Title: Office of Lawyer Regulation v. Neil R. McKloskey
Citation: 2009 WI 65
Docket Number: 2007AP002135-D
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: July 7, 2009

2009 WI 65 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2007AP2135-D 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings 
Against Neil R. McKloskey, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Neil R. McKloskey, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST McKLOSKEY 
 
 
OPINION FILED: 
July 7, 2009   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
      
 
 
 
 
2009 WI 65
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2007AP2135-D  
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Neil R. McKloskey, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Neil R. McKloskey, 
 
          Respondent. 
 
FILED 
 
JUL 7, 2009 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   
Attorney's 
license 
suspended.  
 
¶1 
PER CURIAM.   We review a report and recommendation 
filed by the referee, Stanley F. Hack, recommending this court 
suspend Attorney Neil R. McKloskey's license to practice law for 
60 days and impose the costs of this disciplinary proceeding on 
him.  No appeal has been filed, so the court considers this 
matter pursuant to SCR 22.17(2).1 
                                                 
1 SCR 22.17(2) states:   
No. 
2007AP2135-D   
 
2 
 
¶2 
We 
adopt 
the 
referee's 
findings 
of 
fact 
and 
conclusions of law.  We agree that Attorney McKloskey's 
misconduct warrants the suspension of his license to practice 
law in Wisconsin for a period of 60 days.  We also impose the 
costs of this proceeding on Attorney McKloskey.  
¶3 
Attorney McKloskey was admitted to practice law in 
Wisconsin in 1976.  He received a private reprimand in 2003 for 
a 
violation 
of 
SCR 
20:8.4(f) 
as 
illustrated 
in 
In 
re 
Disciplinary Proceedings Against Gibson, 124 Wis. 2d 466, 369 
N.W.2d 695 (1985).   
¶4 
On September 14, 2007, the Office of Lawyer Regulation 
(OLR) filed a complaint against Attorney McKloskey alleging 11 
counts of professional misconduct.  Eight counts pertained to 
alleged trust account violations.  Three counts derived from 
Attorney McKloskey's handling of a complicated wind-up of 
several matters involving D.C. and T.C. and their now defunct 
company, TJC.  
¶5 
Attorney McKloskey and OLR stipulated to the trust 
account anomalies.  Briefly stated, these matters had to do with 
failure to maintain accurate trust accounts that comported with 
SCR 20:1.15, the "trust account rule."  The referee explicitly 
                                                                                                                                                             
If no appeal is filed timely, the supreme court 
shall review the referee's report; adopt, reject or 
modify the referee's findings and conclusions or 
remand the matter to the referee for additional 
findings; 
and 
determine 
and 
impose 
appropriate 
discipline.  The court, on its own motion, may order 
the parties to file briefs in the matter. 
No. 
2007AP2135-D   
 
3 
 
noted that there was minimal loss to clients as a result of 
these violations and that Attorney McKloskey had initiated 
"corrective action" on these trust account issues before being 
notified of the OLR investigation. 
¶6 
Accordingly, consistent with the parties' stipulation, 
the referee found that: 
• 
Between 2001 and 2005 Attorney McKloskey deposited 
client funds to an account that was titled only with 
the 
name 
of 
Attorney 
McKloskey's 
firm 
and 
not 
designated as a trust account, and in doing so, 
Attorney McKloskey violated former SCR 20:1.15(a)2 and 
SCR 20:1.15(b)(2).3  
                                                 
2 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 Wisconsin Supreme 
Court Rules will be to those in effect at the time of the 
misconduct. 
Former SCR 20:1.15(a) applies to misconduct committed prior 
to July 1, 2004.  It provided: 
 
A lawyer shall hold in trust, separate from the 
lawyer's own property, that property of clients and 
third persons that is in the lawyer's possession in 
connection with a representation or when acting in a 
fiduciary capacity.  Funds held in connection with a 
representation or in a fiduciary capacity include 
funds held as trustee, agent, guardian, personal 
representative of an estate, or otherwise.  All funds 
of clients and third persons paid to a lawyer or law 
firm shall be deposited in one or more identifiable 
trust accounts as provided in paragraph (c).  The 
No. 
2007AP2135-D   
 
4 
 
• 
Between 2001 and 2005 Attorney McKloskey maintained an 
account used for depositing client funds that was not 
an interest-bearing account with interest being paid 
to the Wisconsin Trust Account Foundation, Inc., and 
                                                                                                                                                             
trust account shall be maintained in a bank, savings 
bank, trust company, credit union, savings and loan 
association or other investment institution authorized 
to do business and located in Wisconsin.  The trust 
account shall be clearly designated as "Client's 
Account" or "Trust Account" or words of similar 
import.  No funds belonging to the lawyer or law firm, 
except funds reasonably sufficient to pay or avoid 
imposition 
of 
account 
service 
charges, 
may 
be 
deposited in such an account.  Unless the client 
otherwise directs in writing, securities in bearer 
form shall be kept by the attorney in a safe deposit 
box in a bank, savings bank, trust company, credit 
union, 
savings 
and 
loan 
association 
or 
other 
investment institution authorized to do business and 
located in Wisconsin.  The safe deposit box shall be 
clearly designated as "Client's Account" or "Trust 
Account" or words of similar import.  Other property 
of a client or third person shall be identified as 
such and appropriately safeguarded.  If a lawyer also 
licensed in another state is entrusted with funds or 
property 
in 
connection 
with 
an 
out-of-state 
representation this provision shall not supersede the 
trust account rules of such other state. 
3 SCR 20:1.15(b)(2) applies to misconduct committed after 
July 1, 2004.  It provides as follows:  Identification of 
account. 
Each trust account shall be clearly designated as 
a "Client Account," a "Trust Account," or words of 
similar import.  The account shall be identified as 
such on all account records, including signature 
cards, monthly statements, checks, and deposit slips.  
An acronym, such as "IOLTA," "IOTA," or "LTAB," 
without 
further 
elaboration, 
does 
not 
clearly 
designate the account as a client account or trust 
account. 
No. 
2007AP2135-D   
 
5 
 
in doing so, Attorney McKloskey violated former SCR 
20:1.15(c)(1)b.4  and SCR 20:1.15(c)(1m).5    
• 
Attorney McKloskey failed to obtain an agreement with 
a bank between 1999 (when the overdraft rule went into 
effect) and April 24, 2006, to report overdrafts in a 
trust account, and failed to provide the OLR with a 
copy of such an agreement until April 25, 2006, and in 
doing so, Attorney McKloskey violated former SCR 
20:1.15(j),6 
former 
SCR 
20:1.15(n),7 
former 
SCR 
20:1.15(h)(1),8 and former SCR 20:1.15(h)(8).9  
                                                 
4 Former SCR 20:1.15(c)(1)b. applies to misconduct committed 
prior to July 1, 2004.  It provided: 
The interest accruing on this account, net of any 
transaction costs, shall be paid to the Wisconsin 
Trust Account Foundation, Inc., which shall be deemed 
the beneficial owner thereof.  A lawyer may notify the 
client of the intended use of these funds. 
5 SCR 20:1.15(c)(1m) applies to misconduct committed after 
July 1, 2004.  It provides as follows: 
The interest accruing on an account under par. 
(1), less any transaction costs, shall be paid to the 
Wisconsin Trust Account Foundation, Inc., which shall 
be considered the beneficial owner of the accrued 
interest, pursuant to SCR Chapter 13, Interest on 
Trust Accounts Program.  A lawyer may notify the 
client of the intended use of these funds. 
6 Former SCR 20:1.15(j) applies to misconduct committed 
prior to July 1, 2004.  It stated:  
In the event any properly payable instrument is 
presented against a lawyer trust account containing 
insufficient funds, whether or not the instrument is 
honored, 
the 
financial 
institution 
or 
investment 
institution shall, simultaneously with the customary 
No. 
2007AP2135-D   
 
6 
 
• 
Attorney McKloskey failed to create and maintain a 
complete set of required trust account records for a 
period 
of 
six 
years 
after 
conclusion 
of 
representation, and in doing so, Attorney McKloskey 
violated 
former 
SCR 
20:1.15(e)10 
and 
former 
SCR 
20:1.15(f).11  
                                                                                                                                                             
overdraft notice to the depositor or investor, report 
the overdraft to the office of lawyer regulation. 
7 Former SCR 20:1.15(n) applies to misconduct committed 
prior to July 1, 2004. It stated, "Every lawyer practicing or 
admitted to practice in this state shall comply with the 
reporting and production requirements of this rule." 
8 Former SCR 20:1.15(h)(1) applies to misconduct committed 
between July 1, 2004, and June 30, 2007.  It provided that "[a] 
lawyer shall maintain demand trust accounts only in a financial 
institution that has agreed to provide an overdraft report to 
the office of lawyer regulation under SCR 20:1.15(h)(3)." 
9 Former SCR 20:1.15(h)(8) applies to misconduct committed 
between July 1, 2004, and June 30, 2007.  It stated, "Every 
lawyer practicing or admitted to practice in Wisconsin shall 
comply with the reporting and production requirements of SCR 
20:1.15(h)." 
10 Former SCR 20:1.15(e) applies to misconduct committed 
prior to July 1, 2004.  It provided as follows: 
Complete records of trust account funds and other 
trust property shall be kept by the lawyer and shall 
be preserved for a period of at least six years after 
termination of the representation.  Complete records 
shall include: (i) a cash receipts journal, listing 
the 
sources 
and 
date 
of 
each 
receipt, 
(ii) 
a 
disbursements journal, listing the date and payee of 
each disbursement, with all disbursements being paid 
by check, (iii) a subsidiary ledger containing a 
separate page for each person or company for whom 
funds have been received in trust, showing the date 
and amount of each receipt, the date and amount of 
each disbursement, and any unexpended balance, (iv) a 
No. 
2007AP2135-D   
 
7 
 
                                                                                                                                                             
monthly schedule of the subsidiary ledger, indicating 
the balance of each client's account at the end of 
each month, (v) a determination of the cash balance 
(checkbook balance) at the end of each month, taken 
from the cash receipts and cash disbursement journals 
and a reconciliation of the cash balance (checkbook 
balance) with the balance indicated in the bank 
statement, and (vi) monthly statements, including 
canceled 
checks, 
vouchers 
or 
share 
drafts, 
and 
duplicate deposit slips.  A record of all property 
other than cash which is held in trust for clients or 
third persons, as required by paragraph (a) hereof, 
shall also be maintained.  All trust account records 
shall be deemed to have public aspects as related to 
the lawyer's fitness to practice. 
11 Former SCR 20:1.15(f) applies to misconduct committed 
between July 1, 2004, and June 30, 2007.  It stated:  Record-
keeping requirements for trust accounts. 
(1) Demand accounts.  Complete records of a 
trust account that is a demand account shall include a 
transaction register; individual client ledgers; a 
ledger for account fees and charges, if law firm funds 
are held in the account pursuant to sub. (b)(3); 
deposit 
records; 
disbursement 
records; 
monthly 
statements; and reconciliation reports, subject to all 
of the following: 
 
a. 
Transaction 
register. 
 
The 
transaction 
register shall contain a chronological record of all 
account transactions, and shall include all of the 
following: 
 
1. 
the 
date, 
source, 
and 
amount 
of 
all 
deposits; 
 
2. 
the date, check or transaction number, payee 
and amount of all disbursements, whether by check, 
wire transfer, or other means; 
 
3. 
the date and amount of every other deposit 
or deduction of whatever nature; 
 
4. 
the identity of the client for whom funds 
were deposited or disbursed; and 
No. 
2007AP2135-D   
 
8 
 
                                                                                                                                                             
 
5. 
the 
balance in the account after each 
transaction. 
 
b. 
Individual client ledgers.  A subsidiary 
ledger shall be maintained for each client or matter 
for which the lawyer receives trust funds, and the 
lawyer shall record each receipt and disbursement of 
that client's funds and the balance following each 
transaction.  A lawyer shall not disburse funds from 
the trust account that would create a negative balance 
with respect to any individual client or matter. 
 
c. 
Ledger for account fees and charges.  A 
subsidiary ledger shall be maintained for funds of the 
lawyer deposited in the trust account to accommodate 
monthly service charges.  Each deposit and expenditure 
of the lawyer's funds in the account and the balance 
following each transaction shall be identified in the 
ledger. 
 
d. 
Deposit 
records. 
 
Deposit 
slips 
shall 
identify the name of the lawyer or law firm, and the 
name of the account.  The deposit slip shall identify 
the amount of each deposit item, the client or matter 
associated with each deposit item, and the date of the 
deposit.  The lawyer shall maintain a copy or 
duplicate of each deposit slip.  All deposits shall be 
made intact.  No cash, or other form of disbursement, 
shall be deducted from a deposit.  Deposits of wired 
funds shall be documented in the account's monthly 
statement. 
 
e. 
Disbursement records. 
 
1. 
Checks.  Checks shall be pre-printed and 
pre-numbered.  The name and address of the lawyer or 
law firm, and the name of the account shall be printed 
in the upper left corner of the check.  Trust account 
checks shall include the words "Client Account," or 
"Trust Account," or words of similar import in the 
account name.  Each check disbursed from the trust 
account shall identify the client matter and the 
reason for the disbursement on the memo line. 
 
2. 
Canceled checks.  Canceled checks shall be 
obtained from the financial institution.  Imaged 
checks may be substituted for canceled checks. 
No. 
2007AP2135-D   
 
9 
 
                                                                                                                                                             
 
3. 
Imaged checks.  Imaged checks shall be 
acceptable if they provide both the front and reverse 
of the check and comply with the requirements of this 
paragraph.  The information contained on the reverse 
side 
of 
the 
imaged 
checks 
shall 
include 
any 
endorsement signatures or stamps, account numbers, and 
transaction dates that appear on the original.  Imaged 
checks shall be of sufficient size to be readable 
without magnification and as close as possible to the 
size of the original check. 
 
4. 
Wire transfers.  Wire transfers shall be 
documented by a written withdrawal authorization or 
other documentation, such as a monthly statement of 
the account that indicates the date of the transfer, 
the payee, and the amount. 
 
f. 
Monthly statement.  The monthly statement 
provided to the lawyer or law firm by the financial 
institution shall identify the name and address of the 
lawyer or law firm and the name of the account. 
 
g. 
Reconciliation reports.  For each trust 
account, the lawyer shall prepare and retain a printed 
reconciliation report on a regular and periodic basis 
not less frequently than every 30 days.  Each 
reconciliation report shall show all of the following 
balances and verify that they are identical: 
 
1. 
the balance that appears in the transaction 
register as of the reporting date; 
 
2. 
the total of all subsidiary ledger balances 
for 
IOLTA 
accounts 
and 
other 
pooled 
accounts, 
determined by listing and totaling the balances in the 
individual client ledgers and the ledger for account 
fees and charges, as of the reporting date; and 
 
3. 
the adjusted balance, determined by adding 
outstanding deposits and other credits to the balance 
in the financial institution's monthly statement and 
subtracting outstanding checks and other deductions 
from the balance in the monthly statement. 
(2) Non-demand accounts.  Complete records of a 
trust account that is a non-demand account shall 
include all of the following: 
No. 
2007AP2135-D   
 
10 
 
                                                                                                                                                             
 
a. 
all monthly or other periodic statements 
provided by the financial institution to the lawyer or 
law firm; and 
 
b. 
all 
transaction 
records, 
including 
passbooks, records of electronic fund transactions, 
duplicates of any instrument issued by the financial 
institution from funds held in the account, duplicate 
deposit slips identifying the source of any deposit, 
and duplicate withdrawal slips identifying the purpose 
of any withdrawal. 
(3) Trust property other than funds.  
 
a. 
Property ledger.  A lawyer who receives 
trust property other than funds shall maintain a 
property ledger that identifies the property, date of 
receipt, owner, client or matter, and location of the 
property. 
 
The 
ledger 
shall 
also 
identify 
the 
disposition of all of the trust property received by 
the lawyer. 
 
b. 
Receipt upon taking custody.  Upon taking 
custody of any trust property described in sub. 
(f)(3)a., the lawyer shall provide to the previous 
custodian a signed receipt, with a description of the 
property and the date of receipt. 
 
c. 
Dispositional receipt.  Upon disposition of 
any trust property described in sub. (f)(3)a., the 
lawyer 
shall 
obtain 
a 
signed 
receipt, 
with 
a 
description 
of 
the 
property 
and 
the 
date 
of 
disposition, from the recipient. 
(4) Electronic record retention.  
 
a. 
Back-up of records.  A lawyer who maintains 
trust account records by computer shall maintain the 
transaction 
register, 
client 
ledgers, 
and 
reconciliation 
reports 
in 
a 
form 
that 
can 
be 
reproduced to printed hard copy.  Electronic records 
must be regularly backed up by an appropriate storage 
device. 
 
b. 
IOLTA account records.  In addition to the 
requirements 
of 
sub. 
(f)(4)a., 
the 
transaction 
register, 
the 
subsidiary 
ledger, 
and 
the 
No. 
2007AP2135-D   
 
11 
 
• 
Attorney 
McKloskey had shortfalls in an account 
designated as a trust account such that the balance in 
the account was less than the amount he was supposed 
to be holding in trust for clients, and in doing so, 
Attorney McKloskey violated former SCR 20:1.15(a) 
(effective 
through 
June 
30, 
2004) 
and 
SCR 
20:1.15(b)(1).12  
• 
Attorney McKloskey retained fees in an account used as 
a trust account after the fees had been earned, and in 
doing so, Attorney McKloskey violated former SCR 
20:1.15(a) (effective through June 30, 2004) and SCR 
20:1.15(b)(3).13  
• 
Attorney McKloskey failed to promptly deliver funds 
belonging to Fox Valley, Ltd., Bruce Dix and Double 
                                                                                                                                                             
reconciliation report shall be printed every 30 days 
for the IOLTA account.  The printed copy shall be 
retained for at least 6 years, as required under sub. 
(e)(6). 
12 SCR 20:1.15(b)(1) applies to misconduct committed after 
July 1, 2004.  It provides: 
A lawyer shall hold in trust, separate from the 
lawyer's own property, that property of clients and 
3rd parties that is in the lawyer's possession in 
connection with a representation.  All funds of 
clients and 3rd parties paid to a lawyer or law firm 
in connection with a representation shall be deposited 
in one or more identifiable trust accounts. 
13 SCR 20:1.15(b)(3) applies to misconduct committed after 
July 1, 2004.  It states, "No funds belonging to the lawyer or 
law firm, except funds reasonably sufficient to pay monthly 
account service charges, may be deposited or retained in a trust 
account." 
No. 
2007AP2135-D   
 
12 
 
Grand, or credit fee payments held in an account used 
as a trust account against the client's outstanding 
billing 
statements, 
and 
in 
doing 
so, 
Attorney 
McKloskey violated former SCR 20:1.15(b) 14 and SCR 
20:1.15(d).15  
                                                 
14 Former SCR 20:1.15(b) applies to misconduct committed 
prior to July 1, 2004.  It provided as follows: 
Upon receiving funds or other property in which a 
client or third person has an interest, a lawyer shall 
promptly notify the client or third person in writing.  
Except as stated in this rule or otherwise permitted 
by law or by agreement with the client, a lawyer shall 
promptly deliver to the client or third person any 
funds or other property that the client or third 
person is entitled to receive and, upon request by the 
client or third person, shall render a full accounting 
regarding such property. 
15 SCR 20:1.15(d) applies to misconduct committed after July 
1, 2004.  It states: 
(1) Notice and disbursement.  Upon receiving 
funds or other property in which a client has an 
interest, or in which the lawyer has received notice 
that a 3rd party has an interest identified by a lien, 
court order, judgment, or contract, the lawyer shall 
promptly notify the client or 3rd party in writing.  
Except as stated in this rule or otherwise permitted 
by law or by agreement with the client, the lawyer 
shall promptly deliver to the client or 3rd party any 
funds or other property that the client or 3rd party 
is entitled to receive. 
(2) Accounting.  Upon final distribution of any 
trust property or upon request by the client or a 3rd 
party having an ownership interest in the property, 
the lawyer shall promptly render a full written 
accounting regarding the property. 
(3) Disputes regarding trust property.  When the 
lawyer and another person or the client and another 
person claim ownership interest in trust property 
No. 
2007AP2135-D   
 
13 
 
• 
Attorney 
McKloskey 
inaccurately 
certified 
on 
his  
State Bar dues statements for the years 2001 through 
2005 that he complied with trust account recordkeeping 
requirements, and in doing so, Attorney McKloskey 
violated 
former 
SCR 
20:1.15(g)16 
and 
SCR 
20:1.15(i)(4).17  
                                                                                                                                                             
identified by a lien, court order, judgment, or 
contract, the lawyer shall hold that property in trust 
until there is an accounting and severance of the 
interests.  If a dispute arises regarding the division 
of the property, the lawyer shall hold the disputed 
portion in trust until the dispute is resolved.  
Disputes between the lawyer and a client are subject 
to the provisions of sub. (g)(2). 
16 Former SCR 20:1.5(g) applies to misconduct committed 
prior to July 1, 2004.  It provided:   
A member of the State Bar of Wisconsin shall file 
with the State Bar annually, with payment of the 
member's State Bar dues or upon such other date as 
approved by the Supreme Court, a certificate stating 
whether the member is engaged in the private practice 
of law in Wisconsin and, if so, the name of each bank, 
trust company, credit union or savings and loan 
association in which the member maintains a trust 
account, safe deposit box, or both, as required by 
this section.  Each member shall explicitly certify 
therein that he or she has complied with each of the 
record-keeping requirements set forth in paragraph (e) 
hereof. 
 
A 
partnership 
or 
professional 
legal 
corporation may file one certificate on behalf of its 
partners, associates, or officers who are required to 
file under this section.  The failure of a member to 
file the certificate required by this section is 
grounds for automatic suspension of the member's 
membership in the State Bar in the same manner as 
provided in SCR 10.03(6) for nonpayment of dues.  The 
filing of 
a 
false certificate is unprofessional 
conduct and is grounds for disciplinary action.  The 
State Bar shall supply to each member, with the annual 
dues statement or at such other time as directed by 
No. 
2007AP2135-D   
 
14 
 
¶7 
As noted, the remaining three counts of alleged 
misconduct 
relate 
to 
Attorney 
McKloskey's 
handling 
of 
a 
complicated wind-up of several matters involving D.C. and T.C. 
and their company, TJC.  TJC was a small, closely-held business 
involved in the removal and disposition of oil contaminated 
soil.  Financial problems developed in the late 1990s when a 
principal customer, Westerfeld Oil Company, Inc. ("Westerfeld"), 
did not pay its account.   
¶8 
In January 1998 D.C. hired Attorney McKloskey to 
collect the Westerfeld bill on behalf of TJC.  Attorney 
McKloskey commenced a lawsuit against Westerfeld on February 2, 
1998.  Over the next year, a series of lawsuits and collection 
actions were filed against TJC.  Attorney McKloskey represented 
TJC and/or D.C. in various capacities in these actions.18   
                                                                                                                                                             
the Supreme Court, a form on which the certification 
must be made and a copy of this rule. 
17 SCR 20:1.15(i)(4) applies to misconduct committed after 
July 1, 2004.  It states: 
The failure of a state bar member to file the 
certificate is grounds for automatic suspension of the 
member's membership in the state bar in the same 
manner provided in SCR 10.03(6) for nonpayment of 
dues. 
 
The 
filing 
of 
a 
false 
certificate 
is 
unprofessional conduct and is grounds for disciplinary 
action. 
18 For example, on March 26, 1998, E.G., a supplier of TJC, 
started a collection action against TJC and D.C. and T.C. 
individually.  Attorney McKloskey represented D.C., T.C., and 
TJC in this matter, but there was no fee agreement.  On 
November 6, 1998, R.H., another supplier to TJC, started a 
collection action against D.C. and TJC.  Attorney McKloskey 
represented D.C. and TJC in this action as well. 
No. 
2007AP2135-D   
 
15 
 
¶9 
T.C. filed for divorce in April 1999.  Attorney 
McKloskey did not represent either party in the divorce 
proceeding.   
¶10 As time progressed, Attorney McKloskey increasingly 
began taking direction from T.C. and ceased to communicate with 
D.C.  The referee created a timeline of critical events that 
culminated in the filing of these disciplinary charges against 
Attorney McKloskey.  The record reflects that initially Attorney 
McKloskey communicated with D.C. directly or with both D.C. and 
T.C.  In December 1999 the Westerfeld trial commenced, and in 
April 2000 Attorney McKloskey obtained a judgment in favor of 
TJC in the amount of $283,426.78.  Westerfeld appealed, but over 
the 
next 
several 
years, 
Attorney 
McKloskey 
succeeded 
in 
collecting various sums of money in the Westerfeld matter.   
¶11 In April 2001 Attorney McKloskey advised T.C. that he 
had received $26,498.23 in the Westerfeld matter, but he failed 
to advise D.C. these funds had been obtained.  By July 2002 
Attorney McKloskey had disbursed substantial funds collected in 
the Westerfeld matter to various persons or entities based on 
oral instructions he received from T.C.19  However, D.C. was not 
                                                 
19 In addition to payments of taxes and other debts owed by 
TJC, the checks Attorney McKloskey's office prepared included a 
$2,000 check to F.K and C.K., former employees of TJC and 
friends of T.C.'s; an $8,980 check payable to T.C. for "Taxes 
99-01"; a $17,461.79 check payable to "[T.C.], Neal & Beverly 
[M.]" (T.C.'s parents) labeled, "Per [T.C.] (Legal Exp.)"; a 
$30,405.99 check to the IRS for "(TJC Inc.) Outstanding taxes 
due [T.C.]" and giving T.C.'s personal social security number; 
and the remainder, $27,878.85, paid to T.C. 
No. 
2007AP2135-D   
 
16 
 
made aware of these settlement proceeds and was not asked to 
approve these payouts.  In April 2005 D.C. requested a status 
update in the Westerfeld matter.  After some delays and further 
inquiries, Attorney McKloskey provided D.C. with an incomplete 
settlement statement in July 2005. 
¶12 Eventually, D.C., on behalf of himself and TJC, filed 
a civil action for malpractice and breach of contract against 
Attorney McKloskey and his insurer.  The action was dismissed on 
summary judgment on December 20, 2006, because the trial court 
concluded the corporation was the only entity that could bring 
such an action.  This ruling was affirmed on appeal. 
¶13 Ultimately, the referee found that Attorney McKloskey 
distributed judgment proceeds from the Westerfeld matter at 
T.C.'s oral direction.  The referee found that Attorney 
McKloskey did not notify D.C. of these transactions and did not 
make any payments to or on behalf of D.C. except for a payment 
to the Wisconsin Department of Workforce Development.  The 
referee found that during and subsequent to the divorce 
proceeding, Attorney McKloskey never obtained written consent 
from D.C. or T.C. for his representation of them or their family 
business, TJC, despite their potentially conflicting interests.   
¶14 In proceedings before the referee, Attorney McKloskey 
advanced a number of affirmative defenses to the charges of 
misconduct relating to his handling of these matters.  He noted 
that in the civil malpractice action he was found to have 
represented the company, TJC, not D.C.  So, in proceedings 
before the referee, he argued that issue preclusion should 
No. 
2007AP2135-D   
 
17 
 
apply, and he took the position that he did not represent D.C. 
in the Westerfeld litigation.   
¶15 The referee was not persuaded by these arguments.  
Wisconsin courts hold that even when there is no express 
attorney-client relationship, such a relationship may be implied 
under the circumstances of a particular case, depending on the 
nature of the work performed and the circumstances under which 
client confidences may have been divulged.  Burkes v. Hales, 165 
Wis. 2d 585, 592, 478 N.W.2d 37 (Ct. App. 1991). 
¶16 As the referee noted, the range of disciplinary 
charges filed by the OLR was far broader in scope than the 
malpractice claim.  The referee also noted that Attorney 
McKloskey had represented D.C. on a number of related matters 
and had communicated directly with him regarding these matters, 
including consulting him about a $100,000 settlement offer in 
the Westerfeld matter.  
¶17 In other words, D.C. reasonably relied on Attorney 
McKloskey to represent his interests in the Westerfeld matter.  
Attorney McKloskey also knew about the parties' divorce and knew 
that it was acrimonious.  The referee thus found that "[D.C.] 
was a client" and noted that Attorney McKloskey's testimony in 
his own defense "left much to be desired."  The referee 
concluded that "[Attorney] McKloskey should not have blindly 
accepted oral check writing instructions from [T.C.]."   
¶18 The referee added: 
The manner of handling the final disbursement was in 
many ways similar to the manner in which the trust 
No. 
2007AP2135-D   
 
18 
 
account was poorly handled.  There were many trust 
account errors that took years to resolve.  The 
Westerfeld collection was one of only two or three 
large 
contingent 
fee 
recoveries 
that 
[Attorney] 
McKloskey had in his entire career.  It does not make 
sense to make the large payments to or for [T.C.'s] 
benefit 
without 
the 
knowledge 
and 
approval 
of 
[D.C.] . . . .  It was unreasonable for [Attorney] 
McKloskey 
to 
assume 
[T.C.] 
was 
telling 
[D.C.] 
anything. 
¶19 Based on these findings, the referee concluded that by 
undertaking to represent both T.C. and D.C. regarding matters in 
which both T.C. and D.C. and their company, TJC, had an 
interest, during and after D.C. and T.C.'s divorce, without 
consulting with D.C. and T.C. individually regarding the 
implications of the common representation and the advantages and 
risks involved, and without obtaining D.C.'s and/or T.C.'s 
written consent after that consultation; and by subsequently 
taking actions at the request of T.C. on behalf of her or TJC 
that potentially adversely impacted D.C., Attorney McKloskey 
violated former SCR 20:1.7(b).20  
                                                 
20 Former SCR 20:1.7(b) applies to misconduct committed 
prior to July 1, 2007.  It provided as follows: 
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 
No. 
2007AP2135-D   
 
19 
 
¶20 The referee also concluded that by failing to keep 
D.C. informed regarding collection efforts on behalf of D.C., 
T.C., and TJC; and/or failing to inform D.C. when the Westerfeld 
judgment was paid in full; and/or by failing to consult with 
D.C. regarding distribution of the final Westerfeld proceeds, 
Attorney McKloskey violated former SCR 20:1.4(a)21 and SCR 
20:1.4(b).22  
¶21 Finally, the referee concluded that by failing to give 
D.C. written notice that Attorney McKloskey had received and 
deposited over $200,000 of funds to which D.C. asserted or 
actually held a financial interest to an account used as a 
client trust account; and/or failed to pay to D.C. any of these 
funds; and/or failed to provide D.C. with any accounting, 
Attorney McKloskey violated former SCR 20:1.15(b) (effective 
through June 30, 2004).  
¶22 We 
adopt 
the 
referee's 
findings 
of 
fact 
and 
conclusions of law and turn to the question of the appropriate 
sanction for Attorney McKloskey's misconduct.   
                                                                                                                                                             
common representation and the advantages and risks 
involved. 
21 Former SCR 20:1.4(a) applies to misconduct committed 
prior to July 1, 2007.  It stated "[a] lawyer shall keep a 
client reasonably informed about the status of a matter and 
promptly comply with reasonable requests for information." 
22 SCR 20:1.4(b) provides that "[a] lawyer shall explain a 
matter to the extent reasonably necessary to permit the client 
to make informed decisions regarding the representation." 
No. 
2007AP2135-D   
 
20 
 
¶23 The 
referee 
recommended 
we 
suspend 
Attorney 
McKloskey's license to practice law for 60 days and further 
recommended that he be responsible for all costs in the matter.  
¶24 In 
assessing 
appropriate 
discipline, 
this 
court 
considers the seriousness of the conduct as well as the need to 
protect the public, the courts, and the legal system from 
repetition of misconduct.  See In re Disciplinary Proceedings 
Against 
Arthur, 
2005 
WI 
40, 
¶78, 
279 
Wis. 2d 583, 
694 
N.W.2d 910.  The court also seeks to deter other attorneys from 
engaging in similar misconduct. Id. 
¶25 Each disciplinary case is, of course, unique, but this 
court generally considers suspension appropriate for cases 
involving extensive trust account violations and failure to 
manage client conflicts appropriately.  See, e.g., In re 
Disciplinary Proceedings Against McNeely, 2008 WI 91, 313 
Wis. 2d 283, 752 N.W.2d 857 (attorney suspended for 60 days for 
giving settlement proceeds to decedent's widow without providing 
notice to the decedent's estate which had possible claims); In 
re Disciplinary Proceedings Against Smith, 2008 WI 17, 308 
Wis. 2d 1, 746 N.W.2d 213  (attorney suspended for two years for 
17 counts of misconduct committed in connection with a failed 
business transaction with lawyer's assistant); and In re 
Disciplinary Proceedings Against Mandelman, 158 Wis. 2d 1, 460 
N.W.2d 749 (1990) (27 rule violations involving multiple clients 
warranted one-year suspension).  However, considering the facts 
of these cases, we conclude that the Smith matter warranted more 
severe discipline because there were more numerous types of 
No. 
2007AP2135-D   
 
21 
 
misconduct including charges of dishonesty amid allegations the 
trust account ledgers had been altered.   
¶26 Here, eight of the alleged counts of misconduct 
involved sloppy and careless trust account violations.  Accurate 
trust account records are important to ensure clients and the 
public have confidence in an attorney's management of client 
funds.  We are mindful, however, that the referee found clients 
were not adversely affected by the trust account anomalies that 
occurred here.  Attorney McKloskey stipulated to this misconduct 
and argued, in mitigation, that he relied on an assistant to 
handle these matters.   
¶27 The remaining three counts of misconduct reflect 
serious errors of judgment, but again, there was no finding that 
Attorney 
McKloskey 
was 
dishonest 
or 
that 
he 
benefited 
financially from the misconduct he committed in connection with 
these complex and interrelated matters.  Therefore, we agree 
that a 60-day suspension is reasonable in this case.  The 
referee also recommended the court impose the costs of this 
litigation 
on 
Attorney 
McKloskey, 
and 
we 
accept 
that 
recommendation as well.23 
¶28 IT IS ORDERED that the license of Neil R. McKloskey to 
practice law in Wisconsin is suspended for a period of 60 days 
effective August 17, 2009. 
                                                 
23 On December 23, 2008, the OLR filed a statement of costs 
in the amount of $37,431.08. 
No. 
2007AP2135-D   
 
22 
 
¶29 IT IS FURTHER ORDERED that Neil R. McKloskey shall 
comply with the requirements of SCR 22.26 pertaining to 
activities following suspension if he has not already done so. 
¶30 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Neil R. McKloskey shall 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 Neil R. McKloskey to practice law in Wisconsin 
shall remain suspended until further order of the court. 
 
No. 
2007AP2135-D   
 
 
 
1