Case Title: Office of Lawyer Regulation v. Richard J. Krueger

Citation: 2006 WI 17

Docket Number: 2003AP002558-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2006-02-22T00:00:00Z

Document:
2006 WI 17 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2003AP2558-D 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings 
Against Richard J. Krueger, Attorney at Law: 
 
Office of Lawyer Regulation,  
          Complainant-Respondent, 
     v. 
Richard J. Krueger,  
          Respondent-Appellant. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST KRUEGER 
 
 
OPINION FILED: 
February 22, 2006   
SUBMITTED ON BRIEFS: 
October 12, 2005   
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ABRAHAMSON, C.J., concurs (opinion filed).   
 
CONCUR/DISSENT: 
PROSSER, J., concurs in part, dissents in part 
(opinion filed). 
 
DISSENTED: 
        
 
NOT PARTICIPATING: CROOKS, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For the respondent-appellant there were briefs by Robert N. 
Duimstra and Menn, Teetaert & Beisenstein, Ltd., Appleton. 
 
For the complainant-respondent there was a brief by Richard 
P. Mozinski, Donald J. Chewning and Radosevich, Mozinski, 
Cashman & Olson, LLP, Manitowoc. 
 
2006 WI 17
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2003AP2558-D  
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Richard J. Krueger, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Respondent, 
 
     v. 
 
Richard J. Krueger, 
 
          Respondent-Appellant. 
 
FILED 
 
FEB 22, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding. 
 
Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   Attorney Richard J. Krueger has appealed 
from 
a 
referee's 
report 
concluding 
that 
he 
engaged 
in 
professional misconduct and recommending that his license to 
practice law in Wisconsin be suspended for a period of 60 days. 
¶2 
We conclude that the referee's findings of fact are 
supported by satisfactory and convincing evidence.  We further 
determine that the seriousness of Attorney Krueger's misconduct 
warrants the suspension of his license to practice law for a 
No. 
2003AP2558-D   
 
2 
 
period of 60 days.  We also agree with the referee that the 
costs of the proceeding, which are $20,489.37, should be 
assessed against Attorney Krueger. 
¶3 
Attorney Krueger was admitted to practice law in 
Wisconsin in 1956 and now practices part-time in Oconto.  He has 
not previously been the subject of a disciplinary action. 
¶4 
In September 2003 the Office of Lawyer Regulation 
(OLR) filed a complaint alleging that Attorney Krueger engaged 
in misconduct with respect to his representation of F.S.  
Attorney Krueger had represented F.S. in various legal matters 
beginning in 1960.  In 1999, when the pertinent conduct 
occurred, F.S. was 82 years old.   
¶5 
In June 1999 F.S. experienced financial problems and 
asked Attorney Krueger to file a Chapter 7 bankruptcy petition 
on his behalf.  Attorney Krueger filed a Chapter 7 petition for 
F.S. on June 14, 1999.  As of that date Attorney Krueger's 
records indicated that F.S. owed him $7384.15.   
¶6 
The bankruptcy schedules prepared for F.S. by Attorney 
Krueger showed that F.S. had $70,961 in assets and $372,390 in 
debts, of which $220,232 constituted secured claims.  F.S.'s 
debt to Attorney Krueger for attorney's fees in the amount of 
$7384.15 was not disclosed anywhere in the bankruptcy petition 
or the related schedules of creditors.  The schedules to the 
bankruptcy petition did indicate that Attorney Krueger received 
$1000 for the bankruptcy work and debt counseling and that he 
would receive an additional $800 for bankruptcy representation 
prior to filing the required disclosure of attorney compensation 
No. 
2003AP2558-D   
 
3 
 
which is a requirement under bankruptcy law.  Prior to filing 
F.S.'s bankruptcy petition, Attorney Krueger estimated he had 
handled about 100 other Chapter 7 bankruptcy petitions.   
¶7 
Prior to filing F.S.'s bankruptcy petition, Attorney 
Krueger and F.S. discussed the $7384 debt owed to Attorney 
Krueger.  Attorney Krueger said he told F.S., "[m]aybe it's 
better you get yourself another lawyer to do this because of 
this apparent possibility of a conflict."  Attorney Krueger said 
F.S. insisted that Attorney Krueger continue to represent him.  
Attorney Krueger admits that F.S. did not sign a written consent 
waiving the conflict.   
¶8 
After the bankruptcy petition was filed, F.S. and 
Attorney Krueger attended a first meeting of creditors.  At the 
hearing, the bankruptcy trustee, in Attorney Krueger's presence, 
asked F.S. if he had listed all of his debts on the bankruptcy 
schedules.  F.S. said he had.  Attorney Krueger did not say 
anything to the bankruptcy trustee with respect to the money 
F.S. owed him.  F.S. received a discharge from the bankruptcy 
court in October 1999.  At the time of the discharge, three 
adversary proceedings had been filed by secured creditors, and 
Attorney Krueger represented F.S. in those proceedings.  As of 
February 16, 2000, F.S. owed Attorney Krueger about $12,000, of 
which $7384.15 was for the pre-bankruptcy legal work and the 
rest was for post-bankruptcy work relating to the three 
adversary proceedings.   
¶9 
On February 16, 
2000, Attorney Krueger received 
$40,000 from 
F.S. 
 At 
that time, 
Attorney 
Krueger was 
No. 
2003AP2558-D   
 
4 
 
negotiating with counsel for two secured creditors of F.S. and 
offered to settle those cases for 60 percent of the amount owed 
to each creditor.  Attorney Krueger told counsel for those 
creditors that there was no additional money available for 
settlement.  Attorney Krueger deposited $28,000 of the $40,000 
into his client trust account and applied the remaining $12,000 
to his own fees, which included the pre-bankruptcy charges of 
$7384.15.   
¶10 In the process of settling the claims with the secured 
creditors, Attorney Krueger paid the creditors from his trust 
account.  In making the disbursements, Attorney Krueger made a 
math error, leading him to believe the trust account was $500 
short.  He deposited $500 of his own money into the trust 
account and added $500 to the F.S. ledger.  Attorney Krueger 
later discovered the math error, withdrew the $500 from his 
trust account, but continued to bill F.S. for the $500.  In 
December 2000 Attorney Krueger's records showed that F.S. owed 
Attorney Krueger $6856, which included the $500 math error. 
¶11 In 
April 
2001 
F.S.'s 
daughter, 
M.F., 
contacted 
Attorney Krueger to discuss the homestead exemption F.S. had 
claimed in his bankruptcy petition.  M.F. informed Attorney 
Krueger that she was now acting for her father under a power of 
attorney.  During a phone conversation with M.F., Attorney 
Krueger told her that F.S. owed Attorney Krueger over $6000 and 
he demanded payment.  M.F. requested her father's files.  
Attorney Krueger refused to turn over the files unless he was 
No. 
2003AP2558-D   
 
5 
 
paid.  M.F. filed a grievance against Attorney Krueger with the 
OLR in May 2001. 
¶12 In July 2001 after Attorney Krueger had been informed 
that M.F. had filed a grievance, Attorney Krueger filed a small 
claims action against F.S. for $5000.  A default judgment was 
entered in November 2001.  Attorney Krueger filed a transcript 
of the judgment in Marinette County in an attempt to place a 
judgment lien on real estate F.S. had claimed as exempt as his 
homestead in the bankruptcy proceeding.  In September 2002 
Attorney Krueger filed an action to require a sheriff's sale to 
collect on the judgment lien.  M.F. and F.S.'s son, J.S., both 
of whom claimed an interest in the Marinette County property, 
were named as defendants in the action. 
¶13 In October 2002 
Attorney 
Lawrence 
Vesely, 
while 
representing M.F. and J.S., entered into a settlement agreement 
with Attorney Krueger which stopped the pending sheriff's sale.  
There was a discussion about the defendant's paying Attorney 
Krueger $2500 in return for which M.F. would withdraw her 
grievance.  M.F. subsequently informed the OLR that she wanted 
to withdraw the grievance she had filed against Attorney 
Krueger.  The OLR refused to do so and told Attorney Krueger it 
would continue with its investigation. 
¶14 As part of the OLR's investigation, Attorney Krueger 
was requested to tell the OLR what amount of money was owed to 
him by F.S. before the bankruptcy action was filed.  On August 
13, 2001, Attorney Krueger wrote to the OLR and advised him that 
the amount was less than $500.  When OLR staff asked about the 
No. 
2003AP2558-D   
 
6 
 
apparent discrepancy between this statement and the figures 
shown on Attorney Krueger's ledger for F.S., Attorney Krueger 
acknowledged that at the time the bankruptcy petition was filed 
F.S. actually owed him over $7300.   
¶15 The OLR's complaint alleged the following counts of 
misconduct:  
(1) By representing a client in a Chapter 7 
bankruptcy action while the client was indebted to the 
attorney for over $7,000 in unpaid legal fees, and 
thereafter negotiating for the client regarding the 
compromise of non-discharged debts at the same time as 
funds acquired by the client after the bankruptcy were 
used to pay respondent's own fees in full, without 
obtaining written consent from his client to the 
potential conflict of interest, respondent violated 
SCR 20:1.7(b).1   
(2) By preparing bankruptcy schedules for a 
client that intentionally omitted respondent's own 
attorney fee debt, by failing to disclose to the 
bankruptcy 
trustee 
the 
client's 
payment 
of 
respondent's own fees in preference to the client's 
debts to other creditors, and by collecting on the 
debt 
after 
it 
would 
have 
been 
discharged 
in 
                                                 
1 SCR 20:1.7(b) provides:  Conflict of interest: general 
rule. 
 
(b) A lawyer shall not represent a client if the 
representation 
of 
that 
client may 
be 
materially 
limited by the lawyer's responsibilities to another 
client or to a third person, or by the lawyer's own 
interests, unless: 
(1) the 
lawyer 
reasonably 
believes 
the 
representation will not be adversely affected; and 
(2) the client consents in writing after 
consultation.  When representation of multiple clients 
in a single matter is undertaken, the consultation 
shall include explanation of the implications of the 
common representation and the advantages and risks 
involved. 
No. 
2003AP2558-D   
 
7 
 
bankruptcy, respondent engaged in conduct involving 
dishonesty, 
fraud, 
deceit, 
or 
misrepresentation, 
contrary to SCR 20:8.4(c).2 
(3) By making misrepresentations to OLR staff 
about the amount of a client's indebtedness to 
respondent at the time of the client's bankruptcy 
action, and by misrepresenting to OLR that the debt 
had never been satisfied, respondent violated SCR 
22.03(6).3 
¶16 Konrad Tuchscherer 
was appointed 
referee in the 
matter.  A two-day hearing was held in July 2004.  The parties 
submitted a stipulation as to certain findings of fact in which 
Attorney Krueger admitted the vast majority of the allegations 
in the OLR's complaint.  The referee issued a report on 
September 30, 2004, finding that the OLR had met its burden of 
proof with respect to the three counts of misconduct alleged in 
the complaint.   
¶17 The 
referee 
found 
that 
Attorney 
Krueger's 
representation of F.S. in the Chapter 7 bankruptcy action at a 
time when F.S. owed Attorney Krueger in excess of $7000 in 
unpaid legal fees constituted a conflict of interest in that 
F.S.'s representation by Attorney Krueger was materially limited 
by Attorney Krueger's responsibilities to other creditors as 
well as by Attorney Krueger's own interest in being paid a 
                                                 
2 SCR 20:8.4(c) provides it is professional misconduct for a 
lawyer to "engage in conduct involving dishonesty, fraud, deceit 
or misrepresentation." 
3 SCR 22.03(6) provides that "[i]n 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. 
2003AP2558-D   
 
8 
 
discharged debt.  The referee also found that Attorney Krueger 
failed to obtain F.S.'s consent to the conflict in writing as 
required by SCR 20:1.7(b).   
¶18 The referee also concluded that failing to disclose 
the pre-bankruptcy debt F.S. owed to Attorney Krueger in the 
bankruptcy petition, failing to advise the bankruptcy trustee 
that F.S.'s testimony was not accurate in that the pre-
bankruptcy debt owed by F.S. to Attorney Krueger was not 
included, and depositing $12,000 of the $40,000 received from 
F.S. in Attorney Krueger's account constituted dishonesty, 
fraud, 
deceit 
and 
misrepresentation 
in 
violation 
of 
SCR 
20:8.4(c). 
¶19 The referee noted that 11 U.S.C. § 521(1) and Federal 
Bankruptcy Rule 1007 impose a duty on a debtor for full 
disclosure of all creditors, and bankruptcy law requires the 
debtor to sign the bankruptcy petition under penalty of perjury.  
The 
referee 
also 
noted 
that 
the 
attorney 
preparing 
the 
bankruptcy petition is required to sign the petition, although 
without such sanction.  The referee concluded that by signing 
F.S.'s bankruptcy petition Attorney Krueger verified to the 
bankruptcy 
court 
that 
the 
allegations 
or 
other 
factual 
contentions in the petition had evidentiary support.  The 
referee also concluded that by applying over $7000 of the 
$40,000 check received from F.S. in payment of pre-bankruptcy 
attorney's fees, Attorney Krueger collected a discharged debt in 
violation of 11 U.S.C. § 524(a)(2).  The referee also concluded 
that Attorney Krueger's collection of pre-bankruptcy debt was 
No. 
2003AP2558-D   
 
9 
 
not part of a voluntary repayment by F.S. of a discharged debt 
since the debt collection was part of an arrangement Attorney 
Krueger had with F.S. before filing the bankruptcy petition.  
Finally, the referee concluded that Attorney Krueger's letter to 
the OLR saying F.S. had owed him less than $500 at the time the 
bankruptcy was filed was a misrepresentation in violation of SCR 
22.03(6). 
¶20 In discussing the appropriate discipline to be imposed 
for the three counts of misconduct, the referee noted that the 
OLR's complaint was heavily contested at trial by Attorney 
Krueger and central to the case was Attorney Krueger's state of 
mind and whether he perceived his pre-bankruptcy claim against 
F.S. as a conflict of interest; whether he intentionally omitted 
the debt on the bankruptcy schedules; whether he attempted to 
collect a discharged debt post-bankruptcy; and whether he 
intended to mislead the OLR into believing there was very little 
pre-bankruptcy debt and that it was never paid.   
¶21 The referee noted that F.S. was "[c]onspicuously 
absent from the cast of witnesses at the hearing."  The referee 
noted there was testimony that F.S. had been found incompetent 
for purposes of a criminal proceeding that had been brought 
against him.  The referee said F.S.'s testimony, if competent, 
would have been helpful in determining whether the payment of 
the pre-bankruptcy debt was voluntary.  Even though F.S. was not 
present at the hearing, the referee noted that Attorney Krueger 
admitted he had an outstanding arrangement with F.S. which 
provided that when F.S. came into possession of funds after the 
No. 
2003AP2558-D   
 
10 
 
bankruptcy discharge, those funds would be paid to Attorney 
Krueger to cover the pre-bankruptcy debt.  The referee further 
noted that after being paid for the pre-bankruptcy debt, 
Attorney Krueger pursued a small claims action against F.S. for 
additional 
post-bankruptcy 
services, 
which 
illustrated 
his 
propensity to enforce all debts, discharged or otherwise. 
¶22 The referee noted that this court has held that under 
SCR 20:1.7(b): 
[I]t is mandatory to proceed with consultation and a 
written conflict waiver even when the lawyer believes 
the representation may be adversely affected.  It is 
not the state of mind of the Respondent that should be 
examined, it is the likelihood of adverse affects, 
there 
being 
no 
particular 
degree 
of 
likelihood 
necessary.  See, In Re: Disciplinary Proceedings 
Against Michael Trewin, 2004 WI 116, [275 Wis. 2d 
116,] 684 N.W.2d 121 (2004). 
¶23 The referee noted that the OLR had recommended a six-
month suspension of Attorney Krueger's license, and that 
Attorney Krueger sought dismissal of the complaint, claiming no 
violations of supreme court rules occurred.  The referee also 
noted that at the time of the hearing Attorney Krueger was 72 
years old and occupied emeritus status with the state bar and 
that his practice had been winding down for a number of years 
and was non-existent in the winter when he and his wife reside 
in Arizona.  In addition, the referee noted that in his 48 years 
of practice, Attorney Krueger had a clean record with the OLR 
and its predecessor, the Board of Attorneys Professional 
Responsibility (BAPR) and he had served for many years on a 
district committee of the BAPR.  The referee also noted that 
No. 
2003AP2558-D   
 
11 
 
Attorney Krueger had been involved in the community and his 
church and a local circuit court judge, who was subpoenaed to 
testify at the hearing, spoke highly of his past practices. 
¶24 The referee concluded that a six-month suspension of 
Attorney Krueger's license would work an undue hardship and 
instead recommended that Attorney Krueger's license be suspended 
for 60 days and that he pay the costs of the proceeding. 
¶25 Attorney Krueger appealed, arguing that the OLR failed 
to demonstrate by clear, satisfactory and convincing evidence 
that any misconduct occurred.  Attorney Krueger argues that the 
OLR failed to call its most critical witness, F.S., and he 
asserts that his conduct in representing F.S. cannot be judged 
fairly without testimony directly from F.S.  In addition, 
Attorney Krueger argues there was no conflict of interest with 
respect to his representation of F.S. in the bankruptcy case.  
He asserts that a bankruptcy is not true litigation and he 
further contends that his duty of loyalty to F.S., built over 40 
years, was not affected simply because F.S. owed him money.  He 
also asserts that because he allowed a discharge of his bill 
without participating as an unsecured creditor in the bankruptcy 
proceeding, there was less debt to be paid and more assets 
available to settle other creditors' claims and if anyone should 
have been prejudiced by the representation, it was Attorney 
Krueger, because his fees were discharged and he had no further 
right to a recovery. 
¶26 Attorney Krueger says that unlike the situation in 
Trewin, he did discuss the unpaid fees with F.S. before F.S. 
No. 
2003AP2558-D   
 
12 
 
insisted that Attorney Krueger continue to represent him.  He 
also asserts that, unlike the Trewin case, Attorney Krueger's 
representation of F.S. was not materially limited by his own 
adverse interest, but rather benefited his client and involved 
no possible prejudice to his client's interests.   
¶27 Attorney Krueger argues that failing to list the debt 
for his attorney's fees on the bankruptcy schedules was not an 
act of fraud, deceit, dishonesty or misrepresentation, and he 
contends it was F.S.'s decision not to list the debt on the 
bankruptcy schedules.  He also argues that the OLR failed to 
prove that F.S.'s payment after the bankruptcy was anything but 
voluntary.  Finally, Attorney Krueger asserts that he made no 
misrepresentation to the OLR.  Although he admits that the 
information he provided to the OLR regarding the amount of fees 
owed by F.S. at the time of the bankruptcy filing "was not 
totally free from error," he contends that his inadvertent 
mistakes 
did 
not 
rise 
to 
the 
level 
of 
constituting 
a 
misrepresentation intended to deceive or mislead the OLR.  
Attorney Krueger asks that the case against him be dismissed and 
that he be allowed to conclude his legal career with an 
untarnished record.   
¶28 The OLR argues that the referee correctly concluded 
that the OLR met its burden of proof with respect to the three 
counts of misconduct alleged in its complaint.  The OLR argues 
that by colluding with his client to conceal the debt during the 
bankruptcy 
and 
then 
unlawfully 
collecting 
it 
thereafter, 
Attorney Krueger ran afoul of bankruptcy law and committed an 
No. 
2003AP2558-D   
 
13 
 
ethical violation.  The OLR asserts the responsibility for 
accurately listing F.S.'s debt to Attorney Krueger on the 
bankruptcy schedules was both F.S.'s and Attorney Krueger's and 
Attorney Krueger cannot, under the guise of claiming it was his 
client's idea, permit a client to submit false schedules to the 
bankruptcy court because to do so made Attorney Krueger a party 
to the client's misrepresentation.   
¶29 The OLR asserts that Attorney Krueger compounded his 
misrepresentation on F.S.'s bankruptcy schedules by permitting 
F.S. to testify falsely at the first meeting of creditors.  It 
also argues that Attorney Krueger's misconduct includes his 
improper collection of the discharged debt for attorney's fees, 
and it says the record is replete with evidence that Attorney 
Krueger 
intended 
on 
enforcing 
an 
otherwise 
unenforceable 
arrangement for F.S. to repay the discharged attorney's fees.  
The OLR says a pre-bankruptcy obligation may only be binding 
through a reaffirmation agreement, and there was no such 
agreement here.   
¶30 The OLR notes while Attorney Krueger claims he did 
discuss the conflict issue with F.S. on one occasion, he admits 
he did not obtain a written consent from F.S.  When pressed at 
the hearing, Attorney Krueger agreed that obtaining a written 
consent would have been "a good idea."  The OLR says a written 
consent was more than just a good idea, it was an absolute 
requirement of SCR 20:1.7(b), and the OLR says it is no defense 
to a violation of the rule that the client was ultimately not 
adversely affected by the representation. 
No. 
2003AP2558-D   
 
14 
 
¶31 The OLR argues that testimony from F.S. was not 
necessary to prove the rule violations in this case, and it 
notes that Attorney Krueger himself made no effort to call F.S. 
as a witness. 
¶32 This court will adopt a referee's findings of fact 
unless they are clearly erroneous.  Conclusions of law are 
reviewed de novo.  See In re Disciplinary Proceedings Against 
Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747.  The 
court may also impose whatever sanction it sees fit regardless 
of the referee's recommendation.  See In re Disciplinary 
Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 
N.W.2d 686.  The referee's findings of fact in this case have 
not been shown to be clearly erroneous, and we adopt them.  We 
also agree with the referee's conclusions of law.  We further 
agree with the referee's recommendation for a 60-day suspension 
of Attorney Krueger's license to practice law in Wisconsin and a 
requirement 
that 
Attorney 
Krueger 
pay 
the 
costs 
of 
the 
proceeding. 
¶33 Attorney Krueger admits that he was aware, as a 
creditor of F.S., of a potential conflict of interest situation 
at the time F.S. asked Attorney Krueger to file the Chapter 7 
bankruptcy petition.  As Trewin made clear: 
If the lawyer believes there will be an actual adverse 
effect on the representation, the lawyer may not 
represent the client, even if the client would be 
willing to agree to the representation.  It is only 
where the lawyer believes the representation will not 
be adversely affected and the client consents in 
writing that the representation can continue. 
No. 
2003AP2558-D   
 
15 
 
Trewin, 275 Wis. 2d 116, ¶45.   
¶34 It is undisputed that Attorney Krueger failed to 
obtain F.S.'s consent to the conflict in writing as required by 
SCR 2:1.7(b).  It is also undisputed that Attorney Krueger 
failed to disclose the pre-bankruptcy debt F.S. owed him on the 
bankruptcy petition, and he did not advise the bankruptcy 
trustee that F.S.'s testimony was not accurate.  In addition, 
the evidence supports the referee's conclusion that by applying 
$7384 of the $40,000 check received from F.S. after the 
bankruptcy 
in 
payment 
of 
pre-bankruptcy 
attorney's 
fees, 
Attorney Krueger collected a discharged debt in violation of 
bankruptcy law.  The evidence further supports the referee's 
conclusion that payment of the pre-bankruptcy debt was not a 
voluntary repayment by F.S. of a discharged debt but rather was 
part of an arrangement Attorney Krueger had with F.S. prior to 
filing the bankruptcy.  Finally, the evidence supports the 
referee's conclusion that Attorney Krueger's letter to the OLR 
saying there was less than $500 owed to him by F.S. at the time 
the bankruptcy was filed was a knowing misrepresentation, in 
violation of SCR 22.03(6).  
¶35 We 
also 
agree 
with 
the 
referee 
that 
a 
60-day 
suspension of Attorney Krueger's license to practice law in 
Wisconsin is an appropriate sanction for these violations.  
While the fact that Attorney Krueger has practiced law for 
almost 50 years without any previous disciplinary problems is 
certainly commendable, his age and emeritus status do not 
immunize him from being disciplined for his misconduct.  A 60-
No. 
2003AP2558-D   
 
16 
 
day 
suspension 
of 
his 
license 
is 
commensurate 
with 
the 
seriousness of the misconduct and will serve to deter other 
attorneys from committing similar misconduct.  We also find it 
appropriate for Attorney Krueger to pay the costs of the 
proceeding.  
¶36 IT IS ORDERED that the license of Richard J. Krueger 
to practice law in Wisconsin is suspended for a period of 60 
days, effective March 8, 2006. 
¶37 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Richard J. Krueger 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 Richard J. Krueger to practice law in 
Wisconsin shall remain suspended until further order of the 
court. 
¶38 IT IS FURTHER ORDERED that Richard J. Krueger comply 
with the provisions of SCR 22.26 concerning the duties of a 
person whose license to practice law in Wisconsin has been 
suspended. 
¶39 N. PATRICK CROOKS, J., did not participate. 
 
No.  2003AP2558-D.ssa 
 
1 
 
¶40 SHIRLEY S. ABRAHAMSON, C.J.   (concurring).  Attorney 
Krueger objected to certain duplicative charges (which were 
corrected) and also asserted that the fees charged by counsel 
representing 
the 
Office 
of 
Lawyer 
Regulation 
(OLR) 
were 
excessive in light of the issues involved in the matter.  
Attorney Krueger failed to suggest a reasonable fee.   
¶41 I join the per curiam opinion assessing Attorney 
Krueger with the full costs of the disciplinary proceeding.        
¶42 I write separately once again, as I did in my 
concurrence in OLR v. Konnor, 2005 WI 37, 279 Wis. 2d 284, 694 
N.W.2d 376, on the issue of imposition of costs in disciplinary 
proceedings in which an attorney is disciplined.   
¶43 As I explained in Konnor, the issue of imposition of 
costs has recently divided this court in a few cases, with 
Justice Prosser vehemently opposing our present method of 
generally imposing the costs of the discipline proceedings on 
the 
disciplined 
lawyer. 
 
Justice 
Butler 
has 
proposed 
apportioning fees on the basis of the charges proved.  This 
method is not applicable in the present case.   
¶44 Because the court was concerned about its internal 
debate about imposition of costs, the court asked the Office of 
Lawyer Regulation (OLR), the Board of Administrative Oversight, 
and the State Bar of Wisconsin to consider the issue of the 
imposition of costs and make recommendations to the court.  As a 
result, Keith Sellen, director of OLR, in effect petitioned the 
No.  2003AP2558-D.ssa 
 
2 
 
court for a modification of SCR 22.24(1) (2004)1 and 22.001(3) 
(2004),2 relating to imposition of costs in OLR proceedings.   
¶45 Mr. Sellen proposed that OLR-incurred attorney fees be 
paid by OLR through increased assessments to members of the bar 
and that other costs incurred by OLR in prosecuting a discipline 
case be assessed by the Supreme Court in its discretion against 
the disciplined lawyer.3  This proposal was one of the several 
                                                 
1 Supreme Court Rule 22.24(1) (2004) provides as follows: 
(1) 
The 
supreme 
court 
may 
assess 
against 
the 
respondent all or a portion of the costs of a 
disciplinary proceeding in which misconduct is found, 
a medical incapacity proceeding in which it finds a 
medical incapacity, or a reinstatement proceeding and 
may enter a judgment for costs. The director [of OLR] 
may assess all or a portion of the costs of an 
investigation when discipline is imposed under SCR 
22.09.  Costs are payable to the office of lawyer 
regulation. 
2 Costs are defined in SCR 22.001(3) (2004) as follows:  
"Costs" means the compensation and necessary expenses 
of referees, fees and expenses of counsel for the 
office of lawyer regulation, a reasonable disbursement 
for the service of process or other papers, amounts 
actually paid out for certified copies of records in 
any 
public 
office, 
postage, 
telephoning, 
adverse 
examinations 
and 
depositions 
and 
copies, 
expert 
witness fees, witness fees and expenses, compensation 
and reasonable expenses of experts and investigators 
employed on a contractual basis, and any other costs 
and fees authorized by chapter 814 of the statutes. 
3 Rule 05-01, In the Matter of the Petition for Amendment to 
Supreme Court Rule 22.001(3) Relating to Cost Assessments in the 
Lawyer Regulation System.   
The petition requested that the costs be defined to 
eliminate counsel fees of OLR. The petition requested that costs 
be defined as follows: 
No.  2003AP2558-D.ssa 
 
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possible proposals I outlined in my Konnor concurrence.  See 
also OLR v. Backes, 2005 WI 59, 281 Wis. 2d 1, 697 N.W.2d 49 
(Bradley, J., concurring, joined by Abrahamson, C.J., Wilcox, 
J., & Crooks, J.) (examining the advantages and pitfalls of 
alternatives to the present system of apportioning costs). 
¶46 The Court held a hearing on Mr. Sellen's petition on 
November 14, 2005.  
¶47 Several persons appeared at the hearing or wrote 
letters discussing Mr. Sellen's proposal.  Their suggestions 
ranged from retaining the court's current practice of imposing 
full costs on a disciplined attorney (except in exceptional 
circumstances described in each particular case) to adopting one 
of several methods of apportioning costs. 
¶48 In 
anticipation 
of 
the 
hearing, 
the 
State 
Bar 
conducted a poll, posing the following question relating to 
imposition of costs in discipline proceedings:  
Currently, 
the 
Wisconsin 
Supreme 
Court 
generally 
charges 
full 
costs 
of 
disciplinary 
proceedings, 
including legal fees, against an attorney who is found 
to have violated one or more of the Rules of 
Professional 
Responsibility. 
The 
Court 
generally 
imposes full costs even if some OLR charges against 
                                                                                                                                                             
"Costs" means the compensation and necessary expenses 
of referees, litigation expenses other than counsel 
fees of the office of lawyer regulation, a reasonable 
disbursement for the service of process or other 
papers, amounts actually paid out for certified copies 
of records in any public office, postage, telephoning, 
adverse 
examinations 
and 
depositions 
and 
copies, 
expert witness fees, 
witness fees 
and 
expenses, 
compensation and reasonable expenses of experts and 
investigators employed on a contractual basis, and any 
other costs and fees authorized by chapter 814 of the 
statutes (emphasis added). 
No.  2003AP2558-D.ssa 
 
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the attorney are dismissed or the discipline is less 
than OLR requested. Should the Supreme Court (select 
one): 
___ 
Continue 
the 
current 
assessment 
policy 
of 
generally imposing full costs against the disciplined 
attorney. 
___ Revise its policy to permit apportionment of 
costs. This might require an increase in the annual 
OLR assessments to lawyers. 
___ Adopt the "American Rule" in which each litigant 
pays its own attorney fees? Under this option, a 
disciplined attorney would not be responsible for the 
fees incurred by OLR in proving a violation. This 
would require an increase in annual OLR assessments to 
lawyers. 
___ Adopt the "English Rule" in which the losing party 
pays the prevailing party's attorney fees? This option 
is essentially the same as current policy, except that 
OLR would be required to pay attorney fees when an 
attorney prevails on all counts. This option would 
also require an increase in the annual OLR assessments 
to lawyers. 
¶49 The poll results were not known at the time of the 
hearing.  The Bar recently reported an early draft of the poll 
results to the court.  The attorneys and judges polled were 
significantly divided on how costs should be imposed on 
disciplined attorneys.  Following is the Bar's summary of the 
results of the Bar poll: 
Most respondents split between continuing the current 
assessment policy (37%) and permitting apportionment 
of costs (36%) for how the Wisconsin Supreme Court 
should 
handle 
costs 
of 
disciplinary 
proceedings.  
Another 17% feel the Court should adopt the "English 
Rule," 9% feel it should adopt the "American Rule," 
and a handful of respondents checked a combination of 
methods.   
Continue current assessment policy 
37% 
Revise 
policy 
to 
permit 
36% 
No.  2003AP2558-D.ssa 
 
5 
 
apportionment of costs 
Adopt "English Rule" - losing 
party pays the prevailing party's 
attorney fees 
17% 
Adopt 
"American 
Rule" 
- 
each 
litigant pays its own attorney 
fees 
9% 
Nearly one-half (47%) of judges feel the Supreme Court 
should continue its current assessment policy, while 
lawyers split between permit apportionment of costs 
(37%) and continue the current policy (33%).  Another 
33% of judges chose permit apportionment of costs.   
¶50 The court has made no decision on Mr. Sellen's 
petition as of the date of the release of this opinion.   
¶51 I agree with Justice Bradley's concurring opinion in 
OLR v. Backes, joined by three other justices, that until the 
court acts on Mr. Sellen's petition, we should follow our 
present practice of imposing full costs on a disciplined 
attorney except in exceptional circumstances (as described in 
the particular case in which we deviate from this general 
practice).4  Charging full costs to the disciplined lawyer is 
based on our decision to place the onus of the costs of the 
disciplinary proceeding on the disciplined attorney who created 
the need for the disciplinary proceeding, rather than placing 
the onus of the costs of the disciplinary proceeding on the 
"innocent" members of the bar.  As I wrote in Konnor, we should, 
in exercising our discretion to deviate from the full cost 
approach, hold ourselves to the same high standards we demand of 
circuit courts when exercising their discretion.         
                                                 
4 OLR v. Backes, 2005 WI 59, ¶¶64, 66, 69, 70, 281 
Wis. 2d 1, 697 N.W.2d 49 (Bradley, J., concurring, joined by 
Abrahamson, C.J., Wilcox, J., & Crooks, J.). 
No.  2003AP2558-D.ssa 
 
6 
 
¶52 For the reasons set forth I join the per curiam and 
write separately. 
 
No.  2003AP2558-D.dtp 
 
1 
 
¶53 DAVID T. PROSSER, J.   (concurring in part, dissenting 
in part).  I agree with the referee's recommendation, affirmed 
by this court, to suspend Attorney Krueger's license to practice 
law for a period of 60 days.  But I disagree with this court's 
determination to impose full costs of more than $20,000 for the 
disciplinary proceeding. 
¶54 This case is reminiscent of OLR v. Konnor, 2005 WI 37, 
279 Wis. 2d 284, 694 N.W.2d 376, in that the OLR sought much 
more stringent discipline than it obtained.  The attorney who 
successfully 
fought 
the 
severity 
of 
the 
discipline 
is 
nonetheless required to pay full costs.   
¶55 Supreme Court Rule 22.24(1) provides in part that "The 
Supreme Court may assess against the respondent all or a portion 
of the costs of a disciplinary proceeding in which misconduct is 
found. . . . "  This is a reasonable rule, but it implies the 
exercise of discretion.  As Justice Butler noted in OLR v. 
Polich, 2005 WI 36, ¶38, 279 Wis. 2d 266, 694 N.W.2d 367 
(Butler, J., concurring in part, dissenting in part), our cases 
show a pattern of assigning full costs to disciplined attorneys 
"with little or no rationale," irrespective of the factual 
circumstances.  Although the failure to exercise discretion is 
tantamount to an erroneous exercise of discretion, our court 
consistently proceeds as though this principle is inapplicable 
to the imposition of costs in attorney discipline cases. 
¶56 Here, OLR issued a three-count complaint and it 
subsequently proved the three counts to the satisfaction of the 
referee.  However, it also asked that Attorney Krueger be 
No.  2003AP2558-D.dtp 
 
2 
 
suspended for six months.  Attorney Krueger resisted.  After an 
evidentiary hearing, the referee noted that Attorney Krueger had 
no 
previous 
discipline 
and 
that 
"[a] 
six-month 
suspension . . . would work an undue hardship given the fact 
that 
under 
SCR 
22.28, 
an 
attorney's 
license 
does 
not 
automatically get reinstated but requires an additional hearing 
before 
a 
referee 
pursuant 
to 
SCR 
22.29 . . . ." 
 
The 
investigation, 
hearing, 
and 
supreme 
court 
review 
of 
a 
reinstatement motion may take a year, so that a six-month 
suspension may end up as an 18-month suspension, or more.  Under 
current practice, the disciplined attorney is expected to pay 
the full cost of the reinstatement process as well as the cost 
of initial discipline. 
¶57 Under these circumstances, an attorney has a real 
incentive to fight any proposed suspension of six months or more 
if that proposed suspension is not certain to be adopted.  But 
the attorney will be forced to pay OLR's prosecution costs so 
long as any discipline is imposed. 
¶58 This court should not enforce such a rule without 
explaining or justifying what it is doing.  Rather, the court 
should ask referees to recommend costs, full or partial, based 
on the particular circumstances in each case, and to explain 
each recommendation as part of the Referee's Report.  This 
regimen would permit the court to react to a recommendation and 
develop criteria for the equitable assessment of costs. 
 
No.  2003AP2558-D.dtp 
 
1