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ATTORNEY disciplinary
proceeding. Attorney's license
suspended.
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1. PER CURIAM. We review the
recommendation of the referee
that the license of Attorney Karl Grunewald
be suspended for one year as discipline for
professional misconduct. That misconduct
consisted of the following: (1) failing to
act with reasonable diligence and promptness
in client matters, (2) failing to keep
clients informed of the status of those
matters, comply with their reasonable
requests for information, and explain
matters to them to the extent reasonably
necessary to permit them to make informed
decisions regarding the representation, (3)
revealing information relating to clients'
representation without their consent, (4)
making misrepresentations to clients, (5)
failing to return client property upon
termination of representation, and (6)
failing to communicate to clients the basis
of his fee. The referee also recommended
that Attorney Grunewald be required to make
restitution to the clients harmed by his
misconduct and pay the costs of this
proceeding.
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2. We determine that Attorney Grunewald's
professional misconduct established in this
proceeding warrants the suspension of his
license to practice law for one year. This
is the third time he will have been
disciplined for misconduct. By his handling
of client matters considered in the instant
proceeding, as well as the nature of the
misconduct itself, Attorney Grunewald has
continued to demonstrate an inability or
unwillingness to meet his professional
responsibilities to those who retain him to
represent them and their interests and that
serious discipline is necessary to protect
other clients, the public, and the legal
system from his continued failure to meet
those responsibilities.
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3. Attorney Grunewald was admitted to the
practice of law in Wisconsin in 1976 and
practices in Milwaukee. He has been
disciplined twice previously for
professional misconduct. The court suspended
his license for six months in 1988 for
neglect of four legal matters and failure to
cooperate with the Board of Attorneys
Professional Responsibility (Board) in its
investigation. Disciplinary Proceedings
Against Gruenwald, 141 Wis. 2d 691, 416
N.W.2d 289. In December 1988, he consented
to a private reprimand from the Board for
his failure to file state and federal income
tax returns. The referee in the instant
proceeding, Attorney Stanley Hack, made
findings of fact based on the Board's
complaint, as Attorney Grunewald did not
file an answer or otherwise appear in the
proceeding.
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4. In 1990, Attorney Grunewald was retained
to
pursue a claim regarding the restoration of
an automobile, for which the clients gave
him money to pay the fee for a jury trial.
Attorney Grunewald did not file that lawsuit
until 1992, and over the next five years the
clients received little or no information
from him in response to their numerous
inquiries of him about its status. When he
failed to follow the court's instructions to
draft a pretrial order, the judge removed
the case from the trial calendar and said it
would be replaced on the calendar when the
parties evidenced readiness for trial.
5. Attorney Grunewald billed the clients
for
a number of services asserted to have been
performed from mid-1990 to November 1992,
but there was no further action in the
clients' matter until early 1998. At some
time prior to late 1997, Attorney Grunewald
discussed the lawsuit with another attorney
and provided her documents from the clients'
file without their knowledge or consent. He
misrepresented to that attorney that he had
contacted the clients to obtain permission
to transfer the matter to her.
6. When that attorney appeared at
Attorney
Grunewald's request on behalf of the clients
at a hearing in October 1997 on a motion to
dismiss, without a substitution of counsel
having been obtained, the court sanctioned
the clients for Attorney Grunewald's failure
to prosecute the lawsuit by precluding a
jury trial, barring witnesses other than the
parties themselves, and ordering the clients
to pay the defendant's attorney fees. The
clients were not present at the hearing and
did not learn of the motion, the hearing, or
the purported substitution of counsel until
two weeks later, when Attorney Grunewald
told them he was reducing his law practice
and gave them an envelope with the name of
an attorney who could handle their lawsuit.
It was then the clients learned that the
court had sanctioned them for Attorney
Grunewald's failure to prosecute the action.
7. Attorney Grunewald at first told the
clients he would pay the defendant's
attorney fees, but when he learned they were
approximately $3400, he said that they were
too high and agreed to pay only $1000.
However, he never paid the clients any
amount. The lawsuit ultimately was resolved,
but the resolution reduced the clients'
recovery by $3000 - the amount agreed upon
as the defendant's attorney fees.
8. Attorney Grunewald and his clients
never
agreed to a method by which his fees for
representing them in their lawsuit would be
calculated. After the clients filed a
grievance with the Board in August 1998, he
sent them 10 separate bills, all dated
October 6, 1998, covering a variety of
matters and listing services dating back to
1990. None of those bills, which totaled
$27,300, previously had been sent to the
clients, and Attorney Grunewald never had
requested payment of them previously.
9. Attorney Grunewald had been preparing
income tax returns for those same clients
since 1989, and they retained him to
complete their 1994 and 1995 state and
federal personal and corporate returns.
Attorney Grunewald did not respond to most
of their numerous telephone and written
requests for information regarding the
status of those tax returns. At times, he
told them that they were almost finished and
could be picked up or that he would be
sending them to the clients. However, he
never provided completed tax returns, nor
did he complete those returns, despite many
promises to do so and excuses for not doing
so.
10. The clients hired a certified public
accountant in November 1997 to prepare those
returns, and they and the accountant made
numerous requests to Attorney Grunewald for
his file in the matter. Notwithstanding his
representation to the accountant in early
1998 that he had the returns almost
completed, when he delivered the file
September 8, 1998, it contained no returns
that were even partially completed. As a
result of Attorney Grunewald's failure to
complete the returns timely, the clients
were penalized $9799 by the federal and
state tax authorities.
11. Based on the foregoing facts, the
referee
concluded that Attorney Grunewald engaged in
the following professional misconduct:
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(a) His doing almost nothing on the
clients' claim and the lawsuit he commenced
on their behalf for five years constituted a
failure to act with reasonable diligence and
promptness, in violation of SCR 20:1.3.
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(b) His failure to provide the clients
with information regarding that lawsuit and
respond to their letters and phone calls
violated SCR 20:1.4(a).
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(c) His failure to keep the clients
informed about his fees to represent them in
the matter, the progress of the lawsuit,
substitution of counsel in it, motions, and
the court's sanction constituted a failure
to explain the matter to the extent
reasonably necessary to permit the clients
to make informed decisions regarding the
representation, in violation of SCR 20:1.4
(b).
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(d) Providing information regarding the
representation to other counsel without the
knowledge or consent of his clients violated
SCR 20:1.6(a).
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(e) His misrepresentations to successor
counsel about having secured the clients'
consent to substitution and making
misrepresentations to the clients about the
status of the lawsuit violated SCR 20:8.4
(c).
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(f) His failure to complete the clients'
income tax returns violated SCR 20:1.3.
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(g) His failure to answer letters and
phone calls from the clients and their
accountant regarding the tax returns
violated SCR 20:1.4(a).
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(h) His misrepresentations to the clients
regarding the status of the preparation and
completion of the tax returns violated SCR
20:8.4(c).
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(i) His failure to return the income tax
information and files to the clients upon
their request violated SCR 20:1.16(d).
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(j) His failure to communicate to the
clients the basis for his fees in advance of
performing services violated SCR 20:1.5(b).
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12. As discipline for that misconduct, the
referee recommended a one-year license
suspension, as the Board had proposed. He
recommended further that Attorney Grunewald
be required to make restitution in specified
amounts to the clients harmed by his
misconduct and that he be required to pay
the costs of this proceeding.
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13. IT IS ORDERED that the license of Karl
Grunewald to practice law in Wisconsin is
suspended for one year, commencing November
30, 2000, as discipline for professional
misconduct.
14. IT IS FURTHER ORDERED that within 60
days of the date of this order, Karl
Grunewald make restitution to his former
clients as specified in the report of the
referee filed in this proceeding.
15. IT IS FURTHER ORDERED that within 60
days of the date of this order, Karl
Grunewald pay to the Office of Lawyer
Regulation the costs of this proceeding,
provided that if the costs are not paid
within the time specified and absent a
showing to this court of his inability to
pay the costs within that time, the license
of Karl Grunewald to practice law in
Wisconsin shall remain suspended until
further order of the court.
16. IT IS FURTHER ORDERED that Karl
Grunewald comply with the provisions of SCR
22.26 concerning the duties of a person
whose license to practice law in Wisconsin
has been suspended.
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