2020 WI 37
SUPREME COURT OF WISCONSIN
CASE NO.: 2019AP1173-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Patrick J. Hudec, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Patrick J. Hudec,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST HUDEC
OPINION FILED: April 16, 2020
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
NOT PARTICIPATING:
ATTORNEYS:
2020 WI 37
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2019AP1173-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of the Disciplinary Proceedings
Against Patrick J. Hudec, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant, APR 16, 2020
v. Sheila T. Reiff
Clerk of Supreme Court
Patrick J. Hudec,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review a report filed by Referee James
J. Winiarski, accepting a stipulation executed by Attorney Patrick
J. Hudec and the Office of Lawyer Regulation (OLR), in which
Attorney Hudec pled no contest to four counts of professional
misconduct and agreed that the allegations of the OLR's complaint
were established by clear, satisfactory, and convincing evidence.
Consistent with the terms of the stipulation the referee recommends
we suspend Attorney Hudec's law license for 60 days and require
Attorney Hudec to attend an OLR trust account seminar within one
No. 2019AP1173-D
year. The referee also recommends we order Attorney Hudec to pay
the full costs of this proceeding, which total $3,991.10 as of
January 29, 2020. The OLR did not request restitution and no
restitution is ordered.
¶2 We adopt the referee's findings of fact and conclusions
of law as derived from the parties' stipulation. We agree that a
60-day suspension is appropriate and we direct Attorney Hudec to
attend an OLR trust account seminar within one year of the date of
this order as a condition of his continued practice of law. We
impose the full costs of this proceeding on Attorney Hudec.
¶3 Attorney Hudec was admitted to the practice of law in
Wisconsin in 1979. As the referee observed, Attorney Hudec has an
extensive disciplinary history.
In November 1989, Attorney Hudec consented to a private
reprimand for misconduct that included accepting a
representation that was adverse to a former client and which
constituted a conflict of interest. Private Reprimand No.
1989-27.
In March 1993, Attorney Hudec consented to a second private
reprimand for misconduct that included entering into a
business transaction that was adverse to the financial
interests of a client; engaging in conduct involving
dishonesty, fraud, deceit or misrepresentation; and
withholding material evidence in failing to cooperate with
the investigation of the Board of Attorneys Professional
Responsibility. Private Reprimand No. 1993-4 (electronic
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No. 2019AP1173-D
copy available at https://compendium.wicourts.gov/
app/raw/002076.html).
In May 2001, a third consensual private reprimand was imposed
on Attorney Hudec for misconduct that included failing to
obtain written consent to a potential conflict of interest in
representing two clients and drafting a letter that contained
a false statement of fact. Private Reprimand No. 2001-15.
In 2008, Attorney Hudec received a consensual public
reprimand for misconduct that included failing to act with
reasonable diligence; failing to communicate with his client;
and failing to cooperate with the OLR's investigation. Public
Reprimand of Patrick J. Hudec, No. 2008-2 (electronic copy
available at https://compendium.
wicourts.gov/app/raw/002005.html).
In July 2014, we publicly reprimanded Attorney Hudec for four
counts of misconduct to which Attorney Hudec had stipulated,
including breach of his duty of competence, submitting a brief
with inappropriate facts, and engaging in an ex parte
communication. In re Disciplinary Proceedings Against Hudec,
2014 WI 46, 354 Wis. 2d 728, 848 N.W.2d 287.
On April 18, 2019, this court suspended Attorney Hudec's
Wisconsin law license for 60 days, effective May 30, 2019,
for six counts of misconduct to which Attorney Hudec pled no
contest. In re Disciplinary Proceedings Against Hudec, 2019
WI 39, 386 Wis. 2d 371, 925 N.W.2d 540. His misconduct
involved shortcomings in his fee agreements; lack of
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No. 2019AP1173-D
diligence; failure to communicate with clients; and failure
to comply with discovery rules.
¶4 This disciplinary matter commenced on June 27, 2019,
when the OLR filed a complaint against Attorney Hudec alleging
four counts of professional misconduct. Referee Winiarski was
appointed on August 7, 2019. Attorney Hudec failed to file a
timely answer in this matter, so on October 1, 2019, the OLR sought
a default judgment.
¶5 On October 28, 2019, Attorney Hudec and the OLR entered
into a stipulation in which Attorney Hudec pled no contest to all
the allegations of misconduct. In the stipulation Attorney Hudec
stated that his delays in responding to and/or cooperating with
the OLR were medically related as a result of a lengthy illness
during the summer of 2019, and major back surgery in January of
2018. The parties confirmed that the stipulation was not the
result of plea bargaining but reflects Attorney Hudec's voluntary
decision not to contest this matter. Attorney Hudec represents
and verifies that he fully understands the allegations to which he
stipulated in this disciplinary matter; he fully understands his
right to contest this matter; he fully understands the
ramifications of his entry into the stipulation; he fully
understands that he has the right to consult counsel; and that his
entry into the stipulation was made knowingly and voluntarily.
¶6 The referee requested briefing from the parties
regarding Attorney Hudec's previous misconduct; caselaw supporting
the recommended 60-day license suspension; and evidence and/or
agreement regarding Attorney Hudec's medical conditions. After
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No. 2019AP1173-D
consideration of the OLR's supplemental brief, the referee issued
his report on January 9, 2020. No appeal from that report was
filed so we consider this matter pursuant to SCR 22.17(2).1
¶7 The facts found by the referee derive from the parties'
stipulation. On January 17, 2017, the OLR received a notice of an
overdraft on Attorney Hudec's trust account. The OLR subsequently
received notice of several additional overdrafts. A review of
Attorney Hudec's trust account statements revealed that Attorney
Hudec disbursed funds from his trust account dozens of times to
pay personal and/or law firm expenses. During the same period of
time, Attorney Hudec made trust account checks payable to "cash"
and/or made cash withdrawals from his trust account on multiple
occasions.
¶8 Attorney Hudec then failed to cooperate with the OLR. On
September 6, 2017, the OLR sent a letter to Attorney Hudec
requesting that he submit a written response to its investigation.
Attorney Hudec did not timely respond. He requested extensions of
time to respond, but then repeatedly failed to meet the extended
deadlines and failed to provide the OLR with the requested
information despite the OLR's multiple attempts to contact him.
1 SCR 22.17(2) provides:
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.
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In January 2018, at the OLR's request, this court issued an order
to show cause as to why Attorney Hudec's license should not be
temporarily suspended for failing to cooperate with the OLR's
investigation. This apparently prompted Attorney Hudec to provide
the OLR with enough information, so at the OLR's request, the
motion was withdrawn.
¶9 In June 2018, the OLR sought additional information from
Attorney Hudec and again, he failed to timely respond, requested
extensions of time, and then again failed to respond. In September
2018, at the request of the OLR, we issued another order requiring
Attorney Hudec to show cause why his law license should not be
temporarily suspended for failure to cooperate with the OLR
investigation. Attorney Hudec requested and received two
extensions of time from this court but nonetheless failed to timely
respond to our order. On November 8, 2018, Attorney Hudec finally
provided the OLR with sufficient information so the OLR withdrew
its motion.
¶10 The referee concluded that Attorney Hudec committed four
counts of professional misconduct:
Count 1: By depositing and retaining funds belonging to
himself or his law firm in his trust account, Attorney
Hudec violated SCR 20:1.15(b)(3).2
2SCR 20:1.15(b)(3) provides: "No funds belonging to the
lawyer or law firm, except funds reasonably sufficient to pay
monthly account service charges, may be deposited or retained in
a trust account."
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No. 2019AP1173-D
Count 2: By making trust account checks payable to
"cash" and by making cash withdrawals from his trust
account, Attorney Hudec violated SCR 20:1.15(f)(2)a.3
Count 3: By having trust account checks returned for
insufficient funds, and therefore disbursing funds from
his trust account without the funds being available for
disbursement, Attorney Hudec violated SCR
20:1.15(f)(4)a.4
Count 4: By willfully failing to provide the OLR with
a timely initial written response to the OLR Matter no.
2017MA1283, and by willfully failing to provide the OLR
a timely response to its June 26, 2018 request for
additional information, Attorney Hudec violated
3SCR 20:1.15(f)(2)a. provides: "No withdrawal of cash shall
be made from a trust account or from a deposit to a trust account.
No check shall be made payable to 'Cash.' No withdrawal shall be
made from a trust account by automated teller or cash dispensing
machine."
4SCR 20:1.15(f)(4)(a) provides: "A lawyer shall not disburse
funds from any trust account less the deposit from which those
funds will be disbursed has cleared, and the funds are available
for disbursement."
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No. 2019AP1173-D
SCR 22.03(2)5 and 22.03(6),6 enforceable via
SCR 20:8.4(h).7
¶11 Determining appropriate discipline for professional
misconduct involves: (1) the seriousness, nature, and extent of
the misconduct; (2) the level of discipline needed to protect the
public, the courts, and the legal system from repetition of the
attorney's misconduct; (3) the need to impress upon the attorney
the seriousness of the misconduct; and (4) the need to deter other
attorneys from committing similar misconduct. In re Disciplinary
Proceedings Against Hammis, 2011 WI 3, ¶39, 331 Wis. 2d 19, 793
N.W.2d 884.
5 SCR 22.03(2) provides:
Upon commencing an investigation, the director
shall notify the respondent of the matter being
investigated unless in the opinion of the director the
investigation of the matter requires otherwise. The
respondent shall fully and fairly disclose all facts and
circumstances pertaining to the alleged misconduct
within 20 days after being served by ordinary mail a
request for a written response. The director may allow
additional time to respond. Following receipt of the
response, the director may conduct further investigation
and may compel the respondent to answer questions,
furnish documents, and present any information deemed
relevant to the investigation.
6 SCR 22.03(6) provides: "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."
7 SCR 20:8.4(h) provides: "It is professional misconduct for
a lawyer to fail to cooperate in the investigation of a grievance
filed with the office of lawyer regulation as required by SCR
21.15(4), SCR 22.001(9)(b), SCR 22.03(2), SCR 22.03(6), or SCR
22.04(1)."
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No. 2019AP1173-D
¶12 It is clear from the report that the referee questioned
whether a 60-day suspension is adequate given Attorney Hudec's
disciplinary history and the facts of this matter. The referee
thus requested additional information from the parties. The OLR
submitted a memorandum. Attorney Hudec did not respond.
¶13 The OLR's memorandum indicates that Attorney Hudec did
not provide evidence to establish that the medical conditions he
described caused his misconduct. In re Disciplinary Proceedings
Against Sosnay, 209 Wis. 2d 241, 243, 562 N.W.2d 137 (1997)
("Absent a causal connection between an attorney's medical
condition and that attorney's professional misconduct, the medical
condition may not be considered a factor mitigating either the
seriousness of the misconduct or the severity of discipline to be
imposed for it.") The OLR confirmed that Attorney Hudec's medical
concerns did not mitigate the proposed discipline.
¶14 At the referee's request, the OLR also addressed the
concept of progressive discipline in light of Attorney Hudec's
lengthy history of disciplinary offenses. The OLR confirmed that
it had factored progressive discipline into its recommended
sanction, citing a number of cases in which an attorney with prior
discipline was suspended for 60 days for misconduct that amounted
to commingling of funds and prohibited trust account transactions.
See, e.g., In re Disciplinary Proceedings Against Runyon, 2015 WI
95, 365 Wis. 2d 32, 870 N.W.2d 228; and In re Disciplinary
Proceedings Against Grogan, 2011 WI 7, 331 Wis. 2d 341, 795
N.W.2d 745.
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No. 2019AP1173-D
¶15 The referee was particularly troubled by Attorney Hudec's
persistent failure to cooperate, both during the OLR's
investigation and during the proceedings before the referee. The
referee observed:
It is safe to conclude that the respondent knowingly and
deliberately delays and drags his feet before giving
proper attention to disciplinary matters. A prior 60-
day license suspension, three prior private reprimands,
and two prior public reprimands apparently have not
convinced the respondent of the need to fully and timely
cooperate in OLR investigations and disciplinary
matters.
However, the referee noted that there was no evidence that any of
Attorney Hudec's misconduct resulted in misappropriation or
conversion of client funds; rather, Attorney Hudec's misconduct
amounted to bookkeeping or accounting deficiencies.
¶16 On balance, informed by Wisconsin caselaw, supplemental
briefing provided by the OLR, and the ABA Standards for Imposing
Lawyer Sanctions, the referee accepted the proposed sanctions and
recommends this court suspend Attorney Hudec's law license for a
period of 60 days and require him to attend the OLR's trust account
management seminar within one year of the date of this order. The
referee also recommends we impose the full costs of this proceeding
on Attorney Hudec.
¶17 Considering all of the above, we accept the referee's
findings of fact and conclusions of law as derived from the
stipulation, and we agree with the recommended sanctions and the
imposition of costs. We share the referee's concern about Attorney
Hudec's troubling propensity for delay and lack of cooperation in
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No. 2019AP1173-D
disciplinary matters and warn Attorney Hudec that his failure to
comply with the conditions imposed upon his continued practice of
law may subject Attorney Hudec to immediate license suspension.8
¶18 IT IS ORDERED that the license of Patrick J. Hudec to
practice law in Wisconsin is suspended for a period of 60 days,
effective May 28, 2020
¶19 IT IS FURTHER ORDERED that if he has not already done
so, Patrick J. Hudec shall comply with the provisions of SCR 22.26
regarding the duties of a person whose license to practice law in
Wisconsin has been suspended.
¶20 IT IS FURTHER ORDERED that, as a condition of his license
to practice law in Wisconsin, Patrick J. Hudec shall attend and
successfully complete an Office of Lawyer Regulation trust account
seminar within one year of the date of this order.
¶21 IT IS FURTHER ORDERED that if Patrick J. Hudec fails to
timely complete the requirement that he attend an Office of Lawyer
Regulation trust account seminar, the Office of Lawyer Regulation
is directed to inform this court promptly and Patrick J. Hudec's
law license may be subject to immediate suspension.
¶22 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 $3,991.10 as of
January 29, 2020.
8 Attending the trust account management seminar within a year
is not a prerequisite to Attorney Hudec's reinstatement from the
suspension we impose today.
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