Supreme Court Orders

Safekeeping Property

In the Matter of the Amendment of Supreme Court Rules: SCR 20:1.15 - Safekeeping Property

Order 97-05

The court held a public hearing Sept. 9, 1997, on the petition of the Board of Governors of the State Bar of Wisconsin and the Board of Attorneys Professional Responsibility for the amendment of SCR 20:1.15, governing attorney trust accounts and other accounts for the retention of funds held in a fiduciary capacity. The proposed amendments would permit attorneys to place sufficient attorney or law firm funds in a trust account to avoid the imposition of service charges on it, would enlarge the authority for placing client funds in an income-generating investment vehicle, and would require attorneys to maintain trust accounts in financial institutions that agree to report to the Board of Attorneys Professional Responsibility any properly payable instrument presented against a lawyer trust account containing insufficient funds.

The original petition was filed April 16, 1997, and an amended petition was filed Sept. 8, 1997, the day before the public hearing. Because the amended petition proposed rule amendments that were not part of the petition originally filed and there was no opportunity to give notice of them, the court declines to adopt those proposed amendments; the petitioners may resubmit them in a new petition, for which notice will be given and a public hearing held.

The court has considered the amended petition, the materials filed with the court in the matter, and the presentations of the petitioners and others at the public hearing.

IT IS ORDERED that, effective Jan. 1, 1999, the Supreme Court Rules are amended as follows.

SECTION 1. 20:1.15(a) of the supreme court rules is amended to read:

20:1.15 (a) A lawyer shall hold in trust, separate from the lawyer's own property, that property of clients or and third persons that is in the lawyer's possession in connection with a representation or when acting in a fiduciary capacity. Funds held in connection with a representation or in a fiduciary capacity include funds held as trustee, agent, guardian, personal representative of an estate, or otherwise. All funds of clients paid to a lawyer or law firm shall be deposited in one or more identifiable trust accounts as provided in paragraph (c). The trust account shall be maintained in a bank, trust company, credit union or savings and loan association authorized to do business and located in Wisconsin, which. The trust account shall be clearly designated as "Client's Account" or "Trust Account" or words of similar import, and no. No funds belonging to the lawyer or law firm, except funds reasonably sufficient to pay or avoid imposition of account service charges, may be deposited in such an account. Unless the client otherwise directs in writing, securities in bearer form shall be kept by the attorney in a safe deposit box in a bank, trust company, credit union or savings and loan association authorized to do business and located in Wisconsin, which. The safe deposit box shall be clearly designated as "Client's Account" or "Trust Account" or words of similar import. Other property of a client or third person shall be identified as such and appropriately safeguarded. If a lawyer also licensed in another state is entrusted with funds or property in connection with an out-of-state representation, this provision shall not supersede the trust account rules of such the other state.

SECTION 2. 20:1.15 (c) (intro.) of the supreme court rules is amended to read:

20:1.15 (c) (intro.) Each trust account under this rule shall be an account in any a bank, trust company, credit union or savings and loan association, selected in the exercise of ordinary prudence, and authorized by federal or state law to do business in Wisconsin and. The trust account shall be insured by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, the Wisconsin Credit Union Savings Insurance Corporation, or the Federal Savings and Loan Insurance Corporation. An interest-bearing trust account shall bear interest at a rate no less than that applicable to individual accounts of the same type, size and duration and in which withdrawals or transfers can be made without delay when funds are required, subject only to any notice period which the depository institution is required to observe by law or regulation. Lawyers and law firms are subject to the following:

SECTION 3. 20:1.15 (c) (2)c. of the supreme court rules is amended to read:

20:1.15 (c) (2)c. An income-generating investment vehicle selected by the client and designated in specific written instructions from the client or authorized by the court or other tribunal, on which income shall be paid to the client or as directed by the court or other tribunal, net of any transaction costs.

SECTION 4. 20:1.15 (c) (2)cg. and cm. of the supreme court rules are created to read:

20:15 (c) (2)cg. An income-generating investment vehicle selected by the lawyer and approved by a court where the lawyer serves as guardian for a ward, under chs. 880 and 881, stats.

cm. An income-generating investment vehicle selected by the lawyer to protect and maximize the return on funds in a bankruptcy estate, which investment vehicle is approved by the trustee in bankruptcy and by a bankruptcy court order, consistent with 11 USC 345.

SECTION 5. 20:1.15 (h) to (p) of the supreme court rules are created to read:

20:1.15 (h) In subsections (i) to (p):

(1) "Financial institution" means an institution listed in subs.(a) and (c).

(2) "Properly payable instrument" means an instrument that, if presented in the normal course of business, is in a form requiring payment under the laws of this state.

COMMENT: Terms used in subsections (j) to (p), such as "dishonored instrument," that have specific meaning in Wis. Stat. chapters 401 to 411 (Uniform Commercial Code) and in case law and administrative regulations are to be understood as having that meaning for purposes of subs. (j) to (p).

(i) Lawyer trust accounts shall be maintained only in a financial institution that has agreed to provide the overdraft report under sub. (j).

(j) In the event any properly payable instrument is presented against a lawyer trust account containing insufficient funds, whether or not the instrument is honored, the financial institution shall, simultaneously with the customary overdraft notice to the depositor or investor, report the overdraft to the Board of Attorneys Professional Responsibility.

(k) The overdraft reporting agreement under par. (i) shall provide that all reports made by the financial institution shall be substantially in the following format:

(1) In the case of a dishonored instrument, identical to the overdraft notice customarily forwarded to the depositor and with a copy of the dishonored instrument, if a copy is normally provided to the depositor.

(2) In the case of instruments that are presented against insufficient funds and are honored, identification of the financial institution involved, the lawyer or law firm, the account number, the date on which the instrument is paid, and the amount of overdraft created by the payment.

(l) A report made under par. (j) shall be made simultaneously with the overdraft notice given to the depositor.

(m) The Board shall hold each overdraft report for 10 business days or the minimum time required by the financial institution, whichever is less, to enable the financial institution to withdraw a report provided by inadvertence or mistake, except that the curing of an insufficiency of available funds by a lawyer or law firm by the deposit of additional funds does not constitute reason for withdrawing an overdraft report.

(n) Every lawyer practicing or admitted to practice in this state shall comply with the reporting and production requirements of this rule.

(o) This rule does not preclude a financial institution from charging a particular lawyer or law firm for the reasonable costs of producing the reports and records required by this rule.

(p) This rule does not create a claim against a financial institution or its officers, directors, employees, and agents for failure to provide a trust account overdraft report or for compliance with any provision of this rule.

IT IS FURTHER ORDERED that notice of these amendments of the Supreme Court Rules shall be given by a single publication of a copy of this order in the official state newspaper and in an official publication of the State Bar of Wisconsin.

Dated at Madison, Wis., this 4th day of June, 1998.

By the court:
Marilyn L. Graves, Clerk of Court

Bar Admission on Examination

In the Matter of the Amendment of Supreme Court Rules: SCR 40.04(1) - Law School Graduation Requirement for Bar Admission on Examination

Order 97-09

The court held a public hearing Oct. 21, 1997, on the petition of Massachusetts School of Law deemed to constitute a petition for the amendment of SCR 40.04(1) to permit its graduates to satisfy the legal competence requirement for bar admission by passing the Wisconsin bar examination. The court has considered the presentations made at that public hearing and the materials filed with the court in the matter.

IT IS ORDERED that, effective the date of this order, 40.04(1) of the supreme court rules is amended to read:

(1) An applicant who has been awarded a first professional degree in law from a law school that is fully or provisionally approved by the American bar association at the time of the applicant's graduation one of the following shall satisfy the legal competence requirement by presenting to the clerk certification of the board that the applicant has passed an examination administered by the board covering all or part of the subject matter areas of law specified in SCR 40.03(2)(a).:

(a) A law school that is fully or provisionally approved by the American bar association at the time of the applicant's graduation.

(b) A law school whose graduates are eligible to take the bar examination of the state, territory or District of Columbia in which the law school is located, provided the applicant has passed the bar examination of and has been admitted to practice in that or another state, territory or the District of Columbia.

IT IS FURTHER ORDERED that notice of this amendment of the Supreme Court Rules shall be given by a single publication of a copy of this order in the official state newspaper and in an official publication of the State Bar of Wisconsin.

Dated at Madison, Wis., this 4th day of June, 1998.

By the court:
Marilyn L. Graves, Clerk of Court

Use of Forms in Circuit Courts

In the Matter of the Amendment of the Rules of Civil and Criminal Procedure: Wis. Stat. §§ 801.02(8), 971.025(1), (2), (3) and (4) - Relating to the Creation and Use of Forms in the Circuit Courts

Amended Order 98-01

On June 11, 1998, the Director of State Courts, on behalf of the Wisconsin Records Management Committee, filed an amended petition seeking the creation of Rules of Civil and Criminal Procedure requiring the Wisconsin Judicial Conference to develop standard court forms for mandatory use in civil and criminal actions in the circuit court and in any other court as the Supreme Court or the Legislature may direct, unless an agency has statutory authority for the development of a form. As amended, the proposed rules would permit a party or a court official to delete unnecessary portions of forms according to rules established by the Judicial Conference and to supplement the mandatory forms with additional material. Further, a party's failure to use the mandatory form or follow the format rules would not constitute a reason to dismiss a case, refuse a filing, or strike a pleading, although the party would be required to submit a corrected pleading, and the court could impose terms.

IT IS ORDERED that a public hearing on the amended petition shall be held in the Supreme Court Room in the State Capitol, Madison, Wis., on Sept. 17, 1998, at 1:30 p.m.

IT IS FURTHER ORDERED that the court's conference in the matter shall be held promptly following the public hearing.

IT IS FURTHER ORDERED that notice of the hearing be given by a single publication of a copy of this order and of the amended petition in the official state newspaper once each week for three consecutive weeks and in an official publication of the State Bar of Wisconsin not more than 60 days nor less than 30 days before the date of the hearing.

IT IS FURTHER ORDERED that the court's order of May 6, 1998, directing publication of the petition filed April 27, 1998, is vacated.

Dated at Madison, Wis., this 15th day of June, 1998.

By the court:
Marilyn L. Graves, Clerk of Court

Amended Petition

The Director of State Courts, for and on the recommendation of the Wisconsin Records Management Committee, hereby petitions the Court to create the following rules of civil and criminal procedure pursuant to § 757.12 as follows:

1.801.02(8) is created to read:

801.02(8) Forms. (a) The Judicial Conference shall be responsible for the development of standard court forms for mandatory use by parties and any court official in all civil actions in the circuit courts and any other court for which the Supreme Court or Legislature may direct unless an agency has specific statutory authority for the development of a form.

(b)A party or court official may delete unnecessary portions of the forms according to the rules established by the Judicial Conference. A party or court official may supplement the mandatory forms with additional material.

(c)A party's failure to use the mandatory form or follow the format rules shall not be a reason to dismiss a case, refuse a filing, or strike a pleading. However, the court shall require the party to submit a corrected pleading and may impose terms payable to the opposing party or payable to the court, or both.

(d) If the Judicial Conference has not created a standard court form for the action or pleading undertaken by the party or court official, the party or court official may utilize a format consistent with any statutory or court requirement for such action or pleading.

2. 971.025(1) is created to read:

971.025(1) Forms. The Judicial Conference shall be responsible for the development of standard court forms for mandatory use by parties and any court official in all criminal actions in the circuit courts and any other court for which the Supreme Court or Legislature may direct unless an agency has specific statutory authority for the development of a form.

3. 971.025(2) is created to read:

971.025(2) A party or court official may delete unnecessary portions of the forms according to the rules established by the Judicial Conference. A party or court official may supplement the mandatory forms with additional material.

4. 971.025(3) is created to read:

971.025(3) A party's failure to use the mandatory form or follow the format rules shall not be a reason to dismiss a case, refuse a filing, or strike a pleading. However, the court shall require the party to submit a corrected pleading and may impose terms payable to the opposing party or payable to the court, or both.

5. 971.025(4) is created to read:

971.025(4) If the Judicial Conference has not created a standard court form for the action or pleading undertaken by the party or court official, the party or court official may utilize a format consistent with any statutory or court requirement for such action or pleading.

Respectfully submitted this 8th day of June, 1998.

J. Denis Moran, Director of State Courts

Procedure in Attorney Discipline and Medical Incapacity Proceedings

In the Matter of the Amendment of Supreme Court Rules: SCR 21.07, 22.27(5), and 22.30(1)

Order 98-02

The court, on its own motion, proposes that the Supreme Court Rules of procedure in attorney discipline and medical incapacity proceedings be amended to specify that an immediate suspension of an attorney's license to practice law for medical incapacity under SCR 21.07 continue until further order of the court, to make the procedural rules applicable to disciplinary proceedings also applicable to medical incapacity proceedings, and to specify a procedure for license reinstatement following a suspension for medical incapacity.

IT IS ORDERED that a public hearing on the petition shall be held in the Supreme Court Room in the State Capitol, Madison, Wis., on Sept. 17, 1998, at 1:30 p.m.

IT IS FURTHER ORDERED that the court's conference in the matter shall be held promptly following the public hearing.

IT IS FURTHER ORDERED that notice of the hearing be given by a single publication of a copy of this order in the official state newspaper and in an official publication of the State Bar of Wisconsin not more than 60 days nor less than 30 days before the date of the hearing.

Dated at Madison, Wis., this 6th day of May, 1998.

By the court:
Marilyn L. Graves, Clerk of Court

Wisconsin Lawyer