2019 Legislative Year in Review
The 2019-2021 budget saw some huge victories for access to justice, while other legislative efforts await further action
December 13, 2019—As the days grow shorter, the holidays approach, and the year draws to a close, it’s worth taking a look back on the legislative priorities of the State Bar of Wisconsin. The 2019-2021 budget saw some huge victories for access to justice, while other legislative efforts await further action. This article will review supported new laws and the executive budget, as well as other bills that we hope will advance before the end of the session.
Private Bar Public Defense Rate
The biggest achievement this session is an increase in the rate of compensation paid to private bar attorneys who take public defense cases. Beginning January 2020, for the first time since 1995, the rate will increase, from $40 to $70 per hour. This substantial investment by the state is thanks to the tireless advocacy of the State Public Defender’s office, the State Court system, the State Bar of Wisconsin and hundreds of stakeholders throughout the justice system. The State Bar will continue to advocate on behalf of a justice system that provides the resources necessary to provide everyone access to justice.
Justice System Funding
Along with the private bar rate, the 2019-21 budget provided funding and authorization for nearly 65 new prosecutor positions around the state and funded pay progression for eligible assistant district attorneys. The budget maintains civil legal aid funding of $1 million over the biennium, and keeps in place existing restrictions that the funds assist those dealing with domestic violence and abuse.
State Public Defender Pay Progression
Assembly Bill 501/Senate Bill 468 would provide for “stepped pay progression” for attorneys in the Public Defender’s office. The State Bar believes that retaining staff attorneys with knowledge and experience is critical to help ensure that all citizens, including the indigent and poor, are guaranteed their constitutional Sixth Amendment right to legal counsel. An imbalance occurred when funding for a full step of pay progression for State Public Defenders (SPD) did not continue in the 2019-2021 budget process. Like state prosecutors offices, which received pay progression in the budget, the SPD uses pay progression to retain staff with the knowledge and expertise for complex cases and the ability to mentor new attorneys. The State Bar strongly supports AB 501/SB 468.
Update: Both AB 501 and SB 468 received a public hearing in late October. The State Bar continues to work with the authors and other stakeholders to push passage of the bill during the Legislature’s 2020 floor period.
Assembly Bill 513/Senate Bill 460 would create an 11-member prosecutor board consisting of district attorneys and prosecutors from across the state and the Attorney General (or his designee). The bills also create the State Prosecutors Office (SPO) consisting of an executive director and a legislative liaison. Similar to other public employee groups, this bill would provide for a legislative liaison in place to handle the duties assigned to the prosecutor board and SPO. The State Bar of Wisconsin supports the creation of an independent prosecutor board and a State Prosecutors Office. The board will serve to protect the interests and funding for elected District Attorneys and assistant district attorneys in Wisconsin.
Update: Assembly Bill 513 was passed out of committee and awaits a floor vote in the Assembly. The Senate has not yet held a hearing or voted on SB 460 in committee. Last session, a similar bill passed out of both the Assembly and Senate committees.
Public Defender Tuition Reimbursement Pilot Program
According to the bill sponsors, Assembly Bill 512/Senate Bill 461 “establishes a pilot program for tuition reimbursement for public defenders in rural Wisconsin counties. To be eligible, the attorney must perform the majority of their legal work in a county with 25,000 people or less, or with a population density of 55 persons per square mile or less. Eligible attorneys would receive up to $20,000 in reimbursement per year.”
The State Bar of Wisconsin supports legislative efforts to reduce the cost of a legal education and to provide loan repayment assistance programs. It believes that this program can be an important tool to bringing more attorneys to rural areas, ensuring access to justice for victims and defendants alike, and encouraging attorneys to establish their practices and put down roots in rural communities.
Update: AB 512 has passed through committee and is awaiting scheduling in the Assembly, while SB 461 has yet to have a public hearing or committee vote. Last session, an identical bill passed out of both the Assembly and Senate committees, but was not scheduled for a floor vote in either chamber.
New Circuit Courts
Assembly Bill 470/Senate Bill 458 would create 12 additional circuit court branches to be phased-in over the next three years: four in 2020; four in 2021; and four in 2022.
For a county to be eligible for an additional circuit court branch, the county must pass a resolution requesting an additional circuit court branch, as well as have appropriate infrastructure in place to support an additional circuit court branch by May 31st of the year the circuit branch commences. If a county has met those requirements, the director of state courts will determine where to allocate the branches. Additionally, the director of state courts may also require a county to apply for a drug treatment court grant if it does not already have a program. Elections will be held for all new circuit court branches in the spring of their creation.
The most recent circuit court branch additions were in 2007-2008. Since then, courts’ dockets across the state have become more challenging with the changing dynamics of cases. The State Bar of Wisconsin Supports AB 470/SB 458.
Update: AB 470 passed the Assembly on November 12 on a vote of 94-1. The Senate has held a public hearing on SB 458 but the bill has not been voted out of committee.
Assembly Bill 33 / Senate Bill 39 would reform Wisconsin’s expungement law by:
Eliminating the state mandate on judges to grant/deny expungement at the time of sentencing. Wisconsin is the only state that requires the decision on expungement to be made at the time of sentencing rather than after a sentence has been completed. This bill allows judges to approve (or deny) an expungement petition at the completion of the sentence.
Provide employers and employees with clarity and certainty in regards to criminal background disclosures on employment applications.
Clarify that only low-level offenders are eligible for expungement. The bill does not make any changes to current law regarding the types of crimes that are eligible.
Define what it means to successfully complete a sentence, to ensure that only individuals that have successfully completed their sentences (and have not re-offended) will be eligible for expungement.
Remove the arbitrary age limit of 25.
The State Bar supports legislative efforts to expand the ability of certain persons to expunge court records.
Update: AB 33 passed the Assembly by voice vote on March 15. The Senate has passed the bill out of committee, but has yet to schedule it for a floor vote. You can help encourage your Senators to take action on this important legislation by sending them a message today.
State Bar Section Legislation
Wisconsin Act 29, signed by Gov. Evers in November, allows a plaintiff to personally serve a government entity instead of requiring service via certified mail.
Act 30, also enacted in November, permits, if parties agree, email as an alternative method for serving certain documents in ongoing litigation.
Both of these bills (AB 58 and AB 59) were supported by the Litigation Section, which provided assistance and feedback when the bills were initially being drafted and helped the bill sponsors navigate the bills through the legislative process.
Real Property, Probate, and Trust Law Section
Wisconsin Act 65 updates law regarding financial institutions. RPPT supported the passage of these bills (AB 504/SB 457) as amended with removal of payable-on-death account language.
Assembly Bill 293/Senate Bill 317 provide a process for remote (including online) notarization. The RPPT Section supports these bills. The Assembly has passed AB 293 and a Senate Committee Hearing is scheduled for SB 317 on December 18, 2019.
Family Law Section
Assembly Bill 95, allowing for modification of custody or placement orders contingent upon a future event or change in conditions, has been a longtime initiative of the section. The bill became part of the Child Support and Placement Study Committee bill package in 2018. This bill has passed the Assembly Committee on Family Law and awaits a vote in the full Assembly before moving to the Senate to repeat the process.
Family Law also supports Assembly Bill 100, another bill in the study committee package regarding judicial notice of records. The bill would allow judges to look at Wisconsin Circuit Court Access records (WCCA, commonly referred to as CCAP) in certain cases to discover instances of domestic abuse when determining custody and placement of a minor child. The bill passed committee on September 12 and awaits a vote on the Assembly floor before Senate action can take place.
Finally, Family Law supports Assembly Bill 166 /Senate Bill 158, which would allow for DNA testing when determining paternity. The Senate has passed SB 158, while the Assembly bill has passed out of committee and awaits a full Assembly vote.
Children & the Law Section
Assembly Bill 47 creates a new process and standards for appointment of a guardian. This bill has been a decade-plus long project of the Children & the Law Section and became the focus of the Minor Guardianship Study Committee in 2018, which helped to educate lawmakers on the issue and helped with its eventual passage in the Assembly on November 12. The bill has been sent to the Senate Committee on Universities, Tech Colleges, Children and Families for action.
Assembly Bill 41/Senate Bill 49, “Safe Harbor” legislation would protect underage victims of sex trafficking from being prosecuted for prostitution. The Senate has passed SB 49, and AB 41 has been passed out of committee and awaits further action.
Other bills that Children & the Law supports include Speaker Vos’ bill regarding children’s code authority (AB 502/SB 432) and bills extending the tax credit for certain adoption expenses (AB 201/SB 191).
Public Interest Law Section
Assembly Bill 204/Senate Bill 214 would update Municipal Court procedures. PILS supports the bill as currently amended. The bill has been passed by the full Senate and passed out of Assembly Committee, where it is awaiting floor action.
Elder Law Section
Assembly Bill 287/Senate Bill 254, regarding certifications for advance directives and findings of incapacity related to powers of attorney for health care. Elder Law and PILS both oppose this bill. It has passed the full Assembly but awaits action in Senate.
Assembly Bill 481/Senate Bill 429, regarding financial exploitation of adults, and Assembly Bill 482/Senate Bill 428, a similar bill regarding exploitation of adults with securities accounts, are both opposed by the Elder Law Section. For both bills, hearings were held in Assembly, but there has been no action in the Senate.
Bankruptcy, Insolvency, and Creditor’s Rights
Assembly Bill 541/Senate Bill 488 – BICR Supports this bill which would exempt Health Savings Accounts from executions of judgment. As of now, there has been no action on these bills in either house.
Government Attorneys Top Slate of State Bar Officer Candidates
Meet the 2020 State Bar of Wisconsin officer candidates, including two government lawyers who are nominees for State Bar president-elect. The candidates come from a wide variety of backgrounds and from across the state – get to know them before the election in April.
Dec. 13, 2019 – Cheryl Furstace Daniels and Michael P. May have accepted nominations to run for 2020 State Bar of Wisconsin president-elect.
Both candidates are government lawyers in Madison. Daniels is with the Wisconsin Department of Agriculture, Trade & Consumer Protection in Madison; and May is city attorney for Madison.
The president-elect serves a one-year term before becoming president for the 2020-21 year.
The nominees for secretary are Kristen Hardy of Briggs & Stratton Corporation, Wauwautosa; and Chuck Stertz, assistant district attorney with Outagamie County, Appleton.
The candidates for Judicial Council representative are William C. Gleisner of William C. Gleisner III Attorney at Law, Waukesha; and John R. Orton of Curran, Hollenbeck & Orton SC, Mauston.
“I encourage everyone to get to know the candidates – their backgrounds and accomplishments, as well as their goals and aspirations for the future,” said Kathleen Brost, current State Bar president-elect and chair of the State Bar's Nominating Committee, which nominates candidates for State Bar leadership positions.
The Nominating Committee members, appointed by State Bar President Jill Kastner for the State Bar’s April 2020 election cycle, are:
State Bar President-elect Kathleen Brost, Neenah;
Michelle Behnke, Madison;
Grant Birtch, Neenah;
Laura Skilton Verhoff, Madison; and
Josh Kindkeppel, Madison.
“The Nominations Committee worked hard to recruit a diverse slate of candidates from throughout the state,” Brost said. “While they vary in their backgrounds, they are all dedicated to serving our members and our justice system – and they are all terrific leaders.”
State Bar members can also run for an officer position by filing a petition signed by 100 active State Bar members. The deadline to submit a petition is Feb. 1, 2020. For more information and to receive a petition, contact org jmarks wisbar Jan Marks at (608) 250-6106, or (800) 444-9404, ext. 6106.
Candidates Needed for Board of Governors and Division Leadership Positions
Consider contributing your time and expertise as a Board of Governors’ representative or a Government, Nonresident, or Young Lawyers division leader. Leaders of all experience levels are welcome.
Vote in April: Look for Your Electronic Ballot
All State Bar elections (including for State Bar divisions) will be held via an electronic ballot in 2020. Ballots are emailed by the second week in April, and the election closes at noon Central Time on April 24, 2020.
To ensure you receive your State Bar election ballot, add net noreply directvote directvote noreply net as an approved sender in your inbox sometime before April 1. This prevents the ballot from being identified as spam.
Please note: If you have placed any holds on emails from the State Bar, you may not receive an electronic ballot. Contact Customer Service at (800) 444-9404 to verify that your account is set up to receive your email ballot.
State Bar members with no email address on file will receive paper ballots. Paper ballots will be mailed on April 8, 2020.
Federal District Court Dismisses Lawsuit Against the State Bar of Wisconsin
Dec. 12, 2019 – The U.S. District Court for the Western District of Wisconsin has dismissed a lawsuit against the State Bar of Wisconsin. Two State Bar members filed the lawsuit, challenging rules that require all attorneys to be members of the State Bar.
Wisconsin Supreme Court (SCR) Rule 10.01 and 10.03 require all attorneys admitted to practice in Wisconsin to be members of the State Bar and pay State Bar dues and Supreme Court assessments in accordance with their particular class of membership.
Two attorneys, Adam Jarchow and Michael Dean – represented by the Wisconsin Institute for Law & Liberty – filed a lawsuit earlier this year, arguing that compelled membership and compelled dues violates their free speech and association rights because they do not agree with State Bar activities or lobbying efforts.
However, in Keller v. State Bar of California, 469 U.S. 1 (1990), the U.S. Supreme Court upheld mandatory dues so long as members are not compelled to fund activities not germane to regulation of the legal profession or improving the quality of legal services.
The State Bar maintains an annual Keller dues reduction process that allows members to withhold from their dues the amount used to fund activities that are not germane to the purposes identified in Keller.
More specifically, expenditures deemed nonchargeable to mandatory dues – the Keller rebate amount – includes 1) expenditures relating to activities that are not germane to regulating the legal profession or improving the quality of legal services and, in addition; 2) expenditures relating to activities that constitute direct lobbying on policy matters before the Wisconsin Legislature and U.S. Congress regardless of whether they would otherwise qualify as germane and, therefore, chargeable under Keller.
In other words, the State Bar’s annual Keller rebate calculation goes above and beyond what Keller may otherwise permit as chargeable to mandatory dues in an effort to ensure that members are not compelled to fund lobbying activity they oppose.
U.S. District Judge Barbara Crabb, in dismissing the case against the State Bar, noted plaintiff’s argument that the recent U.S. Supreme Court decision in Janus v. Am. Fed'n of State, Cty., & Mun. Employees, Council 31, 138 S. Ct. 2448, (2018) may have eroded the foundation of Keller but “Keller still binds this court.” Thus, Judge Crabb dismissed the case. The plaintiffs will have 30 days to appeal.
State Bar President Jill Kastner, State Bar Executive Director Larry J. Martin, and the individual justices of the Wisconsin Supreme Court, are facing a similar lawsuit in the U.S. District Court for the Eastern District of Wisconsin, which is still pending.
Attorney Schuyler File of Pewaukee – represented by the Chicago-based Liberty Justice Center and local counsel – is the sole plaintiff in the civil action.
File also contends that the State Bar’s mandatory status is a violation of his First Amendment right of association.
The State Bar maintains an integrated bar litigation page with links to pleadings and motions in both lawsuits, including the one that has now been dismissed.
How to Free Workers from Abusive Restrictive Covenants
Over the last few years, noncompete agreements have been popping up in contexts where they are not permissible. Marianne Goldstein Robbins and Joe Sexauer discuss the specifics of noncompete agreements in Wisconsin and federal law, and how to address their overuse.
Marianne G. Robbins, Joe Sexauer
In representing low wage workers, we have noticed in the last few years the overuse of noncompete agreements in Wisconsin and other states. By overuse, we mean the use in contexts that are not permissible under the law in Wisconsin and many other states and, in some cases, contrary to federal law.
The Problem: Noncompete Agreements for Low-wage Workers
Traditionally, noncompete agreements are applied regularly to sales personnel and technical experts to protect their employers from the misappropriation of customer goodwill and trade secrets should employees leave to join a competitor.
com mgr previant Marianne Goldstein Robbins, Northeastern 1977, is a partner emeritus at The Previant Law Firm in Milwaukee, where she focuses her practice on employment discrimination, labor relations, and labor law litigation.
com jms previant Joe Sexauer, Chicago Kent 2014, is an attorney at The Previant Law Firm Milwaukee, where he practices in labor law litigation and labor relations law.
Recently, however, we’ve seen numerous instances in which low-skilled, low-wage workers – those with no access to customer lists or trade secrets – are employed conditioned on signing noncompete agreements. These agreements limit their mobility and thereby restrict workers’ ability to obtain the full value of their labor in a competitive market. Recent examples of noncompete agreements include those imposed on minimum-wage workers at Jimmy Johns,1 janitors,2 and manual laborers.3
These examples and others are described in an issue brief published by the American Constitution Society last month, which observes, “Taken in the aggregate, such widespread limitations on employee mobility have demonstrable, negative consequences for wages and innovation.”4
As a result of such abuses, the AFL-CIO and several other labor unions joined the Open Market Institute in petitioning the Federal Trade Commission to protect workers from noncompete agreements.5
Noncompete Agreements and Wisconsin Law
You might suppose noncompete agreements imposed on low wage, low skill workers must be lawful if they are so widespread. But in Wisconsin and many other states, they are not.
In Wisconsin, the law covering restrictive covenants is set forth by Wis. Stat. section 103.465:
A covenant by an assistant, servant or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of that employment or agency, within a specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal. Any covenant, described in this section, imposing an unreasonable restraint is illegal, void and unenforceable even as to any part of the covenant or performance that would be a reasonable restraint. 6
The law allows restrictive covenants only when “reasonably necessary” to protect the employer.7 In addition, covenants generally must be limited to a “specified” territory and duration.8 The law should be read to “encourage the mobility of workers.”9 Wisconsin courts view these covenants with “suspicion.”10
To be enforceable, restrictive covenants must:
be necessary for the protection of the employer; that is, the employer must have a protectable interest justifying the restriction imposed on the activity of the employee;
provide a reasonable time limit;
provide a reasonable territorial limit;
not be harsh or oppressive as to the employee; and
not be contrary to public policy. 11
The company has the burden to prove all five of these “prerequisites.”12
Under the first prerequisite, “[A]n employer’s protectable interest is limited to retaining top-level employees, employees who have special skills or special knowledge important to the employer's business, or employees who have skills that are difficult to replace.”13
Applying section 103.465, the court in Manitowoc Co., Inc. v. Lanning, concluded,
that the non-solicitation of employees provision is overbroad on its face. Without a specified territory or class of employees, the provision restricted [the defendant’s] conduct as to all employees of Manitowoc Company everywhere … each of the 13,000 Manitowoc Company employees regardless of the business unit in which they work or where in the world they are located.14
As Manitowoc points out, “section 103.465 is not limited to a covenant in which an employee agrees not to compete with a former employer.”15 Rather, it has also been applied to nondisclosure and nonsolicitation agreements which act as restraints of trade.
In Wisconsin, if part of a covenant is held invalid, the rest of the covenant is void.16 Most states allow the court to edit an illegal covenant into a legal one (commonly the “blue pencil” test), but Wisconsin follows the “red pencil” test that strikes the entire covenant if part of it is invalid.17
However, the existence of one invalid covenant does not void other separate covenants. For example, a court can void a nondisclosure agreement, but hold a noncompete as valid if it can separate the two, provided the latter covenant is reasonable and specific.18
This is not to say employers cannot ask employees to sign noncompete agreements – even ones which, in their factual context, may prove to be unreasonable and therefore unenforceable: “Neither the spirit nor the letter of Wis. Stat. section 103.465 establishes a well-defined public policy in Wisconsin against an employee's signing a covenant not to compete that he or she presumes to be unreasonable” 19
Rather, “the validity of a restrictive covenant is to be established by examination of the particular circumstances which surround it.”20
Thus, in Wisconsin, there is a very limited scope in which an employer can restrict an employee’s ability to gain alternative employment or compete after leaving its employ. Nonetheless, an employee may not be protected from termination if he or she refuses to sign an agreement that appears overly restrictive.
Noncompete Agreements and Federal Law
Federal law creates additional bases on which restrictive covenants can be challenged.
The National Labor Relations Act protects nonsupervisory employees right to organize and their right to bargain collectively. In Minteq International Inc.v. National Labor Relations Board (NLRB), the NLRB found that the employer’s unilateral imposition of noncompete agreements on employees covered by a collective bargaining agreement violated its duty to bargain with the union.21 As a result, the employer was ordered to rescind the noncompete agreements.
Additionally, the provision in the noncompete that prohibited interference with relationships with customers violated Section 8(a)1 of the Act, since it could be reasonably understood to prohibit employees from exercising their Section 7 rights to contact customers in support of a boycott in a labor dispute.22 Such provisions, or provisions that prohibit solicitation of employees to work for a competitor, may violate the Section 7 rights of unorganized employees who seek to solicit coworkers to join a union and work for a union competitor.23
The imposition of noncompetes and other restraints on employees’ mobility to obtain the best compensation and working conditions can also violate federal and state antitrust law. In 2015, a California federal judge approved a settlement of antitrust claims against Apple and Google for entering anti-poaching agreements in restraint of trade only after the amount of the settlement was increased to $415 million.24
A noncompete agreement in states where they are allowed can result in the same restraint of trade as an anti-poaching agreement. Indeed, the Wisconsin Supreme Court made precisely this point in Heyde Companies, Inc. v. Dove Healthcare, LLC when it noted that:
[t]he effect of the no-hire provision is to restrict the employment of ... employees; it is inconsequential whether the restriction is termed a “no-hire” provision between [employers] or a “covenant not to compete” between [an employer] and its employees.25
In 2016, the Illinois attorney general brought a complaint against Jimmy Johns, which it promptly settled by rescinding its noncompete and paying attorney fees. As Attorney General Lisa Madigan explained, “This settlement helps ensure Illinois’ workers have freedom to change jobs in order to seek better wages, further their careers and improve their lives,” and that “[w]orkers in Jimmy John’s sandwich shops should know they are not subject to these unfair and unenforceable agreements.”26
Conclusion: Noncompetes in Wisconsin are Limited
Wisconsin law is carefully tailored to allow only restrictive covenants specific in scope and limited to the employer’s protectable interest related to the high skilled talent. It does not allow such agreements to deprive the low-wage employees from their right to organize or to realize their full earning potential.
Class actions have the potential to reign in the abuse of overbroad noncompete agreements and other restraints of trade that violate Wisconsin and/or federal law, by providing a means of abolishing such restrictive covenants for an entire class, where often an individual employee cannot refuse such a covenant without risking termination.
1 Samantha Monkamp, “Illinois AG sues Jimmy Johns over noncompetes pact; chain ‘disappointed’,” Chicago Tribune (June 9, 2016).
2 Sophie Quinton, “These Days, Even Janitors Are Being Required to Sign Non-Compete Clauses,” U.S.A. Today (May 27, 2017).
3 Conor Dougherty, “How Noncompete Clauses Keep Workers Locked In,” New York Times (May 13, 2017).
4 Flanagan, Jane, “No Exit: Understanding Recent Developments in Employee Non-Competes,” American Constitution Society (November 2019).
5 See “Petition for Rulemaking by Open Markets Inst., et al., for Rulemaking to Prohibit Worker Non-Compete Clauses,” Fed. Trade Comm’n (Mar. 20, 2019).
6 Wis. Stat. § 103.465.
9 Priority Intl. Animal Concepts, Inc. v. Bryk, 2012 WL 1995113, *5 (E.D. Wis. June 01, 2012), citing Gary VanZeeland Talent, Inc. v. Sandas, 84 Wis. 2d 202, 214 (1978).
10 Id., citing Farm Credit Services of North Cent. Wisconsin, ACA v. Wysocki, 243 Wis. 2d 305 (2001).
11 Star Direct, Inc. v. Dal Pra, 2009 WI 76, ¶ 20.
12 Manitowoc Co., Inc. v. Lanning, 2018 WI 6, ¶ 40 (2018).
13 Id. at ¶ 49.
14 Id. at ¶ 59.
15 Id. at ¶ 5.
16 Priority Intl. Animal Concepts *4, citing Star Direct v. Dal Pra, 2009 WI 76, ¶ 78.
17 Schetter v. Newcomer Funeral Serv. Grp., Inc., 191 F. Supp. 3d 959, 962 (E.D. Wis. 2016).
18 Seesupra note 16.
19 Tatge v. Chambers & Owen, Inc., 219 Wis. 2d 99, 116 (1998) (majority op.), aff’g 210 Wis. 2d 51 (Ct. App. 1997) (no wrongful discharge when company fired at-will employee for refusing to sign nondisclosure and noncompetition covenants).
20 Id. at 116-117.
21 364 NLRB No. 63, 207 LRRM 1001 (2016) enforced, Minteq International v. NLRB, 855 F.3d 329 (D.C. Cir. 2017); rehearing en banc denied (2017).
22 Id. at *8.
23 Haynes Mechanical Systems advice memorandum 27-CA-171581, July 25, 2016.
24 “Tech workers will get average of $5,770 under final anti-poaching settlement,” Fortune.com, Sept. 3, 2015.
25 Heyde Companies, Inc. v. Dove Healthcare, LLC, 2002 WI 131, ¶ 14, 258 Wis. 2d 28, 36–37, 654 N.W.2d 830, 834.
26 “Attorney General’s Settlement Ensures Sandwich Shop Workers Will No Longer Be Subject to Restrictive Non-Compete Agreements,” Illinois Attorney General press release, Dec. 7, 2016.
Board Discusses Emeritus Status, Supports Ghostwriting for Pro Se Litigants
The State Bar's Board of Governors discussed proposals to change the emeritus membership classification that currently applies to members age 70 and over, and adopted a policy position that supports lawyer ghostwriting for pro se clients.
Mark Petri, chair of a 12-person Emeritus Task Force, discusses the task force's proposals to change the emeritus membership classification.
Visit the State Bar’s Facebook page for more photos of this event, or click here.
Dec. 9, 2019 – The State Bar of Wisconsin’s Board of Governors last Friday discussed but took no action on possible changes to the “emeritus” classification of State Bar membership. Currently, attorneys who reach age 70 can elect to take emeritus status.
Emeritus members can still practice law but are not required to pay State Bar dues (currently $260 annually) or Wisconsin Supreme Court assessments (currently $236 annually), aside from a fee to the court’s client protection fund (currently $20).
Additionally, emeritus members are not subject to continuing legal education (CLE) requirements. Currently, “active” status members must obtain at least 30 CLE credit hours every two-year reporting period. Emeritus members are exempt.
Mark Petri – an emeritus member and chair of a 12-person Emeritus Task Force (task force) that has recommended changes to the emeritus classification – said the current structure does not distinguish between “inactive” members who are truly retired and no longer practicing and “active” lawyers who continue practicing well beyond age 70.
Petri said the task force reached two fundamental conclusions in developing the recommendations.
First, all lawyers who actively practice law, regardless of age, should be required to obtain CLE to stay up-to-day on the law. Second, all active members, regardless of age, should pay their fair share of membership dues to support the State Bar’s mission.
A straw poll indicated that a majority of the board supports a change to the emeritus membership category, and a majority believe the board should move forward on one of the two task force proposals presented. A majority also indicated support for a “grandparent provision” within any proposal to change the emeritus category.
Again, the board only discussed the proposals. The task force will continue its work to present a final draft proposal for future board consideration, and to gather and communicate additional information as requested by board members.
Emeritus Category has Not Changed in 44 Years
The current emeritus structure was established in 1975. The term “emeritus,” by definition, refers to an honorary title for “retired” individuals.
But the Supreme Court Rule adopted in 1975 does not refer to “emeritus” as a class of membership for retired individuals. It says the emeritus members can be “active” or “inactive.” That is, emeritus status lawyers can continue practicing law in Wisconsin, but are exempt from State Bar dues, most court assessments, and CLE requirements.
Dean Dietrich, immediate past president of the Senior Lawyers Division (SLD) board, spoke on behalf of the SLD board and asked the Board of Governors not to change the emeritus classification.
The Senior Lawyers Division (SLD) board objects to any changes to the emeritus category of membership. The SLD Board submitted materials opposing any emeritus status change, and SLD immediate past president Dean Dietrich spoke on behalf of the SLD board during the State Bar’s Board of Governors’ meeting.
Dietrich challenged any notion that attorneys ages 70 or older present consumer protection hazards and should be subject to continued CLE requirements, and said attorneys age 70 and older have earned the right to be exempt from dues and fees.
“We have been going for 44 years with this system, and there’s no data to suggest that there’s a problem with lawyers who reach age 70 and don’t have to take CLE,” Dietrich said. “That appears to be the undercurrent to a lot of this discussion.”
The SLD board previously voted to oppose any change, in a split vote. “You don’t have to fix a problem that doesn’t need to be fixed,” said Dietrich, who said the SLD board invites continued study on whether emeritus lawyers pose dangers to the public. “If we are going to make a decision on this, let’s make a decision based on data.”
But Petri, speaking on behalf of the task force, said the emeritus category is broken, and needs to be fixed. He also said the State Bar’s budget should not subsidize “active” emeritus attorneys who continue to use the State Bar’s programs and services, especially as many prolong their careers and State Bar demographics shift.
“The current emeritus category includes two distinct kinds of members, actively practicing lawyers and fully retired members,” Petri told the board. “The needs and responsibilities of those two categories are not the same.”
CLE and Dues
For instance, Petri said actively practicing lawyers of any age must stay up-to-date on legal developments through CLE. In other professions, such as the practice of medicine, continuing medical education is required, regardless of age.
“CLE is required for all other actively practicing attorneys, but not actively practicing emeritus members,” Petri said. “I think that’s a problem.” Petri also said that changes in the law come faster than ever, and all attorneys must stay ahead of the curve.
Dist. 2 Gov. Margaret Hickey spoke in support of a change to the emeritus status, noting all actively practicing attorneys should be required to pay bar dues and get continuing legal education, regardless of age.
In addition, Petri said actively practicing emeritus members pay no State Bar dues, but the State Bar still incurs costs to support them as active practitioners. Meanwhile, the State Bar provides fewer services to inactive (retired) emeritus members.
“There is no reserve to cover expenses related to current actively practicing senior attorneys who happen to be over a certain age,” Petri said.
The board discussed proposals that would require lawyers age 70 and over to continue paying State Bar dues and court assessments (and meet CLE requirements) if actively practicing law, as an equitable mechanism to share the costs of State Bar services.
The Nov. 20 issue of InsideTrack included a feature article explaining two proposed changes to the emeritus status classification and sought comments for the board’s consideration. Many comments received were made part of the board’s materials.
Emeritus Task Force Includes SLD Members
For the last two years, the Emeritus Task Force (task force) reviewed whether the current emeritus structure, which has been in place since 1975, should be changed.
The 12-person task force, first appointed by then-State Bar President Chris Rogers in 2018, consisted of two SLD past presidents, a SLD member, a retired Wisconsin Supreme Court justice, Nonresident Lawyers Division members, past and current State Bar presidents and officers, and other member representatives.
In making its recommendations, the task force recognized that the State Bar incurs costs to support emeritus members who actively practice law, and the emeritus membership is growing more rapidly than other membership categories as a whole.
Not all members who are eligible elect emeritus status, but a majority do. Currently, about 13 percent of the membership is 70 and over (3,165 members).
Of those, 2,277 are emeritus members. About 20 percent (4,687) of current members are between the ages of 60 and 69. Thus, if the current emeritus structure remains unchanged, there will be significantly more emeritus-eligible members in the next decade who are exempt from State Bar dues and CLE requirements.
Understanding these challenges, the task force developed two proposals intended as a good faith balancing of the interests of all bar members.
Under the first proposal, emeritus status would be reserved for members age 70 and over who certify that they are not actively practicing law. Emeritus members, under this proposal, could still do pro bono work for “qualified pro bono programs.”
Dist. 9 Gov. Sam Wayne engaged the discussion on proposals to change the emeritus membership classification.
Those members age 70 and over still actively practicing law would continue as “active” members and pay full State Bar dues and Supreme Court assessments. Those active members would also be required to meet the CLE requirements for “active” members.
The Senior Lawyers Division (SLD) Board rejected this proposal after the task force requested input. The SLD Board also opposed a revised task force proposal.
Under the revised proposal, like the first proposal, emeritus status would be reserved for members age 70 and over who certify that they are not actively practicing law. Emeritus attorneys could still do pro bono work for “qualified pro bono programs.”
Those members age 70 and over still actively practicing law would continue as “active” members and pay full State Bar dues and Supreme Court assessments. Those active members would also be required to meet the CLE requirements for “active” members.
However, “active” members would be converted to “senior active status” effective on July 1 following attainment of age 75, and would only be required to pay 50 percent of State Bar dues (plus court assessments) and obtain 15 CLE credits every two years.
Under this proposal, a transition plan is outlined for those currently emeritus and actively practicing to move to “senior active status” ahead of turning age 75.
The Senior Lawyers Division Board also rejected this proposal, for the same reasons as it rejected the first proposal. They see exemptions as an earned privilege and say CLE requirements should not be changed without data to show changes are necessary.
Proposal Not New
In 2013, the State Bar of Wisconsin petitioned the Wisconsin Supreme Court to change the structure of the emeritus classification. Under that proposal, full emeritus membership (no dues, no CLE) would have started at age 75.
State Bar Board Recognizes Wisconsin Legal Innovators
The State Bar of Wisconsin’s Board of Governors recognized this year’s Wisconsin Legal Innovators, who were recently featured in the November Wisconsin Lawyer.
Six innovators (and their teams) received awards and spoke briefly about their programs and innovations. The Lifetime Legal Innovator Award went to Lavinia Goodell, the first woman lawyer to be admitted to practice law in Wisconsin, in 1879.
Attorneys Colleen Ball and Nancy Kopp have spearheaded research on Goodell’s life and work, and have started a website to tell her story, laviniagoodell.com.
South Carolina lawyer Steve Bates, Lavinia’s great, great grandnephew, attended the recognition and awards ceremony, where Goodell’s original certificate of admission was officially donated to the Wisconsin Historical Society.
Visit the State Bar’s Facebook page to see photos of the event.
From age 70 to 75, members billing more than 800 hours annually would have been considered “active emeritus” and required to pay full dues and court assessments.
Those billing less than 800 hours would have been considered “senior emeritus attorneys” required to pay half State Bar dues and assessments.
At that time, the SLD Board supported the proposal, concluding that “it is reasonable for those who are continuing to practice and who can avail themselves of the services of the Bar, to continue to pay dues and take part in those services.”
The SLD Board, at that time, in a letter to the Supreme Court, also said “the additional income to the Bar may help it provide Emeritus members with resources and services to assist them in their practice and help prepare them for eventual retirement.”
Ultimately, the Supreme Court denied the petition (4-3) – which also included changes to ease financial burdens for young lawyers – but remained open to changes after “further refinement.” The court voted 6-1 to send it back to the State Bar.
The current proposals are different from the 2013 proposal in that they do not set a standard of 800 billable hours to determine emeritus classification. The proposals merely distinguish between “active” and “inactive” members age 70 and over.
Those “active” attorneys age 70 and over would still pay all (or half) State Bar dues and Supreme Court assessments as an equitable mechanism to share costs with other “active” members, since those members would likely be using State Bar services.
The proposals for continued CLE requirements recognize that attorneys, even very experienced attorneys, must remain up-to-date on changes in the law.
Discussion at Board Meeting
The board engaged in a robust discussion about the proposals. Some said the board has an obligation to look at the financial impact of change, and would like more data.
The task force did not review the financial impact and focused on the fairness issue, as well as the concern that all active emeritus lawyers should continue to obtain CLE. But the board discussed finances, and whether emeritus active attorneys should contribute.
“I guess I’m just offended that lawyers in full-time practice, under the mandatory bar, who are contributing or making money, or both, are not paying dues and doing CLE,” said Dist. 4 Gov. Mary Lynne Donohue. “This is not about competency.”
Donohue said organizations need to change to survive, and favors changes to the emeritus category. But she also favors “grandparenting” for current emeritus members.
State Bar President Jill Kastner said the financial impact was not part of the task force’s review, which was the intent. “We wanted the task force to look at what is the best structure. But we, as leadership, do want to look at the financial component,” she said.
Kastner said the fastest increasing category is the non-dues paying emeritus category. “The number of new lawyers is not growing as fast,” she said. “We have fewer dues paying members than we did last year. The biggest contributor is emeritus status.”
The financial aspect is important as the board discusses how to proceed in the best interest of the State Bar organization as a whole, Kastner said.
Jim Marshall, one of the Supreme Court’s public appointees on the board, said this situation is similar to individuals who don’t want to pay school taxes after their children are out. “Our job is looking to the future. We are trying to build the organization and maintain it for the next generation of lawyers. That’s a legitimate goal,” he said.
Dist. 2 Gov. Margaret Hickey said a lot has changed in the last 44 years. “The practice of law is much more complex,” Hickey said. “To use the services of the bar and pay nothing doesn’t seem logical to me.”
Numerous other board members weighed in, and a majority indicated support for a change to the emeritus status. A handful raised concerns that the State Bar should not act without more data. Those members were asked to submit specific data requests.
Again, the State Bar took no action on the issue, but will likely consider whether to change the emeritus category of membership at meetings in February or April.
Board Supports Ghostwriting Petition
The board voted to support policies that allow attorneys to engage in the limited-scope representation of “ghostwriting” to help self-represented litigants draft documents.
The policy position supports a pending petition (19-16), filed by Quarles & Brady LLP, which would restore a ghostwriting rule that was adopted by the Wisconsin Supreme Court in 2014 but subsequently amended by the Wisconsin Legislature in 2018.
Dist. 10 Gov. Chuck Stertz, chair of the State Bar's Policy Committee, discussed a policy on lawyer ghostwriting to assist pro se litigants. The board adopted the policy.
The Supreme Court adopted the ghostwriting rule in 2014 as part of practice and procedure rules and statutes to support and expand limited scope representation for self-represented litigants.
Under the rule, lawyers could assist self-represented litigants in drafting pleadings, motions, or documents without identifying themselves by name, so long as the pleading, motion, or document noted that it was “prepared with the assistance of a lawyer.”
The ghostwriting rule was intended to encourage more attorneys to provide free or low-cost legal help in the types of cases that pro se litigants typically appear – civil, family, small claims, and probate cases – through “limited scope” drafting services.
For instance, many volunteer legal clinics allow self-represented litigants to visit with a volunteer lawyer, for free, to obtain the lawyer’s help in drafting a court filing. This allows lawyers to do pro bono work on a limited scope as time and resources permit.
But the Wisconsin Legislature, in a 2018 omnibus bill, modified the ghostwriting rule, codified at Wis. Stat. § 802.05(2m), requiring lawyers to identify themselves and their bar numbers when they assist self-represented litigants in drafting court documents.
The legislature’s modification has a chilling effect on pro bono work, says Jeffrey Davis of Quarles & Brady LLP, who, along with firm attorneys James Goldschmidt, Sydney Vanberg, and Lauren Zenk, filed Petition 19-16.
That is, lawyers may hesitate to provide free drafting services if their names are tied to the case, for various reasons. This is particularly true at bigger firms like Quarles & Brady, which are invested in pro bono initiatives such Legal Action of Wisconsin’s Eviction Defense Project in Milwaukee.
“The court adopted it as a simple way to encourage more pro bono work. We believe it is important to bring the issue back to the court, which has worked hard to improve access to justice in Wisconsin,” Davis said in an Inside Track article on the petition.
Heiner Giese, legal counsel and registered lobbyist for the Apartment Association of Southeastern Wisconsin, filed a letter in opposition to petition 19-16.
He said the legislature has the authority to amend rules of pleading and practice, and litigation opponents and the media have a right to know the names of attorneys who are helping pro se litigants. However, Giese offered an alternative solution.
Giese worked with Sen. Luther Olson (R-Ripon) to draft legislation (not introduced) that would require attorneys helping self-represented litigants to disclose their names and bar numbers “only if it is requested by an opposing party in a contested matter.”
“This would preserve the legislature’s intention to have attorneys reveal their involvement in the small percentage of serious, non-routine cases (by which I mean contested cases) without requiring disclosure in the great majority of pro bono matters,” Giese wrote in his letter to the court.
He urged the court to adopt a ghostwriting rule that aligns with the draft legislation. The draft bill has not been introduced and Giese noted the uncertainty of legislation.
The current ghostwriting petition (19-16) is scheduled for a public hearing Jan. 17, 2020, before the Wisconsin Supreme Court.
Approved by Consent
The board approved the Young Lawyers Division request to amend its bylaws.
The board approved updates to State Bar policy positions, as recommended by the board’s Policy Committee. Policy positions are published in the State Bar’s Policy Positions Handbook, known as the “white book.”
The board approved administrative modifications to rules governing the State Bar’s Fee Arbitration Program, at the recommendation of the Fee Arbitration Committee.
Upon request, interested members may obtain a copy of the minutes of each meeting of the Board of Governors. For more information, contact State Bar Executive Coordinator Jan Marks by org jmarks wisbar email or by phone at (608) 250-6106.
If you have moved, become a partner or an associate, or received a promotion or an award, let us know!
New Hires, Promotions, Partners
Grant A. Beardsley, Stetson 2012, has joined Royal Credit Union, Eau Claire, as corporate counsel.
John Paul (JP) Croake, Marquette 2013, has joined Husch Blackwell LLP as an associate in the Madison office. He is a member of the real estate, development, and construction industry group and advises businesses on formation, purchase agreements, contract disputes, employee classification, commercial arbitration, acquisitions, and financing.
William D. Gardner, Brooklyn 1997 cum laude, has joined von Briesen & Roper s.c. as a shareholder. He is with the banking and commercial finance section in the Milwaukee office, representing banks, nonbank lenders, and borrowers in loan originations, workouts, financial restructurings, and bankruptcies and advising on legislative, regulatory, and other developments affecting the financial services industry and uses for new technology, including blockchain.
Breanna Halyburton, St. Thomas 2019 cum laude, has joined O’Melia, Schiek & McEldowney S.C. as an associate in the Rhinelander office. She practices in criminal defense, divorce and family law, and civil litigation.
Heather M. Hunt, U.W. 1997, has joined Nodolf Flory LLP, Eau Claire, as a partner. She concentrates on business and corporate law, mergers and acquisitions, succession and transition planning, contract negotiations, corporate financing and compliance matters, banking and lending, and real estate transactions.
Christopher J. Johnson, Marquette 1989, has joined Galanis, Pollack, Jacobs & Johnson S.C., Milwaukee, as a shareholder. His experience includes counseling and defending clients in labor and employment matters, with a particular emphasis in health care, manufacturing, banking, retail, transportation, and service industries. He also represents clients in commercial and civil litigation, with an emphasis in business and insurance disputes.
Kristofor L. Hanson, Marquette 2005, Chelsie D. Springstead, Marquette 2008, and Melissa M. Stone, Marquette 2007, have become equity shareholders in Lindner & Marsack S.C., Milwaukee, effective Jan. 1, 2020. Hanson represents employers in labor and employment law matters with an emphasis on traditional labor law, collective bargaining, contract administration, and labor relations. Springstead focuses on worker’s compensation defense, employment defense, subrogation, and Medicare-related issues. Stone represents insurance carriers and self-insured employers, providing legal guidance and establishing action plans for case investigation and litigation through hearings and appeals.
Timothy J. McDermott, Nebraska 1975, has joined Florida- and Alabama-based Upchurch Watson White & Max as a mediator and arbitrator. He previously practiced with Akerman LLP, Jacksonville, Fla. His practice involves civil disputes, including commercial and business disputes, employment matters, real estate litigation, and product liability and personal injury matters.
Krista E. Miller, Marquette 2004, has joined the Office of Court Operations, Madison. She previously was an assistant corporation counsel in Columbia County.
JB Koenings, Marquette 2011, and Erica Reib, Marquette 2011, have been elected as shareholders of O’Neil, Cannon, Hollman, DeJong & Laing, Milwaukee. Koenings focuses on business law matters, including form of entity selection and initial capitalization, private equity offerings, securities compliance and broker-dealer matters, mergers and acquisitions, contract preparation and negotiation, and software, technology, and IP matters. Reib, a member of the employment law practice group, focuses on employment discrimination litigation, noncompetition and trade secret litigation, wage and hour issues, NLRB and unfair labor practice matters, employment policy and agreement drafting and review, and unemployment compensation.
Christina E. Balistreri, U.W. 2012, Imran S. Kurter, John Marshall 2015, and Kellen O’Brien, Colorado 2014, have joined Probst Law Offices, Wauwatosa, focusing on family law. Balistreri has experience in a wide range of family law matters, plus criminal cases and municipal ordinance and traffic violations. Kurter brings courtroom experience in family law, criminal law, personal injury, civil and disability cases, and estate and probate matters. He previously operated Kurter Law Offices. O’Brien previously practiced family law, emphasizing divorce and postjudgment disputes, and also worked on business matters involving torts, construction, real estate, and consumer issues, with Madden Law Group S.C., West Bend.
Seven attorneys have joined Reinhart Boerner Van Deuren s.c., Milwaukee. Lucas Baker, Marquette 2019 cum laude, is with the litigation practice. Brady Brown, Marquette 2019 summa cum laude, is with the corporate law practice. Brett Erdmann, Marquette 2019 summa cum laude, is with the trusts and estates practice. Brooklyn Kemp, Marquette 2019 magna cum laude, is with the real estate practice.
Daniel Murphy, Marquette 2016 cum laude, is with the litigation practice. Shannon Toole, U.W. 2019 cum laude, is with the labor and employment practice. Collin Weyers, U.W. 2019 magna cum laude, is with the corporate law practice.
The Collaborative Family Law Council of Wisconsin (CFLCW) installed Robert MacMillan Arthur, Marquette 2012 cum laude, as its 2020 chair at the annual meeting in November. He operates Arthur Law Office LLC, Milwaukee. Elisabeth Bach-Van Horn, Missouri 2007, was chosen as the 2021 chair. She is a member of the family law practice group of Pines Bach, Madison, and focuses on divorce and legal separation, child custody and placement, child support, maintenance, adoption, and guardian ad litem matters. The CFLCW, which advocates for the resolution of family disputes and divorce outside the court system, uses a team-based system to help couples create unique settlement agreements that strive to protect the interests of all family members.
Francis Deisinger, U.W. 1982, has been appointed to the state Criminal Justice Coordinating Council. Deisinger is a member of the litigation law practice at Reinhart Boerner Van Deuren s.c., Milwaukee, and is a past president of the State Bar of Wisconsin. Deisinger has represented a full spectrum of litigation plaintiffs, defendants, and petitioners. He also served as Reinhart’s corporate counsel and now focuses on fiduciary, trust, estate, and donor disputes and on professional liability matters involving lawyers or law firms.
Daniel Finerty, Marquette 1998, a shareholder with Lindner & Marsack S.C., Milwaukee, has been appointed to the Native Nations Law Task Force by DRI, an organization of defense attorneys and in-house counsel. The taskforce provides networking and educational opportunities for defense litigators, tribal in-house counsel, and insurance companies that defend native nations in civil lawsuits. Finerty continues to extend his practice defending native nations and their employment practice liability insurance carriers in tribal, state, and federal courts.
Michael Hupy, Marquette 1972, has been named president of the recently launched Crime Stoppers: Milwaukee. Comprised of community leaders and volunteers, Crime Stoppers’ mission is to combine efforts of the public and media to aid law enforcement in the fight against crime. The program offers cash rewards up to $1,000 to individuals who provide anonymous information that leads to an arrest. Hupy is president of Milwaukee-based Hupy and Abraham SC, a personal injury law firm.
Todd McEldowney, Marquette 1980, with O’Melia, Schiek & McEldowney SC, Rhinelander, has been appointed to the Wisconsin Physical Therapy Examining Board and is the liaison to the Division of Legal Services and Compliance. McEldowney also is president of the Rhinelander Police and Fire Commission and is on the Oneida County Highway Safety Commission.
James J. Chiolino, U.W. 2007, Wisconsin Department of Workforce Development – Equal Rights Division, Madison, is author of the Wisconsin Wages and Hours Handbook (State Bar of Wis. 7th ed. 2019).
Authors of Hiring and Firing in Wisconsin (State Bar of Wis. 7th ed. 2019) are the following: Peter L. Albrecht, Washington Univ. 1986, and Bradden C. Backer, U.W. 1981, Albrecht Backer Labor & Employment Law S.C., Milwaukee and Madison; and Robert K. Sholl, Chicago 1981, Reinhart Boerner Van Deuren s.c., Milwaukee.
Jason D. Luczak, Chicago-Kent 2008, made several appearances in late 2019 on Court TV as a guest legal expert, offering commentary on a criminal case, Wisconsin v. McCandless. Court TV is a digital broadcast network and former American cable television channel. It was originally launched in 1991 with a focus on crime-themed programs such as true crime documentary series, legal dramas, and coverage of prominent criminal cases. Luczak is with Gimbel, Reilly, Guerin & Brown, Milwaukee, focusing in criminal defense and civil litigation, licensing, and appeals. He also is an adjunct associate professor of law, teaching trial advocacy and the trial skills competition course at Marquette Law School.
Rose Ann Wasserman, U.W. 1984, Wisconsin Department of Workforce Development – Equal Rights Division, Milwaukee, is author of A Guide to Wisconsin Employment Discrimination Law (State Bar of Wis. 7th ed. 2019).
Awards, Degrees, Honors
Gregory Monday, U.W. 1993, has been named a Fellow of the American Bar Foundation. He is a shareholder in the corporate law and trusts and estates practices at Reinhart Boerner Van Deuren s.c., Milwaukee, primarily representing mid-market family businesses in matters involving governance, ownership, and succession. He also represents closely held businesses and their boards in shareholder disputes and corporate fiduciaries and other parties in trusts and estates litigation.
Justin Oeth, Ohio State 2004, has been named a Fellow of the Construction Lawyers Society of America. He is a shareholder in the real estate practice at Reinhart Boerner Van Deuren s.c., Milwaukee, cochair of the construction industry group, and a member of the real estate leasing team. He negotiates and drafts complex leases, subleases, ground leases, purchase agreements, and architect and construction contracts.
The Wisconsin Equal Justice Fund Inc. (WEJF) honored three attorneys for their careers in civil pro bono legal aid at the 17th Annual Howard B. Eisenberg Lifetime Achievement Award Dinner in November.
Shirin Cabraal, U.W. 1981, and Lisa Clay Foley, U.W. 1987, received the Distinguished Service Award, which honors a staff person of one of the WEJF’s three beneficiary civil legal aid organizations. Cabraal recently retired as supervising attorney in the protection and advocacy team at Disability Rights Wisconsin (DRW), representing people with disabilities in actions on the individual and systems levels, including employment and housing discrimination, public accommodations and access, transportation, and education. Before her time at DRW, she was a staff attorney at Legal Action of Wisconsin (LAW), a lecturer at the University of Ceylon, and worked at the Marga Institute for Law and Development in Colombo, Sri Lanka.
Foley recently retired as supervising attorney in DRW’s disability benefits specialists program team. Foley provided technical assistance and training to DRW’s disability benefits specialists located in aging and disability resource centers around the state and worked with the SSI Managed Care External Advocacy Project. She previously worked at LAW, the Wisconsin Geriatric Education Center located at Marquette University, Legal Aid Society of Milwaukee, the AIDS Resource Center of Wisconsin, and the Milwaukee County Children’s Court Center. In 2014, Foley received the State Bar of Wisconsin’s Dan Tuchscherer Outstanding Public Interest Law Attorney Award.
David Pifer, Detroit-Mercy 1981, received the Howard B. Eisenberg Lifetime Achievement Award, which honors an individual who has demonstrated a lifelong dedication to the development and delivery of pro bono legal aid, either through direct provision of services or advocacy and fundraising on behalf of civil legal aid organizations. Pifer recently retired as executive director of LAW. He was instrumental in the creation of LAW’s Road to Opportunity Project to help low-income workers with suspended driver’s licenses restore their licenses. That project later expanded to address and remove other barriers to employment, such as criminal records and child support issues. Before joining LAW, he worked at Legal Services of Eastern Michigan.
Peter S. Balistreri, Marquette 1964, Mequon, Feb. 16, 1941 – Oct. 26, 2019.
James A. Blum, U.W. 1955, Pharr, Texas, July 20, 1928 – Aug. 18, 2019.
Michael J. Briggs, U.W. 1975, Madison, Sept. 1, 1934 – Aug. 26, 2019.
Stephen B. Cohen, Yale 1971, Washington, D.C., Sept. 11, 1945 – Aug. 17, 2018.
Randall D. Crocker, Marquette 1979, Milwaukee, Sept. 28, 1954 – Sept. 23, 2019.
William R. Drew, Marquette 1966, Milwaukee, May 3, 1936 – Oct. 17, 2019.
John S. Hoff, Southwestern 1975, Lake Forest, Ill., Jan. 2, 1946 – May 23, 2019.
James F. Kirschling, Marquette 1949, Glendale, April 27, 1923 – Aug. 16, 2019.
Douglas H. Lenicheck, Marquette 1962, Wauwatosa, April 12, 1933 – Oct. 14, 2019.
Thomas J. Lyons, Georgetown 1965, North Saint Paul, Minn., Jan. 4, 1941 – May 27, 2019.
Neal E. Madisen, U.W. 1952, Phoenix, Ariz., Oct. 2, 1926 – May 4, 2019.
Hon. Joseph D. McCormack, Marquette 1973, Grafton, July 16, 1940 – Oct. 19, 2019.
Timothy T. Patula, Valparaiso 1983, Chicago, Sept. 16, 1958 – Sept. 27, 2018.
Richard W. Pitzner, U.W. 1972, Fitchburg, Sept. 19, 1946 – March 9, 2019.
Paul Pokorney, U.W. 1965, Madison, Dec. 1, 1937 – Sept. 27, 2018.
John D. Rowland, U.W. 1958, Racine, Dec. 30, 1932 – July 23, 2018.
Diane E. Sapp, William Mitchell 1995, Milltown, March 25, 1942 – June 24, 2018.
Nelson E. Shafer, Kentucky 1959, Brookfield, May 31, 1930 – Sept. 24, 2019.
Edwin P. Wiley, Chicago 1952, Milwaukee, Dec. 10, 1929 – Oct. 4, 2019.
How to Place your Announcement
If you have moved, become a partner or an associate, or received a promotion or an award, let us know! Email announcements to: org MembersOnly wisbar wisbar MembersOnly org. Notices about State Bar members in good standing are printed as space is available, and subject to editing. Writing guidelines are available here. Questions? org MembersOnly wisbar Email us or call (608) 250-6139.
Photo placement: Submit a professional-quality photo. If the photo is used, the State Bar will issue an invoice ($35 each). Group photos are not accepted. High-resolution electronic photos are preferred.
Deadline: The first of the month preceding publication. For example, to place an announcement in the May issue, it must be received before April 1.
Ineligible announcements: Talks, speeches (unless they are of national stature), honors from other publications, and political announcements are not accepted.
The Office of Lawyer Regulation, an agency of the Wisconsin Supreme Court, provides these summaries for educational purposes.
The Office of Lawyer Regulation (OLR), an agency of the Wisconsin
Supreme Court, provides these summaries for educational
purposes. The OLR assists the court in supervising the practice
of law and protecting the public from misconduct by lawyers.
Find the full text of these summaries at www.wicourts.gov/olr.
Disciplinary Proceedings Against Courtney Kathleen Kelbel
On Oct. 22, 2019, the Wisconsin Supreme Court suspended the law license of Courtney Kathleen Kelbel, Milwaukee, for six months. Disciplinary Proceedings Against Kelbel, 2019 WI 93. The court ordered Kelbel to pay restitution to the Wisconsin Lawyers’ Fund for Client Protection in the amount of $4,625, as well as the costs of the proceeding, totaling $1,037.25.
Kelbel’s suspension was based on 11 counts of professional misconduct spanning five client matters. In three instances, Kelbel failed to act with reasonable diligence, in violation of SCR 20:1.3. In another three instances, Kelbel failed to refund an unearned advanced fee, in violation of SCR 20:1.16(d). In all five client matters, Kelbel failed to provide the Office of Lawyer Regulation (OLR) with a written response to the grievance, violating SCR 22.03(2). In three of those cases, Kelbel’s failure to respond was willful and therefore also violated SCR 22.03(6).
Kelbel had no prior discipline.
Disciplinary Proceedings Against Elizabeth Farrell
On Sept. 10, 2019, the supreme court publicly reprimanded Elizabeth Farrell, Portland, Ore., as discipline reciprocal to a stipulated public reprimand imposed against Farrell’s Oregon law license by the Oregon Supreme Court on May 17, 2019. Disciplinary Proceedings Against Farrell, 2019 WI 88. Farrell also violated SCR 22.22(1) by failing to notify the OLR of the Oregon public reprimand, although she did not realize she had the responsibility to do so, incorrectly believing her Wisconsin law license was in inactive status. The misconduct leading to the Oregon reprimand consisted of not timely returning a client file to a former client or successor counsel, in violation of Oregon Rule of Professional Conduct 1.16(d).
Farrell had no prior discipline. Her Wisconsin law license has been administratively suspended since 2009.
Disciplinary Proceedings Against Nicholas C. Kefalos
On Oct. 22, 2019, the supreme court suspended Nicholas C. Kefalos’ Wisconsin law license for six months effective Dec. 3, 2019, as discipline reciprocal to a six-month suspension imposed by the Illinois Supreme Court. Kefalos also violated SCR 22.22(1) by failing to notify the OLR of the Illinois suspension. Disciplinary Proceedings Against Kefalos, 2019 WI 94.
The conduct leading to the Illinois license suspension arose out of Kefalos’ violation of the Illinois Rules of Professional Conduct for his failure to act with reasonable diligence and promptness (1.3); failure to keep the client reasonably informed (1.4(a)(3)); failure to promptly comply with a reasonable request for information (1.4(a)(4)); failure to refund $2,550 in unearned advanced fees (1.16(d)); and failure to respond to lawful requests for information from the Attorney Registration and Disciplinary Commission (8.1(b)).
Disciplinary Proceedings Against Jeffrey P. White
On Oct. 22, 2019, the supreme court suspended Jeffrey P. White’s Wisconsin law license for nine months as discipline reciprocal to a nine-month suspension and public reprimand imposed by the Maine Supreme Judicial Court. White also violated SCR 22.22(1) by failing to notify the OLR of the Maine suspension. Disciplinary Proceedings Against White, 2019 WI 95.
The misconduct leading to the Maine license suspension arose out of White’s violation of the Maine Rules of Professional Conduct for his failure to act with reasonable diligence and promptness (1.3); failure to communicate with the client about the means to accomplish the client’s objectives and status of the case and to respond to reasonable requests for information (1.4(a)(2), (3)-(4)); excessive fee (1.5(i)); failure to return unearned advanced fee (1.16(d)); failure to put advanced fee into trust (1.15(b)); candor to the tribunal (3.3(a)); falsifying evidence (3.4(b)); truthfulness in statements to others (4.1(a)); failure to supervise a nonlawyer assistant or employee (5.3); and engaging in conduct involving dishonesty, deceit, and misrepresentation and stating or implying the ability to improperly influence a governmental agency or official (8.4(c)).
Court of Appeals Digest
In this column, Profs. Daniel D. Blinka and Thomas J. Hammer summarize select published opinions of the Wisconsin Court of Appeals. Full-text decisions are linked below.
Preferential Transfers – Voidability
Freund v. Nasonville Dairy Inc., 2019 WI App 55 (filed 10 Sept. 2019) (ordered published 30 Oct. 2019)
HOLDING: The circuit court properly found that a payment to a creditor was a preferential transfer voidable under the Wisconsin Statutes.
SUMMARY: After a bench trial, the circuit court found that one creditor, Nasonville Dairy, received a $290,000 payment from “Liberty Milk” only one month before Liberty entered receivership. This payment constituted a preferential transfer that disadvantaged Liberty’s other similarly situated creditors. The court ordered the receiver to recover the payment from Nasonville.
The court of appeals affirmed in an opinion authored by Judge Hruz. It interpreted the preferential transfer statute, Wis. Stat. section 128.07, which “favors the equal distribution of assets when creditors cannot be fully paid” (¶ 25). The parties stipulated that a preference existed, as defined by Wis. Stat. section 128.07(1) (see ¶ 27). The disputed issue involved whether the preference was voidable under Wis. Stat. section 128.07(2).
“Voidability,” the court held, turns on two beliefs. “First, the creditor must have had a reasonable cause to believe the debtor was insolvent at the time of the transfer. Second, the creditor must have had reasonable cause to believe the transfer would put him or her in a preferential position – i.e., the transfer would enable the recipient ‘to obtain a greater percentage of his or her debt that any other creditor of the same class’” (¶ 31).
Reviewing the record, the court of appeals found that sufficient evidence supported the trial judge’s finding that Nasonville had “reasonable cause to believe” that Liberty was insolvent and that the $290,000 payment would effect a preference.
Sentencing – Credit for Time Spent in Custody
State v. Zahurones, 2019 WI App 57 (filed 10 Sept. 2019) (ordered published 30 Oct. 2019)
HOLDING: The defendant was entitled to sentence credit on a charge for which there had been a “deferred entry of judgment agreement” for the time she was in custody on probation holds for three other convictions arising out of the same course of conduct.
edu daniel.blinka marquette Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.
edu thomas.hammer marquette Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.
SUMMARY: Defendant Zahurones pleaded no contest to four counts arising from a single course of conduct. On three of the counts to which Zahurones pleaded, the circuit court withheld sentence and imposed two years’ probation. The court deferred entry of judgment on the remaining count – Count 2 – pending the successful completion of Zahurones’ probation but the defendant remained subject to a signature bond on Count 2.
Following multiple probation holds, the defendant’s probation and the deferred entry of judgment agreement were all revoked, and the court imposed concurrent sentences on all four counts. The court granted sentence credit on the three counts for which the defendant was on probation for the time she spent in custody on probation holds on those three counts, but it denied that credit on Count 2. The defendant appealed and the court of appeals, in a decision authored by Judge Stark, reversed.
Pursuant to Wis. Stat. section 973.155, a convicted offender “shall be given credit toward the service of his or her sentence for all days spent in custody in connection with the course of conduct for which sentence was imposed.” “To qualify as time spent ‘in connection with’ the course of conduct giving rise to a sentence, a period of custody must be ‘factually connected with the course of conduct for which sentence was imposed.’ The term ‘course of conduct,’ in turn, refers to the specific offense or acts embodied in the charge for which the defendant is being sentenced” (¶ 14) (citations omitted).
The statute’s provisions are mandatory, and a sentencing court must grant the defendant any credit to which he or she is entitled under the statute (see ¶ 29).
In this case the appellate court concluded that the defendant was entitled to credit on Count 2 for the periods of time she was in custody on probation holds for the other three counts because they were factually connected with the course of conduct for which the defendant was ultimately sentenced on Count 2 (see ¶ 15). The factual connection between the defendant’s custody during the probation holds and the course of conduct underlying her sentence on Count 2 “is further strengthened by the manner in which her probation and [her deferred entry of judgment agreement on Count 2] were structured” (¶ 16).
Settlements – Material Terms – Indefinite Terms
Paul R. Ponfil Tr. v. Charmoli Holdings LLC, 2019 WI App 56 (filed 18 Sept. 2019) (ordered published 30 Oct. 2019)
HOLDING: A settlement agreement arising out of a mediation was unenforceable because it lacked agreement on material terms.
SUMMARY: This case involved a property dispute. During a mediation, the parties prepared and signed a handwritten one-page document titled “Mediation Settlement Agreement” (¶ 2). In the agreement’s fifth paragraph, the parties “agree[d] to sign a separate substantive agreement covering such things as liability & indemnity in usual form” (¶ 3). The parties never arrived at any agreement on this point despite later attempts to do so. One party, the Paul R. Ponfil Trust, filed a motion to compel the agreement’s enforcement under Wis. Stat. section 807.05.
The circuit court found that the parties had entered into a binding agreement and that the case had been settled in full. The court did not, however, identity the terms of paragraph 5 and urged the parties to return to mediation to work them out.
The court of appeals reversed in a majority opinion authored by Chief Judge Neubauer. After reviewing the basics of settlement law, the court held that the parties’ failure to agree on the terms of paragraph 5 meant that the settlement was not enforceable (see ¶ 17). “Agreements to agree are unenforceable when there is not agreement as to material terms” (¶ 19). The terms regarding liability and indemnity were both “(1) material and (2) remain to be worked out” (¶ 20).
“To be enforceable, the material terms of the settlement must be addressed with a reasonable degree of certainty and definiteness” (¶ 22). The record showed that “complex issues” remained to be worked out. “In sum, these material terms are not sufficiently definite; there is not objective basis upon which to determine what the terms might be. We have no authority to eliminate Paragraph 5, rewrite its terms, or kick the can down the road by enforcing an agreement with indefinite material terms” (¶ 25).
Dissenting, Judge Reilly observed that the handwritten agreement by “sophisticated parties” had as its objective the dismissal of “THIS CASE.” Paragraph 5 was not a “material term of the contract,” but a “clean-up paragraph meant to handle the executory details ‘in usual form’” (¶ 31). The agreement itself stated that “THIS CASE IS SETTLED IN FULL” (id.).
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Immigration Compliance and Best Practices
By Charles M. Miller, Marcine A. Seid & Daniel Brown (Chicago, IL: ABA, 2018). 452 pgs. $139.95. Order, www.americanbar.org/products.com.
Reviewed by Nilesh Patel
In Immigration Compliance and Best Practices, published in 2018 by the American Bar Association, the authors provide lawyers with the information they need to “proactively implement programs for current and future immigration law compliance” and to help them create more than an “off-the-shelf” compliance approach. The authors state this is a relatively new subspecialty of immigration law, with few compliance resources. They fill that gap with a resource that should help in-house counsel, risk management and compliance, human resources, employment law, and business law practitioners spot major risks and avoid serious compliance problems when it comes to the recruitment of and hiring of employees who are citizens or permanent residents or with work visas. At the same time, the book makes clear that a skilled immigration lawyer will be a necessary partner to successfully navigate the risks.
Right from the introduction, the authors provide crucial guidance, warning that given the range of legal risks involved, employers should make immigration compliance an integral part of their risk management program. In addition, to mitigate or avoid potential legal liability, employers must consider the collateral consequences of possible criminal violations and should factor in consideration of nonimmigration statutes, such as the federal sentencing guidelines. I found this a valuable insight, informing readers to factor in a related issue they might have otherwise missed during the creation and implementation of a compliance program or when evaluating the defense or settlement of an enforcement action.
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Please request a book and writing guidelines from Wisconsin Lawyer managing editor Karlé Lester, at org klester wisbar wisbar klester org or (608) 250-6127. Reviewers may keep the book reviewed. Reviews of about 500 words are due within 45 days of receiving the book. Reviews are published, space permitting, in the order received and may be edited for length and clarity.
The book covers 10 major topics in a relatively short 300 pages. The topics range from employer liability and potential civil and criminal penalties, enforcement actions and legal basis, restrictions on technology and exports, managing immigration visa-based hiring, properly implementing employment verification requirements, avoiding unfair and discriminatory practices, using online employment verification programs for federal contractors, due diligence and compliance strategies, and developing an external audit process to proactively spot risks and also to mitigate penalties as a result of an enforcement action.
The book makes clear that as opposed to only reviewing immigration law-related statutes or case law, a proper understanding of this area also requires knowledge of the relevant enforcement agencies, their overlapping authority, and memoranda and guidance documents from these agencies. The book points to several guides, such as a guide to inspections and penalties for Form I-9 and a handbook for employers.
A small quibble is that the book provides an online link for these documents, but the link did not work. That said, the guides are likely easily found via an online search, if they are still publicly available from the administrative agency. Even if a particular guide is not available, the book once again provides an insight for lawyers to review the most current policy guidance issued by these agencies.
Reviewing this book greatly expanded my understanding of topics with which I thought I was already familiar, such as Form I-9 procedures and avoiding discrimination risks. Overall, I believe the book will prove to be an invaluable tool for spotting issues and creating general protections and policies for companies.
Nilesh Patel, U.W. 2002, is counsel at the Day Care Council of New York Inc., New York, N.Y. He is also the principal attorney at the Mahadev Law Group LLC. In both capacities, he advises business on employment and human resources matters.
Punishment Without Crime: How Our Massive Misdemeanor System Traps the Innocent and Makes America More Unequal
By Alexandra Natapoff (New York, NY: Basic Books, 2018). 352 pgs. $27. Order, www.barnesandnoble.com.
Reviewed by Craig R. Johnson
Punishment Without Crime: How Our Massive Misdemeanor System Traps the Innocent and Makes America More Unequal, by Alexandra Natapoff, is an encyclopedic examination of the system(s) of misdemeanor justice in the United States – systems that, as the title implies, can inflict punishment far out of proportion to the behavior at which it is aimed.
Natapoff, a law professor at the University of California, Irvine, has conducted an exhaustive study of the myriad systems that regulate low-level illegal behavior across the country. Her first task is to recognize that even reaching a clean and consistent definition of “misdemeanor” is problematic. The definition varies and can have a big effect on the outcome of a particular situation – whether a defendant gets a jury trial, for example, or appointed counsel through a public defense system. One chapter examines the ways in which vastly different offenses, from OWI to vagrancy to domestic violence, fit into various systems of “misdemeanor” justice.
Natapoff also examines the policing of petty infractions and how it has negatively affected people of color, low-income people, and others without the power to effectively challenge what amounts to “assembly line” justice. She weaves the stories of individuals into the various chapters to illustrate the devastating effect that the system can have – even on innocent persons. For example, she tells the story of Tyrone Tomlin, who was arrested for a minor drug-paraphernalia violation and was held at Riker’s Island because he couldn’t afford bail and refused the 30-day sentence offered. At Riker’s he was assaulted and ended up with an eye injury that was still causing blurry eyesight months later. He was innocent and the charge eventually was dropped, but the system had already exacted its punishment.
In other chapters, Natapoff traces the history of the misdemeanor justice system’s role in keeping social order, particularly detailing the use of vagrancy laws to control the African-American population in the southern United States. Not only did such laws provide a source of essentially “neo-slave” labor for rent, they also saddled convicted individuals with various fees that help fund the system of oppression under which they suffered. Again, a devastating illustration is used – the story of Green Cottenham, an African-American man who was arrested for vagrancy and sentenced to six months of hard labor in Alabama. His “sentence” was then purchased by a coal company, and he was put to work in a mine. He died of tuberculosis before he completed his sentence – at age 22, in 1908.
The system of misdemeanor injustice has long existed in the shadowy corners of our courthouses. Because its targets are often powerless and neglected, its offenses petty and deemed unimportant, the shortcomings of the system do not get the attention they deserve. Natapoff’s book is a comprehensive examination of the problems and possible solutions for this crisis.
As she points out, progress has been made – vagrancy laws challenged, forced labor apparatus dismantled – because of the dogged advocacy of lawyers, activists, and grassroots organizations. A well-administered system of public defense can make a difference. Public defenders and private attorneys who take appointments to represent indigent defendants can make a big difference, but too often these systems are underfunded. Nonetheless, for novice and veteran lawyers alike, standing up in court and effectively fighting for a misdemeanor defendant can make a huge difference in the defendant’s life. Doing so won’t make the lawyer the subject of a TV show, a podcast, or a documentary, but as Natapoff reveals in her book, few causes in the practice of law are more noble.
Craig R. Johnson, U.W. 1994, practices criminal defense and labor law at Sweet and Associates, Milwaukee.
VERDICT: It’s a Keeper
Zero Tolerance: Best Practices for Combating Sex-Based Harassment in the Legal Profession
By Commission on Women in the Profession (Chicago, IL: ABA, 2018). 92 pgs. $49.95 ($39.97 for ABA members). Order, https://americanbar.org/products/.
Reviewed by Dianne Post
This short and practical book provides everything needed to set up an effective sexual harassment policy in a law firm. After the opening from Anita Hill, the authors outline the problem and legal framework. The prevalence of sexual harassment in law firms cannot be disputed (50 percent of women reportedly have experienced it and 75 percent think it is a problem), and the evidence for the negative effect it has on women and their careers is overwhelming.
The loss is not only to the women but to the legal profession as a whole. Although the problem was recognized 24 years ago, even today, only two states have adopted ABA Model Rule 8.4 to address it. Although this section of the book is short, the footnotes are devastating – defining the depth and breadth of the negative effects on individuals, workplaces, and society.
Next, the authors discuss current manifestations such as bullying and implicit bias. Bullying is often a precursor to sexual harassment, and research at the University of Arizona is ongoing. Harvard has an implicit bias test online that is very instructive (https://implicit.harvard.edu/implicit/takeatest.html).
Law firms pay a high price for sexual harassment, from lost productivity to compensatory and punitive damages. From Anita Hill to Christine Blasey Ford, the public shaming that comes with reporting sexual harassment endures. Recently a victim posted the following on her Facebook page: “When my money is taken, I’m a victim of robbery; when my car is taken, I’m a victim of car theft, when I’m assaulted, I’m a victim of assault; but when I’m raped, I’m an accuser.”
The book then moves into practical actions such as training and prevention, policy, complaint and reporting processes, investigation and anti-retaliation procedures, sanctions, and discipline. At first reading, I was a little aggravated about the time spent on the detail of the investigation procedure – after all we are lawyers and know how to do an investigation, don’t we? But considering how poorly these investigations have been done in the past, perhaps such a step-by-step outline is necessary.
The book concludes with a discussion of sanctions, that is, informal and formal in-firm procedures and (if those are not successful) legal action. The appendices give samples of policy and progressive discipline. Thus, no firm has an excuse not to have a policy and a procedure for dealing with complaints of sexual harassment. The ones in the book can be adapted and used.
As lawyers, we should set the standards, not hide behind outdated power structures and perpetuate abuse. The legal profession has a special obligation to uphold the rule of law, especially in law firms. Let’s do what we should be doing – lead.
Dianne Post, U.W. 1979, is an international human rights lawyer. She practiced family law in Arizona for 18 years, mostly representing battered women and molested children, and then in 1998 began doing international work mainly on gender-based violence.
Interesting facts, trends, tips, bits and bytes in the news.
Spontaneous Combustion or Grandstanding?
A Miami lawyer in 2017 was representing a client accused of setting his own car on fire to collect insurance money.
While arguing to the jury that spontaneous combustion could have caused the vehicle to set fire, smoke began billowing from the lawyer’s pants and he ran out of the courtroom. He later said a faulty e-cigarette ignited inside his pocket, but prosecutors who investigated believed it was a stunt to bolster his spontaneous combustion argument.
The lawyer also faced a bar disciplinary probe. In September 2019, a referee recommended a license suspension of 91 days. But, as of press time, the Florida Supreme Court had ordered the lawyer to show cause why he should not face harsher sanctions.
Source: Miami Herald
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By the Numbers
– The percentage increase in average annual salary among Wisconsin lawyers, from 2014 to 2018, according to Forbes, which used occupational data from the U.S. Bureau of Labor Statistics. That percentage increase is the highest among all states. Only Arizona (19.5 percent) and Illinois (18.5 percent) came close.
In some states, such as Michigan and Minnesota, average annual salaries actually declined during that five-year period.
The data says that Wisconsin lawyers made, on average, $102,000 per year in 2014 and jumped to $130,450 in 2018. This ranks Wisconsin 14th of all states when looking at highest average salary.
California lawyers had the highest average salary in 2018, at $171,550; Illinois was fifth at $152,980. Montana was the lowest at $88,600.
How Quickly Are You Getting Paid?
According to the Clio’s 2019 Legal Trends Report, 57 percent of electronic invoices got paid within the same day they were billed to clients, with 85 percent paid within one week. That bodes well for lawyers who want to get paid quickly for their work.
But some lawyers still do not accept electronic payments, likely because they do not understand the process. If you are not currently accepting electronic payments, there are several resources that can help you get started.
The State Bar’s Options For Trust Account Management outlines permitted, prohibited, and security requirements for the different types of trust accounts. Additional information regarding the rules can be found in “E-banking: Modernizing Trust Account Rules” (Wis. Law., July 2016) and on the Office of Lawyer Regulation Trust Account Program page.
If you have further questions about the trust account rules, contact the State Bar of Wisconsin’s Ethics Hotline at (800) 254-9154.
Ready to receive electronic payments? Review your current practice management software system to determine if it provides or integrates with electronic payment processors. If it does not, check out the payment processing companies, such as LawPay, listed in the Member Benefits – Discount Programs area. For other assistance, contact Practice 411™, (800) 957-4670.
Source: Christopher C. Shattuck – Practice Management Advisor (Practice 411™), State Bar of Wisconsin.
Did You Know
Just Mercy Premieres
Public interest lawyer Bryan Stevenson’s New York Times bestselling nonfiction book Just Mercy is now adapted into a feature film that premieres this month.
The book and film detail Stevenson’s representation of Walter McMillian, who spent 30 years on Alabama’s death row for two murders he did not commit. Actors Michael B. Jordan (Stevenson) and Jamie Foxx (McMillian) star in the film, which will surely rank high in the category of legal drama.
Just Mercy also tells the story of Stevenson, who as a young graduate of Harvard Law School opened the Equal Justice Initiative in Montgomery, Ala. He has spent his entire career representing wrongfully convicted individuals, including death row inmates, and juveniles sentenced to adult prisons.
Stevenson also promotes racial justice and criminal justice reform through education. He was a featured speaker at the State Bar of Wisconsin’s 2016 Annual Meeting and Conference.
Before heading out to the movie, read Bryan Stevenson: This Public Interest Lawyer Could Change America (InsideTrack, May 6, 2015).
“What good is the warmth of summer, without the cold of winter to give it sweetness.”
– John Steinbeck, from Travels with Charley: In Search of America.
Winter in the Northern Hemisphere begins on Saturday, Dec. 21, 2019.
On the Radar
NCAA to Let College Athletes Profit from Endorsements
As college basketball heats up and college football bowl games fast approach, players in those and other college sports could soon be paid for endorsements that use their name, image, or likeness.
Last month, the NCAA’s governing board voted unanimously to permit students participating in athletics the opportunity to benefit from the use of their name, image, and likeness.
The move follows passage, in September, of California’s Fair Pay to Play Act (effective in 2023), which expressly allows college players to profit from endorsement deals despite current NCAA rules that bar student-athletes from entering such deals.
Other state legislatures reportedly have introduced or will introduce similar legislation, including the Big 10 Conference states of Illinois, Iowa, Michigan, Minnesota, and Wisconsin.
Time will tell how NCAA rules that govern student-athletes will interact with “Fair Pay to Play” legislation.
Sources: NCAA, ESPN, Washington Post
Final Thought: Diversity: Opportunity to Overcome Differences
Negotiating a physical disability myself and living and working among various cultures have informed my views about diversity and inclusion. Diversity is an opportunity to become better lawyers and a better legal community.
Karen K. McKenzie
“Big law firms struggling to comply.” “Not an option anymore. It’s a mandate.” “Checking a box.” “In compliance.” These comments are excerpts from recent articles related to diversity – almost all couched as obligation rather than opportunity. However, lawyers and firms who view diversity through this limited prism are missing the mark. The mark is the intrinsic value of a diverse legal community.
com mckenzie608 gmail Karen McKenzie, RN U.W.-Madison 1997, JD Marquette 2017, practices with the Judiciary of the Virgin Islands, Christiansted, Virgin Islands. Her practice focuses on complex litigation and class action. The opinions in this article are the author’s alone and do not reflect the views of the Judiciary of the Virgin Islands.
First, diversity should not be couched in terms of a compliance requirement, but as a mindset through which one can appreciate the socioeconomic, cultural, and physical barriers that other lawyers have overcome. Lawyers in underrepresented groups have overcome challenges many others likely will never encounter. Thus, they bring tenacity, mutuality, determination, work ethic, and sheer grit to any task. Moreover, they possess a key to winning a successful jury award – commonsense, relatable experiences.
Diversity also should be viewed as an opportunity to better understand the public we represent, the clients we serve, and the jurors we hope to persuade. According to Tiffani Lee, partner at Holland & Knight, “Clients receive the highest quality service when their legal teams are drawn from professionals mirroring the diversity of the marketplace.”
Second, diversity improves how the public views the legal profession and ensures that future leaders reflect talented, qualified individuals from unique backgrounds. As Justice Sandra Day O’Connor has said, a diverse legal profession “informs the public of their impressions of the legal field and ensures that the nation’s leaders are reflective of the country.”
The ABA’s Litigation Section put teeth into its efforts to foster future diverse leaders by creating the Diverse Leaders Academy (DLA). The DLA selects a few lawyers and facilitates their two-year involvement with bar leadership, committees, and various bar initiatives. DLA members must actively support the program’s success by designing a diversity project, with a concrete action plan having measurable results. (My project involves quantitative and qualitative measures of what motivates individuals raised in poverty or socioeconomically depressed areas to pursue a law career.)
My contributions as a DLA member stem from my experience overcoming a life-threatening illness, which resulted in a long-term physical disability. Overcoming the challenges associated with relearning every activity associated with the use of my arm, facing new limitations, and how I am viewed motivated me to provide pro bono legal services to U.S. Armed Services veterans and their families regarding service-connected disability benefits appeals. In addition, my experience as an assistant attorney general in the Office of Attorney General for the U.S. Territory of Guam and current work as an attorney for the U.S. Virgin Islands has given me a special perspective and viewpoint. I see diversity as an opportunity to understand the challenges that others face and overcome, which serves only to improve our legal community.
Embracing our differences and understanding others’ challenges is an opportunity to become better lawyers and a better legal community.
Diversity should be couched not in terms of a compliance requirement but as a mindset through which one can appreciate the socioeconomic, cultural, and physical barriers that other lawyers have overcome.
Meet Our Contributors
What is the worst travel experience you’ve had?
When I accepted my first full-time job as a lawyer, I flew halfway around the world, through Japan, to Guam. I shipped everything I owned and hoped it would not get lost at sea. When I left Madison, it was -55° F and the wind chill was -80° F. I was bundled up in every piece of winter clothing I owned.
Upon arrival in Tokyo, it was a balmy 45°. When I eventually landed in Guam, it was 115°. I shed my winter gear, secured a rental car, found the condo I rented online, fought jet lag, and prepared to report for work the next day. My household goods arrived two months later, most of them broken or damaged. Part of my prized jazz collection was lost, never to be recovered.
Yes, it was rough to move halfway around the world. And yet, this troublesome travel opened the door to diverse cultural viewpoints, important work in the Office of Attorney General, and invaluable experiences as a prosecutor. The trip was worth it.
com mckenzie608 gmail Karen McKenzie, Judiciary of the Virgin Islands, Christiansted, Virgin Islands.
Become a contributor! Are you working on an interesting case? Have a practice tip to share? There are several ways to contribute to Wisconsin Lawyer. To discuss a topic idea, contact Managing Editor Karlé Lester at (800) 444-9404, ext. 6127, or email org klester wisbar wisbar klester org. Check out our writing and submission guidelines.
Ethics: Reporting OLR Investigations to Employers
Supreme Court Rules do not require lawyers to report disciplinary investigations to their employers, but fiduciary duty might require doing so. Law firms can encourage a robust fiduciary duty by requiring lawyer-employees to notify their managers regarding pending disciplinary investigations.
Dean R. Dietrich
I am the managing partner at a small law firm. I have heard a rumor that one of the firm’s associates is being investigated by the Office of Lawyer Regulation. Does the associate have to notify me of the investigation?
Nothing in the Rules of Professional Conduct requires a lawyer to notify his or her employer if the lawyer is the subject of an investigation by the Office of Lawyer Regulation (OLR). A proposal was presented to the Wisconsin Supreme Court that would make such a requirement part of the Supreme Court Rules; however, the supreme court has decided to take no action to consider that proposal.
com dietrich dvlawgroup Dean R. Dietrich, Marquette 1977, of the law firm of Dietrich VanderWaal Law Group SC, Wausau, is past chair of the State Bar Professional Ethics Committee.
Under the current Rules of Professional Conduct, lawyers have a duty to cooperate with the OLR. That duty is found in SCR 21.15(4) and SCR 22:03(4) and (6). The duty of cooperation is a crucial requirement for lawyers, and a lawyer can be subject to significant discipline if the lawyer refuses to provide information to the OLR or to cooperate in an investigation. A lawyer is also required to notify the supreme court (and the OLR) if the lawyer has been convicted of a crime (see SCR 21.15(5)), which again is an absolute requirement except for instances of traffic violations that do not rise to the level of a crime. The primary example of the latter is a first-offense operating while intoxicated; any additional convictions for operating while intoxicated would require notification be given to the clerk of the supreme court and the OLR.
Although there is no Supreme Court Rule regarding notification by lawyers if they are under an OLR investigation, every lawyer owes various fiduciary duties to the law firm that employs the lawyer. The nature and extent of a fiduciary duty depends on the employment relationship and the policies established by the employing law firm. This is more of a legal analysis than an interpretation of the Rules of Professional Conduct but is something that law firms and lawyers should be aware of.
It would make sense that a law firm would have a very clear policy either in an employment agreement or in an employment handbook that places an obligation on the lawyer to notify the managing partner of any investigation being conducted concerning the lawyer’s conduct. This would apply whether the lawyer is an associate in a law firm or a partner or an owner of the law firm.
The potential of adverse consequences from an investigation and how it may affect services to clients is something that the law firm should consider. It certainly starts by having knowledge of the investigation, which might be ongoing. It also provides an opportunity for the law firm to assist the lawyer in addressing the issues that may arise from the OLR investigation.
Lawyers must remember that they owe fiduciary duties to their employer and recognize when they need to take the appropriate steps to meet those fiduciary duties.
The nature and extent of a fiduciary duty depends on the employment relationship and the policies established by the employing law firm.
Reflections: How Do You Identify?
There's no wrong answer to the question of which of your life's roles you primarily identify with, as long as the response feels right for you.
Deanne M. Koll
At one of my firm’s retreats, after too much wine, I got into a discussion with another lawyer about how I “identify.” One of my firm’s lawyers had recently gone through a scary cancer diagnosis and surgery, but now had a good prognosis. He was professing that he did not identify as a “cancer survivor.” This began his probing of others at the table: How do you identify?
com dkoll bakkenorman Deanne M. Koll, William Mitchell 2006, is an attorney and shareholder with Bakke Norman S.C., with offices in Menomonie and New Richmond, Wis.
Very quickly, I said that I identify as a lawyer. That was easy; I mean, duh, right?
Then, I quickly threw my hand over my mouth. Did I just say that my primary identity was as a lawyer? Did my self-identification as a lawyer work as an exclusion of my many other identities? Did that mean that I didn’t self-identify as a wife? As a daughter? Or worse, that I didn’t self-identify as a mother? (Insert *gasp*).
Aaaaaaaand, cue the guilt. Guilt about ordering another bottle of wine for our table, but also guilt for not primarily identifying as a mother. Contemporaneously with the rising guilt, so rose my swirling feminist disposition. I thought, is this guilt of not identifying “as a mother” a result of the social indoctrination that women must identify primarily with being a mom? Why can’t I identify primarily as a lawyer? I mean, I’m a better lawyer than I am a mother, right?
I suspect there’s a psychoanalysis pyramid for this, but after the guilt, I began the rationalization process. My brain spun. I thought, I immediately identify as a lawyer, because I’m always a lawyer – it never shuts off. I’m either 1) at work, 2) worrying about work, or 3) making a mental list for what I have to do when I’m next at work. The other hours of the day, I’m either sleeping, yelling at my kids, or participating in a wine-and-whine, after my kids are in bed. I really am just a high functioning mess of a mom, but I’m a pretty okay lawyer. This conclusion – of never being able to “turn off” being a lawyer, together with my conclusion on my respective abilities at each – made for a smooth rationalization as to why I so quickly identified primarily as a lawyer.
For some context, I’ll tell you I was raised by a matriarch. Everyone in my family knew who was in charge. (Sorry dad, but even he would agree.) And, my mother worked outside the home my entire childhood – she had an identity outside of our family and never apologized for that. My dad never gave her money and was never allowed to ask where she spent hers. (To this day she maintains her own bank accounts; Nordstrom thanks her). She was the final say on what we were allowed to do, and there was no negotiation if we didn’t like the response. She was firm, fair, and had a life (and career) of her own, outside of her kids.
All the same, she was a good mom – a great mom, in fact. She made us ask to be excused from the dinner table, she always made us use our manners, and we never got a gift for which we were not required to write a handwritten thank-you note. If there was a reality TV show competition for moms, she’d certainly win.
I’m sure that if I asked my mother how she identified, she would say “as a school teacher.” And, I think that’s okay. She taught me (and my sister) that we needed to be independent, we needed to be educated, and we needed to have our own money. But, most importantly, my mother taught me that you can be a mom and identify as something outside of motherhood. For me, that’s being a lawyer. So, why all of my angst about not primarily identifying as a mother? What I’m telling you other lawyer-moms is this: let’s stop apologizing for this! We can primarily identify as a lawyer, because we’re good at it. As for the motherhood aspect, it’s like folding a fitted sheet – no one really knows how to do it.
I’ve traversed the internal path of rationalization. Have you?
Is this guilt of not identifying “as a mother” a result of the social indoctrination that women should identify primarily with being a mom?
Managing Risk: Top 10 Ways to Save Your Malpractice Deductible
The best malpractice insurance policy is the one you never have to use. Here are WILMIC's top 10 things to keep in mind when trying to avoid being the target of a grievance or a malpractice claim.
Thomas J. Watson
Brilliant legal work is sometimes not enough to insulate you from grievances or legal malpractice claims. ABA statistics show an average of three claims per career for every lawyer starting in practice these days. Mistakes happen. They’re a fact of life and the reason you have malpractice insurance.
Of course, there are things you can do in your everyday practice to help minimize the risk of a claim. In addition, periodically assessing your risk management strategies, including selecting clients, managing client expectations, billing, and calendaring, can help you provide better representation. Wisconsin Lawyers Mutual Insurance Co. (WILMIC) frequently presents continuing legal education programs focused on helping lawyers assess how they manage those procedures and avoid malpractice claims. Katja Kunzke, WILMIC president and CEO, likes to call this topic the top 10 ways to avoid spending your deductible. The list is not all inclusive and does not guarantee you will never have a claim or grievance filed against you, but it is a good start to making your life easier, minimizing risk, and maybe even making you a better lawyer.
With apologies to David Letterman, let’s look at our top 10 list.
1) Stop Lying to Your Calendar About Who Is In Charge of Your Life
More than 20 percent of all claims and 27 percent of all claim dollars result from calendaring errors, including missed deadlines, often because lawyers do not calendar enough time for the “unexpected.” When was the last time you had a day without the “unexpected?” Kunzke, who ran WILMIC’s claims department for 14 years, says, “Calendar as though something bad will happen.”
Lawyers often find that tasks take longer than the time they have put on their calendar. Maybe a client meeting takes longer than expected. Kunzke says, “Allow for time to fix mistakes. Allow more time to get it done than you think necessary. You might even consider including it in someone else’s calendar in the office so you have some back-up if you need it.”
2) “No” is a Complete Sentence
Our claims attorneys often hear the refrain, “I knew I shouldn’t have taken that case.” Facing real people in real crises makes it difficult to always make the right decision about which cases to choose. And turning away business is never easy. Solo practitioners and lawyers in small firms often feel they cannot be choosy about the clients they select.
Kunzke says, “Lawyers need to believe they can say ‘no’ and their practice won’t dry up. It doesn’t take long to recognize the clients you shouldn’t have taken.”
Don’t take cases strictly for financial reasons. It can be tempting to accept every potential client who comes in the door. But you may end up with a case outside your area of expertise. This is what Kunzke calls dabbling. “A high number of malpractice claims are directly related to this problem,” she says. “Don’t be afraid to refer a case if you do not have the required expertise.”
Some lawyers stay away from representing a client who has already had at least one other attorney for the same matter. For one thing, Kunzke says, “it may be an indication that the client will never be satisfied no matter who is representing them. Second, how long before the client leaves you? Will the client cooperate? Is the client going to make demands that are unrealistic or unethical?”
Red flags can also include a gut check. Assess honesty and reliability in potential clients at the very first meeting. You can sometimes learn things about a potential client by observing the person’s interactions with your staff. Rude or discourteous behavior or giving inconsistent information to a staff member can be significant red flags.
More than 20 percent of all claims and 27 percent of all claim dollars result from calendaring errors, including missed deadlines, often because lawyers do not calendar enough time for the unexpected.
3) If You Don’t Like Your Client, You Better Love Your Carrier
You will always have least favorite clients, and they likely are the ones you don’t want to deal with. So you won’t. “These are the matters where you will fail to properly communicate, miss deadlines, and make bad choices,” Kunzke says. Unfortunately, these things may lead to a much higher risk of a malpractice claim.
“You don’t have to like your client to do their work, but you do have to do the work or pay the claim,” Kunzke says. “So either fire the client or keep them. If you keep them, plan to be miserable while you do the work that prevents the need to put your carrier on notice.”
4) Conflicts of Interest Aggravate Everyone
You can persuade clients to waive potential conflicts, but Kunzke says jurors generally aren’t impressed with conflict waivers, especially if the lawyer was paid by both sides. In addition, clients may recall waiving a potential conflict, but they inevitably say they did not understand what that meant. She says, “If it meant they weren’t going to ‘win,’ they wouldn’t have done it. Life is too short and you’re too busy to spend time and money defending against conflict claims. There is plenty of unconflicted work that needs your full attention.”
5) Your Client Already Knows How the Case Is Going to Turn Out
People who “know everything” and just want you to carry out their wishes rarely, if ever, are good clients. They become the clients who don’t listen attentively and go into denial when the discussion turns to potential weaknesses in the case. It’s a major warning sign if a potential client tells you he “knows the law” or she was “told the law” by several other lawyers.
Kunzke says lawyers should always ask clients what they expect for an outcome and listen to them. When clients’ answers don’t make sense, correct them. “You need to make sure they understand that ‘winning’ looks a lot like compromising,” she says.
Everyone who watches TV and movies thinks they know what lawyers do. Based on those legal dramas, nonlawyers think lawyers’ work is always exciting and very rewarding. Cases always go to court, and the lawyer’s three-minute closing argument brings tears to the judge’s eyes and gasps of outrage from opposing counsel. Clients are grateful and shower lawyers with praise, gifts, and bonus payments. Some clients want to date their lawyers!
Many clients also think they know how their case is going to turn out. They will be vindicated, completely reimbursed, pain free, and debt free; have their dignity restored; and get more money than they’ve asked for. If the lawyer does it “right,” nobody has to compromise. Wouldn’t it be nice if it always worked that way?
Ultimately, it is important to tell clients that you cannot promise them an outcome. In addition, throughout the representation, be sure to inform the client of the risks that are involved.
Always put your advice in writing, even if you’re sure the client understood it when you said it.
6) Never Give Bad News to a Hungry Client
When a client first comes to you, their problem is BIG. Kunzke says, “That is the time to tell them that it will take time and money to fix that problem, and that our legal system requires compromise. As you start to shrink their problem, their need for you shrinks, too – they are less willing to listen.”
As you learn about new problems along the way, tell the client about them early and often. Kunzke says, “These are excellent moments to test their expectations: Let the client read the bad report from the expert and explain it to you. You will know how much correction the current expectation will require.”
Most important, Kunzke says, “Say and write the important stuff. And use words they understand, not words only lawyers use.”
7) You Have to Let Clients Make Bad Choices
Clients will sometimes do the wrong thing, not spend enough money to do the right thing, and occasionally tell you not to worry about the important thing. They have a right to do all these things. Hindsight will often show them they were wrong. Usually hindsight is too late. Therefore, Kunzke says, protect yourself. “Make sure you told them what the right thing was. Say it and write it. Give them enough information to enable them to make the choices that belong to them. Even the dumb ones.”
8) What the Client Heard Matters More Than What You Said
We all hear what we want to hear. You say, “You might win; it is not likely to cost an unreasonable amount of your money; it will happen as quickly as our system allows; I’m hoping you will be satisfied when it’s over.” The client hears, “You will win; it won’t cost any of your money; it will happen quickly; you will be happy when it’s over.”
Kunzke says, “Always put your advice in writing, even if you’re sure the client understood it when you said it. They probably did. But what they remember is what they wanted to hear, not necessarily everything you said.”
9) Smiling and Nodding Do Not Indicate the Client Understands or Agrees with You
We all want uncomfortable situations to pass quickly. Clients are usually uncomfortable in your office because they couldn’t solve their problem on their own, they don’t believe they should have the problem at all, it’s not their fault to begin with, and they don’t like that they have to pay you to solve it.
Kunzke says clients often handle these uncomfortable feelings in a very understandable way. “We all know these two rules: Questions make everything take longer, and smiling and nodding makes everything go quicker. We all do it, whether we’re in our doctor’s office, facing a police officer who pulled us over, listening to Uncle Walter’s 600th retelling of his rags-to-riches story at Thanksgiving, or enduring the senior partner’s 600th retelling of how much harder it used to be to practice law. We don’t ask questions, and we smile and nod approvingly. Never mistake smiling and nodding as anything other than an indication of discomfort. Say the important stuff loudly, with ordinary words, and put it in writing!”
10) They May Call It ‘Practice,’ but They’re Just Kidding
As Kunzke tells lawyers, “The standard of care is ‘be really good all the time.’ You aren’t really good all the time – nobody is. If you say you’re extra good, in an ad for example, you are holding yourself out as a ‘specialist.’ Then you have to be extraordinarily good all the time. Even if you say you’re an average lawyer (and who does that?), you still have to be really good all the time. If you continue to make yourself available to your client 24 hours a day on your smartphone, you will raise the standard of care.”
The bottom line, Kunzke says, is the following: “Pay attention to your calendar, what your clients are saying, changes in the law, and potential twists and turns of your cases. You have to keep up.”
Solutions: New Residential Offer to Purchase: Now With a Transactional Flow
The new Residential Offer to Purchase contract form, with mandatory use starting Jan. 1, 2020, is reorganized to more closely track the flow of buying and selling a residence. Read here about the most significant changes.
Debra P. Conrad
Many lawyers have worked on a residential real estate transaction at one time or another. At first glance they may think the updated WB-11 Residential Offer to Purchase is a completely different contract. However, many of the offer provisions are substantially the same as before. What is most different is that the provisions have been rearranged to approximate the flow of the buying and selling of a residence.
The Real Estate Examining Board at the Department of Safety and Professional Services (DSPS) has approved an updated version of the WB-11 Residential Offer to Purchase. This form is the product of “drafting by committee,” specifically the DSPS Real Estate Contractual Forms Advisory Committee, comprised of real estate brokers and lawyers. For real estate licensees, the optional use date was Nov. 1, 2019, and the mandatory use date is Jan. 1, 2020.
The updated WB-11 Residential Offer to Purchase is available on the DSPS website, https://tinyurl.com/yfgte3zm.
The 2011 version of the WB-11 had several provisions out of any logical order, and users had to jump from page to page if a definition was needed. The inspection contingency was on the last page, but the inspection certainly is not the last step in the transaction.
org dconrad wra Debra Peterson Conrad, U.W. 1979, is the senior attorney and director of legal affairs for the Wisconsin REALTORS® Association. She is coauthor of Wisconsin Real Estate Law (CLEW 2017), Wisconsin Real Estate Clauses (CLEW 2019), and Real Estate Trust Accounts in Wisconsin (CLEW 2014) and is on the Department of Safety and Professional Services’ Real Estate Contractual Forms Advisory Committee.
In contrast, the first page of the updated WB-11 includes sections identifying what is “Included in Purchase Price” and “Not Included in Purchase Price,” immediately followed by the definition of “fixture” because that term plays a predominant role in those provisions. This cohesive sequence of provisions addresses what a buyer is to receive in exchange for the indicated purchase price without the user needing to scroll or flip pages to search for the fixture definition. Granted the closing is not the next step in the process, but the closing provision and a wire-transfer-fraud warning are included at the bottom of the first page because of their crucial importance.
Some of the familiar provisions have been modified.
Title Company Holding Earnest Money
In recognition of the practice in some areas of a title company instead of a real estate firm holding the earnest money, the language was modified with regard to who receives and holds the earnest money. A “strike-one” feature allows the parties to designate whether the earnest money will be delivered to and held by the listing firm, the buyer’s agent’s firm, or a third person named on a blank line. That might be a title company. An escrow agreement will be needed if a person other than a real estate firm holds the earnest money because the earnest-money-disbursement provisions in the offer apply only to real estate firms.
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Delivery of Loan Commitments
The financing contingency has been renamed “Financing Commitment Contingency,” and the buyer’s loan commitment subsection has been replaced by a “Satisfaction of Financing Commitment Contingency” subsection, which, not surprisingly, tells the buyer how to satisfy the contingency. The buyer’s delivery of a loan commitment must be authorized; the buyer either signs the loan commitment or gives separate written directions for delivery that are delivered with the loan commitment, as was the case in the 2011 version of the WB-11. Delivery of a loan commitment by a lender or accompanied by a notice of unacceptability does not satisfy the contingency.
The caution following this provision warns the buyer: “The delivered loan commitment may contain conditions Buyer must yet satisfy to obligate the lender to provide the loan. Buyer understands delivery of a loan commitment removes the Financing Commitment Contingency from the Offer and shifts the risk to Buyer if the loan is not funded.”
Price Adjustments Based on Appraisal
The appraisal contingency on page 6 of the updated offer includes a right-to-cure option for the seller. If the buyer is dissatisfied with the appraised value, the buyer can deliver a copy of the appraisal report along with a notice objecting to the appraised value. If the seller has the right to cure, the seller may deliver written notice to the buyer adjusting the purchase price to match the appraised value. The form also provides that the parties agree to promptly execute an amendment to the offer, if initiated by either party, to change the purchase price. This may be required by the lender.
If the seller does not have a right to cure or does not deliver notice adjusting the purchase price, the offer will be null and void. The parties can instead agree to an amendment naming a compromise price or some other solution, as would also be the case in other offer contingencies.
Buyer’s Property Not Sold Before Closing
The “Closing of Buyer’s Property” contingency on page 6 of the revised WB-11 indicates the consequences if the transaction for the sale of the buyer’s property does not close by the stated deadline. Specifically, the offer becomes null and void if the deadline passes without a closing unless the buyer delivers to the seller, on or before the deadline, reasonable written verification that the buyer has the funds to close from a financial institution or third party in control of the buyer’s funds.
Laundry List for Avoiding the Bump
The bump clause is now a separate checkbox item. The most important change in the bump clause, which appears immediately after the closing of buyer’s property contingency, is the default of 72 hours for the bump clause time frame if nothing is entered on the blank line, a mistake sometimes made by real estate agents.
A buyer receiving a bump notice from the seller must deliver the listed items to avoid termination of the offer. First, a written waiver of the closing of buyer’s property contingency must be delivered to the seller if that contingency is a part of the offer. Second, a waiver of any additional contingencies written in the blank line must also be delivered. Third, the buyer must deliver any other documentation indicated, for example, a bridge loan, third-party reasonable written verification of funds, and other requirements written into the provision.
Homeowner Association Transfer Fee
The new homeowner-association provision advises the parties that if the property is subject to a homeowner association, there may be periodic fees and a fee upon the transfer of the property. The parties indicate whether any transfer fee will be paid by the buyer or by the seller.
Because many offers are drafted incorrectly with radon testing written into the inspection contingency, and some home inspectors conduct radon testing without seller permission, an optional radon-testing contingency was added to the offer. (See Figure 1: Radon Testing Contingency.)
The buyer may arrange for radon testing performed by a qualified third party consistent with U.S. Environmental Protection Agency (EPA) and Wisconsin Department of Health Services protocols and standards. The contingency is deemed satisfied unless the buyer delivers a copy of test results showing a radon level of 4.0 picoCuries per liter (pCi/L) or higher and a notice objecting to the results.
The parties choose whether the seller has a right to cure. If the seller elects to cure, the seller must install a radon mitigation system in conformance with EPA standards in a “good and workmanlike” manner and give the buyer a report of the work done and a post-remediation test report indicating a radon level of less than 4.0 pCi/L no later than three days before closing.
Figure 1: Radon Testing Contingency
When Sellers Are Foreign Persons
Buyers purchasing a property from a person classified as a “foreign person” are subject to the Foreign Investment in Real Property Tax Act (FIRPTA), a law passed in response to concerns that foreign sellers might leave the United States without paying the tax due on the sale. The IRS solution is to make the buyer responsible for ensuring the tax is collected.
Although these transactions may be infrequent, buyers who do not comply with FIRPTA can be held responsible for a foreign seller’s unpaid tax. The blame – and the penalty – for noncompliant buyers has at times been shifted to real estate agents, primarily because they did not alert buyers to FIRPTA. Accordingly, Wisconsin is following the example set by other states, such as Minnesota, by adding a FIRPTA provision to the offer.
The provision in the offer presumes the seller is not a foreign person and indicates the seller must execute and deliver to the buyer, or a qualified substitute, a sworn certification under penalties of perjury stating the seller’s nonforeign status. This action leads the seller down the path toward meeting the terms of a FIRPTA exception, thus eliminating any need for the buyer to withhold seller proceeds. The seller’s certification is the buyer’s golden ticket, an insurance policy that the buyer will not be liable to the IRS for a foreign seller’s unpaid tax.
Because many offers are drafted incorrectly with radon testing written into the inspection contingency, and some home inspectors conduct radon testing without seller permission, an optional radon-testing contingency was added to the offer.
The offer states that if the seller does not deliver the certification at least 15 days before closing, the buyer will be entitled to 1) withhold up to 15 percent of the total amount realized in the sale or 2) terminate the offer by written notice to the seller at any time before closing. The 15-day time frame was included to allow time for the parties, their advisers, and the title company to implement FIRPTA withholding, satisfy the requirements of another FIRPTA exception, or otherwise negotiate a resolution before the closing date.
The offer indicates the seller certification is to be delivered to the buyer or a qualified substitute, which includes the lawyer or the title company responsible for closing the transaction. Delivery to the title company is the preferred resolution from a real estate licensee’s perspective because the certification includes the seller’s tax identification number: the certification goes from the seller to the title company without licensees having to transmit or store it. The qualified substitute must deliver a statement to the buyer advising that the substitute has the seller’s certification. Thus, the buyer does not receive the seller’s tax identification number, and the seller does not receive the buyer’s direct contact information.
The offer provision states, “The Parties are advised to consult with their respective independent legal counsel and tax advisors regarding FIRPTA.” Legal advice will be needed regarding whether particular sellers are foreign persons, qualifications for other FIRPTA exceptions, and assistance with any withholding.
As with any form update, the revisions to the 2020 WB-11 Residential Offer to Purchase may enhance clarity and ease of use and lead to new concerns to be rectified in the next round of revisions.
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Who does the holiday baking, decorating, and meal making at your house?
Baking for the holidays with all of the breads, pies, cookies, and Scandinavian pastries is one of my passions! What could be better than sharing delicious morsels representing family and cultural traditions with family, friends, and coworkers? Ditto for the holiday decorations and the magical lights both inside and outside the house; nothing is more joyful than the sparkle of twinkling lights and those special tree ornaments and decorations handed down through the generations or handmade by family members.
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org dconrad wra Debra Peterson Conrad, Wisconsin REALTORS® Association, Madison.
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