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    Wisconsin Lawyer
    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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