Vol. 78, No. 8, August
2005
Lawyer Discipline
The Office
of Lawyer Regulation (formerly known as the Board of Attorneys
Professional Responsibility), an agency of the Wisconsin Supreme Court
and component of the lawyer regulation system, assists the court in
carrying out its constitutional responsibility to supervise the practice
of law and protect the public from misconduct by persons practicing law
in Wisconsin. The Office of Lawyer Regulation has offices located at
Suite 315, 110 E. Main St., Madison, WI 53703, and Suite 300, 342 N.
Water St., Milwaukee, WI 53202. Toll-free telephone: (877) 315-6941.
Disciplinary Proceeding against
Nikola P. Kostich
In an opinion filed June 24, 2005, the Wisconsin Supreme Court
publicly reprimanded Nikola P. Kostich, Milwaukee, for professional
misconduct in two matters. Disciplinary Proceedings Against
Kostich, 2005 WI 90. The court further ordered that in one matter
Kostich make restitution of $3,200 plus interest, and that he pay the
full $9,064.70 costs of the disciplinary action.
In the first matter, Kostich provided postconviction representation
to a client who had been convicted of a felony pursuant to a guilty
plea. The representation was arranged by the client's parents. The
client's mother paid Kostich an advance fee of $5,000. There was no
written fee agreement, and Kostich did not inform the mother whether the
advance was refundable. At the time, Kostich's hourly rate was $200.
Kostich timely filed a notice of intent to pursue postconviction
relief, obtained a copy of the case file from trial counsel, and had
telephone conversations with trial counsel and the prosecutor. Although
Kostich did not keep billing records, the supreme court referee who
heard the disciplinary action found that Kostich also engaged in at
least four hours of preliminary research and review of the case file.
Kostich sent the client a copy of the notice of intent (the last
correspondence he forwarded to the client) and shortly thereafter met
with the client at the prison in which he was incarcerated. Case
progress and communication with the client then stalled for years.
By failing to determine if the client had grounds for an appeal for
more than 30 months after he was hired to do so, Kostich failed to act
with reasonable diligence and promptness in representing a client, in
violation of SCR 20:1.3.
By failing to respond to the client's letters and telephone calls,
Kostich failed to keep his client reasonably informed about the status
of a matter and promptly comply with reasonable requests for
information, in violation of SCR 20:1.4(a).
By failing to inform the client before statutory deadlines expired
that the client had no legal grounds for an appeal, Kostich failed to
explain a matter to the extent reasonably necessary to permit the client
to make informed decisions about the direction of the representation, in
violation of SCR 20:1.4(b).
Kostich did not perform a sufficient amount of work on the client's
appellate issues to earn the full $5,000 fee, and by not refunding any
part of the fee after determining that the client did not have grounds
for an appeal, Kostich failed on termination of representation to take
reasonable steps to protect the client's interests, such as refunding
any unearned advance payment of fees, in violation of SCR 20:1.16(d).
Kostich further violated SCR 20:1.16(d) by failing to timely forward the
client's file to a successor legal representative, despite numerous
requests that he do so.
Further, Kostich failed to cooperate with the Office of Lawyer
Regulation's (OLR) investigation of the client's grievance, contrary to
SCR 22.03(6).
In a second, unrelated matter, Kostich again failed to cooperate with
the OLR's investigation, contrary to SCR 22.03(6).
Kostich received a previous public reprimand in 1986 for willful and
knowing failure to file a federal individual income tax return.
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Disciplinary Proceeding
against Bruce B. Jacobson
On June 14, 2005, the Wisconsin Supreme Court publicly reprimanded
Bruce B. Jacobson, 60, Milwaukee, and extended the duration of
previously ordered conditions on his law license from two years to three
years. Those conditions are semi-annual reports regarding Jacobson's
psychological condition, monitoring of his law practice, and quarterly
reports on his trust account. The court also ordered that Jacobson pay
the full $9,355 costs of the disciplinary proceeding. Disciplinary
Proceedings Against Jacobson, 2005 WI 74.
The public reprimand is based on Jacobson's conduct in two separate
matters. In the first matter, he represented a husband and wife
regarding a civil claim relating to the purchase of a business. Pursuant
to a stipulated settlement, Jacobson's clients were paid $18,000 in
installments of $300 per month. The clients never received a billing
statement from Jacobson, and there was no written fee agreement. The
initial fee arrangement was an hourly rate. Subsequently, Jacobson
changed the fee to one-third of the amount collected, then to
two-thirds, and finally to three-thirds. Jacobson could not document
that the clients agreed to these changes or that the clients were
notified of any withdrawals from the settlement proceeds for fees. The
OLR alleged five counts of misconduct relating to this matter, but the
referee found only one count - failing to provide the clients with a
full accounting of the funds Jacobson had collected [former SCR
20:1.15(b), current rule SCR 20:1.15(d)(2)].
In the second matter, Jacobson represented a husband and wife in a
medical malpractice claim relating to their child's brain injury. In
1998, he commenced a lawsuit against a hospital, two doctors, an
insurance company, and the Wisconsin Patient's Compensation Fund.
However, between April 1999 and June 2000, Jacobson failed to conduct
any discovery, failed to respond to interrogatories, and failed to
provide opposing counsel with a written witness list. In March 2000, the
hospital and one of the doctors filed motions for summary judgment based
on Jacobson's failure to comply with discovery. In early May 2000,
Jacobson had a heart attack, and his clients obtained new counsel. The
court ultimately denied the motions to terminate the action, but imposed
monetary sanctions against Jacobson and the plaintiffs and limited the
plaintiffs to one expert witness on causation. In so doing, the circuit
court judge described Jacobson's failure to name witnesses, itemize
damages, provide a special permanency report, and conduct discovery "as
egregious," adding, "It is 13 months of contempt as far as I can see."
The clients subsequently filed a malpractice claim against Jacobson, and
his insurer settled their claim for $990,000. Jacobson's neglect in the
matter constituted a violation of SCR 20:1.3.
Jacobson had previously been suspended for five months, effective
Jan. 27, 2005, and the above-referenced two years' worth of conditions
were imposed in that proceeding. Disciplinary Proceedings Against
Jacobson, 2004 WI 152, 277 Wis. 2d 120, 690 N.W.2d 264.
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Disciplinary Proceeding
against Mark E. Sostarich
On June 29, 2005, the Wisconsin Supreme Court suspended the law
license of Mark E. Sostarich, 52, Elkhorn, for 18 months, retroactive to
May 18, 2004. In addition, the court ordered that Sostarich pay the
costs of the disciplinary proceeding.
On May 18, 2004, pursuant to SCR 22.20(1), the Wisconsin Supreme
Court summarily suspended Sostarich's law license. The suspension was
based on Sostarich's guilty plea in federal court to one count of
conspiracy to commit offenses involving federal program funds in
violation of 18 U.S.C. §§ 371, 666, 1341, and 1346. On July
19, 2004, the OLR filed a disciplinary complaint alleging that, because
he was convicted of the federal offense, Sostarich had engaged in
professional misconduct by committing a criminal act that reflects
adversely on the lawyer's honesty, trustworthiness, or fitness as a
lawyer in other respects, in violation of SCR 20:8.4(b). Sostarich's
conviction was based on his improperly providing a portion of the legal
fees he received from the Police Athletic League (PAL), a nonprofit
organization that received federal funding, to Gary R. George, who was
on the PAL board of directors. Sostarich did not disclose the payments
to the other PAL board members until a criminal investigation into the
matter commenced. Sostarich was sentenced to three years of probation,
conditioned on 150 days of home confinement. He also was ordered to
perform 75 hours of community service and pay restitution of
$42,649.
In its June 29, 2005, opinion, the court found that Sostarich had
violated SCR 20:8.4(b). While the OLR had sought an 18-month suspension
and Sostarich had argued for a 90-day suspension, the referee in the
matter recommended a one-year suspension retroactive to May 18, 2004.
The court concluded, however, that an 18-month suspension was more
appropriate given the serious nature of the underlying conviction.
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