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Attorney-Client Relationship – Conflict of Interest

Office of Lawyer Regulation v. Nikola P. Kostich, 2010 WI 136

Counsel publicly reprimanded for “a clear conflict of interest,” SCR 20:1.9(a): sexual assault victim had consulted counsel about suing his assailant, and counsel later represented assailant in criminal case involving number of victims including the one who had consulted him. The matters were “the same or … substantially related”; the interests of the subsequent client was “materially adverse” to the interests of the former client; and, counsel failed to obtain informed, written consent from the former client, therefore, counsel came within the 20:1.9(a) bar on the subsequent representation.

The court indicates that public reprimand” is condign sanction “for cases involving a single conflict of interest,” ¶23, and that is the sanction it metes out here, notwithstanding the “egregious” nature of the conflict. (Albeit with conditions, namely ethics CLE attendance.) The 2-Justice dissent is minded to go a bit farther: a 60-day suspension, ¶28.

Counsel’s defense was that the prior consult was merely a matter of “professional courtesy” and, because it didn’t eventuate in a retainer agreement, no attorney-client relationship was established. This defense ignored, among other things, that counsel had obtained highly confidential information, including the former client’s therapy records. Although the existence of an A-C relationship seems abundantly clear (and supports the court’s conclusion of an “egregious” conflict), the broadly sketched principles are worth reciting:

¶15  Attorney Kostich contended that he did not represent G.K.  Attorney Kostich noted that no retainer agreement was signed, no authorizations were signed at his office, no file was created on behalf of G.K., and no notes were taken during the initial meeting with G.K.

¶16  Whether an attorney-client relationship is created depends upon the intent of the parties and is a question of fact.  See, e.g., Marten Transport, Ltd. v. Hartford Specialty Co., 194 Wis. 2d 1, 14, 533 N.W.2d 452 (1995).  An attorney-client relationship is not formed simply because one of the parties knows that the other is an attorney.  Such knowledge, however, coupled with legal advice being sought and provided, ordinarily is enough to establish the relationship.  Moreover, the existence of a lawyer/client relationship is determined principally by the reasonable expectations of the person seeking the lawyer’s advice.  See 7A C.J.S. Attorney & Client § 202 (2010); see also Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686, 693 (Minn. 1980); Dean R. Dietrich, “Ethics‑Determining Current & Former Clients,” Wisconsin Lawyer, Vol. 73, No. 8 (Aug. 2000), available at https://www.wisbar.org/AM/Template.cfm?Section=Wisconsin_Lawyer&template=/CM/ContentDisplay.cfm&contentid=49073.

¶17  G.K. reasonably believed that there was an attorney-client relationship with Attorney Kostich when he shared highly confidential information about childhood sexual assaults and other sensitive mental health information with Attorney Kostich for the purpose of pursuing litigation against Giannini.

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