Case Title: Office of Lawyer Regulation v. Nikola P. Kostich

Citation: 2012 WI 118

Docket Number: 2011AP000277-D

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2012-11-27T00:00:00Z

Document:
2012 WI 118 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2011AP000277-D   
COMPLETE TITLE: 
 
In the Matter of Disciplinary Proceedings 
Against Nikola P. Kostich, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant-Respondent, 
    v. 
Nikola P. Kostich, 
          Respondent-Appellant.   
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST KOSTICH     
 
 
OPINION FILED: 
November 27, 2012   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
September 7, 2012   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: Justice David T. Prosser did not participate.   
 
 
 
ATTORNEYS: 
 
For the respondent-appellant, there were briefs filed by 
Lew A. Wasserman, and Law Offices of Jean M. Kries, S.C., 
Milwaukee, and oral argument by Lew A. Wasserman. 
For the Office of Lawyer Regulation, there was a brief 
filed by Robert G. Krohn, and Roethe, Pope, Roethe, LLP, 
Edgerton, and oral argument by Robert G. Krohn.  
 
 
 
2012 WI 118
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2011AP277-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Nikola P. Kostich, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Respondent, 
 
     v. 
 
Nikola P. Kostich, 
 
          Respondent-Appellant. 
 
FILED 
 
NOV 27, 2012 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   Attorney Nikola P. Kostich has appealed 
from 
a 
referee's 
report 
concluding 
that 
he 
engaged 
in 
professional misconduct and recommending that his license to 
practice law in Wisconsin be suspended for a period of 60 days. 
¶2 
We conclude that all of the referee's findings of fact 
are supported by satisfactory and convincing evidence.  We agree 
that 
the 
appropriate 
discipline 
for 
Attorney 
Kostich's 
misconduct is a 60-day suspension of his license to practice 
No. 
2011AP277-D   
 
3 
 
law.  We further conclude that the costs of the proceeding, 
which total $6,803.81 as of September 20, 2012, should be 
assessed against Attorney Kostich. 
¶3 
Attorney Kostich was admitted to practice law in 
Wisconsin in 1970.  His disciplinary history consists of three 
public reprimands.  In 1986 he was reprimanded on the basis of a 
criminal conviction for failing to file a tax return.  In re 
Disciplinary Proceedings Against Kostich, 132 Wis. 2d 227, 391 
N.W.2d 208 (1986).  In 2005 he was reprimanded for failing to 
determine if a client had grounds for an appeal for over 30 
months after being retained, failing to respond to the client's 
letters and phone calls, failing to inform the client he had no 
legal grounds for an appeal, failing to refund an advance 
payment of fees upon termination, failing to provide the 
client's file upon termination, and failing to cooperate with an 
Office of Lawyer Regulation (OLR) investigation.  In re 
Disciplinary Proceedings Against Kostich, 2005 WI 90, 282 
Wis. 2d 206, 700 N.W.2d 763.   
¶4 
In 
2010 
Attorney 
Kostich 
was 
reprimanded 
for 
representing an individual on criminal charges in which he had 
previously consulted with the victim in the criminal case about 
a potential civil action against the person he ultimately 
represented in the criminal matter.  In re Disciplinary 
Proceedings Against Kostich, 2010 WI 136, 330 Wis. 2d 378, 793 
N.W.2d 494.   
¶5 
The misconduct at issue in the instant case arises out 
of Attorney Kostich's representation of L.P., who was indicted 
No. 
2011AP277-D   
 
4 
 
in August of 2006 on federal charges pertaining to distribution 
of crack cocaine.  L.P. hired Attorney Kostich to defend her in 
mid-August 2006.  Attorney Kostich agreed to represent L.P. for 
a $5,000 retainer and told her she would need to pay an 
additional $5,000 if the case went to trial.  L.P. paid Attorney 
Kostich a total of $4,000 toward the retainer.   
¶6 
L.P.'s former boyfriend, L.B., was a co-defendant in 
the federal drug case.  Attorney Mark Nielsen represented L.B.   
¶7 
Between August of 2006 and November of 2008, L.P. and 
Attorney Kostich had various communications either in person or 
by telephone regarding possible plea agreements.  L.P. did not 
want to enter a plea to any sort of drug trafficking charge and 
was hoping to be able to plead to a misdemeanor rather than a 
felony. 
¶8 
In late 2008 Attorney Kostich experienced certain 
serious health issues which resulted in his absence from his law 
office from mid-November 2008 to early February 2009.  Attorney 
Kostich had lost his secretary a few months before this, and 
during his absence he had his daughter come in to serve as a 
part-time paralegal/secretary.  Attorney Kostich testified at 
the hearing before the referee that he had instructed his 
daughter to tell clients who called that he was out of the 
office and would not be back for several months.   
¶9 
L.P. testified that between November 2008 and February 
2009, she had tried to contact Attorney Kostich numerous times, 
but he never responded.  She said she left messages with 
Attorney Kostich's daughter and at other times she left 
No. 
2011AP277-D   
 
5 
 
voicemail messages asking him to get back to her because she 
wanted to know what was going on.  She said at times his 
voicemail box would be full and she would be unable to leave a 
message.  L.P. denied ever being told that Attorney Kostich was 
experiencing serious medical problems or that he was going to be 
absent from his office.  L.P.'s mother said she, too, made 
numerous attempts to contact Attorney Kostich, all to no avail. 
¶10 On January 26, 2009, L.P. called and left a message 
saying 
she 
wanted 
to 
terminate 
Attorney 
Kostich's 
representation.  In e-mails dated February 4 and 19, 2009, and 
in a letter dated February 23, 2009, L.P. or her mother 
confirmed 
their 
desire 
to 
terminate 
Attorney 
Kostich's 
representation.  They asked for a partial refund of the $4,000 
retainer.  In the February 23 letter L.P. informed Attorney 
Kostich that she qualified for a public defender but that she 
needed him to withdraw as her attorney so she could proceed with 
new counsel. 
¶11 It 
is 
undisputed 
that 
Attorney 
Kostich 
had 
no 
communication with L.P. from mid-November 2008 until March 2009.  
Attorney Kostich acknowledged that during his absence from the 
office he did not send any letters to clients informing them 
about his illness and absence. 
¶12 At a status conference on March 9, 2009, Attorney 
Kostich formally withdrew as L.P.'s attorney.  L.P. subsequently 
entered into a plea agreement to a charge of "misprision of a 
felony," which was the lowest felony charge available.  She was 
placed on probation.  Attorney Kostich did not refund any 
No. 
2011AP277-D   
 
6 
 
portion of the $4,000 retainer paid to him and claimed that he 
earned all of it.   
¶13 On February 8, 2011, the OLR filed a complaint 
alleging that Attorney Kostich's representation of L.P. resulted 
in three counts of misconduct.  Count One alleged that by 
failing to communicate with L.P. between November 2008 and March 
2009, during which time L.P. repeatedly tried to reach him to 
discuss her pending criminal matter, Attorney Kostich violated 
SCRs 20:1.4(a)(3) and (4).1  Count Two alleged that by failing to 
respond to a letter or e-mails from L.P. or her mother 
concerning fees, Attorney Kostich violated SCR 20:1.5(b)(3).2  
Count Three alleged that by failing to take timely steps to 
withdraw 
from 
his 
representation after receiving numerous 
communications from L.P. and her mother discharging him, 
Attorney Kostich violated SCR 20:1.16(a)(3).3   
¶14 Richard C. Ninneman was appointed referee.  At the 
hearing before the referee, L.P. testified that no one informed 
her that Attorney Kostich was experiencing any medical issues 
                                                 
1 SCRs 20:1.4(a)(3) and (4) state a lawyer shall "(3) keep 
the client reasonably informed about the status of the matter; 
[and] (4) promptly comply with reasonable requests by the client 
for information; . . . ." 
2 SCR 20:1.5(b)(3) states, "A lawyer shall promptly respond 
to a client's request for information concerning fees and 
expenses." 
3 SCR 20:1.16(a)(3) states:  "Except as stated in par. (c), 
a lawyer shall not represent a client or, where representation 
has commenced, shall withdraw from the representation of a 
client if: . . . (3) the lawyer is discharged." 
No. 
2011AP277-D   
 
7 
 
and that she knew nothing about his medical problems until March 
2009 when he withdrew from her case.  L.P. estimated that during 
Attorney Kostich's absence from his law office, she probably 
made 50 attempts to contact him, all to no avail.  L.P.'s mother 
estimated she tried to reach Attorney Kostich at least 15 times 
between November 2008 and February 2009. 
¶15 Attorney Kostich testified that prior to his absence 
from his practice, he told L.P. that time was on their side 
because as long as her former boyfriend was cooperating with the 
government, no pressure was being put on her and there was no 
trial date.  Attorney Kostich said it was his feeling that the 
delay benefitted L.P. because in the meantime she was doing very 
well on monitoring by the probation department and she had gone 
into rehabilitation.  He said none of L.P.'s rights were in any 
way compromised by the fact that he was out of his office and 
unavailable between late 2008 and early 2009.   
¶16 Attorney Kostich admitted that when he left his office 
due to illness in November 2008 he did not prepare any sort of 
letter to be sent to clients to tell them he was going to be 
gone for an extended period of time.  He agreed that sending 
letters to confirm his absence would have been the best thing to 
do. 
¶17 The referee issued his report and recommendation on 
October 11, 2011.  The referee found that the OLR proved by 
clear, satisfactory, and convincing evidence all three counts of 
misconduct alleged in the complaint.  As to the appropriate 
sanction, the referee noted that Wisconsin adheres to a system 
No. 
2011AP277-D   
 
8 
 
of progressive discipline.  See In re Disciplinary Proceedings 
Against 
Converse, 
2006 
WI 
4, 
¶37, 
287 
Wis. 2d 72, 
707 
N.W.2d 530.  The referee noted that Attorney Kostich has been 
the subject of three prior public reprimands, and he noted that 
the 2005 public reprimand involved some counts of misconduct 
which are similar to the violations in the instant case.  The 
referee said under the circumstances, he had no hesitation in 
recommending that Attorney Kostich's license to practice law in 
Wisconsin be suspended for a period of 60 days as requested by 
the OLR in its complaint.  The referee also recommended that the 
full costs of the proceeding be assessed against Attorney 
Kostich.   
¶18 Attorney Kostich has appealed.  He asserts that Counts 
One and Two of the OLR's complaint are multiplicitous, and that 
a 60-day suspension is disproportionate to the seriousness of 
the offenses.  He asks this court to impose a fourth public 
reprimand.  He also asserts that an award of restitution is not 
appropriate. 
¶19 Attorney Kostich argues that Counts One and Two of the 
OLR's complaint are multiplicitous because the allegations 
underlying the two counts arose out of a single course of 
conduct.  He argues that Counts One and Two should be treated as 
one offense, failure to promptly respond to requests from the 
client regarding the status of her case and for a return of 
fees.   
¶20 Attorney 
Kostich also argues that the referee's 
recommendation for a 60-day suspension is disproportionate to 
No. 
2011AP277-D   
 
9 
 
the conduct at issue.  Although he acknowledges that apparently 
no attorney subject to this court's supervision has been 
afforded a fourth consecutive public reprimand, he suggests this 
would be an appropriate case to impose a fourth public 
reprimand. 
¶21 The 
OLR 
argues 
that 
Attorney 
Kostich's 
conduct 
represents violations of three separate supreme court rules.  It 
says although there may be a common element (ignoring the 
client), it does not follow that the charges are multiplicitous 
since there are separate policies and reasons behind each rule. 
¶22 The OLR asserts there are a number of aggravating 
circumstances in this case, the most important one being that 
Attorney Kostich has been publicly reprimanded three times 
before, with the 2005 reprimand having similarities to the facts 
of this case (failing to keep a client informed).  The OLR says 
Attorney Kostich refuses to acknowledge his misconduct and 
blames it on either his illness or an acrimonious break-up of 
his old law firm.  The OLR says "had he shared information about 
his illness and his absence from the law practice with his 
clients, many of these problems may have been avoided."   
¶23 This court will adopt a referee's findings of fact 
unless they are clearly erroneous.  Conclusions of law are 
reviewed de novo.  See In re Disciplinary Proceedings Against 
Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747.  The 
court may impose whatever sanction it sees fit regardless of the 
referee's recommendation.  See In re Disciplinary Proceedings 
Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.  
No. 
2011AP277-D   
 
10 
 
The referee's findings of fact in this case are not clearly 
erroneous, and we adopt them.  We also agree with the 
conclusions of law that flow from the referee's findings of 
fact. 
¶24 We reject Attorney Kostich's argument that Counts One 
and Two of the OLR's complaint are multiplicitous.  As the OLR 
points out, SCRs 20:1.4(a)(3) and (4) require an attorney to 
keep a client reasonably informed about the status of a matter 
and promptly comply with reasonable requests by the client for 
information.  Supreme court rule 20:1.5(b)(3) addresses a 
separate category of lawyer responsibility——fees——and requires 
the attorney to inform the client of the purpose and effect of 
any retainer or advanced fee.  Counts One and Two of the 
complaint address separate instances of misconduct and are not 
multiplicitous.  Attorney Kostich acknowledges that he failed to 
keep L.P. reasonably informed about the status of her case and 
failed to promptly respond to her request for information about 
fees.  He also acknowledges that he failed to timely take steps 
to withdraw from representation after L.P. left numerous 
messages saying she wanted to discharge him.  Accordingly, we 
agree with the referee that the OLR met its burden of proof on 
all three counts of misconduct.   
¶25 As to the issue of whether Attorney Kostich should be 
ordered to make restitution to L.P., the OLR stated at oral 
argument that it was not seeking a restitution award.  We accede 
to the OLR's judgment on this issue. 
No. 
2011AP277-D   
 
11 
 
¶26 As to the appropriate sanction, this court has 
repeatedly stated that it adheres to a system of progressive 
discipline.  See Converse, 287 Wis. 2d 72, ¶37; Eisenberg, 322 
Wis. 2d 518, ¶59.  As the referee pointed out, Attorney 
Kostich's 
2005 
public reprimand involved conduct somewhat 
similar to that at issue here.  In both cases he failed to 
respond to clients' requests for information about their pending 
cases.  Attorney Kostich admits he was absent from his office 
and uncommunicative with L.P. between November 2008 and early 
March 2009.  He admits he never instructed his daughter to send 
letters to any of his clients or to the courts before which he 
practiced informing them of his absence.  Although he claims he 
did instruct his daughter to tell clients who called that he 
would be out of the office for several months, L.P. and her 
mother 
both 
testified 
they 
were 
never 
given 
any 
such 
information.  No testimony was presented at the hearing before 
the referee to challenge those statements.   
¶27 Although Attorney Kostich maintains that L.P. was not 
harmed in any way by his failure to communicate with her, it is 
reasonable to assume that his failure to respond to dozens of 
messages left by L.P. and her mother caused L.P., who was facing 
federal 
felony 
counts 
that 
carried 
mandatory 
terms 
of 
imprisonment, acute distress.  We agree with the referee that a 
60-day 
suspension 
of 
Attorney 
Kostich's 
license 
is 
an 
appropriate sanction for his misconduct.  
No. 
2011AP277-D   
 
12 
 
¶28 IT IS ORDERED that the license of Nikola P. Kostich to 
practice law in Wisconsin is suspended for 60 days, commencing 
January 1, 2013. 
¶29 IT IS FURTHER ORDERED that Nikola P. Kostich shall 
comply with the provisions of SCR 22.26 concerning the duties of 
a person whose license to practice law in Wisconsin has been 
suspended. 
¶30 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Nikola P. Kostich shall pay to the Office of 
Lawyer Regulation the costs of this proceeding. 
¶31 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See SCR 
22.28(2).  
¶32 DAVID T. PROSSER, J., did not participate.