Court Opinion

ID: 2762272
Source: CourtListenerOpinion
Date Created: 2014-12-18 14:16:19.669084+00
Date Added: 2024-06-11T10:43:41.729789
License: Public Domain

2014 WI 128

                  SUPREME COURT             OF   WISCONSIN
CASE NO.:               2012AP2350-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against Richard W. Steffes, Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant-Appellant,
                             v.
                        Richard W. Steffes,
                                  Respondent-Respondent.

                            DISCIPLINARY PROCEEDINGS AGAINST STEFFES

OPINION FILED:          December 18, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:

ATTORNEYS:
       For the Office of Lawyer Regulation, there were briefs by
Matthew J. Price and Foley & Lardner LLP, Milwaukee.

       For the respondent-respondent, there was a brief by Richard
W. Steffes and the Steffes Law Office, Beaver Dam.
                                                                             2014 WI 128
                                                                     NOTICE
                                                       This opinion is subject to further
                                                       editing and modification.   The final
                                                       version will appear in the bound
                                                       volume of the official reports.
No.    2012AP2350-D

STATE OF WISCONSIN                                :               IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Richard W. Steffes, Attorney at Law:

Office of Lawyer Regulation,                                                 FILED
             Complainant-Appellant,
                                                                     DEC 18, 2014
      v.
                                                                        Diane M. Fremgen
                                                                     Clerk of Supreme Court
Richard W. Steffes,

             Respondent-Respondent.

      ATTORNEY       disciplinary        proceeding.             Attorney       publicly

reprimanded.

      ¶1     PER CURIAM.      Pending before the court is a referee's

report      recommending,     inter    alia,      that      Attorney         Richard     W.

Steffes     be   publicly   reprimanded     for        professional          misconduct.

The Office of Lawyer Regulation (OLR) appeals from that portion

of    the    referee's   report       declining       to    impose       a    $10,809.57

restitution      award   as    recommended        by       the     OLR   and     instead

recommending that Attorney Steffes pay $1,000 in restitution to
the grievant.      The OLR also appeals the referee's recommendation
                                                                                No.      2012AP2350-D

that Attorney Steffes's law firm trust account be monitored by

the OLR for a period of two years.                             While the OLR agrees with

the    referee's            recommendation         that     Attorney         Steffes      attend    a

trust account rules and compliance course, it argues that six

months      is    a        sufficient       length     of      time    to    monitor       Attorney

Steffes's trust account compliance.

       ¶2        The       OLR    does      not   appeal       the    referee's         recommended

sanction     of        a    public       reprimand,       as    opposed       to    the    two-year

suspension originally sought by the OLR, or the imposition of

full costs.

       ¶3        Upon       careful      review      of     this      matter,      we    adopt   the

referee's findings, conclusions, and recommendation for a public

reprimand.            For the reasons set forth herein, we decline both

the    OLR's      request          for      restitution        to     the    grievant      and   the

referee's recommended $1,000 restitution award.                                    We agree that

Attorney Steffes should be required to attend a trust account

rules and compliance course and that his trust account should be

monitored by the OLR, but we accept the OLR's argument that six
months is a sufficient length of time for such monitoring.                                         We

further determine that Attorney Steffes should pay the costs of

this     proceeding,              less      the   costs        of     the    appeal,       totaling

$7,805.09 as of November 26, 2013.

       ¶4        Attorney Steffes was admitted to the practice of law

in    Wisconsin            in    May   of    1970.        He    is     a    sole   practitioner,

residing and practicing in the Beaver Dam area.                                     Other than a

brief       administrative               suspension            several       years        ago    for
noncompliance with continuing legal education requirements and a
                                                   2
                                                                     No.     2012AP2350-D

temporary suspension for noncooperation with the OLR in this

case, Attorney Steffes has no significant disciplinary history.

    ¶5      The matter now before the court consists of two parts:

(1) Attorney Steffes permitting his non-lawyer son to use his

trust    account,   giving   rise     to       five   disciplinary         counts,    and

(2) Attorney Steffes's ensuing failure to cooperate with the OLR

when a grievance was filed, giving rise to two counts.

    ¶6      In   2003,     the     grievant,          R.W.,        entered     into     a

construction     contract     with     Steffes          ICF     Construction,         LLC

(Steffes Construction), owned by Attorney Steffes's son, G.S.

G.S. was retained to build an addition to R.W.'s existing home,

including construction of a basement and three bedrooms.                             R.W.

gave Steffes Construction five checks totaling $27,228.50 for

the work.

    ¶7      Steffes    Construction        commenced         the   work,     but   never

completed it.       In 2004, R.W. himself directed suspension of the

project due to his then-pending divorce.                     In 2005, he requested

that construction be restarted, but neither G.S. nor any other
Steffes Construction representative ever returned to R.W.'s home

to perform additional work.          Apparently no work was performed on

the bedrooms.       R.W. also claimed that the inside concrete wall

poured    against    the   house     ruptured         and,    when    repoured,       was

defective.

    ¶8      In 2007, R.W. filed a lawsuit in Dodge County against

Steffes   Construction,      G.S.,    and       another      defendant.        Attorney

Steffes represented his son.               During litigation, R.W. and his
attorney discovered that the checks R.W. had written to Steffes
                                           3
                                                                     No.    2012AP2350-D

Construction as advances for the home construction project had

been deposited into Attorney Steffes's trust account.

       ¶9    R.W., through his attorney, requested an accounting of

the funds deposited to and disbursed from Attorney Steffes's

trust account.        Attorney Steffes did not provide an accounting.

       ¶10   In December 2008, R.W. reported Attorney Steffes to

the OLR.       Meanwhile, the parties in the Dodge County lawsuit

eventually stipulated to entry of a judgment against Steffes

Construction in the amount of $9,500.

       ¶11   In    2011,    G.S.    filed       for   Chapter    7   bankruptcy     and

listed R.W. as one of his creditors.                   Later that year, G.S. was

granted an order discharging his debts.

       ¶12   Upon    receipt   of    R.W.'s       grievance,     the    OLR's   intake

staff contacted Attorney Steffes and requested a response by

January 9, 2009.        On January 9, 2009, Attorney Steffes requested

a one-month extension, followed by another extension request on

January      29,    2009.      Having   received         no     response,     the   OLR

initiated a formal investigation.
       ¶13   On February 16, 2009, the OLR formally requested that

Attorney Steffes respond to R.W.'s grievance by March 11, 2009.

Attorney Steffes failed to respond.                   On April 23, 2009, the OLR

again advised Attorney Steffes of his obligation under supreme

court rules to comply, this time by May 4, 2009.                           No response

was received.

       ¶14   On July 1, 2009, the OLR sought a temporary suspension

of Attorney Steffes's law license for his failure to cooperate
with   the    OLR's    investigation.            Attorney     Steffes      sought   and
                                            4
                                                                  No.     2012AP2350-D

received several extensions to respond to the court's order to

show cause, but never filed a response.                  This court temporarily

suspended Attorney Steffes's law license on November 3, 2009.

His license was reinstated on January 12, 2010.

      ¶15    On    December      22,     2009,    Attorney       Steffes        finally

provided a preliminary response to R.W.'s grievance.                            In his

letter, he admits he allowed his son to use his law firm trust

account as a business checking account for Steffes Construction.

He acknowledges that R.W.'s payments to Steffes Construction of

$27,228.50 were deposited into his law firm's trust account.                        He

claims he traced expenditures related to the R.W. project in

excess of $26,000.         Attorney Steffes admits he did not notify

R.W., in writing, that R.W.'s funds were deposited into his

trust account and he did not maintain a separate trust account

ledger for R.W.'s funds.

      ¶16    Attorney Steffes explained that he allowed his son to

use his law firm trust account for Steffes Construction because

his son was having financial trouble.              When his son wanted trust
funds issued, Attorney Steffes would provide him with a blank,

signed    check    from    the    trust    account,      which    his     son    would

complete.      His son would subsequently report the name of the

payee and the amount to Attorney Steffes and/or his secretary

for   recording.          Attorney      Steffes    admitted       that     he    "very

sporadically"      questioned      the    payees    to    those    trust        account

checks,     even   when   it     was   obvious    that   the     checks    were    not

related to construction projects, such as a $7,500 check issued
to his son's girlfriend.
                                          5
                                                                           No.         2012AP2350-D

       ¶17    R.W.     disputed        certain        expenses          Attorney          Steffes

claimed were related to the R.W. project.                               In an effort to

resolve      the     discrepancy,        the       OLR     subpoenaed         bank        records

pertaining to Attorney Steffes's law firm trust account.                                           The

OLR's    ensuing       audit    of     the     bank      records     showed            that    only

$16,418.93         disbursed    from     Attorney          Steffes's      law       firm       trust

account      was    clearly     attributable          to    the    R.W.    project.                The

$10,809.57         discrepancy        triggered        a    series       of       supplemental

requests      by    the   OLR    to     Attorney         Steffes    for       trust       account

information and documentation.

       ¶18    On     October    29,     2012,      the     OLR    filed       a    seven-count

disciplinary complaint against Attorney Steffes.                              The OLR sought

a two-year suspension of Attorney Steffes's license to practice

law,    restitution       to    R.W.     in    the       amount    of     $10,809.57,              and

assessment of costs against Attorney Steffes.

       ¶19    Attorney     Steffes       filed        an    answer,       followed            by    an

amended      answer.      The     court       appointed       Attorney            Catherine         M.

Rottier as referee.             She conducted an evidentiary hearing on
September 18, 2013, and issued a report on November 8, 2013.

Briefly, she concluded that Attorney Steffes had committed three

and one-half of the alleged counts of misconduct but declined to

find violations of the other three and one-half counts.

       ¶20    Count One alleged that Attorney Steffes's failure to

timely respond to the OLR's requests for information, with such

failure      resulting     in     the     temporary          suspension           of     his       law

                                               6
                                                             No.   2012AP2350-D

license, violates Supreme Court Rule (SCR) 22.03(2) and (6),1

enforced via SCR 20:8.4(h).2

     ¶21    The   referee   found   that   the   OLR   had    sustained    its

burden of proof as to Count One.

     ¶22    Count Two alleged that Attorney Steffes's failure to

notify R.W. of the receipt of funds in his trust account and his

     1
         SCR 22.03(2) and (6) provide:

          (2) Upon    commencing  an   investigation,   the
     director shall notify the respondent of the matter
     being investigated unless in the opinion of the
     director the investigation of the matter requires
     otherwise.    The respondent shall fully and fairly
     disclose all facts and circumstances pertaining to the
     alleged misconduct within 20 days after being served
     by ordinary mail a request for a written response.
     The director may allow additional time to respond.
     Following receipt of the response, the director may
     conduct further investigation and may compel the
     respondent to answer questions, furnish documents, and
     present any information deemed relevant to the
     investigation.

            . . . .

          (6) In the course of the investigation, the
     respondent's   wilful  failure   to  provide  relevant
     information, to answer questions fully, or to furnish
     documents and the respondent's misrepresentation in a
     disclosure are misconduct, regardless of the merits of
     the matters asserted in the grievance.
     2
       SCR 20:8.4(h) provides that it is professional misconduct
for a lawyer to "fail to cooperate in the investigation of a
grievance filed with the office of lawyer regulation as required
by SCR 21.15(4), SCR 22.001(9)(b), SCR 22.03(2), SCR 22.03(6),
or SCR 22.04(1)."

                                     7
                                                                  No.     2012AP2350-D

failure to render a full accounting upon request violate former

SCR 20:1.15(b).3

     ¶23   The   referee     found    that   the      OLR   had    sustained        its

burden of proof as to Count Two.

     ¶24   Count     Three   alleged    that     by    allowing         his   son    to

utilize client trust account checks to make disbursements from

his client trust account and by allowing his son to fill in the

payees   and   the   amounts    for    various      disbursements          for   both

personal   and   business     purposes,      Attorney       Steffes       failed     to

protect client funds on deposit in his client trust account in

violation of former SCR 20:1.15(a).4               Count Three also alleged

     3
       Former SCR 20:1.15(b), as in effect prior to July 1, 2004,
provided:

          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.
     4
       Former SCR 20:1.15(a), as in effect prior to July 1, 2004,
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
                                                    (continued)
                                       8
                                                                    No.   2012AP2350-D

that       Attorney    Steffes      engaged    in   conduct    involving      fraud,

deceit,       dishonesty,      or     misrepresentation        in    violation     of

SCR 20:8.4(c).5

       ¶25    The referee found that the OLR had established the

first rule violation of Count Three (former SCR 20:1.15(a)) but

rejected      the     more   serious    allegation      that   Attorney      Steffes

engaged      in   conduct     involving       fraud,   deceit,      dishonesty,    or

misrepresentation (SCR 20:8.4(c)).

       firm shall be deposited in one or more identifiable
       trust accounts as provided in paragraph (c).           The
       trust account shall be maintained in a bank, savings
       bank, trust company, credit union, savings and loan
       association or other investment institution authorized
       to do business and located in Wisconsin.        The trust
       account shall be clearly designated as "Client's
       Account" or "Trust Account" or words of similar
       import. No funds belonging to the lawyer or law firm,
       except funds reasonable sufficient to pay or avoid
       imposition   of   account    service  charges,    may   be
       deposited in such an account.         Unless the client
       otherwise directs in writing, securities in bearer
       form shall be kept by the attorney in a safe deposit
       box in a bank, savings bank, trust company, credit
       union,   savings   and    loan   association   or    other
       investment institution authorized to do business and
       located in Wisconsin.    The safe deposit box shall be
       clearly designated as "Client's Account" or "Trust
       Account" or words of similar import.      Other property
       of a client or third person shall be identified as
       such and appropriately safeguarded. If a lawyer also
       licensed in another state is entrusted with funds or
       property    in   connection     with   an    out-of-state
       representation, this provision shall not supersede the
       trust account rules of the other state.
       5
       SCR 20:8.4(c) provides that it is professional misconduct
to "engage in conduct involving dishonesty, fraud, deceit or
misrepresentation."

                                          9
                                                                      No.      2012AP2350-D

    ¶26        Count Four alleged that by stating to the OLR that he

allowed    his      son    to    temporarily       make    deposits      to     and   take

disbursements from his client trust account in connection with

Steffes Construction during the period of May 1, 2003, until

November 4, 2004, when bank records disclosed that deposits and

disbursements relating to his son and Steffes Construction were

being made to and from his client trust account prior to May 1,

2003,     Attorney        Steffes     violated     SCR 22.03(6),         enforced       via

SCR 20:8.4(h).

    ¶27        The referee determined that the temporal discrepancy

disclosed      to   the    OLR    was   not    willful     and    thus   rejected      the

allegations in Count Four.

    ¶28        Count Five alleged that by allowing his son to deposit

and disburse money to and from his client trust account when he

knew his son and his son's business were experiencing financial

difficulties which limited his son's abilities to utilize other

banks     or    accounts         to   conduct      his    personal       and     business

transactions,       and     without     disclosing        the    existence      of    those
funds being deposited to and disbursed from his client trust

account to other potential creditors or customers of his son or

his son's business, Attorney Steffes violated SCR 20:1.2(d)6 and

SCR 20:8.4(c).

    6
        SCR 20:1.2(d) provides:

         A lawyer shall not counsel a client to engage, or
    assist a client, in conduct that the lawyer knows is
    criminal or fraudulent, but a lawyer may discuss the
    legal consequences of any proposed course of conduct
                                                    (continued)
                                              10
                                                    No.   2012AP2350-D

     ¶29   The referee was not persuaded that Attorney Steffes's

behavior reflected fraud or deceit and rejected the allegations

in Count Five.

     ¶30   Count Six alleged that by failing to keep complete

records of his trust account funds and other trust property,

Attorney Steffes violated former SCR 20:1.15(e).7

     with a client and may counsel or assist a client to
     make a good faith effort to determine the validity,
     scope, meaning or application of the law.
     7
       Former SCR 20:1.15(e), as in effect prior to July 1, 2004,
provided:

          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
     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
                                                      No.    2012AP2350-D

     ¶31    The referee found that the OLR had met its burden of

proof as to Count Six.

     ¶32    Count Seven alleged that by failing to submit trust

account records to the OLR as requested on multiple occasions,

including    pursuant   to   an   investigative   notice    to   appear,

Attorney Steffes violated SCR 20:1.15(f).8

     8
       The referee noted that the supreme court rule cited in the
OLR's complaint as to Count Seven appears to be incorrect.     In
reviewing the matter, we find that SCR 20:1.15(f) as quoted in
the complaint was in effect only until July 1, 2004, prior to
the time period in which the allegations of Count Seven
occurred. For reference, former SCR 20:1.15(f) provided:

          Upon request of the office of lawyer regulation,
     or upon direction of the Supreme Court, the records
     shall be submitted to the office for its inspection,
     audit, use, and evidence under such conditions to
     protect the privilege of clients as the court may
     provide.   The records, or an audit thereof, shall be
     produced at any disciplinary proceeding involving the
     attorney wherever material.    Failure to produce the
     records shall constitute unprofessional conduct and
     grounds for disciplinary action.

     The applicable rule in effect during the relevant time
period appears to be current SCR 20:1.15(j)(7), which provides:

          All fiduciary account records have public aspects
     related to a lawyer's fitness to practice.        Upon
     request of the office of lawyer regulation, or upon
     direction of the supreme court, the records shall be
     submitted to the office of lawyer regulation for its
     inspection, audit, use, and evidence under any
     conditions to protect the privilege of clients that
     the court may provide.    The records, or an audit of
     the records, shall be produced at any disciplinary
     proceeding involving the lawyer, whenever material.
     Failure    to   produce    the   records   constitutes
     unprofessional conduct and grounds for disciplinary
     action.

                                   12
                                                                      No.       2012AP2350-D

     ¶33     The    referee     deemed       the    allegation       in     Count    Seven

duplicative of Count One and declined to find a violation.

     ¶34     The    referee      recommends         a    public     reprimand.           She

explicitly stated in her report that the OLR's recommended two-

year suspension "seems entirely too harsh for the circumstances

of   this     case,"    based        on    her     determination       that       Attorney

Steffes's conduct was careless but not fraudulent.                          The referee

concluded, however, that it was "absolutely clear" that Attorney

Steffes did not understand the trust account rules or appreciate

their significance.           She stated:

     He allowed his client trust account to be used as a de
     facto bank for his financially compromised son. There
     is no evidence that respondent benefited personally
     from allowing his son to make deposits and take
     withdrawals from the client trust account, but that is
     no excuse for allowing respondent's client trust
     account to be used for purposes for which it was never
     intended.
     ¶35     The     referee        also    had     harsh    words        for     Attorney

Steffes's disregard of the OLR's requests for information.                               She

noted that his reference to the OLR's requests as "a bother" is

offensive to all attorneys who take their obligations to the OLR

seriously.

     ¶36     To     justify     the       recommended      public     reprimand,         the

referee cited as persuasive several cases she deemed relevant,

including Public Reprimand of J.E. Nugent, 2010-OLR-3 (attorney

had substantial disciplinary history, along with trust account

violations,       and   was    guilty      of     unauthorized      practice        of   law
during      times    when     his     license      was    suspended)        and     Public

                                             13
                                                                             No.     2012AP2350-D

Reprimand of Ronald J. Thompson, 2012-OLR-18 (attorney used his

trust account as a personal account to pay business and personal

expenses, commingled funds in the trust account, and failed to

keep adequate trust account records; attorney had also practiced

law while his license was suspended).

      ¶37   The referee distinguished the cases cited by the OLR

in its trial brief in support of a more severe sanction, noting

that each involved more egregious conduct than is at issue here

and/or a lawyer with a previous disciplinary history.

      ¶38   Attorney Steffes made a half-hearted claim that less

discipline, namely a private reprimand, is warranted, but he

failed to cross-appeal on the question of discipline and we deem

his argument undeveloped and unpersuasive.

      ¶39   In an attorney disciplinary proceeding, a referee's

findings of fact are upheld on appeal unless they are clearly

erroneous.        In    re     Disciplinary          Proceedings        Against       Hahnfeld,

2013 WI 14, ¶44, 345 Wis. 2d 462, 826 N.W.2d 47.                                   A referee's

conclusions   of       law     are        reviewed    de    novo.       Id.         This   court
determines         discipline               independent            of       the       referee's

recommendation, based upon the particular facts of each case.

Id.     And   although              the     court     may        consider     the     referee's

recommendation         as      to     discipline,           it     is   not        entitled   to

conclusive    or       great    weight.         In     re    Disciplinary           Proceedings

Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.

      ¶40   The    OLR       appeals        neither    the        referee's       findings    and

conclusions regarding the alleged counts of misconduct, nor her
recommendation for a public reprimand.                           The record here supports
                                               14
                                                                      No.     2012AP2350-D

the   referee's    findings       and      conclusions       and    the     referee    has

substantiated her recommendation for a public reprimand.                               The

court    therefore      accepts      and     adopts    the    referee's        findings,

conclusions, and recommendation for a public reprimand.

      ¶41   This     brings     us      to    the     disputed      aspects      of    the

referee's report.         The OLR challenges on appeal both of the

referee's restitution recommendations:                  (1) the referee rejected

the     OLR's   claim    that     the      grievant,     R.W.,       is     entitled    to

$10,809.57 in restitution, and (2) she recommends that the court

award R.W. $1,000 in restitution.                   The OLR contends that the

referee is wrong on both counts.

      ¶42   The referee was not persuaded that Attorney Steffes

should be ordered to reimburse R.W. $10,809.57 for his alleged

losses on the construction project.                 The referee was troubled by

what she deemed inconclusive evidence of whether R.W. was ever

compensated for his losses in another venue.                       She found that the

evidence at the hearing was not clear as to whether R.W. was

paid the settlement amount.                She observed further that "[w]hile
it is undisputed that [R.W.] did not get the information and

accounting to which he was entitled, it is less clear whether he

suffered a financial loss as a result."                 The referee stated:

      [R.W.] testified at the hearing that his lawsuit
      against respondent's son ended in a settlement.
      Later, [G.S.] filed bankruptcy, listing [R.W.] as a
      creditor.   Perhaps [R.W.] never received the amount
      for which he and his attorney decided to settle the
      Dodge County lawsuit.   If that is so, however, it is
      not clear from the evidence presented.

                                             15
                                                                       No.    2012AP2350-D

       ¶43   The referee further stated:

            The   inadequacy   of   the   evidence   makes  a
       restitution award problematic.   It is not clear that
       the trust account machinations made [R.W.'s] financial
       circumstances worse than they would have been had
       there been no trust account violations.     At bottom,
       [R.W.] had a claim against [G.S.] which he settled and
       then may have lost to the bankruptcy, though that
       conclusion is far from clear.
       ¶44   The OLR challenges the referee’s finding, noting that

"Steffes conceded at trial that he had no reason to doubt the

attribution of expenses to the [R.W.] project set forth on trust

account records OLR subpoenaed from Steffes' bank, which totaled

$16,418.93.        Accordingly, [R.W.] is due restitution from Steffes

of $10,809.57 ($27,228.50 - $16,418.93)."

       ¶45   While    Attorney      Steffes       himself      did    not    necessarily

dispute the OLR's accounting, the referee noted that Attorney

Steffes reported that some of his law firm's computer records

had been lost, and with them details of client trust account

transactions       during     the    relevant      period      of     time.        Without

specifically        stating    that     she      accepted        Attorney         Steffes's

explanation for his inability to account for the trust account

discrepancy, the referee did observe that the hearing in this

case   occurred      nearly    a    full       decade    after      some     of    the    key

underlying    events     occurred,         a    fact    that   likely        impeded      any

defense Attorney Steffes might offer.

       ¶46   The    referee    was    also      influenced       by    the    fact       that

although Attorney Steffes was utterly lacking in understanding
of the requirements of the trust account rules, his conduct did

                                           16
                                                                         No.    2012AP2350-D

not   amount     to    fraud       and    she     was    mindful    that       he   did    not

personally benefit from the misconduct.

      ¶47   The OLR maintains that Attorney Steffes should have to

reimburse R.W.        The OLR contends:

           Once [R.W.'s] funds were deposited into Steffes'
      law firm trust account, Steffes became obligated to
      protect them.   SCR 20:1.15(d).    Steffes' failure to
      properly safekeep [R.W.'s] project funds subjects
      Steffes to a claim for restitution to the extent he
      did not properly protect those funds, independent of
      any compromise settlement [R.W.] reached regarding
      those same funds with another party (here, [G.S.])
      that may have been subsequently discharged in that
      other party's bankruptcy or even fully satisfied.
      ¶48   The OLR cites SCR 20:1.15(d) for the proposition that

Attorney    Steffes          was    obligated           to    protect    R.W.'s        funds.

SCR 20:1.15(d) (as in effect prior to July 1, 2004, when the

funds were placed in Attorney Steffes's trust account) provided:

           When, in the representation, a lawyer is in
      possession of property, in which both the lawyer and
      another person claim interests, the property shall be
      treated by the lawyer as trust property until there is
      an accounting and severance of their interests. If a
      dispute arises concerning their respective interests,
      the portion in dispute shall continue to be treated as
      trust property until the dispute is resolved.
      ¶49   The       OLR     argues        "[t]hat          [R.W.’s]    claim      endures

independently         from    any        claims    or        potential   claims        [R.W.]

asserted    or    could       have       asserted       against     [G.S.]      that      were

subsequently compromised and/or discharged in bankruptcy."                                 The

OLR   chides     Attorney      Steffes       for    "his       failure    to    appreciate

[R.W.'s] financial loss."

                                             17
                                                                                      No.     2012AP2350-D

       ¶50     There is no question that Attorney Steffes violated

the trust account rules by allowing his son to use his trust

account      as     a     clearing       house       for    his      construction              business.

However, we are not convinced that this ethical failure per se

obligates         Attorney        Steffes       to       reimburse      his           son's       business

client,      R.W.,        for    the     loss       R.W.     incurred            in     his       business

dealings with G.S. and Steffes Construction.                                 R.W. had a remedy

for that loss and indeed availed himself of that remedy:                                               R.W.

sought       and    obtained        a     civil          monetary      judgment             for    $9,500

directly from Steffes Construction.

       ¶51     We    reiterate          that    Attorney         Steffes         should        not     have

permitted his son to deposit funds into Attorney Steffes's trust

account.          This conduct violated the ethics rules and warrants

discipline.             However, we are not persuaded under the facts of

this    case       that    the    rules        go    so    far    as    to       require          Attorney

Steffes to essentially serve as guarantor for funds of his son's

business client, R.W.                While the court can appreciate that R.W.

is aggrieved because he lost over $10,000 due to G.S.'s failure
to complete a construction project, it remains true that R.W.

obtained a judgment against G.S. in civil court.

       ¶52     As       such,      the     court          agrees       with           the      referee's

conclusion         that     the    facts        of       this    case       do    not        adequately

establish a basis for granting the full restitution award to

R.W.    simply       because       the    construction               fees    improperly            passed

through Attorney Steffes's trust account.                                    We thus deny the

OLR's    request          for    full    restitution            to    the    grievant             in   this
matter.
                                                    18
                                                                        No.     2012AP2350-D

      ¶53    The referee then proposed a $1,000 restitution award

to R.W.      She said that, "[b]ecause [R.W.] performed a service in

filing his grievance and bringing to light the inadequacies of

the trust account recordkeeping of respondent's law firm, some

payment to [R.W.] may be justified."                     The referee explained that

she   made       this    recommendation       because        the     evidence     did    not

clearly     prove       his    entitlement    to     a     greater    award,     but    some

payment to him nonetheless seems "fair and equitable" and would

be at least some recompense for Attorney Steffes's failure to

provide a timely accounting of trust account funds.

      ¶54    The OLR opposes this recommendation.                     It characterizes

the proposed $1,000 as a "whistleblower-type" payment.                             The OLR

asserts:

      [D]espite the good intentions of the referee to employ
      a whistleblower-type payment mechanism to at least
      nominally compensate [R.W.] when she believed the
      record failed to support restitution, there is no
      authority to award payments to a grievant in attorney
      disciplinary matters other than in the form of
      restitution to compensate for an actual loss.      OLR
      submits that there is no factual or legal basis for
      such an award.
      ¶55    The       court    agrees   with      the     OLR’s    assessment     of    the

$1,000    recommended          restitution        award.      The     OLR's    oft-stated

policy      is    to     seek     restitution        only     under     the      following

circumstances:          (1) there is a reasonably ascertainable amount;

(2) the funds to be restored were in the respondent lawyer's

direct control; (3) the funds to be restored do not constitute

incidental or consequential damages; and (4) the grievant's or
respondent's rights in a collateral proceeding will not likely

                                             19
                                                               No.   2012AP2350-D

be prejudiced.       The proposed $1,000 award "for his trouble" is

not based on any specific loss and is more akin to incidental

damages.       The court therefore rejects the $1,000 restitution

award recommended by the referee.

    ¶56       The OLR also challenges the referee's proposal that

the OLR monitor Attorney Steffes's law firm trust account for

two years.

    ¶57       The OLR agrees with the referee's recommendation that

Attorney Steffes attend a trust account rules and compliance

course, as well as the need for some monitoring of Attorney

Steffes's trust account.           However, the OLR suggests that six

months   is    a   sufficient   length     of    time    to   monitor   Attorney

Steffes's trust account compliance.             The OLR explains:

         Without question, Steffes negligently supervised
    and managed his law firm trust account. In doing so,
    he displayed either an ignorance of and/or unabashed
    disregard for important trust account rules.      That
    said, Steffes admits that he now possesses a far
    greater understanding of his trust account obligations
    than he did during the time of the violations charged
    in this matter[.]
    ¶58       The OLR adds that it cannot foresee that an additional

18 months of monitoring beyond the six it proposes here would

meaningfully       improve   the   likelihood       of    Attorney      Steffes's

compliance.

    ¶59       The court finds the OLR's argument reasonable.                 The

court therefore orders Attorney Steffes to:                    (a) attend the

OLR's next available trust account seminar and pay the related

                                      20
                                                                       No.     2012AP2350-D

participation fees, and (b) provide his trust account records to

the OLR every two months for a period of six months.

     ¶60    Finally,       Attorney       Steffes       does    not    challenge        the

referee’s recommendation that he be required to pay the costs of

the underlying disciplinary proceeding.                   In his appellate brief,

however, he asks to be excused from the costs of the appeal.9                            As

the OLR, not Attorney Steffes, pursued this appeal and did not

prevail    on    its     primary   issue     pertaining        to     restitution,      we

impose upon the respondent the costs of this proceeding, less

the appeal costs, a balance of $7,805.09.

     ¶61    IT    IS     ORDERED   that    Richard       W.    Steffes       is    publicly

reprimanded for his professional misconduct.

     ¶62    IT IS FURTHER ORDERED that within 60 days of the date

of this order, Richard W. Steffes shall pay to the Office of

Lawyer Regulation $7,805.09, reflecting the full costs of this

proceeding ($9,676.51) less the costs of the appeal ($1,871.42).

     ¶63    IT IS FURTHER ORDERED that Richard W. Steffes shall

attend an Office of Lawyer Regulation trust account seminar at
the earliest possible opportunity following the date of this

opinion, and shall pay the related participation fees.

     ¶64    IT IS FURTHER ORDERED that Richard W. Steffes shall

provide    his    trust     account   records       to    the     Office       of   Lawyer

Regulation       every    two   months     over     a    period       of     six    months,

     9
       The OLR's amended supplemental statement of costs, filed
April 10, 2014, shows total costs of $9,676.51, with $1,871.42
of the total cost contributable to appellate fees and costs.

                                           21
                                                  No.     2012AP2350-D

commencing upon the first deposit or disbursement of funds from

his trust account following the date of this opinion.

    ¶65   IT IS FURTHER ORDERED that the director of the Office

of Lawyer Regulation shall advise the court if there has not

been full compliance with all conditions of this order.

                               22
    No.   2012AP2350-D

1