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Attorney John Anthony Ward, 54, is licensed
to practice law in both Wisconsin and
Illinois. He currently practices in
Kenosha, Wisconsin. This reprimand is based
on the following conduct relating to three
grievance matters and an OLR Inquiry.
With respect to the first grievance, on
March 31, 2004, a man hired Atty. Ward to
reduce and ultimately terminate maintenance
payments awarded to his ex-wife by an
Illinois court. The client entered into a
written fee agreement with Atty. Ward that
included a “non-refundable minimum fee” of
$3,000. The client subsequently gave Atty.
Ward $290 for filing fees, and those funds
were deposited in Ward’s trust account.
Several months later, Atty. Ward filed a
motion to terminate maintenance. A filing
fee was not required, and after deducting
service fees there was a balance of $255 in
trust for the client. While Atty. Ward
considered the representation to have ended
following a motion hearing on January 7,
2005, he did not refund the $255 trust
account balance at that time.
After performing some additional work
relating to the client’s matter in the fall
of 2005, Atty. Ward billed him an additional
$660 in October 2005. When the client
questioned the bill, Atty. Ward waived the
fees but did not account for or refund the
$255 at that point. Atty. Ward ultimately
refunded the $255 in October 2007 after the
client filed a grievance.
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By failing to return the unexpended $255 in
costs to the client either at the conclusion
of the representation in January 2005 or
when he sent the final bill in October of
2005, Atty. Ward violated SCR 20:1.15(d)(1)
(effective July 1, 2004), which requires
prompt delivery of any funds that a client
is entitled to receive, and SCR 20:1.16(d)
(effective through June 30, 2007), which
requires the surrender of property to which
the client is entitled upon the termination
of representation.
With respect to the second grievance, a
man
hired Atty. Ward to represent him regarding
visitation and custody issues. On July 30,
2008, the client gave Atty. Ward a $3,500
advanced fee and signed a fee agreement,
allowing the advance to be deposited into
Ward’s business account, subject to the
requirements of SCR 20:1.15(b)(4m).
After several attempts to resolve the issues
between Ward’s client and the client’s wife,
the parties reached an agreement, which was
approved by the court on January 29, 2009.
Atty. Ward mailed an invoice to the client
on March 20, 2009, along with a copy of the
fee agreement, directing the client’s
attention to the SCR 20:1.15(b)(4m)-related
language. At the conclusion of the
representation, $425 of the fee had not been
earned by the provision of services at Atty.
Ward’s hourly rate. The $425 and was
described in the invoice as a “minimum
charge adjustment for minimum charge for
completed case.” It was not refunded, and
the client filed a grievance regarding the
matter on April 20, 2009.
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By failing to refund the unearned $425, Ward
violated SCR 20:1.16(d), which requires a
lawyer to refund of any advance payment of
fee or expense that has not been earned upon
termination of representation.
With respect to the third grievance, on
November 20, 2007, a man hired Atty. Ward to
represent him regarding a potential criminal
charge with workplace ramifications. Both
the
employer and a district attorney’s office
were investigating the allegations at the
time the client signed an hourly fee
agreement and paid Atty. Ward a $5,000 fee
that was identified as
being “nonrefundable.”
Atty. Ward did not deposit the $5,000 fee
into his trust account, and he did not
provide the client with the information that
lawyers must provide to clients when they
will not be holding a clients’ fee advances
in trust. Atty. Ward treated the fee as a
traditional retainer. Several days after
the client paid the $5,000 fee, his employer
decided not to pursue work-related charges
against him. Based upon Atty. Ward’s
subsequent itemization of services in the
matter, his legal work totaled approximately
$700 at that point. Criminal charges were
never filed against the client.
On October 7, 2009, the client filed a
grievance with OLR, alleging that Atty. Ward
had failed to return unearned fees despite
requests for such refunds in November 2007
and July 2008. Atty. Ward performed
additional services for the client in 2009
in connection with a potential civil rights
claim and deducted fees for those services
from the $5,000 paid in 2007.
Four days after being notified of the
grievance, Atty. Ward provided his client
with an itemization of his services, along
with information relating to the SCR 20:1.15
(b)(4m) alternative to holding advanced fees
in trust. The itemization indicated that
there was a balance of $1,925 that could not
be attributed to any particular services.
Approximately one month later, the client
agreed to and received a $2,500 refund.
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By failing to deposit a $5,000 fee advance
to his trust account, and depositing it to
his business account without complying with
the alternative fee protection provisions of
SCR 20:1.15(b)(4m), Atty. Ward violated SCR
20:1.15(b)(4), which requires lawyers to
hold unearned fees in trust until earned by
the lawyer unless the lawyer complies with
the requirements of SCR 20:1.15(b)(4m).
The fourth and final matter relates to
OLR’s
review of Atty. Ward’s trust account
management and recordkeeping. From 1999
to
date, Atty. Ward has utilized a total of
three IOLTA trust accounts in his various
practice settings. Throughout those years,
he used computer software to keep his
records and employed accrual, rather than
cash basis accounting principles.
Consequently, a positive balance in his
trust account records reflects an overdraft
in the trust account while a negative
balance in his records reflects a positive
balance in the trust account. Beginning in
2002, Atty. Ward became primarily
responsible for managing the trust
accounts. He subsequently employed a series
of accountants to assist him.
At some point, the transaction registers and
client ledgers for two of the trust accounts
were combined into a single set of records.
It is unclear whether the funds in those two
accounts were actually combined at that
time. Atty. Ward’s transaction register
reflects that there was an $11,295.76
balance in Trust Account #1 on August 16,
2000, when $7,564.79 of that amount was
transferred to Trust Account #2. Ward’s
records do not identify the clients to whom
the transferred funds belonged. Trust
Account #1 was subsequently closed.
Atty. Ward acknowledges that his general
ledger, i.e., transaction register, “is not
accurate in some respects.” This is due
to “entries that were made and should not
have been made, data entry errors and
possibly entries that were not made, but
should have been made.” Some of the errors
may be attributable to loss of data due to
computer failures.
Atty. Ward’s client ledgers reflect delays
in disbursing funds in 30 separate matters.
Those delays ranged from two years to over
six years.
While Atty. Ward’s trust accounts were
reconciled on a sporadic basis, the
reconciliations were deficient in the
following respects:
• A listing of individual client
balances and a totaling of those balances
was not included;
• The transaction register balances
identified in the monthly reconciliations
did not match the balances in the actual
registers. (For example, the July 2007
reconciliation showed a register balance of
$50,984.07 when the balance that appeared in
the register was actually
$26,414.41.);
• The reconciliations included
numerous stale transactions that had not
cleared or been addressed. (For example,
the November 2007 reconciliation included 18
checks totaling $4,668.74 that had not
cleared between December 2000 and June
2006. That reconciliation also included 17
deposits totaling $29,424.24 that had not
been made between October 2002 and July
2007.)
By late 2005, Atty. Ward recognized that
there were serious problems with his trust
account records. Based upon “his personal
knowledge and recollection of the client
accounts and the unreimbursed fees and
expenses that were owed to the business
account,” Ward concluded that he was
entitled to receive $15,511.30 that had been
sitting in his trust account for an extended
period of time. He further determined that
he had disbursed $10,432.92 more than he was
holding in trust in connection with 68 other
matters.
In order to address these issues, Atty. Ward
disbursed a $5,078.38 check to his firm (No.
2066) and recorded that disbursement in his
records as relating to 223 separate client
matters. With respect to the clients who had
negative ledger balances, Check No. 2066 was
identified as a deposit. In the client
matters where funds had been undistributed
for years, Check No. 2066 was identified as
a disbursement. Atty. Ward did this in lieu
of disbursing $15,511.30 to his firm and
then depositing $10,432.92 to the trust
account.
In 2008, after OLR asked Atty. Ward to
produce various records, he made another
attempt to address ongoing problems in his
client ledgers. In July 2008, a series of
transactions totaling $3,139.71 were entered
in the register and client ledgers. Those
transactions included 16 deposits totaling
$3,139.71 and 18 disbursements totaling the
same amount.
OLR’s review of Atty. Ward’s trust account
records identified numerous irregularities
and violations. The amounts involved in
individual matters ranged from dollars to
thousands of dollars. The examples that
follow are illustrative of the problems that
were discovered:
Atty. Ward represented a man and his
business in defense of a complaint filed
with the Department of Workforce
Development. Ward deposited the “retainer
fee” in that matter to his business account
rather than his trust account. In January
2003, Atty. Ward disbursed a $3,600 refund
to the client. As there were no funds in
the account belonging to that client, funds
belonging to other clients or third parties
were used to make that disbursement. This
error was not discovered and addressed until
December 2005. At that time, Atty. Ward
added a $3,600 credit to the client’s ledger
as one of the 223 transactions included in
Trust Account Check No. 2066.
In the second matter, Atty. Ward represented
another man regarding three legal matters, a
criminal matter, a CHIPS matter and a
divorce. In December 2005, Atty. Ward
disbursed $800 from his trust account
relating to one of those matters when there
were no funds in trust belonging to the
client. Three months later, that shortfall
was covered by a $5,000 deposit of funds
belonging to the client. Four months after
that, Atty. Ward disbursed $2,500 from trust
on behalf of the client, overdrawing that
client’s balance at the time by $2,250. In
October 2006, a $377 deposit relating to the
client was recorded in the trust account’s
transaction register and voided. Atty.
Ward’s reconciliation reports identify this
transaction as an “uncleared” deposit of
$377. Atty. Ward simultaneously disbursed a
$377 check relating to one of the client’s
matters.
In late July 2007, $8,625 was deposited to
the trust account for the client, restoring
that ledger to a positive balance of
$5,998. One month later, there was a
$50,000 deposit to the trust account from an
assignment of bond money for legal fees.
That same day, Atty. Ward disbursed
$42,303.44 in fees to his firm relating to
the criminal matter, along with several
additional checks, leaving a balance of
$6,805.39 in trust.
In September 2007, Atty. Ward disbursed
attorney fees and costs from the trust
account relating to the client’s divorce,
thereby reducing his balance to $4,809.39.
Atty. Ward simultaneously refunded $7,672.39
to the client’s mother, when she requested a
refund of monies she advanced. This led to
a negative balance of $2,863 in the client’s
ledger. Atty. Ward determined the amount of
the refund by reviewing a software report
that identified the client’s balance as
$7,702.39.
Atty. Ward disbursed funds from his trust
account in many other clients’ matters when
he was holding either insufficient funds in
trust to cover those disbursements or no
funds whatsoever. The length of time that
the individual client accounts remained
overdrawn ranged from a week to over three
years.
In a third matter, in late December 2005, a
$4,500 personal injury settlement was
deposited to Atty. Ward’s trust account for
a married couple. Atty. Ward immediately
disbursed all but $500 of the settlement.
That $500 balance was still in trust and
undistributed 2½ years later. In addition
to this matter, OLR identified 17 other
cases in which Atty. Ward inexplicably
failed to distribute funds from his trust
account for extended periods of time. He
has included this couple in a listing of
clients to whom refunds are to be made.
In the fourth matter, Atty. Ward represented
a woman in a paternity case. His client
ledgers for Trust Accounts #1 and #2
included two deposits for her, a $185
deposit in May 2002 and a $154 deposit in
July 2002. Ward disbursed $154 to the Clerk
of Circuit Court on July 10, 2002; however,
the $185 balance was not returned to the
client. In December of 2005, Atty. Ward
disbursed the woman’s $185 to his firm as
a “reimbursable” expense. However, there is
currently no documentation to support that
the $185 was owed to him.
Finally, Atty. Ward represented a man in a
child support matter. In August 2001,
$4,405.19 was deposited to the trust account
for the man’s child support obligations.
One month later, following a disbursement to
the Wisconsin Child Support Collections
Trust Fund there was a balance of $600 in
trust for this client. That $600 remained
in Atty. Ward’s trust account for over four
years. In December 2005, it was disbursed
to Atty. Ward’s law firm for fees; however,
there is currently no documentation that
fees were owed in this client’s matter.
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By disbursing at least $14,473.89 from his
trust accounts in connection with multiple
client matters, when there were either
insufficient or no funds whatsoever in trust
relating to those matters, and thereby
failing to hold funds belonging to other
clients in trust, Atty. Ward violated former
SCR 20:1.15(a) (Effective through June 30,
2004) and SCR 20:1.15(b)(1) (Effective
July
1, 2004), which require a lawyer to hold
the
property of clients and third parties in
trust which are in the lawyer’s possession
in connection with a representation, as well
as SCR 20:1.15(f)(1)b. (Effective July 1,
2004), which prohibits a lawyer from
disbursing funds from a trust account if
doing so would create a negative balance
with respect to any individual client or
matter.
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By depositing fee and cost advances to his
business account in multiple client matters,
and thereby failing to hold those funds in
trust, Atty. Ward violated former SCR 20:1.15
(a) (Effective through June 30, 2004),
which
requires a lawyer to hold the property of
clients and third persons in trust, separate
from the lawyer’s own property and in an
identifiable trust account. Atty. Ward also
violated former SCR 20:1.15(b) (Effective,
July 1, 2004 through June 30, 2007) and
SCR
20:1.15(b) (Effective July 1, 2007),
which
require unearned fees to be held in trust
until earned by the lawyer and advanced
payments of costs to be held in trust until
the costs are incurred.
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By disbursing cost reimbursements to his
firm in numerous client matters in December
2005 and July 2008 in connection with trust
account reconciliations, without providing
an accounting to the clients involved, Atty.
Ward violated SCR 20:1.15(d)(2)
(Effective, July 1, 2004), which
requires a
lawyer to promptly render a full written
accounting to a client or 3rd party who has
an ownership interest in the property upon
the final distribution of that trust
property.
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By holding in trust fee and cost advances,
earned fees and other funds in multiple
client matters for periods of time ranging
from two years to over six years and thereby
failing to promptly deliver funds to which
his clients or his law firm were entitled,
Atty. Ward violated four rules:
• SCR 20:1.15(b)(3) (Effective, July
1, 2004), which prohibits depositing or
retaining funds in trust that belong to the
lawyer or law firm, except funds reasonably
sufficient to pay monthly account service
charges;
• SCR 20:1.15(d)(1) (Effective,
July
1, 2004), which requires that, upon
receiving funds 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 must promptly
deliver to the client or 3rd party any funds
that the client or 3rd party is entitled to
receive;
• Former SCR 20:1.16(d) (Effective
through June 30, 2007), which requires a
lawyer to take steps to the extent
reasonably practicable to protect a client's
interests upon termination of
representation, including surrendering
papers and property to which the client is
entitled and refunding any advance payment
of fee that has not been earned; and
• SCR 20:1.16(d) (Effective, July 1,
2007), which requires a lawyer to take
steps
to the extent reasonably practicable to
protect a client's interests upon
termination of representation, including
surrendering papers and property to which
the client is entitled and refunding any
advance payment of fee or expense that has
not been earned or incurred.
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By failing to reconcile his trust accounts
on a monthly basis from July 2004 through at
least April 2008 and by failing to retain
printed reconciliation reports, reflecting
the subsidiary ledger balances, Atty. Ward
violated SCR 20:1.15(f)(1)g. (Effective,
July 1, 2004), which requires a lawyer to
prepare and retain a printed reconciliation
report on a regular and periodic basis not
less frequently than every 30 days for each
of the lawyer’s trust accounts. The rule
further requires that the reconciliation
reports show that the following balances are
identical: (1) the balance in the
transaction register as of the reporting
date; (2) the total of all subsidiary
ledger balances 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 to the balance
in the financial institution’s monthly
statement and subtracting outstanding checks
from that statement’s balance.
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Atty. Ward has a prior private reprimand and
a prior public reprimand.
In accordance with SCR 22.09(3), Attorney
John Anthony Ward is hereby publicly
reprimanded.
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In addition, prior to the imposition of this
reprimand, Atty. Ward willingly complied
with the following conditions requested by
the Office of Lawyer Regulation:
• He has refunded $425.00 to his
client, T. J.;
• He has disbursed funds to which 29
former clients were entitled, most of which
had been held in trust for extended periods
of time;
• He has closed an inactive trust
account after escheating any unclaimed
and/or unidentifiable funds in that account
to the State Treasurer’s Office; and
• He has commenced using a cash basis
accounting system for his active trust
account.
Furthermore, for a period of one year after
the imposition of this reprimand, Atty. Ward
shall have an accountant review his trust
account records on a quarterly basis and
shall furnish the results of those quarterly
examinations to the Office of Lawyer
Regulation.
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