobson's 
representation of a married couple on several occasions before 
1996 when they came to him over a dispute involving construction 
of a home.  He asked for a $4000 retainer.  An initial payment 
of $1000 was made for which he spent six to ten hours reviewing 
construction documents to see if there was a basis for suit.  A 
second $1000 was sent to him six months later, in mid-1997.   
¶57 The clients claimed that the initial $1000 was to 
cover court costs and filing fees to actually commence the 
lawsuit.  However, they had no specific recollection of having 
discussed the exact nature of the fee and have no records to 
this effect.   
¶58 Attorney Jacobson testified that he did not recall 
exactly whether this would be a flat fee or on an hourly basis 
but admitted there was no written retainer agreement.  He 
conceded that his file on the matter was "not available——I have 
no idea where it is."   
                                                 
13 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. 
02-0931-D   
 
20 
 
¶59 The clients also claimed that in mid-1998 they asked 
for a copy of the demand letter that Attorney Jacobson 
supposedly had previously sent to the builder.  He admitted that 
he never sent them a copy.   
¶60 The clients further claimed that in mid-1998 they 
first requested an itemized statement of services.  This was 
followed by an early 1999 demand to the same effect which 
accompanied a notice terminating Attorney Jacobson's service and 
a request for a return of any of the unused $2000.  This was 
followed by a third request for an itemized statement and a 
return of unused money a few months later in 1999.  A fourth 
such request was made in late 1999.  Attorney Jacobson stated in 
a letter after the fourth request, at a time when he knew the 
clients had already filed a grievance, that he would soon send 
an itemized statement, but he never did so.  
¶61 The referee concluded there had been a violation of 
both counts.  She held that Attorney Jacobson should have 
discussed the nature of the fee agreement with the clients given 
that the fee basis was apparently going to be different than 
when he had done prior legal work for them.  She also noted that 
Attorney Jacobson never explained why he told the clients to 
bring in $4000 nor did he ever inform them how the $2000 that 
they did pay was being used.  Finally, the referee concluded 
Attorney Jacobson had clearly failed to respond to the clients' 
numerous requests for an itemized statement and return of any 
unused funds.  
No. 
02-0931-D   
 
21 
 
¶62 Attorney Jacobson claims that because neither he nor 
the clients can recall whether there was a discussion of the 
basis for a fee, there was insufficient proof that he did not 
explain the fee and thus Count 16 is not proven.14 
¶63 Attorney 
Jacobson 
concedes 
there 
is 
sufficient 
evidence that he failed to provide the clients with the demand 
letter he had sent to the builder, and thus Count 17 was proven.  
However, he claims he could not provide them with a billing 
statement because he had already turned over his file to them 
which contained the notes he would have needed to prepare a 
bill. 
¶64 The OLR argues in response that simply because neither 
side can recall whether the basis for the fee was discussed, 
Attorney Jacobson cannot validly claim that he "communicated" 
the fee basis as the rule requires.  The OLR emphasizes that 
Attorney Jacobson admitted there was no written fee agreement 
and contends that therefore communication was inadequate. 
¶65 The OLR further indicates that in late 1999 Attorney 
Jacobson admits having sent the clients a letter indicating that 
                                                 
14 Attorney 
Jacobson 
also 
maintains 
that 
since 
he 
represented these clients before, under a strict reading of the 
rule there was no reason for him to explain the basis for the 
fee.  He relies on the Comment to SCR 20:1.5(b): "When the 
lawyer has regularly represented a client, they ordinarily will 
have evolved an understanding concerning the basis or rate of 
the fee." 
Attorney Jacobson's argument assumes that an understanding 
concerning the basis/rate of a fee have evolved here, which the 
referee did not find to be the case.  
No. 
02-0931-D   
 
22 
 
an itemized bill would soon be sent, without any hint that he 
did not have access to billing information.  Further, the OLR 
notes that when Attorney Jacobson says he turned over the file 
to the clients in late 1999, he had already previously received 
several requests for billing information.  Finally, the OLR 
states there is nothing in the record from the clients 
indicating that they indeed ever received the file.  
¶66 We adopt the referee's findings and conclusions with 
respect to these counts.   
¶67 The absence of a written fee agreement or any 
recollection by either side that the fees had otherwise been 
discussed supports the conclusion that Attorney Jacobson failed 
in his duty under the supreme court rule to communicate the 
basis/rate for the fee.   
¶68 Attorney Jacobson concedes he never forwarded to the 
clients a copy of the demand letter.  But his attempt to dismiss 
the failure to furnish a bill is not supported by the findings.  
Attorney Jacobson stated in the late 1999 letter——well after the 
clients' initial request for a bill——that he would furnish one, 
yet he did not do so.  There was no evidence that he asked for 
return of the file, assuming it was ever sent to the clients, as 
a necessary step to prepare the bill.  
No. 
02-0931-D   
 
23 
 
 
VII. SANCTIONS 
¶69 The OLR initially requested a two-year suspension, 
restitution of the $2058.50 to the Client Security Fund (with 
repayment to the client of $100), two years of trust account 
supervision, and costs.  Attorney Jacobson asked for a reprimand 
only.   
¶70 The 
referee 
originally 
recommended 
an 
18-month 
suspension plus the additional factors, including costs.  The 
referee acknowledged that mitigating factors on the sanction 
could include mental disability and alcohol dependency provided 
the attorney suffers from such a condition, the condition caused 
the misconduct, recovery from the condition is demonstrated by a 
meaningful and sustained period of successful rehabilitation, 
and the recovery has stopped the misconduct suggesting that it 
is unlikely to recur.  However, the referee noted that Attorney 
Jacobson's proffered evidence to support such mitigating factors 
was insufficient.  
¶71 However, as previously noted, this court committed 
this matter to be reopened for additional evidence relating to 
Attorney Jacobson's physical and mental condition.  Following 
the remanded proceedings, the referee issued amended findings, 
conclusions, 
and 
a 
recommendation. 
 
The 
suspension 
recommendation was reduced to 90 days.  The referee also 
recommended that reinstatement be conditioned on not only two 
years of trust account supervision but also: (1) semi-annual 
reports for a period of two years from a psychiatrist or other 
No. 
02-0931-D   
 
24 
 
healthcare 
provider 
indicating 
that 
Attorney 
Jacobson's 
depression and any other emotional or psychological problems 
that would impair his practice of law are under control; and 
(2) two years of monitoring of Attorney Jacobson's law practice 
by an OLR-approved attorney with reports of that monitoring to 
the OLR on a mutually agreed schedule.   
¶72 At 
the 
remanded 
proceedings 
Attorney 
Jacobson 
primarily presented testimony from himself and a psychiatrist.  
The evidence and testimony revealed that on May 6, 2000, 
Attorney Jacobson suffered a heart attack and underwent double 
bypass surgery.  
This was 
followed 
by three 
months of 
rehabilitation. 
 
While 
recovering 
from 
the 
surgery, 
the 
psychiatrist found Attorney Jacobson to be anxious and depressed 
and preoccupied with issues surrounding his medical situation 
such as the possibility of death or physical debilitation and 
concern about family and finances.   
¶73 In the subsequent two years the psychiatrist saw 
Attorney Jacobson approximately 50 times and continues to see 
him one or two times a month at present as needed.  In addition 
to his heart problems, Attorney Jacobson has reported other 
problems since mid-2000 including divorce, problems with his 
children, and a decrease in income.  The psychiatrist has 
prescribed varying levels of anti-depressant medication since 
September 2000.   
¶74 The psychiatrist testified that to a reasonable degree 
of medical probability there was a direct relationship between 
Attorney 
Jacobson's 
depression 
and 
his 
misconduct. 
 
The 
No. 
02-0931-D   
 
25 
 
psychiatrist found an "extremely high degree of correlation" 
between the timing of the misconduct and the periods when 
Attorney 
Jacobson 
was 
reporting 
severe 
depression. 
 
The 
psychiatrist further stated that Attorney Jacobson is no longer 
depressed, is not on medication, is continuing therapy as 
needed, and his past self-destructive behavior is unlikely to 
recur.   
¶75 The referee concluded that since all but the counts 
relating to Client One occurred during the 2000-2002 period 
during which Attorney Jacobson had heart and psychological 
problems, and given the causal testimony from the psychiatrist——
which the referee characterized as an "extremely clear and 
thorough analysis" of the problem——his condition should be a 
mitigating factor.  The referee stated: 
Depression is a devastating illness and its effects as 
described by Dr. Taxman were obvious in every aspect 
of Mr. Jacobson's life.  There is no question that Mr. 
Jacobson's ability to function as a lawyer was 
diminished and that he was unable to handle the myriad 
details of a sole practice, i.e., his depression and 
the failure to fulfill his duties as a lawyer co-
existed for a lengthy period of time.  As Dr. Taxman 
noted, fear and anxiety, as well as depression and 
certain 
personality 
traits, 
led 
to 
significant 
disorganization in Mr. Jacobson's life. . . .    
The OLR's contention that the depression did not 
disable him from performing his legal duties is not 
supported by the evidence.  It is my opinion that Mr. 
Jacobson's on-going depression was the cause of the 
misconduct 
which 
led 
to 
these 
disciplinary 
proceedings.   
¶76 Attorney Jacobson concedes that if the 12 counts 
against him stand, a 90-day suspension is appropriate.  But he 
No. 
02-0931-D   
 
26 
 
argues that if less than 12 counts are upheld, the discipline 
should be reduced proportionately, perhaps even down to a public 
reprimand.   
¶77 The OLR has a variety of objections to a reduction in 
suspension and wants the original 18-month suspension imposed.  
These include contentions that: (1) the psychiatrist offered 
only "vague general information" as to what problems a depressed 
attorney could encounter in his practice; (2) the psychiatrist 
was "very hesitant" to render an opinion on causation given that 
he was not an attorney; (3) the psychiatrist admitted that 
Attorney Jacobson's condition could not have led to any 
deceitful or dishonest information in communications with the 
OLR; (4) the psychiatrist never conducted formal testing on 
Attorney Jacobson and simply took his word as truth; (5) in 
addition to the matter with Client One, which predates the onset 
of Attorney Jacobson's condition, much of the misconduct with 
respect to Client Two also occurred in early 2000 before the 
heart attack and the overdraft involving Client Three predated 
the heart attack; (6) at the same time Attorney Jacobson 
supposedly had severe problems, he apparently was functioning 
adequately in the other aspects of his practice suggesting that 
his depression, selectively caused him to misbehave only as to 
some of his clients; and (7) an 83 percent reduction in the 
recommended sanction is excessive in light of In re Disciplinary 
Proceedings Against North, 148 Wis. 2d 45, 434 N.W.2d 614 
(1989), where somewhat similar mitigating circumstances only 
No. 
02-0931-D   
 
27 
 
resulted in a reduction of the suspension from 12 months to 9 
months.  
¶78 We do not consider 
the 
psychiatrist's 
testimony 
regarding causation to be as vague as the OLR portrays it.  He 
did concede that he was not familiar with the specifics of the 
numerous counts in this matter.  Attorney Jacobson acknowledges 
that he only questioned his witness in a "more concentrated 
nature" regarding the connection between his condition and the 
misconduct.  Yet the psychiatrist's opinion that there was a 
direct causal connection between the two was unequivocal.   
¶79 However, we agree with the OLR that several of the 12 
counts in which we have found misconduct to have occurred in 
whole or in significant part predate the onset of Attorney 
Jacobson's medical and psychological problems.  We also agree 
that the fact that he apparently was able to serve other clients 
free of misconduct is also significant.  Pursuant to In re 
Disciplinary Proceedings Against Karlsson, 2001 WI 126, 248 
Wis. 2d 681, 635 N.W.2d 771, the fact that the attorney was able 
to maintain and represent other clients during the period when 
she purportedly suffered from anxiety and depression, coupled 
with unclear, detailed and inconsistent evidence of causation, 
led the referee to reject this as a mitigating factor.   
¶80 Accordingly, we believe that a suspension in excess of 
the referee's amended recommendation is necessary.  Attorney 
Jacobson's 12 counts of misconduct represent a serious and 
persistent failure to comply with the Rules of Professional 
No. 
02-0931-D   
 
28 
 
Conduct. 
 
Under 
these 
circumstances, 
we 
believe 
that 
a 
suspension of five months is warranted.15  
¶81 IT IS ORDERED that the license of Attorney Bruce B. 
Jacobson to practice law in Wisconsin is suspended for a period 
of five months, effective January 27, 2005. 
¶82 IT IS FURTHER ORDERED that Attorney Jacobson comply 
with the provisions of SCR 22.26 concerning the duties of an 
attorney whose license to practice law has been suspended. 
¶83 IT IS FURTHER ORDERED that within 60 days of the date 
of this order Attorney Jacobson shall: (1) pay $18,705.19 to the 
OLR representing the costs of this proceeding; and (2) pay the 
Client Security Fund $2058.50 and Client Two $100, plus interest 
at the statutory rate from the date the fund and client expended 
those amounts.  If these costs are not paid within the time 
specified, and absent a showing to this court of an inability to 
pay those costs within that time, the license of Attorney 
Jacobson to practice law shall remain suspended indefinitely 
until further order of the court.  
¶84 IT IS FURTHER ORDERED that for a period of two years 
following Attorney Jacobson's suspension, semi-annual reports 
shall be submitted by his psychiatrist or other healthcare 
provider, as approved by the OLR, concerning the state of his 
psychological condition insofar as it might impair his practice 
                                                 
15 The OLR asks this court to take judicial notice of 
another 
pending 
disciplinary 
proceeding 
against 
Attorney 
Jacobson, Case No. 04-0753-D, complaint filed March 12, 2004.  
We do so, however the pendency of that proceeding is not a 
factor in the disposition of this case.  
No. 
02-0931-D   
 
29 
 
of law.  The first such report shall be filed six months after 
the date of suspension.  
¶85 IT IS FURTHER ORDERED that for a period of two years 
following the date of his reinstatement to practice law, 
Attorney Jacobson's practice of law shall be monitored by an 
OLR-approved attorney on a schedule set by the OLR. 
¶86 IT IS FURTHER ORDERED that for a period of two years 
after reinstatement Attorney Jacobson shall provide the OLR with 
quarterly reports, in a manner satisfactory to the OLR, 
concerning his trust account record keeping.  These reports 
shall commence three months after the date of reinstatement.  
 
No. 
02-0931-D   
 
 
 
1