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

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2005 WI 90 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2003AP2950-D 
 
 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings 
Against Nikola P. Kostich, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Nikola P. Kostich, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST KOSTICH 
 
 
OPINION FILED: 
June 24, 2005   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: PROSSER and BUTLER, JR., J.J., did not 
participate.   
 
 
 
ATTORNEYS: 
 
      
 
 
2005 WI 90
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2003AP2950-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, 
 
     v. 
 
Nikola P. Kostich, 
 
          Respondent. 
 
FILED 
 
JUN 24, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.  Attorney 
publicly 
reprimanded. 
 
¶1 
PER CURIAM.   We review, pursuant to SCR 22.17(2),1 the 
findings of fact, conclusions of law, and recommendations of 
                                                 
1 SCR 22.17(2) provides:  Review; appeal.   
(2) If no appeal is filed timely, the supreme 
court shall review the referee's report; adopt, reject 
or modify the referee's findings and conclusions or 
remand the matter to the referee for additional 
findings; 
and 
determine 
and 
impose 
appropriate 
discipline.  The court on its own motion, may order 
the parties to file briefs in the matter. 
No. 
2003AP2950-D   
 
2 
 
Referee Stanley Hack, concluding that Attorney Nikola Kostich 
engaged in unprofessional conduct in the course of his practice 
of law in violation of the Rules of Professional Conduct.  The 
referee recommended a public reprimand, restitution and payment 
of the costs of this proceeding.  Neither party has appealed 
from the referee's report and recommendation. 
¶2 
We 
approve 
the 
findings, 
conclusions 
and 
recommendations as to the appropriate discipline for Attorney 
Kostich's misconduct. 
¶3 
Nikola Kostich was admitted to practice law in 
Wisconsin on August 21, 1970.  He has previously received a 
public reprimand for failing to timely file a federal tax 
return. 
¶4 
On October 31, 2003, the Office of Lawyer Regulation 
(OLR) filed a complaint against Kostich alleging he had 
committed seven disciplinary violations in connection with two 
separate client matters.  The matter proceeded to a hearing 
before Referee Hack in September 2004.   
¶5 
Many of the charges against Kostich derive from a 
single criminal appeal involving Kostich's former client, P.S.  
In March 1999, P.S. was sentenced to 16 years in prison 
following entry of a guilty plea to attempted first-degree 
sexual assault.  At P.S.'s request, his parents retained 
Attorney Kostich to represent him in postconviction proceedings.  
The client's mother paid Kostich an advance fee of $5000.  At 
the time, Kostich's hourly rate was $200 per hour.  There was no 
No. 
2003AP2950-D   
 
3 
 
fee agreement between the parties and Kostich did not inform the 
client's mother that the fee was nonrefundable. 
¶6 
Attorney Kostich did file a timely notice of intent to 
pursue postconviction relief, obtained a copy of the case file 
from trial counsel, and had telephone conversations with the 
previous counsel and with the assistant district attorney.  
Although he does not keep billing records, the referee found 
that he also engaged in at least four hours of preliminary 
research and review of the case file.  On May 14, 1999, he sent 
his client a copy of the notice of intent.  However, that was 
the last correspondence he ever forwarded to this client. 
¶7 
In June 1999, Kostich met with P.S. at the Dodge 
County Correctional Institution.  He did not inform P.S. at this 
meeting that he thought there were no grounds for an appeal. 
¶8 
Thereafter, Kostich failed to file various documents 
in the appeal.  He failed to return P.S.'s numerous calls 
inquiring about the status of the appeal.  Between March 1999 
and July 2001, P.S.'s mother made repeated efforts to contact 
Kostich.  Most were unsuccessful.  On the few occasions she did 
see Kostich, he promised to work on the matter.   
¶9 
In June 2000, because of his inability to contact 
Kostich, P.S. contacted the Frank J. Remington Center at the 
University of Wisconsin Law School.  In June 2000, he executed a 
release asking Kostich to send his file to the Frank J. 
Remington Center.  Kostich failed to do so and failed to respond 
to telephone calls from Kurt Klomberg at the Frank J. Remington 
Center.  In June 2002, the director of the Remington Center 
No. 
2003AP2950-D   
 
4 
 
forwarded correspondence to Kostich seeking release of the file 
to which Kostich failed to respond.  After ignoring several 
further requests, Kostich finally released P.S.'s file on August 
9, 2002. 
¶10 P.S. filed an initial grievance against Kostich and 
Kostich promised to act in the matter.  He cited difficulties 
contacting 
previous 
counsel 
and 
difficulties 
obtaining 
transcripts as the cause for his delay.  However, Kostich took 
no further action and a second grievance was filed on July 23, 
2001. 
¶11 Subsequently, Kostich sent several letters to the OLR, 
stating he was prepared to act on P.S.'s behalf.  On November 
21, 2001, he sent a letter stating that he found no grounds for 
appeal.  He claimed he had been waiting for decisions on 
relevant case law, but the referee later found that the issue in 
question had been decided in 1996.  In addition, the referee 
found that Kostich failed to respond promptly or fully to a 
number of further inquiries from the OLR, and from the OLR 
district committee. 
¶12 The remaining charges against Attorney Kostich derive 
from allegations that he committed misconduct in his failure to 
respond to OLR questions regarding a grievance filed against him 
by another former client, J.H.  Basically, the referee found 
that Kostich failed to respond to questions regarding the 
grievance 
and 
significantly 
delayed 
the 
investigation.  
Kostich's participation in the ensuing disciplinary proceeding 
was minimal. 
No. 
2003AP2950-D   
 
5 
 
¶13 Ultimately, the referee found that by failing to 
determine if P.S. had grounds for an appeal for over 30 months 
after he was retained to do so, Kostich failed to act with 
reasonable diligence and promptness in representing a client, in 
violation of SCR 20:1.32 (Count 1).   
¶14 The referee found further that by failing to respond 
to P.S.'s letters or telephone calls, Kostich failed to keep his 
client reasonably informed about the status of a matter or to 
promptly comply with reasonable requests for information, in 
violation of SCR 20:1.4(a)3 (Count 2). 
¶15 In addition, by failing to inform P.S. that he had no 
legal grounds for an appeal prior to the expiration of statutory 
deadlines, the referee found that Kostich failed to explain a 
matter to the extent reasonably necessary to permit P.S. to make 
an informed decision regarding representation, in violation of 
SCR 20:1.4(b)4 (Count 3). 
¶16 The referee also concluded that by not performing a 
sufficient amount of work on P.S.'s appellate issues to earn the 
full $5000 fee, and by not refunding any part of the fee after 
                                                 
2 SCR 20:1.3 provides:  Diligence.  "A lawyer shall act with 
reasonable diligence and promptness in representing a client." 
3 SCR 20:1.4(a) provides:  Communication. "(a) A lawyer 
shall keep a client reasonably informed about the status of a 
matter 
and 
promptly 
comply 
with 
reasonable 
requests 
for 
information." 
4 SCR 20:1.4(b) provides:  Communication. "(b) A lawyer 
shall explain a matter to the extent reasonably necessary to 
permit the client to make informed decisions regarding the 
representation." 
No. 
2003AP2950-D   
 
6 
 
determining that P.S. did not have legal grounds for an appeal, 
Kostich failed, upon termination of representation to take steps 
reasonably practicable to protect a client's interests, such as 
refunding any advance payment of fees that have not been earned 
in violation of SCR 20:1.16(d)5 (Count 4). 
¶17 The referee found further that by failing to timely 
forward the P.S. file to the Frank J. Remington Center despite 
numerous 
requests, 
Kostich 
failed, 
upon 
termination 
of 
representation, to take steps reasonably practicable to protect 
a client's interests, such as surrendering papers to which the 
client is entitled, in violation of SCR 20:1.16(d) (Count 5). 
¶18 Finally, the referee found that by failing to timely 
and/or fully respond to OLR's correspondence and questions, as 
well as those of the district committee investigator, Kostich 
willfully failed, during the course of an investigation, to 
provide relevant information, answer questions fully, or furnish 
documents, regardless of the merits, thus violating two counts 
                                                 
5 SCR 
20:1.16(d) 
provides: 
 
Declining 
or 
terminating 
representation. 
 
(d) Upon termination of representation, a lawyer 
shall take steps to the extent reasonably practicable 
to protect a client's interests, such as giving 
reasonable notice to the client, allowing time for 
employment of other counsel, surrendering papers and 
property to which the client is entitled and refunding 
any advance payment of fee that has not been earned.  
The lawyer may retain papers relating to the client to 
the extent permitted by other law. 
No. 
2003AP2950-D   
 
7 
 
of SCR 22.03(6),6 both in regard to the P.S. matter and the J.H. 
matter (Counts 6 and 7). 
¶19 Turning to the question of the appropriate discipline, 
the referee observed that the P.S. matter involved "serious 
neglect."  Although the referee acknowledged that Kostich was 
busy during the time of the grievance investigation, traveling 
to the former Yugoslavia to participate in the International 
Criminal Tribunal, and was hindered by the breakup of his law 
firm, the referee noted that these events did not excuse 
Kostich's misconduct.  The referee noted further that it was 
"very troubling" that Kostich made various claims to excuse his 
misconduct that were not substantiated.  The referee ultimately 
concluded that a public reprimand was appropriate, together with 
an order requiring Kostich to pay restitution to P.S.'s mother 
in the amount of $3200 in unearned legal fees and recommended 
that Attorney Kostich pay the costs of the proceeding.  
¶20 This court adopts a referee's findings of fact unless 
they are clearly erroneous.  In re Disciplinary Proceedings 
Against Charlton, 174 Wis. 2d 844, 974, 498 N.W.2d 380 (1993). 
The referee's conclusions of law are reviewed de novo.  In re 
Disciplinary Proceedings Against Norlin, 104 Wis. 2d 117, 122, 
310 N.W.2d 789 (1981). 
                                                 
6 SCR 22.03(6) provides:  Investigation. "(6) In the course 
of the investigation, the respondent's wilful failure to provide 
relevant information, to answer questions fully, or to furnish 
documents and the respondent's misrepresentation in a disclosure 
are misconduct, regardless of the merits of the matters asserted 
in the grievance." 
No. 
2003AP2950-D   
 
8 
 
¶21 Here, we adopt the referee's findings of fact and 
conclusions of law and agree that a public reprimand is 
appropriate discipline for the misconduct committed by Attorney 
Kostich in these two client matters.  We agree, further, that it 
is appropriate to direct Attorney Kostich to pay restitution to 
P.S.'s mother in the amount of $3200, representing unearned 
legal fees, and that he should be required to pay the costs of 
this disciplinary proceeding, which are $9,064.70 as of November 
24, 2004.  
¶22 IT 
IS 
ORDERED 
that 
Nikola 
Kostich 
is 
publicly 
reprimanded for professional misconduct. 
¶23 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Attorney Nikola Kostich make restitution to his 
former client's mother in the amount of $3200, plus post-
judgment interest, provided that if the restitution is not made 
within the time specified and absent a showing to this court of 
his inability to make the restitution within that time, the 
license of Nikola Kostich to practice law in Wisconsin shall be 
suspended until further order of the court. 
¶24 IT IS FURTHER ORDERED that within 60 days of the date 
of this order Nikola Kostich pay to the Office of Lawyer 
Regulation all the costs of this proceeding provided that if 
such costs are not paid within the time specified and absent a 
showing to this court of his inability to pay the costs within 
that time, the license of Nikola Kostich to practice law in 
Wisconsin shall be suspended until further order of the court. 
No. 
2003AP2950-D   
 
9 
 
¶25 DAVID T. PROSSER and LOUIS B. BUTLER, JR., J.J. did 
not participate. 
No. 
2003AP2950-D   
 
 
 
1