Office of Lawyer Regulation v. Lunde
2016 WI 84
Wis.2016Background
- Gregory M. Lunde, admitted 1981, served as attorney for the estate of J.S., who died in 2001 leaving two minor children entitled to life-insurance proceeds.
- Circuit court ordered MetLife to pay proceeds into Lunde’s trust account in 2004 and required funds to remain in trust until further order; Lunde later reported a remaining balance to be split between the children.
- Records showed Lunde’s trust account had no activity after 2007 and a balance smaller than the funds owed; Lunde could not produce trust-account records and later paid one beneficiary (Z.S.) from his personal account in 2014 after long delays.
- Lunde failed to respond to multiple OLR investigative letters (2012–2013), prompting a temporary suspension in 2013; he later cooperated and his license was reinstated; he ceased active practice in April 2016 for health reasons.
- Parties stipulated to facts and agreed Lunde violated multiple Supreme Court Rules (trust-account, tribunal-order, conversion, and failure-to-cooperate rules); referee and Supreme Court imposed a 60-day suspension and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Failure to promptly deliver client funds (SCR 20:1.15(d)(1)) | Lunde delayed paying Z.S. his share of insurance proceeds for years. | Lunde asserted inability to access or locate trust records and believed funds were available; paid once identity confirmed. | Court: Violated SCR 20:1.15(d)(1). Suspension imposed. |
| Failure to keep client funds in trust (SCR 20:1.15(b)(1)) | Lunde did not maintain required trust-account funds and records. | Lunde said account balanced when he closed private practice and couldn’t explain later shortfall. | Court: Violated SCR 20:1.15(b)(1). |
| Disobeying court order to hold funds (SCR 20:3.4(c)) / conversion (SCR 20:8.4(c)) | Funds required by court order were not retained; trust balance fell below client’s share, amounting to conversion. | Lunde’s conduct resulted from neglect/sloppiness, not intentional misappropriation. | Court: Violated SCR 20:3.4(c) and engaged in conduct in violation of SCR 20:8.4(c). Suspension affirmed. |
| Failure to cooperate with OLR investigation (SCR 22.03(2), 22.03(6), enforced via SCR 20:8.4(h)) | Lunde failed to respond to multiple investigative letters and show-cause order, obstructing investigation. | Lunde later cooperated after temporary suspension and provided information about account problems. | Court: Violated rules requiring cooperation; aggravated the sanction. |
Key Cases Cited
- In re Disciplinary Proceedings Against Bartz, 362 Wis. 2d 752, 864 N.W.2d 881 (Wis. 2015) (approved 60-day suspension in trust-account misappropriation context)
- In re Disciplinary Proceedings Against Barrock, 299 Wis. 2d 207, 727 N.W.2d 833 (Wis. 2007) (60-day suspension for failing to hold settlement funds subject to third-party claim in trust)
- In re Disciplinary Proceedings Against Riegleman, 259 Wis. 2d 1, 657 N.W.2d 339 (Wis. 2003) (suspension for failure to notify lienholder and unauthorized endorsement of settlement check)
- In re Disciplinary Proceedings Against Eisenberg, 269 Wis. 2d 43, 675 N.W.2d 747 (Wis. 2004) (standards for reviewing referee findings and conclusions)
- In re Disciplinary Proceedings Against Widule, 261 Wis. 2d 45, 660 N.W.2d 686 (Wis. 2003) (court may impose sanctions different from referee’s recommendation)