Office of Lawyer Regulation v. Terry L. Nussberger
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2009 WI 103 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2009AP353-D In the Matter of Disciplinary Proceedings Against Terry L. Nussberger, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Terry L. Nussberger, Respondent. DISCIPLINARY PROCEEDINGS AGAINST NUSSBERGER OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: December 4, 2009 2009 WI 103 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2009AP353-D STATE OF WISCONSIN : IN SUPREME COURT In the Matter of Disciplinary Proceedings Against Terry L. Nussberger, Attorney at Law: FILED Office of Lawyer Regulation, Complainant, DEC 4, 2009 v. David R. Schanker Clerk of Supreme Court Terry L. Nussberger, Respondent. ATTORNEY disciplinary proceeding. Attorney publicly reprimanded. ¶1 Office PER CURIAM. of Lawyer We review the stipulation filed by the Regulation (OLR) and Attorney Terry L. Nussberger regarding his professional misconduct in handling the probate of the estate of V.K. The OLR and Attorney Nussberger stipulate Attorney Nussberger violated his duties of competence and diligence in probating the estate and agree the appropriate discipline would be a public reprimand. No. ¶2 facts 2009AP353-D Upon our independent review, we adopt the stipulated and accept misconduct in the this stipulation. matter, we Given conclude the nature Attorney of the Nussberger's professional misconduct warrants a public reprimand. ¶3 Attorney Nussberger was admitted to practice law in Wisconsin in 1983 2003, Attorney and practices Nussberger in Ladysmith. received a misconduct that violated SCR 20:8.4(c). Terry L. Nussberger, 2003-6. On public On March 29, reprimand for See Public Reprimand of August 8, 2006, Attorney Nussberger's license to practice law was suspended for 60 days, effective September 11, 2006, for counseling a client to engage in conduct that he knew was criminal or fraudulent, contrary to SCR 20:1.2(d). See In re Disciplinary Proceedings Against Terry L. Nussberger, 2006 WI 111, ¶25, 296 Wis. 2d 47, 719 N.W.2d 501. His license was reinstated on November 10, 2006. ¶4 The current disciplinary matter involves the probate of the V.K. estate. Attorney Nussberger stipulates to having committed two counts of professional misconduct: Count One. estate in a By failing to value the assets of the timely and accurate manner; by failing to determine whether the estate was required to file state and federal estate tax returns prior to the filing deadlines; and by preparing and filing an inventory and amended inventory that incorrectly used the redemption value of the 2 No. decedent's savings bonds rather than the 2009AP353-D date of death value, Attorney Nussberger violated SCR 20:1.1.1 Count Two. until almost By failing to file an estate inventory a year after the filing deadline and by failing to file estate tax returns for almost three years after the filing deadline, Attorney Nussberger violated SCR 20:1.3.2 ¶5 The following facts are stipulated. V.K. died on August 21, 2001, leaving a will dividing her estate among her beneficiaries. Attorney Nussberger was retained to probate her estate and filed a formal probate petition on November 29, 2001. On January 14, 2002, R.G. was named personal representative. ¶6 R.G. gave to Attorney Nussberger V.K.'s U.S. savings bonds with a total face value of $77,825 and accrued interest. The remaining deposit, estate assets personal property, consisted bank of accounts, certificates and a home. of The value of these remaining assets totaled $278,000. ¶7 indicating On January 17, 2002, Attorney Nussberger wrote to R.G. the value of the savings bonds had not yet been determined but that Attorney Nussberger would take care of the valuation promptly. To file an estate inventory and determine whether the estate needed to file tax returns, a determination 1 SCR 20:1.1 provides that, "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation." 2 SCR 20:1.3 provides that, "A lawyer shall act with reasonable diligence and promptness in representing a client." 3 No. of the bonds' date of death value was necessary. 2009AP353-D If the total value of the estate exceeded $675,000, the estate would have been required to file state and federal estate tax returns or file within nine months of the date of request with an estimated tax payment. death an extension The filing deadline was May 21, 2002. ¶8 R.G. redeemed the U.S. savings bonds in two groups. He redeemed the first group on September 23, 2002, for a total of $369,557.84. He redeemed the second group on October 15, 2002, for a total of $90,791.12. and other estate assets totaled Because the bonds' redemption $738,348.96, an estate tax return was required. ¶9 Attorney Nussberger failed to determine whether the estate's value exceeded $675,000 and did not file estate tax returns in 2002. Also, an estate inventory was required to have been filed within six months of the personal representative's appointment. Attorney Nussberger did not file an estate inventory by the July 14, 2002, deadline. ¶10 On June 6, 2003, Attorney Nussberger filed an estate inventory inaccurately listing the total estate value as $647,928. The inventory omitted the bonds redeemed in October 2002 and erroneously valued the other bonds at their redemption value, rather than their date of death value. In June or July 2003 Attorney Nussberger realized the bonds redeemed in October 2002 had been omitted from the inventory. He stipulates he should have also realized at this time that an estate tax return was required. Although Attorney Nussberger charged the estate 4 No. 2009AP353-D for one hour of his time to review the bonds' values, he failed to determine their date of death values. ¶11 In September 2003 V.K.'s house was sold. Upon the completion of the sale all estate assets had been liquidated. Therefore, the estate could have been closed after the filing of a final account and final tax returns. Other than filing a fiduciary income tax return prepared by the estate's accountant, nothing happened to close the estate for the next year. ¶12 On Nussberger September 27, determined he 2004, had over a year inadvertently after omitted Attorney the bonds redeemed on October 2002 from the estate inventory, he filed an amended inventory listing a total estate value of $738,719, with the bonds still listed at their redemption value rather than their date of death value. In January 2005 the estate's accountant provided Attorney Nussberger with the bonds' date of death value. ¶13 On January 13, 2005, Attorney Nussberger filed a second amended inventory listing the bonds' date of death value and showing January estate 2005 tax $8,946.79 in a total estate Attorney return, value Nussberger resulting interest. In of $726,222.50. filed in April a an $500 2005 a Also untimely late federal in Wisconsin penalty and estate tax return was filed and no tax was owed. ¶14 On January 20, 2005, Attorney Nussberger filed a petition for an extension to close the estate, stating that he was waiting for a Wisconsin Department of Revenue certificate. On January 28, 2005, three and one-half years after the date of 5 No. death, Attorney Nussberger wrote to the 2009AP353-D estate's heirs, explaining that an accurate valuation of the estate had been accomplished. the When R.G. questioned Attorney Nussberger about interest and penalty charges totaling $9,446.79 on the Wisconsin estate tax return, Attorney Nussberger responded that "no one had any idea that the assets would surpass the [estate tax] limit and that an Estate Tax return would even have to be filed." ¶15 On November 28, 2005, Attorney Nussberger filed a final account and, on January 6, 2006, filed an amended final account. At the February 2006 hearing on the final account, R.G. alleged Attorney Nussberger should be held responsible for the $500 penalty and $8,946.79 interest for the late estate tax return. The court deferred action on the final account and the estate remained open. A new attorney was hired to complete probate. ¶16 In the OLR's memorandum filed in support of the stipulated discipline of a public reprimand, the OLR states it has considered Attorney Nussberger's disciplinary the ABA Standards for Imposing Lawyer Sanctions. on the case of the Public Reprimand of history and The OLR relies James Moldenhauer, 2008-01, involving failure to close an estate with diligence, failure to respond to client's failure to appear at hearings. previously received one request private reprimand. 6 for information, and Attorney Moldenhauer had reprimand and one public No. ¶17 The OLR says that as mitigating 2009AP353-D factors, Attorney Nussberger lacked a dishonest or selfish motive, made a full disclosure, and evinced a cooperative attitude. The OLR notes, however, that Attorney Nussberger's misconduct evinces certain aggravating history, factors: his Attorney initial refusal to Nussberger's acknowledge disciplinary wrongdoing, his substantial experience, his failure to compensate the estate for over $9,000 in tax penalties and interest, and the fact that the estate had been harmed by these charges. Attorney Nussberger failed to show The OLR states that remorse and his prior disciplinary proceedings were not remote. ¶18 The OLR does not seek costs. The OLR explains its practice is not to seek a cost assessment against a respondent who enters into a comprehensive stipulation that is approved by the court because, in such circumstances, the respondent has been fully cooperative in the litigation process with the effect of limiting the expenditure of OLR resources. the court approve the parties' The OLR requests stipulation without the appointment of a referee. ¶19 Pursuant to SCR 22.12(1), this court may consider a complaint and stipulation without the appointment of a referee. If this court stipulated approves facts and stipulated discipline. the stipulation, conclusions of See SCR 22.12(2). it law shall and adopt impose the the If the court rejects the stipulation, a referee shall be appointed and the matter 7 No. 2009AP353-D shall proceed as a complaint filed without a stipulation. See SCR 22.12(3).3 ¶20 The stipulation demonstrates that Attorney Nussberger's misconduct harmed the estate by the belated filing of the estate tax return that resulted in $9,446.79 in penalties and interest. Because of our concern that the stipulation does not address restitution, we ordered the parties to explain why their stipulation does not provide for restitution of the tax penalties and interest Nussberger's misconduct. formulated in 2007, is the estate incurred due to Attorney The OLR responded that its policy, to seek restitution only under the following circumstances: ¢ The grievant's or respondent's rights in a collateral proceeding will not likely be prejudiced; ¢ The funds to be restored do not constitute incidental or consequential damages; 3 SCRs 22.12(1), follows: Stipulation. (2), and (3) provide (1) The director may file with the complaint a stipulation of the director and the respondent to the facts, conclusions of law regarding misconduct, and discipline to be imposed. The supreme court may consider the complaint and stipulation without the appointment of a referee. (2) If the supreme court approves a stipulation, it shall adopt the stipulated facts and conclusions of law and impose the stipulated discipline. (3) If the supreme court rejects the stipulation, a referee shall be appointed and the matter shall proceed as a complaint filed without a stipulation. 8 as No. ¢ The funds to be restored were in 2009AP353-D the respondent lawyer's direct control; and ¢ There is a reasonably ascertainable amount. ¶21 The OLR states that although the V.K. estate incurred consequential damages in penalties and interest, and the amount is reasonably ascertainable, the funds were never under Attorney Nussberger's direct control. The OLR says that to be consistent with its 2007 policy, it decided not to pursue restitution. The OLR notes that its policy regarding restitution does not bind this court and, in a 1997 case involving similar misconduct, the court ordered restitution. Against Langer, 213 See In re Disciplinary Proceedings Wis. 2d 125, 569 N.W.2d 465 (1997). Attorney Nussberger filed a short response stating restitution should not be ordered based on the OLR's policy. ¶22 It is this court's responsibility appropriate level of discipline. 4 to determine See SCR 21.16;4 see also In re SCR 21.16 provides as follows: Discipline. (1m) Any of the following may be imposed on an attorney as discipline for misconduct pursuant to the procedure set forth in SCR chapter 22: (a) Revocation of license to practice law. (b) Suspension of license to practice law. (c) Public or private reprimand. (d) Conditions on the continued practice of law. (e) Monetary payment. (em) Restitution, as provided under sub. (2m). (f) Conditions on seeking license reinstatement. 9 the No. 2009AP353-D Disciplinary Proceedings Against Steinberg, 2007 WI 113, ¶20, 304 Wis. 2d 577, 735 N.W.2d 527. This court considers the seriousness of the misconduct, the need to protect the public, the courts, and the legal system from repetition of misconduct, the need to impress upon the attorney the seriousness of the misconduct, and the need to deter other attorneys from engaging in similar restitution misconduct. "to the See person id. whose Discipline money or may include property was misappropriated or misapplied in the amount or value of such money or property as found in the disciplinary proceedings." See SCR 21.16(1m)(em) and (2m). (2m) (a) An attorney may be ordered to do any of the following as restitution under sub. (1m)(em): 1. Pay monetary restitution to the person whose money or property was misappropriated or misapplied in the amount or value of such money or property as found in the disciplinary proceedings. 2. Reimburse the Wisconsin lawyers' fund for client protection for awards made to the person whose money or property was misappropriated or misapplied. (b) Any payment made as restitution under par. (a) does not limit, preclude or impair any liability for damages in any civil action or proceeding for an amount in excess of the payment. (c) Upon ordering restitution to the Wisconsin lawyers' fund for client protection under par. (a)2., the supreme court shall issue a judgment and furnish a transcript of the judgment to the Fund. The transcript of the judgment may be filed and docketed in the office of the clerk of court in any county and shall have the same force and effect as judgments docketed under ss. 809.25 and 806.16, stats. 10 No. ¶23 We note restitution circumstances similar to Disciplinary Proceedings Wis. 2d 303, 743 has those presented Against N.W.2d 819 been imposed here. Losby, under See 2008 (restitution 2009AP353-D WI In re 306 interest of 8, and penalties incurred by estate due to attorney misconduct imposed as a condition of reinstatement); In re Disciplinary Proceedings Against Seehafer, 108 Wis. 2d 578, 322 N.W.2d 888 (1982) (stipulation included the imposition of restitution of interest and penalties incurred by estate due to attorney misconduct). Nonetheless, while this court frequently imposes restitution, historically the purpose of lawyer discipline is not to make whole those harmed by attorney misconduct. See In re Disciplinary Proceedings Against Harman, 137 Wis. 2d 148, 150, 403 N.W.2d 459 (1987). ¶24 We are satisfied that a public reprimand of Attorney Nussberger will achieve the objectives of lawyer discipline. therefore adopt committed the complaint. the two We stipulation counts impose of the Nussberger's Attorney misconduct stipulated impose costs or restitution. Attorney that Nussberger charged discipline in We has the and OLR do not We place considerable weight on admission of his misconduct, his full disclosure, and his cooperative attitude. ¶25 We are mindful that Attorney Nussberger has failed to compensate the estate for more than $9,000 in penalties and interest incurred as a result of his misconduct. The court will review policies with the OLR the broader respect to seeking restitution. 11 issue of its with In approving the stipulation, No. 2009AP353-D we note that Attorney Nussberger's stipulation to his lack of competence agreement and to diligence a public in handling reprimand does the and his detract not estate from the grievant's right to any civil remedy against Attorney Nussberger for harm suffered as a result of his misconduct. ¶26 We adopt discipline. impose engages in facts and recommended We remind Attorney Nussberger that the court progressively a Wis. 2d 47, pattern ¶27. unacceptable. expectation stipulated We caution Attorney Nussberger of the seriousness of his misconduct. may the pattern id. We Attorney sanctions misconduct. A See that of severe of accept Nussberger when See repetitive the an Nussberger, not 296 misconduct stipulation will attorney commit with is the conduct subjecting him to future discipline. ¶27 IT IS ORDERED that Attorney Terry L. Nussberger is publicly reprimanded as discipline for professional misconduct. 12 No. 1 2009AP353-D
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