Case Title: Office of Lawyer Regulation v. Jenny R. Armstrong

Citation: 2015 WI 60

Docket Number: 2015AP000460-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2015-06-24T00:00:00Z

Document:
2015 WI 60 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2015AP460-D 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against   
Jenny R. Armstrong, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Jenny R. Armstrong, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST ARMSTRONG 
 
 
OPINION FILED: 
June 24, 2015 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
      
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
 
 
 
 
 
2015 WI 60
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2015AP460-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Jenny R. Armstrong, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Jenny R. Armstrong, 
 
          Respondent. 
 
FILED 
 
JUN 24, 2015 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.  Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   We review a stipulation filed pursuant 
to Supreme Court Rule (SCR) 22.12 by the Office of Lawyer 
Regulation (OLR) and Attorney Jenny R. Armstrong.  In the 
stipulation, Attorney Armstrong does not contest that she 
committed nine counts of professional misconduct and that a two-
year suspension of her license to practice law in Wisconsin is 
appropriate discipline.  The parties further stipulate that 
No. 
2015AP460-D   
 
2 
 
Attorney Armstrong should pay $60,899.81 in restitution to a 
former client. 
¶2 
Attorney Armstrong was licensed to practice law in 
Wisconsin in 1979.  She resides in Middleton.  She has not 
previously been the subject of a disciplinary proceeding. 
¶3 
During the events giving rise to this matter, Attorney 
Armstrong was a licensed real estate broker doing business as 
ABA Realty, Inc.  She was the only broker employed by the firm.  
Attorney Armstrong was licensed by the office of the Insurance 
Commissioner of Wisconsin to sell life, accident, and health 
insurance lines for several companies. 
¶4 
From the 1980s until October 2005, Attorney Armstrong 
had an attorney-client relationship with a woman we shall refer 
to as B.R.T.  B.R.T. was born in October 1924.  Briefly stated, 
Attorney Armstrong engaged in a lengthy pattern of misconduct, 
repeatedly overbilling her client, and ultimately, between 2000 
and 2005, charging her client $170,651.95 for various tasks, 
many of which were not legal in nature. 
¶5 
In June 2000, Attorney Armstrong sold B.R.T. a 
deferred annuity policy for a single premium of $5,000.  
Attorney Armstrong received an immediate four and one-half 
percent commission on the policy in the sum of $225.  At the 
time B.R.T. purchased the annuity policy, Attorney Armstrong was 
doing legal work, financial planning, and financial management 
for B.R.T. and billing B.R.T. for it.  Attorney Armstrong did 
not disclose to B.R.T. in writing that Attorney Armstrong would 
receive a commission on the sale of the annuity policy prior to 
No. 
2015AP460-D   
 
3 
 
B.R.T. entering into the transaction.  Attorney Armstrong did 
not obtain B.R.T.'s written consent to the transaction involving 
Attorney Armstrong's receipt of a commission on the sale of the 
annuity policy prior to the transaction.   
¶6 
The OLR alleged and the parties have stipulated that, 
by selling to her legal client an annuity policy in June 2000, 
for which Attorney Armstrong received a commission, without 
obtaining a separate written consent from the client waiving the 
conflict of interest and indicating the client was given 
reasonable opportunity to consult with independent counsel, and 
in a transaction that was not fair or reasonable to the client, 
Attorney Armstrong violated former SCR 20:1.8(a) (Count One).1 
¶7 
In June 2005, B.R.T. executed a listing contract 
giving Attorney Armstrong's realty firm, ABA Realty, Inc., the 
                                                 
1 SCR 20:1.8(a), as in effect prior to July 1, 2007, 
provides: 
A 
lawyer 
shall 
not 
enter 
into 
a 
business 
transaction with a client or knowingly acquire an 
ownership, possessory, security or other pecuniary 
interest adverse to a client unless: 
(1) the transaction and terms on which the lawyer 
acquires the interest are fair and reasonable to the 
client and are fully disclosed and transmitted in 
writing to the client in a manner which can be 
reasonably understood by the client; 
(2) the client is given a reasonable opportunity 
to seek the advice of independent counsel in the 
transaction; and 
(3) the client consents in writing thereto. 
No. 
2015AP460-D   
 
4 
 
exclusive right to sell B.R.T.'s duplex.  Attorney Armstrong 
prepared and executed the listing contract, which included a 
"list price" of $450,000 and provided for a broker's commission 
of seven percent if the conditions for earning the commission 
were satisfied.  At the time Attorney Armstrong and B.R.T. 
entered into the listing contract, Attorney Armstrong was 
performing legal and other services relative to the duplex and 
the sale of the duplex and billing B.R.T. for that work.  
Attorney Armstrong did not obtain B.R.T.'s written consent to 
the transaction involving Attorney Armstrong's receipt of a 
commission on the sale of the duplex prior to B.R.T. entering 
into the listing contract. 
¶8 
The OLR alleged and the parties have stipulated that, 
by contracting with B.R.T. to act as her real estate agent in 
the sale of her duplex for a seven percent commission, while 
simultaneously acting as her lawyer with respect to the sale, 
without obtaining a separate written consent from the client 
waiving the conflict of interest and indicating that the client 
was given reasonable opportunity to consult with independent 
counsel, Attorney Armstrong violated former SCR 20:1.8(a) (Count 
Two). 
¶9 
In April 2001, Attorney Armstrong prepared and filed 
joint income tax returns for B.R.T. and her husband for the 2000 
tax year.  Attorney Armstrong billed the couple $3,430.88.  The 
couple paid in full.  The income tax returns prepared by 
Attorney Armstrong contained errors, and Attorney Armstrong 
either knew or should have known of the errors, or knew or 
No. 
2015AP460-D   
 
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should have known that she did not have sufficient information 
to complete accurate returns and that the necessary information 
could have been obtained from the clients or other sources.  
¶10 In May 2002, the United States Internal Revenue 
Service (IRS) notified the couple of a deficiency and proposed 
changes to the 2000 tax return, which increased the taxes they 
owed by $2,156.  The IRS demanded an additional payment of 
$2,717, which included interest. 
¶11 In December 2002, Attorney Armstrong disputed the 
IRS's proposed changes to the return and asserted that the 
clients were entitled to a $435 tax refund.  Attorney Armstrong 
petitioned the United States Tax Court for a hearing on behalf 
of the couple.  She also prepared and submitted an amended Form 
1040 for the 2000 tax year which, as it turned out, also 
included several errors.  
¶12 Shortly before the scheduled trial date, the IRS 
completed an audit and reduced the amount of the clients' tax 
deficiency; the clients agreed to a stipulation offered by the 
IRS, under which they agreed to pay $1,136 in additional tax, 
plus $195 in interest, for a total additional payment of $1,331.  
¶13 Attorney Armstrong then billed B.R.T. and her husband 
$4,118.95 for responding to the IRS notice of deficiency.  The 
clients paid in full. 
¶14 The OLR alleged and the parties have stipulated that, 
by preparing and filing her clients' tax returns for 2000 
without accurate information that she already knew, should 
reasonably have known, or could have readily obtained, thereby 
No. 
2015AP460-D   
 
6 
 
resulting in a tax deficiency and added legal expenses for her 
clients, Attorney Armstrong violated SCR 20:1.3 (Count Three).2   
¶15 In addition, by charging additional fees of $4,118.95 
to reduce an IRS tax deficiency determination from $2,156 to 
$1,136, Attorney Armstrong violated former SCR 20:1.5(a) (Count 
Four).3 
                                                 
2 SCR 20:1.3 provides that "[a] lawyer shall act with 
reasonable diligence and promptness in representing a client." 
3 SCR 20:1.5(a), as in effect prior to July 1, 2007, 
provides: 
A lawyer's fee shall be reasonable.  The factors 
to be considered in determining the reasonableness of 
a fee include the following: 
(1) the time and labor required, the novelty and 
difficulty of the questions involved, and the skill 
requisite to perform the legal service properly; 
(2) the likelihood, if apparent to the client, 
that the acceptance of the particular employment will 
preclude other employment by the lawyer; 
(3) the fee customarily charged in the locality 
for similar legal services; 
(4) the amount involved and the results obtained; 
(5) the time limitations imposed by the client or 
by the circumstances; 
(6) the nature and length of the professional 
relationship with the client; 
(7) the experience, reputation, and ability of 
the lawyer or lawyers performing the services; and 
(8) whether the fee is fixed or contingent. 
No. 
2015AP460-D   
 
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¶16 From some time before 2000 and through September 2005, 
Attorney Armstrong invoiced B.R.T. a flat fee of $500 per month 
for services identified under a matter name of "POA/Financial."4  
Attorney Armstrong's records indicate that between April 2000 
and October 2005 she spent from two to four and one-half hours 
per month, with a monthly average of 2.69 hours, on this matter.  
Attorney 
Armstrong's 
work 
on 
this 
matter 
was 
mostly 
nonprofessional clerical work, such as receiving, scanning, and 
filing dividend checks, depositing checks, writing checks, and 
bookkeeping. 
¶17 However, the monthly invoices issued to B.R.T. under 
the 
"POA/Financial" 
matter 
described 
the 
activities 
as 
"professional services," such as "Received, Reviewed, Processed 
Financial Documents for the Month, Conferences with Client and 
Financial 
Advisors." 
 
The 
parties 
stipulate 
that 
these 
descriptions did not fairly or accurately describe the services 
performed, and included work that was not properly billable to a 
client. 
¶18 Attorney Armstrong sought to justify the flat fee 
arrangement by estimating two hours of work per month, billed at 
her normal hourly rate of $250 for professional services.  
However, the actual legal work consisted of about 15 minutes or 
less per month.  The remainder of the time was spent on non-
                                                 
4 The reference to "POA" was to powers of attorney executed 
by B.R.T. in 1998 and 2004, appointing Attorney Armstrong to 
serve as her attorney-in-fact. 
No. 
2015AP460-D   
 
8 
 
legal clerical activities.  Attorney Armstrong charged the 
monthly $500 flat rate despite language in both the 1998 and 
2004 
powers 
of 
attorney 
setting 
her 
compensation 
as 
reimbursement for "all reasonable costs and expenses actually 
incurred and paid" on behalf of the client. 
¶19 The OLR alleged and the parties have stipulated that, 
by billing B.R.T. a flat fee of $500 per month from May 1, 2000, 
through October 1, 2005, for legal work that generally consisted 
of only 15 minutes or less, despite the aforementioned language 
in the written powers of attorney, Attorney Armstrong violated 
former SCR 20:1.5(a) (Count Five). 
¶20 In 
addition, 
between 
September 
1, 
2004, 
and 
November 1, 2005, Attorney Armstrong billed B.R.T. somewhere 
between $58,422.32 and $62,815.20 for what was primarily 
nonprofessional work assisting B.R.T. with matters related to 
her duplex.  This work included "general contractor" type of 
services (such as consulting with her client about needed 
repairs, soliciting bids, and helping select contractors such as 
painters, carpenters, plumbers, and the like); property manager 
services (such as dunning tenants for unpaid rent, fielding 
complaints, keeping accounting records for rents, listing the 
duplex for lease, and seeking new tenants); retaining and 
supervising workers to clean the duplex; personally sorting and 
boxing the client's personal property; and running errands (such 
as picking up parts and supplies, boxes, plastic bags, packing 
tape, mulch, and the like). 
No. 
2015AP460-D   
 
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¶21 Attorney 
Armstrong 
charged 
her 
client 
at 
her 
professional rate of $250 per hour for these services and 
charged her client $150 per hour for services performed by legal 
assistants.  
¶22 The OLR alleged and the parties have stipulated that, 
by charging her $250 hourly rate as an attorney, and by charging 
her paraprofessional staff rate of $150 per hour, for the 
aforementioned nonprofessional work, Attorney Armstrong violated 
former SCR 20:1.5(a) (Count Six). 
¶23 B.R.T.'s husband, John, died in April 2004, and B.R.T. 
retained Attorney Armstrong to perform legal services relative 
to John's estate.  When John died, he owned a 1993 Mercury Sable 
automobile, the depreciated value of which was likely less than 
ten percent of its original base price of $17,500.  Attorney 
Armstrong billed B.R.T. approximately $3,265 for services in 
cancelling the auto insurance on the vehicle and transferring 
the vehicle title to John's daughter. 
¶24 The OLR alleged and the parties have stipulated that, 
by charging B.R.T. approximately $3,265 during 2004 and 2005 to 
cancel auto insurance and transfer a vehicle title, Attorney 
Armstrong violated former SCR 20:1.5(a) (Count Seven). 
¶25 In December 1998, an entity named Trustmark issued a 
check payable to B.R.T. in the sum of $315.  In July 2004, 
B.R.T. attempted to deposit the check, but her bank rejected and 
returned the check as stale.  B.R.T. gave Attorney Armstrong the 
stale check and asked her to try to get a replacement.  The 
parties have stipulated that between July 15 and October 26, 
No. 
2015AP460-D   
 
10 
 
2004, Attorney Armstrong billed B.R.T. approximately $562.50 to 
attempt to have a $315 stale check reissued, thereby violating 
former SCR 20:1.5(a) (Count Eight). 
¶26 Finally, following John's death, B.R.T. wanted to 
close John's AOL account.  The parties have stipulated that 
Attorney Armstrong billed B.R.T. about $385 for the work to 
cancel this account, thereby violating former SCR 20:1.5(a) 
(Count Nine). 
¶27 Attorney Armstrong has stipulated that she understands 
the misconduct allegations; that she understands her right to 
contest this matter; that she understands her right to consult 
with counsel, and has done so; that she understands the 
ramifications should the court impose a two-year suspension; and 
that her entry into the stipulation is made knowingly and 
voluntarily and represents her admission to the facts and to the 
alleged 
misconduct 
and 
her 
agreement 
with 
the 
level 
of 
discipline sought by the OLR, as well as her assent to making 
restitution as recommended by the OLR.  The stipulation states 
that it did not result from plea-bargaining.   
¶28 With respect to restitution, the parties stipulated 
that $16,500 represents a reasonable fee for the "POA/Financial" 
services.  The OLR recommends that we require Attorney Armstrong 
to make restitution to B.R.T. in the sum of $16,500 for these 
services.   
¶29 With respect to the IRS notice of deficiency, the 
stipulation provides that $500 represents a reasonable fee for 
the services performed.  The OLR recommends that we require 
No. 
2015AP460-D   
 
11 
 
Attorney Armstrong to make restitution to B.R.T. in the sum of 
$3,618.95 for this matter. 
¶30 With respect to the work performed relating to the 
duplex, the stipulation provides that $8,307.64 represents a 
reasonable fee for the services performed.  The OLR recommends 
that we require Attorney Armstrong to make restitution to B.R.T. 
in the sum of $37,568.36 for these services.   
¶31 With respect to the estate of B.R.T's husband, the 
stipulation provides that $1,000 represents a reasonable fee for 
the services performed.  The OLR recommends that we require 
Attorney Armstrong to make restitution to B.R.T. in the sum of 
$3,212.50 in this matter.  
¶32 Attorney 
Armstrong's 
professional 
misconduct, 
including 
the 
systematic 
overcharging 
of 
her 
client, 
is 
deplorable.  Her misconduct is aggravated by her refusal to 
acknowledge wrongdoing throughout much of the investigation.  
Her conduct absolutely warrants a lengthy suspension of her 
license to practice law.  
¶33 After 
reviewing 
the 
matter, 
we 
approve 
the 
stipulation, in part to facilitate payment of restitution to the 
victim and in reliance on the cases cited by the OLR in support 
of a two-year suspension.  See, e.g., In re Disciplinary 
Proceedings Against Gilbert, 227 Wis. 2d 444, 595 N.W.2d 715 
(1999).  We suspend Attorney Armstrong's license to practice law 
in this state for a period of two years.  We direct Attorney 
Armstrong to pay restitution to B.R.T. in the amount of 
$60,899.81.  Because this matter is being resolved without the 
No. 
2015AP460-D   
 
12 
 
appointment of a referee, and because the OLR has not sought 
costs, we do not impose the costs of this proceeding on Attorney 
Armstrong. 
¶34 IT IS ORDERED that the license of Jenny R. Armstrong 
to practice law in Wisconsin is suspended for a period of two 
years, effective July 24, 2015. 
¶35 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Jenny R. Armstrong shall pay $60,899.81 in 
restitution to B.R.T. 
¶36 IT IS FURTHER ORDERED that Jenny R. Armstrong shall 
comply with the provisions of SCR 22.26 concerning the duties of 
a person whose license to practice law in Wisconsin has been 
suspended. 
¶37 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See 
SCR 22.29(4)(c). 
 
 
No. 
2015AP460-D   
 
 
 
1