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In re Disciplinary Proceedings Against Wagner

Supreme Court of Wisconsin

July 3, 2019

In the Matter of Disciplinary Proceedings Against Kathleen Anna Wagner, Attorney at Law:
v.
Kathleen Anna Wagner, Respondent-Appellant. Office of Lawyer Regulation, Complainant-Respondent,

          SUBMITTED ON BRIEFS: ORAL ARGUMENT: FEBRUARY 21, 2019

         DISCIPLINARY PROCEEDINGS AGAINST WAGNER

         ATTORNEY disciplinary proceeding. Professional misconduct found; no discipline imposed.

          For the respondent-appellant, there was a brief filed by Kathleen A. Wagner, Madison. There was an oral argument by Kathleen A. Wagner.

          For the complainant-respondent, there was a brief filed by William J. Weigel and Office of Lawyer Regulation, Madison. There was an oral argument by William J. Weigel.

          PER CURIAM.

         ¶1 Attorney Kathleen Anna Wagner has appealed a report filed by Referee James C. Boll, concluding that Attorney Wagner committed two counts of professional misconduct and recommending that she be privately reprimanded. The Office of Lawyer Regulation (OLR) has now that asked one of those counts be dismissed. Thus, what is before the court is Attorney Wagner's challenge to the referee's conclusion that she violated Supreme Court Rule (SCR) 20:1.5(b)(3). Attorney Wagner has also challenged the referee's recommendation that she be assessed the full costs of this proceeding.

         ¶2 Upon careful review of this matter, we conclude that although Attorney Wagner did violate SCR 20:1.5(b)(3), the violation does not warrant the imposition of any discipline. In addition, we find it appropriate, under the unique facts of this case, to depart from our normal custom of imposing full costs, which are $40, 639.72 as of March 4, 2019. Instead, we deem it appropriate to require Attorney Wagner to pay $4, 500 in costs.

         ¶3 Attorney Wagner was admitted to practice law in Wisconsin in 1983. She practices in Madison. She has no prior disciplinary history.

         ¶4 On October 31, 2014, the OLR filed a complaint alleging three counts of misconduct with respect to Attorney Wagner's trust, estate, and tax work for the G. family. W.G., the matriarch of the family, first met with Attorney Wagner on April 10, 2008 and asked Attorney Wagner to provide legal services regarding completing her late husband's estate, funding a living trust of which W.G. was the trustee, and completing her tax return.

         ¶5 During this initial meeting, W.G. executed a written representation agreement. The agreement called for Attorney Wagner to bill W.G. on an hourly basis at a rate of $250 per hour. The agreement also stated that it was Attorney Wagner's practice to bill for services "upon completion" of the matter, although she retained discretion to bill on a more frequent basis when the fees exceeded the amount of the initial payment. In addition to signing the representation agreement, W.G. also gave Attorney Wagner a check for $500.

         ¶6 After meeting with W.G. for an hour on April 10, 2008, Attorney Wagner had a 90-minute conversation with W.G.'s prior attorney a few days later. During that conversation, Attorney Wagner learned that numerous marital property assets had not been transferred into the living trust; no one completed the process of transferring those assets into the living trust prior to the death of W.G.'s husband in November 2006; and a number of sub-trusts needed to be created and funded.

         ¶7 Attorney Wagner contends that, based on her conversations with predecessor counsel, she learned that W.G. was attempting to transfer into the living trust two parcels of waterfront land in Adams county for which she did not have good title because of violations of the Statute of Frauds. In addition, Attorney Wagner claims she learned that W.G. had not properly segregated income between herself and the living trust, nor had she filed proper tax returns. As a result of these discoveries, Attorney Wagner claims that, at a July 30, 2008 meeting, she offered to return to W.G. the uncashed $500 check and the files she had obtained from predecessor counsel. W.G. refused to accept the check, and Attorney Wagner retained it. Attorney Wagner again met with W.G. on September 19, 2008, at which time Attorney Wagner submitted correspondence to W.G. laying out her proposed plan for the estate and trusts. Attorney Wagner deposited the $500 check into her client trust account on October 10, 2008.

         ¶8 According to Attorney Wagner, in late 2008 and early 2009, while W.G. was experiencing health issues and learned that she had a short period of time left to live, W.G. was being pressured about who would be in control of the family assets and handle their disposition after her death. Attorney Wagner states that W.G.'s third eldest child, T.G., a Virginia lawyer who practiced family law, was seeking to take over control of the family's finances. W.G. resisted the pressure and obtained agreements from her four children that W.G. would remain in control of the finances.

         ¶9 On January 17, 2009, W.G. signed a new representation agreement. W.G. authorized Attorney Wagner to transfer assets from the living trust to a family trust and a marital survivor's trust. Attorney Wagner asserts there was a rush to transfer into the living trust the remaining marital assets that should have been transferred long before. Attorney Wagner said she worked nights and weekends, including 16-hour or more days, to accomplish those transfers.

         ¶10 W.G. passed away in February 2009. Her son, J.G. became the successor trustee of the W.G. marital survivor's trust and the G. family trust. At or after W.G.'s death, certain beneficiary trusts came into existence for W.G.'s children.

         ¶11 At some point in 2009, J.G. and T.G. began to ask Attorney Wagner about her fees and the preparation of invoices. In November 2009, J.G. sent Attorney Wagner an email expressly requesting her to provide him with an invoice for her services. On January 15, 2010, Attorney Wagner and J.G. entered into a "Fee Dispute Procedure" agreement. On that same date, as part of the agreement, J.G. gave Attorney Wagner two checks. The first check, for $113, 000, was made payable to Wagner Law Offices S.C. and was apparently intended to be applied by Attorney Wagner toward her fees. The second check, in the amount of $47, 000, was made payable to Attorney Wagner's client trust account and carried the notation "disputed fee for court to decide." Under the agreement, Attorney Wagner was to provide a detailed billing to J.G. by February 15, 2010.

         ¶12 Attorney Wagner claims that during late 2009 and early 2010, T.G. began to cause problems and interfere with her working relationship with J.G. On January 5, 2010, T.G. sent Attorney Wagner an email saying he would be in Madison on January 16-18 and that he wanted her to provide an invoice and back-up receipts to J.G. by that date. On January 8, 2010, T.G. filed a demand for fee arbitration with the State Bar of Wisconsin.

         ¶13 In April 2010, T.G. filed a grievance against Attorney Wagner with the OLR. In July 2010, T.G. filed a lawsuit in Dane County Circuit Court against Attorney Wagner and her law firm on behalf of himself, J.G., and his two other siblings. The complaint asked for a declaratory judgment as to the amount of fees that Attorney Wagner was owed.

         ¶14 In April 2011, in the course of the lawsuit, the G. siblings served a request asking Attorney Wagner to produce any documents identifying any compensable legal services provided to W.G., her agent, or her successor-death trustee, J.G. The circuit court issued an order requiring Attorney Wagner to prepare and send her invoices to the plaintiffs by June 14, 2011. On June 6, 2011, Attorney Wagner filed a request for an extension of time, which the court denied. Attorney Wagner did not submit the invoices by June 14, 2011. Attorney Wagner later renewed her motion for an extension of time, this time including a supporting affidavit from her doctor. The circuit court granted a stay of all discovery in the case from June 22, 2011 to October 4, 2011, due to Attorney Wagner's health.

         ¶15 When the stay expired, the circuit court issued an order scheduling Attorney Wagner's deposition for November 14, 2011 and requiring her to submit to J.G. "an annotated bill for services provided by Wagner Law Offices, S.C." Attorney Wagner did not provide the invoices by November 1, 2011. The circuit court held another scheduling conference on November 30, 2011, and established a new deadline of January 3, 2012 for Attorney Wagner to provide her legal invoices. Attorney Wagner met that deadline when she submitted her invoices on January 3, 2012. This was approximately 25 months after J.G. had made his initial written request, via email, for the invoices.

         ¶16 The OLR acknowledged at oral argument that on April 24, 2013, the circuit court found that Attorney Wagner did not overcharge the G. siblings for her legal services and in fact she had under billed. Following the circuit court's ruling, the parties reached ...


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