By failing to maintain and keep a transaction register and client ledgers that showed a consistent and accurate running balance and the source of each deposit and the purpose of each disbursement, and failing to maintain duplicate deposit slips, Theobald violated former SCR 20:1.15(e), effective through June 30, 2004, which require a lawyer to maintain such trust account records.

On October 27, 2003, a woman hired Theobald as successor counsel to represent her regarding the custody and placement of her minor grandson, (“the child”), who had lived with her after his mother died. The child had not seen his father since about 1994.

The client and her former husband had filed proceedings seeking custody and primary placement of the child and were initially represented by counsel other than Ms. Theobald. The client’s former husband subsequently decided to proceed without counsel.) The father contested the grandparents’ efforts regarding custody and placement of the child, whom the father began visiting again in October 2003.

A custody evaluator had initially recommended that Theobald’s client receive primary placement of the child, with the father to receive visitation. At a pretrial hearing in February, 2004, the court temporarily awarded primary placement of the child to Theobald’s client and for the father to begin periods of alternate placement. The court also issued orders for an updated custody study and for a final pretrial and trial to occur in June, 2004.

Prior to the final pretrial, the evaluator filed an updated report, recommending that the father have primary placement and that Theobald’s client would maintain a significant relationship with the child. During the final pretrial on June 16, 2004, the child’s guardian ad litem told the court that he supported the recommendation for the father to receive primary placement. The court told Theobald and her client that chances were extremely remote that the court would disagree with the recommendations in the custody study and those made by guardian ad litem. The court ordered Theobald and her client to meet with the guardian ad litem and the father’s counsel to try to reach a stipulation.

Theobald reached an oral agreement with the guardian ad litem and the father’s counsel that reflected the recommendations of the updated custody study, whereby the father would have primary placement and Theobald’s client would have scheduled visitation. Theobald was to reduce the agreement to writing and send it to opposing counsel. However, Theobald did not send a stipulation to opposing counsel until July 21, 2004.

By letter dated June 17, 2004, Theobald told the court that the parties had reached an agreement and were reducing it to writing. Theobald asked the court to remove the trial from its calendar and if any issues were unresolved, that the parties be allowed to return to court at a later date.

Theobald told OLR that her client subsequently failed to follow her repeated instructions to contact the father to discuss how the child would make the transition to the father’s home. Theobald said the attorneys did not discuss the transition issue on June 16, 2004 and that it was a significant omission in the oral agreement. However, the client told OLR that Ms. Theobald never told her to discuss the transition issue with the father.

In a letter dated July 12, 2004, the father’s counsel informed the court that Theobald had agreed to draft a stipulation and that counsel had tried to contact Theobald regarding the status of the stipulation and had received no response. The father’s counsel said that Theobald’s client was refusing to allow the father to have primary placement, as stipulated, and that the father wanted the child to have time to get acclimated before school began in early September. The father’s counsel said it was in the child’s best interests to have an immediate hearing, in order to place critical portions of the agreement on the record, so that transfer of placement could occur immediately. A copy of the letter was sent to Theobald.

During the weeks of Monday, July 12, 2004 and Monday, July 19, 2004, Ms. Theobald was out of her office on vacation. On Friday, July 16, 2004, the court issued a notice, scheduling a hearing for Thursday, July 22, 2004 and stating it was mandatory for all parties to appear. Theobald’s staff received the notice of hearing on Monday, July 19, 2004 and immediately informed the court that Theobald was out of town and asked that the hearing be rescheduled. The court refused to reschedule or to allow Theobald to appear by phone. Theobald’s staff notified Theobald and her client of the hearing.

On Tuesday, July 20, 2004, Ms. Theobald wrote to the court, noting her unavailability and objecting to the scheduling of the hearing on July 22, 2004. Theobald asked the court to reschedule or allow her to appear by phone. Theobald said she had tried without success to find another attorney to appear for her. Theobald said that she would appeal any ruling that was unfavorable to her or her client. Ms. Theobald said that neither party had contacted the other to discuss the transition of the child and that the fault for any concerns was passed around equally. Theobald said that her court schedule had prohibited her from completing the stipulation and that the other attorneys could have drafted it if they were concerned about the situation.

On Wednesday, July 21, 2004, Ms. Theobald faxed a proposed Stipulation and Order to the father’s counsel and to the guardian ad litem. Theobald also sent the document to her client and to the client’s former husband. Throughout the day on July 21, 2004, Theobald and opposing counsel discussed revisions to the proposed stipulation. Theobald asserts that by late afternoon on July 21, 2004, they had reached a complete agreement. (The father’s counsel disagrees.) Theobald says that the father’s counsel assured her that she would go to court the next morning and tell the judge that the matter was resolved. Theobald says that the father’s counsel subsequently drafted a revised stipulation and faxed it to Theobald’s office late on the night of July 21, 2004.

Also on July 21, 2004, Ms. Theobald sent a fax to the court, saying that she was enclosing the proposed stipulation and order that was being circulated to the parties, thereby negating the need for the hearing on July 22, 2004. Theobald said she believed that the issue of transitioning the child had been resolved. Theobald stated that she could not attend the July 22, 2004 hearing as she was out of town, and she asked the court to call her if the court had questions.

On July 21, 2004, Ms. Theobald told her client that the hearing was being removed from the court’s calendar and that the client did not need to appear in court on July 22, 2004.

On July 22, 2004, the court held the hearing, which was attended by the father, his counsel, the child’s grandfather, and the guardian ad litem. During the hearing, the court said that it had received a letter from the father’s counsel saying that the oral agreement was not being followed and that the written stipulation had not been submitted. The court said that Theobald had been contacted and was not around. The court said it scheduled the matter for hearing because it was concerned about the school year approaching. The court noted that Theobald and her client had failed to appear for the hearing. The court said that Theobald was publicly reprimanded in May 2004, for very similar conduct in four different client matters.

During the hearing on July 22, 2004, the guardian ad litem told the court that both he and the custody evaluator were recommending that primary placement be awarded to the father. The guardian ad litem told the court that “dueling stipulations” were being circulated by counsel and that they had not reached a firm agreement. At the close of the hearing, the court awarded the father sole legal custody and primary physical placement of the child, with transfer of placement to occur forthwith. The court also ordered that the child’s grandparents would have alternate physical placement at reasonable times. The court said it was basing its order on the recommendations of the guardian ad litem and custody evaluator and on the actions of Theobald and her client.

Ms. Theobald asserts that during the court hearing on July 22, 2004, the father’s counsel did not inform the court of their alleged agreement or counsel’s assurances to Theobald that neither Theobald’s appearance, nor her client’s was necessary. The father’s counsel told OLR, however, that she and Theobald had not reached an agreement at the time of the July 22, 2004 hearing.

On October 22, 2004, Theobald filed a notice of appeal in the District II Court of Appeals from the circuit court order entered on July 23, 2004. In the docketing statement, Theobald stated that the circuit court had held a hearing without adequate notice to all parties and then awarded custody and placement to the father without testimony.

Meanwhile, the client had filed a grievance with OLR. On November 5, 2004, OLR sent Ms. Theobald the written grievance materials received to that point, and asked her to provide a written response to the allegations of misconduct no later than November 29, 2004. Ms. Theobald’s response was to address specific issues identified by OLR staff. Theobald did not respond. On December 1, 2004, OLR sent a follow-up letter to Ms. Theobald by first class mail and by certified mail, stating that her response had to be postmarked no later than December 13, 2004. Theobald signed the return receipt for the certified letter on December 4, 2004.

On December 7, 2004, the Court of Appeals issued an order dismissing the appeal filed by Theobald for lack of jurisdiction, arising from Theobald’s failure to timely file the notice of appeal. The Court of Appeals’ order stated that the notice of appeal had to be filed within 90 days after entry of judgment, but Theobald’s notice of appeal was filed 91 days after entry of the July 23, 2004 order. The Court of Appeals noted that if a notice of appeal is not timely filed, the Court of Appeals lacked jurisdiction over the appeal, under Wis. Stat. Rule 809.10(1)(e). The Court of Appeals stated that the notice of appeal was not timely filed, and the court lacked jurisdiction over the appeal. The Court of Appeals’ order issued on December 7, 2004, indicates, in part, that the order was sent to Theobald.

On December 30, 2004, Theobald submitted a response to the grievance. Theobald said that from a practical point of view, she should have prepared a draft stipulation sooner, but from a legal point of view, there was nothing untimely about her preparation of the proposed stipulation. Theobald said that she sent the stipulation to opposing counsel approximately thirty- three days after they had reached the oral agreement on the matter. (OLR calculated that thirty-five days passed from June 16, 2004 to July 21, 2004.) Theobald said that there was no statutory time requirement and no time limit set by the court. Theobald said the greatest problem occurred when her client failed to contact the father to discuss the transitioning of the child to the father’s home.

After OLR provided written notice of the grievance investigation by letter dated November 5, 2004, which letter stated a response deadline of November 29, 2004, by failing to submit an initial written response until December 30, 2004 (following additional notice from OLR by letter dated December 1, 2004 sent by regular and certified mail), Ms. Theobald violated SCR 22.03(2), which states in relevant part, “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.” SCR 22.03 (2) is enforceable under the Rules of Professional Conduct via SCR 20:8.4(f), which states, “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.”

In a third unrelated matter, a man hired Theobald in 2001 to represent him in a pre- judgment paternity matter. There was no written fee agreement. The oral fee agreement called for the client to pay a $2,000.00 initial retainer, with billing at $150.00 per hour and any amounts beyond the retainer to be billed and kept current. When Theobald first became involved with the case, the client was with the United States military, stationed in Japan. During the representation, the client was transferred to Ft. Leonard Wood, Missouri, where he has been stationed since.

The case involved a custody dispute between the client and his ex-girlfriend, the mother of his daughter. In October 2002, the judge issued the original placement order, granting the ex-girlfriend primary physical placement of the daughter with partial placement to the client and his parents in Wisconsin. The client was very concerned with his daughter’s health and general well- being and he wanted primary physical placement of her.

Theobald informed the client that, pursuant to Wis. Stats. § 767.325, the placement order could not be changed for the initial two years unless the terms then in place were physically or emotionally harmful to the child, and that this was an extremely high standard to establish. Theobald told the client he would have to provide her with information to support such a motion. In Theobald’s opinion, the client did not provide information sufficient to meet the standard.

On June 10, 2003, the court issued an Order to Enforce Physical Placement Order and ordered the ex-girlfriend to pay $480.00 in costs and attorneys fees to the client within 180 days.

On September 30, 2003, the parties had a hearing on a contempt motion against the ex- girlfriend. According to the client, the court commissioner asked Theobald to prepare the contempt order and she responded, “I live to do orders.” Theobald did not file this order.

In August 2004, the client began attempting to contact Theobald about reopening the final judgment entered on October 24, 2002. The client still wanted to change the placement order. Theobald did not return the client’s calls until one occasion some time between September and November 2004, when the client spoke to Theobald on the telephone and Theobald indicated she was drafting the motion to modify placement. The client also attempted to contact Theobald by telephone in December 2004, but she did not return his calls.

By that point in time, beyond the two-year period, the standard for a change in placement had changed to “change in circumstances and best interest of the child.” While Theobald believed that at that point there was a possibility for greater placement, the client had not yet brought his account current. His account had a balance of $840 as of November 2004. Theobald stated, “I should have been direct with him rather than subtle and told him that I would file the motion when the bill was paid in full.”

On January 4, 2005, the client sent a typed letter to Theobald, which included a list of items that the client wanted her to address in court, including physical placement of his daughter. In this letter, the client stated, “I’m enclosing my payment of $400. The balance is [my ex-girlfriend]’s responsibility for motions she was found in contempt.” Theobald did not respond to this letter.

The client heard nothing from Theobald until approximately January 17, 2005, when the client called again and this time he was able to speak with Theobald. Though Theobald did not recall the specific date of the telephone call, she stated, “At some point in time we did have a conversation in which I admitted that I didn’t have the motion completed, however again raising the fee issue.”

Theobald explained that it would have been hard to show modified placement would be in the best interest of the child because the client was in the military and he could be sent anywhere. Nevertheless, the client wanted to pursue the matter. On February 15, 2005, the client sent Theobald a letter in which he expressed his frustration with the court system and his desire to return to court to get physical placement of his daughter.

On March 11, 2005, the client achieved telephone contact with Theobald, who said she was not able to talk with the client at that time, but that she would call him the next day. She did not do so.

On April 2, 2005, the client sent Theobald a letter in which he detailed his conversations with Theobald on January 17, 2005 and March 11, 2005. In this letter he further indicated that Theobald had not been returning his telephone calls for months, except for the January 2005 conversation in which Theobald acknowledged she had not completed the motion. In his April 2, 2005 letter, the client also referred to two letters, dated January 4 and February 15, 2005, and numerous emails he sent, to which Theobald did not respond. Theobald did not respond to the client’s April 2, 2005 letter.

Theobald sent the client regular billing statements and, according to Theobald, she reminded him of past due balances on his account during their telephone conversations. Though Theobald raised the fee issue with the client on more than one occasion, she did not inform him that she would not complete the motion unless he paid his account in full.

While the client did not always timely pay Theobald’s fees, he did pay nearly all of the balance due. The client carried an unpaid balance of $840.00 from August 25, 2004 until January 12, 2005. There is still an outstanding balance of $340.00 that the client did not pay. Nevertheless, according to the billing statements that Theobald provided, between June 2002 and January 2005, the client paid Theobald $14,600 in fees and costs for the representation.

Apparently, the client believed that, because his ex-girlfriend had been ordered to pay $480.00 in costs and attorneys fees in the June 10, 2003 contempt order, he was relieved of his obligation to pay the balance that he owed Theobald. In one undated, handwritten letter to Theobald, the client stated, “I believe the rest of the balance is [my ex-girlfriend]’s responsibility. My portion is paid in full. When can I get [my daughter]?” Theobald did not explain to the client that despite the fact that the court had ordered his ex- girlfriend to pay him $480.00 in costs and attorneys fees, the client was still obligated to pay his outstanding bill to Theobald.

The client sent three additional undated, handwritten letters to Theobald in which he requested that Theobald keep in contact with him. In a fifth undated, handwritten letter to Theobald, the client indicated he would like to file for permanent placement of his daughter.

Aside from billing statements, the only correspondence from Theobald to the client were two letters: one dated December 3, 2002 regarding counseling and possibly returning to court on a contempt motion because of the ex-girlfriend’s failure to follow the court order; and another dated March 27, 2003 regarding a change in a hearing date. The client provided 21 emails sent to Theobald from his mother’s email account, dating from January 2, 2003 to August 22, 2004. These emails detailed concerns about his daughter’s health and well-being, as well as his and his parents’ ability to visit and speak with her. Theobald did not respond to these emails.

Though Theobald explained that she did not respond to these emails because the messages were from the client’s mother and that she was not Theobald’s client, the client indicated that he had informed Theobald that the emails were from him and that he sent them from his mother’s computer while visiting Wisconsin. Furthermore, Theobald filed several documents with the court indicating that she represented both the client and his parents, with respect to visitation rights for them as paternal grandparents. Four court orders indicate that Theobald appeared on behalf of the client’s parents.

Theobald has been the subject of prior discipline, having been publicly reprimanded by the Wisconsin Supreme Court in May 2004 for failing to diligently file a bankruptcy petition, failing to keep a client informed about the status of a bankruptcy petition, and failing to respond to inquiries by the Office of Lawyer Regulation’s predecessor, the Board of Attorneys Professional Responsibility.