Disciplinary Proceedings Against Hudec
2019 WI 39, 4/18/19 (2019)
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ATTORNEY disciplinary proceeding.
Attorney's license suspended.
¶1 PER CURIAM. We review Referee
Richard M. Esenberg's report and
recommendation concluding that Attorney
Patrick J. Hudec violated the rules of
professional conduct in connection with his
representation of two clients, D.B. and N.K.
The referee recommended that this court
impose a 60-day suspension of Attorney
Hudec's law license and condition Attorney
Hudec's continued practice of law on his
satisfaction of a monetary judgment entered
in N.K.'s civil lawsuit against him. We
adopt the referee's findings of fact,
conclusions of law, and recommendation
regarding discipline. We impose the full
costs in this matter, which total $4,319.04
as of January 24, 2019.
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¶2 Attorney Hudec was admitted to
practice law in Wisconsin on May 21, 1979.
He has a substantial disciplinary history:
a 1989 consensual private reprimand; a 1993
consensual private reprimand; a 2001
consensual private reprimand; a 2008
consensual public reprimand; and a 2014
public reprimand.
¶3 On March 22, 2017, the Office of
Lawyer Regulation (OLR) filed a complaint
against Attorney Hudec alleging six counts
of professional misconduct arising out of
his representation of D.B. and N.K.
Attorney Hudec moved to dismiss the
complaint on a variety of grounds. This
court appointed a referee, who denied the
motion. Attorney Hudec then filed an answer
in which he denied all misconduct.
¶4 Attorney Hudec later entered into a
stipulation in which he agreed to plead no
contest to the six counts of misconduct
charged in the complaint. Attorney Hudec
agreed that the referee could use the
allegations of the complaint as a factual
basis for the referee's determination of
misconduct. The parties stipulated that a
60-day suspension was appropriate
discipline. The parties further stipulated
that, as a condition upon his continued
practice of law, Attorney Hudec must comply
with any judgment resulting from a pending
civil case against him brought by N.K. The
parties further agreed that the stipulation
was not the result of plea bargaining; that
Attorney Hudec's entry into the stipulation
was knowing and voluntary; and that he
understood the misconduct allegations made
in the OLR's complaint, his right to contest
those allegations, his right to consult with
counsel, and the ramifications of his entry
into the stipulation.
¶5 In January 2019, the referee filed
his report and recommendation. The referee
accepted the parties' stipulation and found,
based on the stipulation, that the following
facts were true.
Representation of D.B. (Counts 1-
3)
¶6 D.B.'s mother, J.A.R., died in May
2012. In June 2012, D.B. hired Attorney
Hudec to represent her in her capacity as
personal representative for her mother's
estate. D.B. paid Attorney Hudec a $1,500
advanced fee. Attorney Hudec did not
communicate the scope of the representation
or the basis or rate of the fee in writing
to D.B. within a reasonable time of
commencing the representation, nor did he
provide her with a written communication
explaining the purpose and effect of the
advanced fee.
¶7 J.A.R.'s will was admitted to
probate. On November 16, 2012, C.D.,
another daughter of J.A.R., filed a claim
against the estate concerning payments made
on her mother's behalf and an asserted
interest in a house she had shared with her
mother. Attorney Hudec received a copy of
the claim.
¶8 Attorney Hudec failed to file an
objection to C.D.'s claim within 60 days as
required by Wis. Stat. § 859.33. He also
failed to promptly respond to several of
D.B.'s emails and telephone calls requesting
information regarding the status of the
estate proceeding.
¶9 On November 6, 2013, nearly a year
after C.D. filed her claim, C.D.'s counsel
moved for a default judgment on the claim,
as well as for a protective order relating
to discovery.
¶10 On November 20, 2013, Attorney Hudec
filed an objection to C.D.'s claim, a motion
for an extension of time for objections to
claims, and various filings in opposition to
C.D.'s motions for default judgment and for
a protective order.
¶11 In a December 23, 2013 order, the
circuit court granted C.D.'s motion for
default judgment. The circuit court also
granted C.D.'s requested protective order.
¶12 On December 30, 2013, C.D. filed a
notice of entry of judgment.
¶13 On January 8, 2014, Attorney Hudec
filed a motion for reconsideration and a
"Motion to Reopen Judgment." The circuit
court denied these motions, noting that
Attorney Hudec's failure to timely file an
objection to C.D.'s claim was not the result
of excusable neglect, but rather was part of
a pattern of late filings in his handling of
the estate proceedings.
¶14 Attorney Hudec did not timely appeal
from the circuit court's default judgment.
He did, however, timely appeal from the
circuit court's order denying the estate's
motions for reconsideration and to "reopen"
the default judgment.
¶15 In November 2014, the court of
appeals affirmed the circuit court's order.
In doing so, it noted the circuit court's
observation that Attorney Hudec had engaged
in a pattern of missed deadlines for reasons
that did not meet the standard for excusable
neglect.
¶16 In March 2015, the circuit court
ordered that D.B. continue as the personal
representative and retain new counsel.
¶17 In a November 2015 letter to the
OLR, D.B. stated that Attorney Hudec had not
provided her with copies of the circuit
court and appellate decisions; that he had
provided "only a general synopsis of what
took place"; that successor counsel had
provided her with copies of these decisions;
and that she was "astonished" by what she
read and disappointed in the amount of
information Attorney Hudec had withheld from
her.
¶18 In February 2016, the circuit court
entered a final judgment, entered an order
discharging the personal representative, and
closed the case.
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¶19 The OLR complaint alleged, the parties
stipulated, and the referee determined that by
failing to communicate the scope of the
representation and the basis or rate of the
fee in writing to D.B. within a reasonable
time after commencing the representation, and
by failing to communicate the purpose and
effect of the advanced fee in writing to D.B.,
Attorney Hudec violated SCR 20:1.5(b)(1) and
(2) (Count 1).
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¶20 The OLR complaint alleged, the parties
stipulated, and the referee determined that by
failing to timely object to C.D.'s claim
against the Estate, by failing to timely
appeal from the trial court's default
judgment, and by failing to comply with
several deadlines during the case, Attorney
Hudec violated SCR 20:1.3 (Count 2).
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¶21 The OLR complaint alleged, the
parties stipulated, and the referee
determined that by failing to keep D.B.
reasonably informed about the status of the
case and by failing to promptly respond to
several of D.B.'s requests for information
regarding the case, Attorney Hudec violated
SCR 20:1.4(a)(3) and (4) (Count 3).
Representation of N.K. (Counts 4-
6)
¶22 In January 2012, N.K. hired Attorney
Hudec to pursue a defamation claim against
B.K. regarding B.K.'s complaint to the
Better Business Bureau about N.K.'s
business. In April 2012, Attorney Hudec
filed a defamation suit on behalf of N.K.
and her business against B.K. and B.K.'s
husband, D.K.
¶23 In June 2012, D.K. filed a motion
for sanctions on the basis that there was no
evidence he was a party to the alleged
defamation and, therefore, he should not
have been named as a defendant. Also in
June 2012, B.K. filed an answer and
affirmative defenses to N.K.'s complaint,
and D.K. filed a counterclaim and a motion
to dismiss.
¶24 In July 2012, Attorney Hudec filed
documents in opposition to D.K.'s motions
for sanctions and to dismiss.
¶25 In August 2012, the circuit court
held a hearing and granted D.K.'s motion to
dismiss on the ground that there was no
evidence to justify naming him as a party.
The circuit court denied D.K.'s motion for
sanctions.
¶26 In October 2012, Attorney Hudec
filed a reply to the counterclaim and motion
to dismiss that D.K. had filed several
months earlier. D.K. responded by moving to
strike Attorney Hudec's filing as untimely
and moving for a default judgment on the
counterclaim. The circuit court ultimately
granted D.K.'s motions. Attorney Hudec
failed to adequately communicate that fact
to N.K.
¶27 Over the following months, Attorney
Hudec missed a variety of court-imposed
deadlines. In April 2013, B.K. filed a
motion for sanctions as a result of these
missed deadlines. Attorney Hudec failed to
inform N.K. of this motion, and failed to
inform her of the subsequently scheduled
hearing on the motion. Attorney Hudec then
failed to appear at the sanctions hearing.
The circuit court dismissed plaintiffs' case
with prejudice, finding Attorney Hudec's
actions were egregious, extreme,
substantial, and persistent. The circuit
court noted the following facts: (1)
Attorney Hudec had been granted extensions
for various medical issues; (2) court-
mandated mediation never took place; (3)
Attorney Hudec failed to provide requested
discovery to opposing counsel; (4) Attorney
Hudec failed to file a pretrial report; and
(5) Attorney Hudec stated that he intended
to withdraw as counsel for plaintiff, but
failed to so do, filing only unsigned
documents.
¶28 As a sanction for failing to comply
with its scheduling order, the circuit court
imposed attorney's fees of $3,862.50 against
plaintiffs and Attorney Hudec. The court
gave plaintiffs leave to seek relief from
the imposition of attorney's fees by filing
a motion with the court.
¶29 The circuit court kept a scheduled
final pretrial conference on its calendar to
discuss matters related to D.K.'s
counterclaim. N.K. appeared at the final
pretrial conference. Attorney Hudec did
not. N.K. did not know that Attorney Hudec
would not be in attendance. She did not
know that the circuit court had dismissed
her claims against the defendants. She did
not know that the circuit court had imposed
sanctions against her and Attorney Hudec.
¶30 In May 2013, N.K. paid an amount to
the defendants in order to settle the
default judgment that D.K. had obtained on
his counterclaim.
¶31 In June 2013, N.K. retained a new
lawyer and satisfied the sanctions judgment
in favor of the defendants.
¶32 In December 2016, N.K. filed a civil
suit against Attorney Hudec, his law office,
and his insurance carrier, if any, seeking
recovery of her previous payments to
Attorney Hudec and other damages she alleged
were caused by him. This lawsuit was
pending at the time of the parties'
stipulation. Although the referee's report
does not note as much, the court takes
judicial notice that, according to
Wisconsin's Consolidated Court Automation
Programs (CCAP) records, a $9,235.48
judgment against Attorney Hudec and in
N.K.'s favor was entered on December 14,
2018, and Attorney Hudec has not filed a
notice of appeal of the judgment.
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¶33 The OLR complaint alleged, the parties
stipulated, and the referee determined that by
failing to timely file a reply to D.K.'s
counterclaim resulting in the court striking
plaintiffs' pleading and granting default
judgment on the counterclaim, and by failing
to comply with the court's scheduling order,
Attorney Hudec violated SCR 20:1.3 (Count 4).
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¶34 The OLR complaint alleged, the parties
stipulated, and the referee determined that by
failing to inform N.K. that he did not timely
file a reply to D.K.'s counterclaim, by
failing to inform N.K. that the court granted
a default judgment on the counterclaim, and by
otherwise failing to keep N.K. reasonably
informed about the status of the case,
Attorney Hudec violated SCR 20:1.4(a)(3)
(Count 5).
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¶35 The OLR complaint alleged, the
parties stipulated, and the referee
determined that by failing to make a
reasonably diligent effort to comply with
defendants' discovery requests, Attorney
Hudec violated SCR 20:3.4(d) (Count 6).
¶36 The referee recommended a 60-day
suspension of Attorney Hudec's license in
his report. The referee noted that Attorney
Hudec has an extensive disciplinary record
(three private and two public reprimands),
and that his previous misconduct included
neglect similar to what occurred here.
See, e.g., Public Reprimand of Patrick
J.
Hudec, No. 2008-2 (electronic copy available
at
https://compendium.wicourts.gov/app/raw/0020
05.html) (imposing a public reprimand for
misconduct that included failing to act with
reasonable diligence and promptness, failing
to keep his client reasonably informed, and
failing to timely respond to the OLR's
investigative efforts); In re Disciplinary
Proceedings Against Hudec, 2014 WI 46, 354
Wis. 2d 728, 848 N.W.2d 287 (imposing a
public reprimand for misconduct that
included failing to provide competent
representation; e.g., gross inattention to
detail in circuit court litigation, filing a
principal appellate brief rife with
grammatical and spelling errors, and filing
an appellate reply brief that was struck as
untimely and was not served on opposing
counsel).
¶37 The referee also pointed to certain
cases that support a 60-day suspension under
similar circumstances. See In re
Disciplinary Proceedings Against
Moldenhauer, 2016 WI 43, 369 Wis. 2d 1,
879
N.W.2d 605 (imposing a 60-day suspension for
failing to act with reasonable diligence and
promptness and failing to keep a client
reasonably informed; respondent-lawyer's
disciplinary history included a private
reprimand and three public reprimands for
similar misconduct); In re Disciplinary
Proceedings Against Theobald, 2010 WI 102,
329 Wis. 2d 1, 786 N.W.2d 834 (imposing a
60-day suspension for failing to act with
reasonable diligence and promptness and
failing to keep a client reasonably
informed; respondent-lawyer's disciplinary
history included two public reprimands for
similar misconduct); In re Disciplinary
Proceedings Against Anderson, 2010 WI 39,
324 Wis. 2d 627, 782 N.W.2d 100 (imposing a
60-day suspension for failing to act with
reasonable diligence and promptness and
failing to properly communicate with a
client; respondent-lawyer's disciplinary
history included two public reprimands and a
private reprimand for similar misconduct).
¶38 The referee also deemed it
reasonable for the court to require Attorney
Hudec to comply with any judgment resulting
from N.K.'s lawsuit against him——a term the
parties agreed to in their stipulation.
¶39 Neither party appealed the referee's
report, so this matter is submitted to the
court for review pursuant to SCR 22.17(2).
We review a referee's findings of fact
subject to the clearly erroneous standard.
See In re Disciplinary Proceedings
Against
Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43,
675 N.W.2d 747. We review the referee's
conclusions of law de novo. Id. We
determine the appropriate level of
discipline independent 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.
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¶40 We agree with the referee that a 60-
day suspension is appropriate. Clearly,
Attorney Hudec's many previous reprimands
have not impressed upon him the importance
of his ethical obligations. "This court has
long adhered to the concept of progressive
discipline in attorney regulatory cases."
In re Disciplinary Proceedings Against
Netzer, 2014 WI 7, ¶49, 352 Wis. 2d 310,
841
N.W.2d 820. A suspension is the next step
in the progressive discipline process, and
Moldenhauer, Theobald, and
Anderson instruct
that under circumstances like those present
here, a 60-day suspension is appropriate.
¶41 We turn next to the issue of
restitution. The OLR did not request
restitution related to Attorney Hudec's
representation of D.B. The OLR reports that
while some of Attorney Hudec's work on
D.B.'s mother's estate was clearly
deficient, its investigation did not provide
a reasonably ascertainable amount of funds
to be restored. In addition, the OLR
reports, any losses the estate incurred as a
result of Attorney Hudec's failure to object
to C.D.'s claim would constitute incidental
or consequential damages, as opposed to
funds that were under Attorney Hudec's
direct control. Given these circumstances,
we agree with the OLR that no restitution is
warranted related to the D.B. matter.
See
In re Disciplinary Proceedings Against
Blessinger, 2017 WI 107, ¶21, 378 Wis. 2d
539, 905 N.W.2d 122 (noting that the OLR's
policy is to seek restitution only when,
among other things, there is a reasonably
ascertainable amount of restitution, and the
funds to be restored were in the lawyer's
direct control and do not constitute
incidental or consequential damages).
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¶42 Although the OLR did not seek
restitution related to the N.K. matter, the
parties stipulated, and the referee agreed,
that the court should condition Attorney
Hudec's continued practice of law on his
satisfaction of any monetary judgment
entered in N.K.'s civil lawsuit against him.
As mentioned above, CCAP records show that
N.K. obtained a $9,235.48 judgment against
Attorney Hudec in December 2018. Consistent
with the parties' stipulation and the
referee's recommendation, we deem it
appropriate to require, as a condition of
the reinstatement of his Wisconsin law
license, that Attorney Hudec satisfy this
judgment.
¶43 Finally, we deem it appropriate to
impose the full costs of this disciplinary
proceeding on Attorney Hudec, as is our
usual custom. aSee SCR 22.24(1m).
¶44 IT IS ORDERED that the license of
Patrick J. Hudec is suspended for a period
of 60 days, effective May 30, 2019.
¶45 IT IS FURTHER ORDERED that within 60
days of the date of this order, Patrick J.
Hudec shall pay to the Office of Lawyer
Regulation the costs of this proceeding,
which are $4,319.04 as of January 24, 2019.
¶46 IT IS FURTHER ORDERED that, as a
condition of reinstatement of his license to
practice law in Wisconsin, Patrick J. Hudec
shall satisfy the judgment issued against
him and in N.K.'s favor in connection with
the misconduct described herein.
¶47 IT IS FURTHER ORDERED that Patrick
J. Hudec 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.
¶48 IT IS FURTHER ORDERED that
compliance with all conditions of this order
is required for reinstatement. See SCR
22.28(2).
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