Title: Paul R. Horvath v.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
97-2241-D 
 
 
Complete Title 
of Case: 
 
In the Matter of Disciplinary 
Proceedings Against 
Paul R. Horvath, 
Attorney at Law. 
 
 
DISCIPLINARY PROCEEDINGS AGAINST HORVATH 
 
 
Opinion Filed: 
October 1, 1997 
Submitted on Briefs: 
 
Oral Argument: 
 
 
 
Source of APPEAL 
 
COURT: 
 
 
COUNTY: 
 
 
JUDGE: 
 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
 
 
 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 97-2241-D 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against PAUL R. HORVATH, Attorney at Law. 
FILED 
 
OCT 1, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
1 
 
 
 
Attorney 
disciplinary 
proceeding. 
 
Attorney’s 
license 
suspended. 
¶1 
PER CURIAM.   We review, pursuant to SCR 21.09(3m),1 
the stipulation of the parties filed with the complaint of the 
Board of Attorneys Professional Responsibility (Board) alleging 
that Attorney Paul R. Horvath has engaged in professional 
misconduct. The parties stipulated that Attorney Horvath’s 
license to practice law be suspended for six months as 
discipline for that misconduct, which consisted of his failing 
to comply promptly with a client’s reasonable requests for 
                     
1 SCR 21.09 provides, in pertinent part: Procedure. 
 . . .  
(3m) The board may file with a complaint a stipulation by 
the board and the respondent attorney to the facts, conclusions 
of law and discipline to be imposed. The supreme court may 
consider the complaint and stipulation without appointing a 
referee.  . . .   
No. 97-2241 
 
2 
information concerning the status of a collection matter and 
failing to explain that matter to the client, failing to 
cooperate in the Board’s investigation of the client’s grievance 
and disclose all facts and circumstances regarding it, failing 
to act with reasonable diligence and promptness on behalf of the 
client and misrepresenting to the client his having collected 
funds on her behalf, failing to deposit client funds in a trust 
account, and failing to maintain a trust account in compliance 
with SCR 20:1.15(c)(1)b.  
¶2 
We approve the parties’ stipulation and determine that 
the professional misconduct established by the facts and 
conclusions set forth in it warrants a six-month license 
suspension. In addition to the seriousness of that misconduct, 
this is the third occasion the court has had to discipline 
Attorney Horvath for professional misconduct.  
¶3 
Attorney Horvath was admitted to practice law in 
Wisconsin in 1971 and practices in Appleton. In 1984, the court 
publicly reprimanded him for neglecting a client’s legal matter, 
misrepresenting to her that he had reached a settlement on a 
damage claim and paying her from his own funds, and failing to 
respond timely to inquiries from the Board regarding his conduct 
in the matter. Disciplinary Proceedings Against Horvath, 119 
Wis. 2d 265, 349 N.W.2d 484 (1984). In May, 1991, he consented 
to a public reprimand from the Board for failing to commence a 
legal action on a client’s collection matter for eight months, 
failing to respond to requests for information concerning the 
status of that matter by the collection agency that had referred 
No. 97-2241 
 
3 
the matter to him, and failing to respond to the Board’s 
inquiries into the matter and provide copies of collection files 
on which he had been retained.  
¶4 
The facts to which the parties stipulated in this 
proceeding are as follows. In December, 1994, an out-of-state 
insurance company retained Attorney Horvath to collect a 
judgment it had obtained against a Wisconsin resident. In 
October, 
1995, 
Attorney 
Horvath 
told 
the 
insurer’s 
representative that he had collected some $300 from the judgment 
debtor and expected to receive the remainder within 30 days. Two 
months later the representative telephoned Attorney Horvath and 
left a message requesting a report of the status of the matter, 
but he did not return the call. A month later the representative 
wrote to Attorney Horvath requesting a status update, but he did 
not respond.  
¶5 
In March, 1996, Attorney Horvath told the insurer’s 
attorney that the judgment had been collected in full and that 
he would send the funds and an accounting that day. When the 
attorney did not receive either the money or the accounting, he 
made further inquiries. Attorney Horvath then sent a copy of a 
trust account check he claimed to have sent a week after the 
attorney’s telephone call. The check stub on the copy indicated 
that the total amount collected was $13,638, from which he had 
deducted $2727.60 as his fee. When the attorney told him the 
check had not been received, Attorney Horvath said he would stop 
payment on the original check and send a replacement check by 
overnight courier, but he did not do so. The insurer’s attorney 
No. 97-2241 
 
4 
then sent a letter April 12, 1996 demanding prompt payment of 
the $10,910.40, but Attorney Horvath did not respond. In mid-
October, 1996, the insurer filed an action against Attorney 
Horvath for the funds allegedly collected from the judgment 
debtor and, when Attorney Horvath did not answer the complaint, 
obtained a default judgment.  
¶6 
When the Board asked him for information concerning 
the grievance that had been filed in respect to that conduct, 
Attorney Horvath did not respond. He also did not respond to a 
subsequent letter from the Board reminding him of his duty to 
cooperate in the investigation and requesting a prompt response 
to the grievance. Ultimately, Attorney Horvath admitted to the 
Board 
that 
he 
had 
lied 
to 
the 
insurer’s 
attorney 
and 
representative about having collected on the judgment and that 
he failed to pursue the matter.  
¶7 
The parties stipulated that Attorney Horvath’s failure 
to promptly comply with the client’s reasonable requests for 
information violated SCR 20:1.4(a) and his failure to explain 
the matter to the extent reasonably necessary for the client to 
make informed decisions regarding his representation violated 
SCR 20:1.4(b).2 His failure to act with reasonable diligence and 
                     
2 SCR 20:1.4 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.  
(b) A lawyer shall explain a matter to the extent 
reasonably necessary to permit the client to make informed 
decisions regarding the representation.  
No. 97-2241 
 
5 
promptness violated SCR 20:1.3,3 and his misrepresentations to 
the client regarding collection of the judgment constituted 
conduct 
involving 
dishonesty, 
fraud, 
deceit 
or 
misrepresentation, in violation of SCR 20:8.4(c).4 His failure to 
cooperate in the investigation violated SCR 21.03(4),5 and his 
failure to fully and fairly disclose to the Board all facts and 
circumstances pertaining to the conduct under investigation 
violated SCR 22.07(2).6  
                     
3 SCR 20:1.3 provides: Diligence 
A lawyer shall act with reasonable diligence and promptness 
in representing a client.  
4 SCR 20:8.4 provides, in pertinent part: Misconduct 
It is professional misconduct for a lawyer to: 
 . . .  
(c) engage in conduct involving dishonesty, fraud, deceit 
or misrepresentation;  
5 SCR 21.03 provides, in pertinent part:  
 . . .  
(4) Every attorney shall cooperate with the board and the 
administrator in the investigation, prosecution and disposition 
of grievances and complaints filed with or by the board or 
administrator.  
6 SCR 22.07 provides, in pertinent part: Investigation. 
 . . .  
(2) 
During 
the 
course 
of 
an 
investigation, 
the 
administrator or a committee may notify the respondent of the 
subject being investigated. The respondent shall fully and 
fairly disclose all facts and circumstances pertaining to the 
alleged misconduct or medical incapacity within 20 days of being 
served by ordinary mail a request for response to a grievance. 
No. 97-2241 
 
6 
¶8 
The records of Attorney Horvath’s trust account that 
the Board had subpoenaed disclosed that the trust account was 
not one in which interest accruing to it was paid to the 
Wisconsin Trust Account Foundation, Inc., as required by SCR 
20:1.15(c)(1)b.7 Also, while 
the checks for that account 
identified it as the “Paul R. Horvath Trust Account,” the 
statements for the account showed the title to be “Paul R. 
Horvath, Custodian; Cory S. Horvath, Minor [his daughter].” 
Attorney Horvath repeatedly deposited client funds into that 
custodian account, in violation of SCR 20:1.15(a) and (c).8  
                                                                  
The administrator or committee may make a further investigation 
before making a recommendation to the board.  
7 SCR 20:1.15(c)(1)b. requires that the interest accruing on 
a lawyer’s trust, net of any transaction costs, be paid to the 
Wisconsin Trust Account Foundation, Inc.  
8 SCR 20:1.15 provides, in pertinent part: Safekeeping 
property 
(a) A lawyer shall hold in trust, separate from the 
lawyer’s own property, property of clients or third persons that 
is 
in 
the 
lawyer’s 
possession 
in 
connection 
with 
a 
representation. 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) maintained in a bank, 
trust company, credit union or savings and loan association 
authorized to do business and located in Wisconsin, which 
account shall be clearly designated as “Client’s Account” or 
“Trust Account” or words of similar import, and no funds 
belonging to the lawyer or law firm except funds reasonably 
sufficient to pay account service charges may be deposited in 
such an account.  . . .  
 . . .  
(c) Each trust account under this rule shall be an account 
in any bank, trust company, credit union or savings and loan 
association, selected in the exercise of ordinary prudence, 
No. 97-2241 
 
7 
¶9 
As discipline for his misconduct in these matters, we 
impose a six-month suspension of Attorney Horvath’s license to 
practice 
law, 
the 
discipline 
to 
which 
the 
parties 
had 
stipulated. Under the rules of this court, SCR 22.28(3),9 
Attorney Horvath will be required to demonstrate his fitness to 
represent others in the legal system in order that his license 
to do so be reinstated.  
¶10 IT IS ORDERED that the license of Paul R. Horvath to 
practice law in Wisconsin is suspended for a period of six 
months, commencing November 3, 1997.  
¶11 IT IS FURTHER ORDERED that within 60 days of the date 
of this order Paul R. Horvath pay to the Board of Attorneys 
Professional Responsibility any costs of this proceeding that 
may have been incurred by the Board, provided that if the 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 Paul R. Horvath to practice law in Wisconsin 
shall remain suspended until further order of the court.  
                                                                  
authorized by federal or state law to do business in Wisconsin 
and 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 . . . .  
9 SCR 22.28 provides, in pertinent part: Reinstatement. 
 . . .  
(3) An attorney whose license is revoked or suspended for 6 
months or more for misconduct or medical incapacity shall not 
resume practice until the license is reinstated by order of the 
supreme court.  . . .  
No. 97-2241 
 
8 
¶12 IT IS FURTHER ORDERED that Paul R. Horvath comply with 
the provisions of SCR 22.26 concerning the duties of a person 
whose license to practice law in Wisconsin has been suspended.