Title: Office of Lawyer Regulation v. Jeffrey L. Elverman
Citation: 2008 WI 28
Docket Number: 2006AP001062-D
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 8, 2008

2008 WI 28 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2006AP1062-D 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings 
Against Jeffrey L. Elverman, Attorney at Law: 
 
 
Office of Lawyer Regulation, 
          Complainant-Appellant, 
     v. 
Jeffrey L. Elverman, 
          Respondent-Respondent. 
 
 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST ELVERMAN 
 
 
OPINION FILED: 
April 8, 2008   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
February 20, 2008   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: ZIEGLER, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For the complainant-appellant there were briefs by Robert 
G. Krohn and Roethe Krohn Pope LLP, Edgerton, and oral argument 
by Robert G. Krohn. 
 
For the respondent-respondent there was a brief by Daniel 
W. Hildebrand, Dawn E. Hildebrand, Joseph A. Ranney III, and 
DeWitt Ross & Stevens, S.C., Madison, and oral argument by 
Joseph A. Ranney III. 
 
 
 
 
2008 WI 28
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2006AP1062-D  
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Jeffrey L. Elverman, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Appellant, 
 
     v. 
 
Jeffrey L. Elverman, 
 
          Respondent-Respondent. 
 
FILED 
 
APR 8, 2008 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   
Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   The Office of Lawyer Regulation (OLR) 
has appealed a referee's report finding Attorney Jeffrey L. 
Elverman violated former SCR 20:8.4(f)1 by failing to report co-
                                                 
1 Effective July 1, 2007, substantial changes were made to 
the Wisconsin Supreme Court Rules of Professional Conduct for 
Attorneys, SCR Chapter 20.  See S. Ct. Order 04-07, 2007 WI 4, 
293 Wis. 2d xv, 726 N.W.2d Ct.R-45 (eff. July 1, 2007); and 
S. Ct. 
Order 
06-04, 
2007 
WI 
48, 
297 
Wis. 2d xv, 
730 
N.W.2d Ct.R.-29 (eff. July 1, 2007).  Because the conduct 
underlying this case arose prior to July 1, 2007, unless 
otherwise indicated, all references to the supreme court rules 
will be to those in effect prior to July 1, 2007. 
No. 
2006AP1062-D   
 
2 
 
trustee fees he received as income on his state and federal tax 
returns for the years 1999 to 2003, thereby violating a supreme 
court decision regulating the conduct of lawyers, In re 
Disciplinary Proceedings Against Owens, 172 Wis. 2d 54, 56-57, 
492 N.W.2d 157 (1992), and recommending a public reprimand for 
that misconduct. 
¶2 
The OLR's complaint had also alleged that by receiving 
$230,000 in co-trustee fees for work performed on trusts and 
failing to turn those fees over to the law firm in which he was 
a partner, as required by the firm's partnership agreement, 
Attorney Elverman violated SCR 20:8.4(c).2  The referee found 
that 
the 
OLR 
failed 
to 
present 
clear, 
satisfactory 
and 
convincing evidence to support a conclusion that Attorney 
Elverman violated SCR 20:8.4(c). 
¶3 
The OLR argues that the referee's finding that 
Attorney Elverman did not know he was not entitled to retain 
trustee fees is clearly erroneous.  The OLR also appeals the 
sanction recommended by the referee. 
¶4 
We conclude that all of the referee's findings of 
fact, including those challenged by the OLR, are supported by 
satisfactory and convincing evidence.  Thus, we will not disturb 
                                                                                                                                                             
Former SCR 20:8.4(f) states that it is professional 
misconduct for a lawyer to "violate a statute, supreme court 
rule, supreme court order or supreme court decision regulating 
the conduct of lawyers." 
2 Former SCR 20:8.4(c) states that it is professional 
misconduct for a lawyer to "engage in conduct involving 
dishonesty, fraud, deceit or misrepresentation." 
No. 
2006AP1062-D   
 
3 
 
the referee's conclusion that the OLR failed to prove that 
Attorney Elverman violated SCR 20:8.4(c).  We conclude, however, 
that 
the 
appropriate 
discipline 
for 
Attorney 
Elverman's 
violation of SCR 20:8.4(f) is a nine-month suspension of his 
license to practice law rather than the public reprimand 
recommended by the referee.  We further agree with the referee 
that the costs of the proceeding, which total $24,222.99 as of 
March 3, 2008, should be assessed against Attorney Elverman. 
¶5 
Attorney Elverman was admitted to practice law in 
Wisconsin in 1986.  He is currently a partner with Michael Best 
& Friedrich, LLP, in Waukesha County.  From 1986 to 1991 
Attorney Elverman was an associate at Foley & Lardner.  In 1991 
and 1992 he was associated with a Florida law firm.  Attorney 
Elverman is also a registered, but unlicensed CPA.  He has no 
prior disciplinary history. 
¶6 
In October 1992 Attorney Elverman started as an 
associate at Quarles & Brady.  He was a member of the firm's 
trusts and estates group.  He became a partner at Quarles & 
Brady effective October 1, 1995.  He resigned from Quarles & 
Brady in 2004 for reasons unrelated to the acts which are the 
subject of this proceeding. 
¶7 
When he was offered a partnership with Quarles & Brady 
in 1995, Attorney Elverman signed a one-page amendment no. 43 to 
the Quarles & Brady partnership agreement.  The partnership 
agreement itself was not attached to amendment no. 43.  By 
signing the amendment, Attorney Elverman agreed to be bound by 
the terms of the Quarles & Brady partnership agreement.  A bit 
No. 
2006AP1062-D   
 
4 
 
later, at the orientation meeting for new partners, Attorney 
Elverman received the partnership agreement.  On page 3 of the 
partnership agreement, under the subheading "4. Profit and Loss. 
(a)" was the following statement: 
Fees payable to a Partner for serving as a trustee 
under 
a 
trust 
agreement 
or 
as 
a 
personal 
representative of the estate of a decedent and all 
other remuneration or income of any nature whatsoever 
received by any Partner in consideration of the 
practice of law or the performance of legal services 
shall be turned over to the firm and shall constitute 
partnership income. 
¶8 
During the time Attorney Elverman was a partner at 
Quarles & Brady, he received three additional versions of the 
partnership agreement.  Each of those amendments to the 
partnership agreement reiterated the requirement that trustee 
fees had to be paid to Quarles & Brady and were not to be 
retained by any individual attorney.   
¶9 
Donald W. Kastner (Kastner) hired Attorney Elverman to 
handle various legal matters concerning his estate plan, 
including three trusts.  The first trust was the Donald W. 
Kastner Revocable Trust of 1994, which was established on 
September 8, 1994.  The inventory balance on December 6, 1999, 
was $1,250,781.60.  The second trust was the Donald W. Kastner 
Marital Trust established on April 10, 2001, which received cash 
distributions from the Donald W. Kastner Revocable Trust of 1994 
of $426,735.31 on October 26, 2001.  The third trust was the 
Donald W. Kastner Family Trust established on October 26, 2002, 
which received stock distributions from the Donald W. Kastner 
No. 
2006AP1062-D   
 
5 
 
Revocable Trust of 1994 of $266,795.27 on October 26, 2001, and 
cash distributions from the Donald W. Kastner Revocable Trust of 
1994 totaling $60,393.16 on October 30, 2001, October 31, 2001, 
and November 29, 2001, for a total of $327,188.43.   
¶10 The initial trust documents named M&I Bank and 
Attorney Elverman as co-trustees.  Kastner's son, Donald A. 
Kastner, replaced M&I Bank as a co-trustee a few years before 
Donald W. Kastner died.  Co-trustee fees and fees for legal 
services were billed separately at Quarles & Brady.  
¶11 It is undisputed that between 1999 and 2004 Attorney 
Elverman received $230,000 in co-trustee fees from the Kastner 
trusts.  The co-trustee, Donald A. Kastner, received the same 
amount of fees.  It is also undisputed that none of the trustee 
fees received by Attorney Elverman were turned over to Quarles & 
Brady.  After Attorney Elverman resigned from Quarles & Brady, 
the trustee fees were returned to Quarles & Brady by offsets 
from the year-end compensation payment due to Attorney Elverman 
from Quarles & Brady and an additional cash payment of $2,423.24 
from Attorney Elverman.  Quarles & Brady subsequently reimbursed 
the Kastner trusts for the full $230,000.   
¶12 When Attorney Elverman left Quarles & Brady, it was 
his belief that Donald A. Kastner wished Attorney Elverman to 
continue working for him.  In November of 2004 Attorney Elverman 
represented Mr. Kastner in a guardianship hearing in connection 
with his mother.   
¶13 Attorney Elverman did not include the trustee fees he 
received from the Kastner trusts for the years 1999 to 2001 on 
No. 
2006AP1062-D   
 
6 
 
his tax returns.  He said he forgot.  He acknowledged he would 
have been prompted to report the trustee fees as income on his 
tax returns if Quarles & Brady's fiduciary accounting department 
had sent him 1099 forms, but he did not receive 1099 forms 
showing the trustee fees.  Attorney Elverman said he failed to 
report trustee fee income from the Kastner trusts for 2002 and 
2003 because he had numerous family financial demands and made 
the decision to pay the taxes later.  Attorney Elverman filed 
amended tax returns and paid the additional taxes and interest 
on or before April 15, 2005.  The OLR's investigation into 
Attorney Elverman's receipt of the trustee fees was pending at 
that time.  Attorney Elverman has not been audited by the 
Wisconsin Department of Revenue or the Internal Revenue Service 
(IRS) and has not been contacted with respect to paying any 
penalties, including a fraud penalty. 
¶14 On May 3, 2006, the OLR filed a complaint alleging two 
counts of misconduct: 
COUNT 1 
 
By receiving $230,000 in co-trustee fees for work 
performed on the Kastner trusts and converting those 
co-trustee fees to his personal use as opposed to 
turning those fees over to the firm as required and 
applicable under the firm's partnership agreement, 
Elverman engaged in conduct involving dishonesty, 
fraud, deceit, or misrepresentation, in violation of 
SCR 20:8.4(c). 
COUNT 2 
 
By failing to report $230,000 in co-trustee fees 
he had converted from the Kastner trusts as income on 
state and federal returns filed in the applicable 
years, and instead belatedly reporting those fees on 
No. 
2006AP1062-D   
 
7 
 
amended returns filed on or about April 15, 2005, 
Elverman engaged in conduct involving dishonesty, 
fraud, deceit, or misrepresentation, in violation of 
SCR 20:8.4(c). 
¶15 As a sanction for the two counts of misconduct, the 
OLR asked that Attorney Elverman's license to practice law in 
Wisconsin be revoked. 
¶16 Attorney Elverman filed an answer on May 25, 2006.  
The Honorable Kim M. Peterson was appointed referee.  On 
November 9, 2006, Attorney Elverman filed a motion for partial 
summary judgment pertaining to count 1 of the complaint.  The 
referee denied the motion.   
¶17 A hearing was held before the referee on January 15 
and 16, 2007.   
¶18 Patrick M. Ryan (Ryan), Quarles & Brady's managing 
partner, said historically Quarles & Brady has followed the rule 
that all trustee or personal representative fees are the 
property of the partnership.  Ryan testified while he was aware 
of situations where trustee fees were made payable to a partner, 
the practice was for the partner to endorse the fees over to the 
firm.  He said he knew of no other partners except Attorney 
Elverman who kept the trustee fees. 
¶19 Ryan testified that at partnership meetings, "the 
partners 
don't 
sit 
down 
and 
fly 
speck" 
the 
partnership 
agreements, and that he would be surprised if a partner would 
sit down and read the partnership agreement word for word.  Ryan 
testified that Quarles & Brady operated on trust and did not 
check to see whether people were complying with the partnership 
No. 
2006AP1062-D   
 
8 
 
agreement.  He said the firm found it unnecessary to inquire of 
its lawyers whether they were retaining trustee fees because the 
partnership agreements historically forbade such a practice.  He 
also said Quarles & Brady found no need to hold partnership 
orientation meetings or other meetings to discuss the trustee 
fee prohibition.   
¶20 Paul Tilleman (Tilleman), a Quarles & Brady attorney 
who works primarily in the trusts and estates division and has 
served on the firm's executive committee, testified that over 
the years he was not aware of anyone other than Attorney 
Elverman who kept personal representative or trustee fees for 
themselves.  Tilleman said he was asked by Ryan to investigate 
trust issues as they related to Attorney Elverman.  Tilleman 
reviewed the Kastner trusts and determined that Attorney 
Elverman had been retaining trustee fees over the years.  
Tilleman's analysis of the situation led him to the conclusion 
that Attorney Elverman was financially better off keeping the 
trustee fees as opposed to reporting them to the firm and later 
being paid under the firm's compensation formula.  Tilleman 
admitted that he merely skimmed the partnership agreement when 
he first became a partner and simply "signed on the dotted 
line."  Tilleman also said at no time during Attorney Elverman's 
tenure as a partner did the executive committee explain firm 
policy as to payment of trustee fees to Quarles & Brady 
attorneys.   
¶21 Mary Koster (Ms. Koster), a trusts and estates 
paralegal at Quarles & Brady, worked with Attorney Elverman on 
No. 
2006AP1062-D   
 
9 
 
the Kastner trusts.  She testified it was her understanding that 
if trustee fees were paid directly to a Quarles & Brady 
attorney, the firm was to be notified in some manner, and the 
money was to ultimately go to Quarles & Brady.  Ms. Koster 
testified that "early on" she had a conversation with Attorney 
Elverman about his practice of retaining the trustee fees 
personally as opposed to turning them over to Quarles & Brady.  
Ms. Koster said Attorney Elverman's response was that he would 
have his secretary do an interoffice memo to the firm indicating 
that the trustee fees were being retained by him.  Ms. Koster 
testified she never saw such a memo.  She also testified that 
she never mentioned Attorney Elverman's retention of the trustee 
fees to anyone else at Quarles & Brady. 
¶22 Attorney 
Elverman 
testified 
that 
he 
"had 
the 
impression that other attorneys were taking trustee fees and not 
handing them over" but he did not have names of any particular 
attorneys who might have been doing this.  Attorney Elverman 
denied having any conversation with Ms. Koster in which she told 
him that trustee fees were to be paid to Quarles & Brady.  
¶23 Attorney Elverman said he "briefly reviewed" the 
partnership agreement and "kept it . . .  buried" in his office 
desk.  He said he "probably took all of about 30 seconds to 
briefly review it, and that was the extent of it."  He also 
admitted that although he was provided with three subsequent 
amendments to the partnership agreement, he did not review them 
at all.  He said the reason he did not review the amendments was 
"[b]ecause I had an understanding that these documents were 
No. 
2006AP1062-D   
 
10 
 
being 
revised 
largely, 
not 
solely, 
for 
retirement, 
and 
retirement was the last thing on my mind."   
¶24 Attorney Elverman testified at the time he was 
receiving the trustee fees he was aware that under IRS rules the 
fees would have to be reported on his income tax returns, but he 
did not report them.  He explained: 
[I]t wasn't until 2002 that I realized that that 
income had not been reported on my income tax returns.  
And in 2002, as I looked around and it was time to 
file my income tax returns, I had a lot of other 
family obligations in that I needed to take care of 
kids going to college, high school tuition, braces.  
And at that point, I had to make a decision, do we 
take the kids out of school and/or do I pay these 
taxes later on, which is ultimately what I did. 
¶25 On January 15, 2007, the parties entered into a 
stipulation whereby the OLR's original complaint was amended by 
OLR withdrawing paragraph 17 of its complaint and substituting 
the following paragraph in its place as Count 2: 
 
By failing to report $230,000 in co-trustee fees 
he received from the Kastner trusts as income on state 
and federal returns he filed in the applicable years, 
Elverman violated a Supreme Court decision regulating 
the 
conduct 
of 
lawyers, 
Disciplinary 
Proceedings 
Against Owens, 172 Wis. 2d 54, 56-57, 492 N.W.2d 157 
(1992), and thereby violated SCR 20:8.4(f). 
¶26 As part of the stipulation, Attorney Elverman amended 
his answer to admit the allegations of substituted paragraph 17. 
¶27 The referee filed her report on May 14, 2007.  With 
respect to count 1 of the OLR's complaint, she made the 
following findings of fact: 
 
When Elverman became a partner at Quarles & 
Brady, he signed Amendment No. 43 to the Quarles & 
No. 
2006AP1062-D   
 
11 
 
Brady partnership agreement.  He briefly reviewed the 
partnership agreement, and deposited it in his office 
desk.  The partnership agreement is a 21 page, single 
spaced document. Section three, pertaining to trustee 
fees, is one sentence in paragraph 4(a) entitled 
"Profit and Loss." 
 
The partnership agreement was distributed to the 
new partners at an orientation meeting, which Mr. 
Elverman believed would cover things he needed to 
know.  The meeting dealt with how compensation would 
change from that of an associate to partner and 
overall structure of the firm, attorney fees and 
discussion regarding compensation and productivity 
credit.  There was no discussion regarding personal 
representative or trustee fees.  At no time during his 
partnership at Quarles & Brady, did Elverman attend a 
meeting where there was discussion of the need to turn 
over trustee fees.  
 
The practice regarding an attorney's ability to 
retain trustee fees at Quarles & Brady was not 
effectively communicated to the employees at Quarles & 
Brady, and several employees were confused regarding 
the firm's policy on this issue. 
 
Quarles & Brady's fiduciary accounting department 
administered the Kastner trust, and several employees 
within that department were aware that Mr. Elverman 
was personally retaining the Kastner trustee fees.  
Mr. Elverman made no effort to hide the fact that he 
was personally retaining the Kastner trustee fees.  At 
no time did any Quarles & Brady employee report Mr. 
Elverman's conduct to a superior, or tell Mr. Elverman 
that his conduct was improper. 
 
The Kastner matter was the first matter where Mr. 
Elverman actually administered an estate and trust and 
acted as a fiduciary. 
 
After Mr. Elverman resigned from Quarles & Brady, 
effective December 31, 2004, Mr. Elverman was called 
into Mr. Ryan's office for a meeting.  Mr. Ryan was 
the managing partner at Quarles & Brady at the time.  
At that meeting, Mr. Ryan asked Mr. Elverman whether 
he received and retained trustee fees from the Kastner 
trusts.  Mr. Elverman, who was not given prior notice 
of the purpose of the meeting, admitted receiving the 
No. 
2006AP1062-D   
 
12 
 
fees.  At that time, Mr. Ryan informed Mr. Elverman 
that his retention of the trustee fees was contrary to 
the terms of the partnership agreement, told Mr. 
Elverman that he should retain an attorney, and 
informed Mr. Elverman that Quarles & Brady had already 
retained an attorney in the matter.  Mr. Elverman 
stated at the meeting that he would return the fees to 
Quarles & Brady as soon as possible. 
 
Prior to the meeting with Mr. Ryan, Mr. Elverman 
was not aware of the specific terms of the partnership 
agreement which required him to turn over the trustee 
fees to Quarles & Brady.  
 
Subsequently, Elverman resigned from Quarles & 
Brady and the trustee fees were returned by offsets 
and a cash payment of $2,423.24. 
¶28 Based on those findings of fact, the referee made the 
following conclusion of law with respect to count 1 of the 
complaint: 
 
Elverman did not engage in conduct involving 
dishonesty, deceit, fraud or misrepresentation in 
violation of SCR 20:8.4(c) because he was not actually 
aware that his retention of trustee fees from the 
Kastner trusts was in violation of his duties to his 
Quarles & Brady partners. 
¶29 With respect to count 2 of the complaint, in an 
amended order issued on June 6, 2007, the referee made the 
following conclusion of law: 
 
By failing to report co-trustee fees he received 
from the Kastner trusts as income on state and federal 
returns he filed for the years 1999-2003, Elverman 
violated a Supreme Court decision regulating the 
conduct of lawyers, Disciplinary Proceedings Against 
Owens, 172 Wis. 2d 54, 56-57, 492 Wis. 2d 157 (1992), 
and thereby violated SCR 20:8.4(f). 
¶30 With respect to her findings of fact and conclusion of 
law as to count 1, the referee said while it was undisputed that 
Attorney Elverman's failure to turn over the trustee fees to 
No. 
2006AP1062-D   
 
13 
 
Quarles & Brady was a breach of his partnership agreement, "the 
question to be answered is whether Mr. Elverman's failure was 
intentional——the result of deceit or dishonesty.  In other 
words, did he take these fees, knowing that they properly 
belonged to Quarles & Brady, or did he simply make a mistake?"  
The referee noted it was the OLR's burden to prove by clear and 
convincing 
evidence 
that 
Attorney 
Elverman 
acted 
with 
a 
fraudulent 
or 
deceitful 
intent. 
 
Based 
on 
the 
evidence 
presented, she concluded the OLR failed to meet that burden. 
¶31 While the referee agreed that there was merit to the 
OLR's argument that it was inconceivable Attorney Elverman did 
not know he had to turn over the trustee fees to the firm, and 
while such an inference might be appropriate, "I believed Mr. 
Elverman's testimony when he testified that he simply did not 
review the agreement and did not read the provision regarding 
trustee fees.  . . .  [B]oth Mr. Tilleman and Mr. Ryan confirmed 
that many other Quarles & Brady attorneys don't read the 
partnership agreement in detail either."  The referee also said 
there was no evidence that Attorney Elverman learned through 
other sources that he was not to retain trustee fees personally, 
and she said there was confusion among employees at Quarles & 
Brady regarding the policy of retaining trustee fees.  The 
referee said: 
 
Perhaps the most convincing evidence of fraud 
presented by the OLR comes in the testimony of Ms. 
Koster, who testified that she told Mr. Elverman that 
trustee fees are to be paid to Quarles & Brady, and 
the firm notified of his receipt of such fees.  She 
also stated that Mr. Elverman indicated that he would 
No. 
2006AP1062-D   
 
14 
 
have his secretary send a note to the firm with regard 
to his receipt of these fees.  Mr. Elverman denies 
that such a conversation took place, and that he 
promised to prepare a memo to the firm.   
 
I tend to believe Mr. Elverman's testimony that 
this conversation did not take place.  First, if this 
conversation did occur "early on," as Ms. Koster 
testified, one would think that Mr. Elverman, intent 
on violating the policy without the firm's knowledge, 
would have been concerned that he would be "found 
out."  In other words, if Ms. Koster found out he was 
keeping these fees in violation of the partnership 
agreement, Mr. Elverman certainly would have been 
concerned that she would tell the partners, and he 
would be caught.  If he were concerned about such an 
outcome, I believe it is logical to presume that he 
would have made more of an effort to hide his conduct, 
or keep Ms. Koster from telling others about his 
conduct.  For example, he might have used an outside 
accounting firm to hide his receipt of these fees or 
asked Ms. Koster to keep this information secret.  Mr. 
Elverman did not take any action, however, and kept 
his conduct out in the open, for all to see.  This 
conduct seems inconsistent with Ms. Koster's testimony 
that Mr. Elverman was aware he should not retain these 
trustee fees. 
 
In addition to the foregoing, Mr. Elverman's 
conduct also belies a fraudulent motive.  First, I 
find it persuasive that Mr. Elverman did not make an 
effort to hide his receipt of trustee fees from the 
Kastner trusts, and in fact, his receipt of these fees 
was out in the open and known by many Quarles & Brady 
employees.  Not only does this openness suggest that 
Mr. Elverman was unaware that his conduct was improper 
or in violation of his partnership agreement, as 
indicated above, it also is indicative of a Quarles & 
Brady policy that might not have been as clear as the 
firm would like to think.  In other words, if everyone 
at Quarles & Brady were aware that an attorney's 
retention of such fees was wrongful and improper, why 
didn't anyone bring the matter of Mr. Elverman's 
retention of these fees to the attention of Quarles & 
Brady management?  By failing to raise this red flag 
to management, the employee conduct seems to indicate 
some ambiguity in the policy.  It is quite possible 
No. 
2006AP1062-D   
 
15 
 
that Mr. Elverman's conduct was not reported to 
management because the employees that were aware of 
his conduct were not sure whether his conduct was 
wrongful. 
 
The OLR's suggestion that Mr. Elverman's conduct 
was "out in the open" so that he could later, if 
caught, maintain plausible deniability, is a stretch.  
In fact, if everyone was well aware of Quarles & 
Brady's policy that receipt and retention of trustee 
fees was improper, this plan wouldn't work, since Mr. 
Elverman's conduct would be "found out" right away. 
There are many people who were aware of Mr. Elverman's 
receipt of these trustee fees, . . . .  With all of 
these individuals aware of Mr. Elverman's conduct, and 
none reporting it to Quarles & Brady management, it 
indicates confusion regarding the legitimacy of Mr. 
Elverman's receipt of trustee fees. 
 
Moreover, I don't believe that there can be a 
violation of SCR 20:8.4(c) based only upon Mr. 
Elverman's receipt of trustee fees in violation of the 
Quarles & Brady partnership agreement.  Rather, to 
prove a violation of SCR 20:8.4(c) the OLR must prove 
that Mr. Elverman's receipt of those fees involved 
dishonest, deceitful or fraudulent conduct.  In this 
case, I don't believe that the OLR has demonstrated by 
clear 
and 
convincing evidence that Mr. Elverman 
engaged in fraudulent, dishonest or deceitful conduct.  
He did not lie to anyone when confronted about 
receiving the fees, nor did he lie about taking the 
fees in the first place.  The fact of Mr. Elverman's 
receipt of the trustee fees was out in the open, and 
well known to those in the Quarles & Brady fiduciary 
accounting department, as well as the co-trustee, Mr. 
Kastner.  When Mr. Elverman was informed that his 
receipt 
of 
these 
fees 
was 
a 
violation 
of 
the 
partnership 
agreement, 
he 
returned 
the 
fees 
immediately.   
 
. . .  
 
In sum, while there is some evidence that tends 
to demonstrate 
Mr. Elverman's misconduct in the 
receipt of trustee fees contrary to Quarles & Brady's 
written partnership agreement, I don't believe that 
the 
evidence 
rises 
to 
the 
level 
of 
clear 
and 
No. 
2006AP1062-D   
 
16 
 
convincing, and as such, I find that there has been no 
violation of SCR 20:8.4(c). 
¶32 With respect to Attorney Elverman's admitted violation 
of SCR 20:8.4(f), the referee concluded that a public reprimand 
was appropriate.  She pointed to a number of cases where a 
public reprimand was imposed in spite of facts more egregious 
than those involved here.  See In re Disciplinary Proceedings 
Against Young, 2006 WI 109, 296 Wis. 2d 36, 718 Wis. 2d 717, in 
which the attorney failed to file tax returns from 1996 to 2003, 
failed to respond to OLR investigations, and failed to file tax 
returns and pay taxes by the time of the OLR hearing, and Public 
Reprimand of Gwin (BAPR 2003-12).  The referee said, "a public 
reprimand is appropriate here where Mr. Elverman admitted [he] 
failed to file returns for the applicable years, but he also 
amended his returns and paid all taxes and interest before the 
OLR's investigation of the tax matter, and fully cooperated with 
the OLR in its investigation." 
¶33 The OLR argues that the referee's factual finding that 
Attorney Elverman did not know he was not entitled to retain the 
trustee fees is clearly erroneous, and it asks this court to 
overturn it and find that Attorney Elverman did in fact violate 
SCR 20:8.4(c) as alleged in the OLR's complaint.  Regardless of 
what this court does with respect to count 1, the OLR asserts 
that a public reprimand is an insufficient sanction and a 
suspension of Attorney Elverman's license is appropriate. 
¶34 The OLR notes the unambiguous language in all versions 
of the Quarles & Brady partnership agreement prohibited an 
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2006AP1062-D   
 
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attorney from retaining personal representative or trustee fees, 
and it says the clear prohibitions against retaining such fees 
are readily found in all versions of the partnership agreement, 
especially when one uses the index contained in the later 
partnership documents.  The OLR argues the referee's conclusion 
that Attorney Elverman did not know the terms of the partnership 
agreement is wrong as a matter of simple contract law and is 
clearly erroneous. 
¶35 The OLR argues the referee's finding that there was 
confusion among Quarles & Brady employees regarding the policy 
of retaining trustee fees is contrary to the evidence.  It 
points to testimony of Ryan and Tilleman who both said they had 
never 
heard 
of 
any 
other 
partners 
keeping 
personal 
representative or trustee fees for themselves.  It also points 
to Ms. Koster's testimony that she had a conversation with 
Attorney Elverman about the trustee fees. 
¶36 The OLR argues the referee gave undue consideration to 
the fact that Attorney Elverman's conduct was open and that 
others could have or did know about it.  The OLR asserts the 
referee ignored the testimony of Tilleman and Ryan that the firm 
operated on trust and assumed their partners would be following 
the rules set forth in the partnership agreement.  It says the 
individuals who may have been aware of Attorney Elverman's 
receipt of the trustee fees included secretaries and staff, none 
of whom had supervisory authority over him.   
¶37 With respect to count 2, the OLR argues that Attorney 
Elverman's tax violations were "egregious."  It says that 
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2006AP1062-D   
 
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Attorney Elverman, a trained lawyer and accountant, consciously 
chose not to include trustee fees totaling $230,000 on his tax 
returns.  It argues Attorney Elverman's claimed entitlement to 
the trustee fees is inconsistent with his failure to report the 
funds on his tax returns.  While the OLR notes that this court 
is free to impose whatever discipline it deems appropriate, it 
argues that Attorney Elverman's misconduct warrants a meaningful 
license suspension. 
¶38 Attorney Elverman argues that the referee correctly 
concluded that the OLR failed to prove count 1 by clear, 
satisfactory and convincing evidence.  Attorney Elverman argues 
the referee's finding that he was not aware he was required to 
turn over the trustee fees to the firm is supported by the 
evidence, and he also asserts the referee made appropriate 
credibility determinations supported by the evidence.   
¶39 As to count 2, Attorney Elverman argues that this 
court should adopt the referee's recommendation of a public 
reprimand as the sanction for his violation of SCR 20:8.4(f).  
He says he filed amended tax returns and paid taxes on the 
trustee fees before the OLR contacted him, and he points out 
that he has not been prosecuted or penalized by either federal 
or state taxing authorities. 
¶40 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 impose whatever sanction it sees fit regardless of the 
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19 
 
referee's recommendation.  See In re Disciplinary Proceedings 
Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686. 
¶41 The OLR's argument that the referee's findings of fact 
as to count 1 were clearly erroneous turn largely on credibility 
determinations, particularly as to the alleged conversation 
between 
Ms. 
Koster 
and 
Attorney 
Elverman. 
 
The 
referee 
specifically found Attorney Elverman's testimony in this regard 
to be more credible than Ms. Koster's.  The test for an 
appellate court to apply in matters of witness credibility is 
whether "the trier of facts could, acting reasonably, be 
convinced to the required degree of certitude by the evidence 
which it had a right to believe and accept as true."  State v. 
Oliver, 84 Wis. 2d 316, 323, 267 N.W.2d 333 (1978), quoting Lock 
v. State, 31 Wis. 2d 110, 114-15, 142 N.W.2d 183 (1966).  While 
we find Attorney Elverman's claimed failure to read any of the 
versions of the partnership agreement with respect to partners' 
expected handling of trustee fees, and his further failure to 
inquire of other partners as to how such fees were to be handled 
rather troubling, based on the record before us, we are unable 
to declare any of the referee's findings clearly erroneous.  
Consequently, we conclude that the referee's findings of fact as 
to both counts 1 and 2 are not clearly erroneous, and we adopt 
them.  We also agree with the conclusions of law that flow from 
the referee's findings of fact. 
¶42 The remaining issue before us is the appropriate 
sanction for Attorney Elverman's admitted misconduct in failing 
to report as income the co-trustee fees he received for the 
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2006AP1062-D   
 
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years 1999 to 2003.  In support of his argument that a public 
reprimand is appropriate, Attorney Elverman cites previous 
disciplinary cases in which a public reprimand was issued, 
including In re Disciplinary Proceedings Against Lex, 2000 WI 
49, 235 Wis. 2d 381, 611 N.W.2d 456, and In re Disciplinary 
Proceedings Against Young, 2006 WI 109, 296 Wis. 2d 36, 718 
N.W.2d 717.  In support of its argument that a suspension is 
warranted, the OLR cites In re Disciplinary Proceedings Against 
Owens, 172 Wis. 2d 54, 56-57, 492 N.W.2d 157 (1992), and In re 
Disciplinary Proceedings Against Washington, 2007 WI 65, 301 
Wis. 2d 47, 732 N.W.2d 24.  Based on our review of the record, 
we conclude that this case falls somewhere between the conduct 
at issue in Lex, Young, and Owens, and that at issue in 
Washington and In re Disciplinary Proceedings Against Phillips, 
2007 WI 63, 301 Wis. 2d 33, 732 N.W.2d 17. 
¶43 Attorney Lex intentionally failed to timely file 
Wisconsin income tax returns for the years 1991 and 1993 through 
1995.  In addition, he had received 24 separate assessments from 
the Wisconsin Department of Revenue from 1983 through 1998 for 
failing to file either individual income tax returns or employee 
withholding tax returns.  Attorney Lex ultimately filed the tax 
returns and completed an agreement with the Department of 
Revenue to pay all taxes, interest and penalties for the years 
in question.  The referee in Lex also found that Attorney Lex 
experienced financial and professional hardships during the 
period for which he failed to file tax returns, that he was not 
No. 
2006AP1062-D   
 
21 
 
prosecuted 
criminally, 
and 
that 
he 
cooperated 
with 
the 
investigation into his conduct. 
¶44 Attorney Young failed to file state income tax returns 
for the years 1996 through 2003.  The OLR and Attorney Young 
filed a stipulation in which they agreed an appropriate level of 
discipline would be a public reprimand.  Although this court 
said it was troubled by the fact that there was no evidence in 
the record that Attorney Young had worked toward resolving the 
issue of failing to file tax returns and to pay the tax due, it 
agreed that a public reprimand was an appropriate level of 
discipline.  However, it imposed conditions on Attorney Young's 
license to ensure that he made progress on paying his tax 
delinquencies.  
¶45 Attorney Owens intentionally failed to file state 
income tax returns for four years and failed to timely file tax 
returns for ten years.  In addition, he failed to cooperate with 
the investigation into his misconduct.  This court suspended 
Attorney Owens' license to practice law for 60 days. 
¶46 Attorney Washington entered a guilty plea and was 
convicted of attempting to evade and defeat the payment of a 
large portion of her federal income taxes for the year 1998.  
Her license was suspended for a period of 18 months.  In 
Phillips, the attorney's license was suspended for three years 
for engaging in a willful attempt at federal income tax evasion 
for which he had been convicted and sentenced. 
¶47 Both Attorneys Washington and Phillips were found to 
have 
violated 
SCR 
20:8.4(b), 
which 
states 
that 
it 
is 
No. 
2006AP1062-D   
 
22 
 
professional misconduct for a lawyer to commit a criminal act 
that reflects adversely on the lawyer's honesty, trustworthiness 
or fitness as a lawyer in other respects.  It is important to 
note that Attorney Elverman was not found to have violated that 
supreme court rule, but rather was found to have violated SCR 
20:8.4(f), as were Attorneys Young and Lex.   
¶48 In our view, Attorney Elverman's failure to report the 
trustee fees on his income tax returns falls into two separate 
categories, the first encompassing tax years 1999 through 2001, 
and the second encompassing tax years 2002 and 2003.  For the 
earlier years, Attorney Elverman claims that he simply forgot to 
report the trustee fees as income.  If those three tax years 
were the only ones at issue, we would be more inclined to view 
this as a Lex or Young situation and impose a public reprimand.  
For the tax years 2002 and 2003, however, Attorney Elverman 
freely admits that he knew he was supposed to report the trustee 
fees as income but chose not to do so because of other personal 
financial obligations.  In addition, we note that it was not 
until 
April 
of 
2005, 
after 
the 
OLR 
had 
commenced 
its 
investigation, that Attorney Elverman took the affirmative step 
of filing amended income tax returns for all of the years in 
question.  It is Attorney Elverman's post-2001 conduct, whereby 
he consciously chose not to report the trustee fees as income 
even though he knew he was supposed to do so, that takes this 
case outside the realm of a Lex or Young situation and moves it 
on the continuum toward Washington and Phillips.   
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2006AP1062-D   
 
23 
 
¶49 Attorney Elverman's failure to report the trustee fees 
as income on his tax returns is a serious failing.  In light of 
the seriousness of his misconduct and particularly given the 
fact that he knowingly failed to report the fees as income until 
he was under investigation by the OLR, we believe that the 
public reprimand recommended by the referee is too lenient.  
Instead, we conclude that a nine-month suspension of Attorney 
Elverman's license to practice law in this state is appropriate.  
In addition, we agree with the referee that Attorney Elverman 
should pay the full costs of the proceeding. 
¶50 IT IS ORDERED that the license of Jeffrey L. Elverman 
to practice law in Wisconsin is suspended for nine months 
commencing May 12, 2008. 
¶51 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Jeffrey L. Elverman pay to the Office of Lawyer 
Regulation the costs of this proceeding.  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 Jeffrey L. Elverman to practice law in Wisconsin 
shall remain suspended until further order of the court. 
¶52 IT IS FURTHER ORDERED that Jeffrey L. Elverman comply 
with the provisions of SCR 22.26 concerning the duties of a 
person whose license to practice law in Wisconsin has been 
suspended.   
¶53 ANNETTE KINGSLAND ZIEGLER, J., did not participate. 
 
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