In re Disciplinary Proceedings Against Pelecky

420 N.W.2d 53, 143 Wis. 2d 51, 1988 Wisc. LEXIS 9
CourtWisconsin Supreme Court
DecidedMarch 14, 1988
DocketNo. 85-2236-D
StatusPublished

This text of 420 N.W.2d 53 (In re Disciplinary Proceedings Against Pelecky) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Disciplinary Proceedings Against Pelecky, 420 N.W.2d 53, 143 Wis. 2d 51, 1988 Wisc. LEXIS 9 (Wis. 1988).

Opinion

PER CURIAM.

Attorney disciplinary proceeding; attorney’s license revoked.

This is an appeal and cross-appeal from the referee’s recommendation that the license of Stanley [52]*52T. Pelecky to practice law be suspended for three years as discipline for misconduct consisting of misuse of client funds, conversion of client funds to his own use, failure to maintain records of client funds and provide appropriate accounting thereof, misrepresentation, neglect of legal matters and failure to cooperate with the investigation into his conduct. Appealing from the referee’s recommendation for discipline, the Board of Attorneys Professional Responsibility (Board) argued that Attorney Pelecky’s misconduct warrants the revocation of his license. Attorney Pelecky cross-appealed from the referee’s findings of fact and conclusions of law concerning his conduct and contended that several procedural errors were committed in the course of this proceeding. He asked that the matter be remanded to the referee for further proceedings.

The referee’s findings are not clearly erroneous and we adopt them, together with the conclusions based on them. Attorney Pelecky’s allegations of procedural improprieties are without merit and remand is unwarranted. We determine that the seriousness of Attorney Pelecky’s misconduct warrants the revocation of his license to practice law. By failing to carry out his duties to his clients as legal representative and custodian of their funds, by placing his personal financial interests above theirs and by making misrepresentations to the court before which he practiced, Attorney Pelecky has demonstrated that he is unfit to practice law.

Attorney Pelecky was admitted to practice law in Wisconsin in 1964 and, until suspended from membership in the State Bar in January, 1985 for failure to comply with continuing legal education requirements, practiced in Milwaukee. He has not been the subject of [53]*53prior disciplinary proceedings. The referee is Attorney S. Michael Wilk.

The first of two matters in which Attorney Pelecky was found to have engaged in misconduct concerned his representation of a woman in a divorce proceeding. In May, 1983, prior to retaining him to represent her in that action, Linda Robarge turned over to Attorney Pelecky $14,000 from a joint savings account she had with her husband. The husband’s attorney subsequently demanded that Attorney Pe-lecky release those funds and, when he failed to do so, commenced an action in circuit court alleging that Attorney Pelecky had converted the funds to his own use. In response to the husband’s motion for summary judgment in that action, Attorney Pelecky filed an answer stating that the money was being held in his trust account and advising the judge that he would deposit it with the clerk of the court pending conclusion of the divorce action. Attorney Pelecky then deposited with the clerk a check written on his trust account in the amount of $15,320 but that check was not paid by reason of insufficient funds. The court then ordered judgment in favor of the husband and against Attorney Pelecky.

In response to the Board’s initial inquiry into this matter, Attorney Pelecky wrote that the money was held by him in trust and was under his client’s control at all times. After the Board referred the matter to the district professional responsibility committee, Ms. Robarge testified that at the end of March, 1985 Attorney Pelecky had given her two checks, each in the amount of $7000, but that both checks were dishonored, following which Attorney Pelecky gave her a cashier’s check for $14,000.

[54]*54In the course of its investigation the Board served Attorney Pelecky with a request for the production of trust account records. Attorney Pelecky responded that he was unable to comply with that request due to health problems and asked for an extension. In a subsequent discussion with Board staff, Attorney Pelecky stated that his record-keeping for his trust account had lapsed during the previous three years and that he had not maintained a running balance. Subsequently, Board staff met with Attorney Pelecky at his home to examine those trust account records he was able to produce. That examination disclosed that numerous checks and bank statements were missing.

The records showed that the account into which Attorney Pelecky had placed Ms. Robarge’s $14,000 in 1983 was not his trust account but a personal account in a bank other than that in which he maintained his trust account. Subsequent to depositing that $14,000, Attorney Pelecky wrote three checks on the account, totaling approximately $13,800, for purposes unrelated to Ms. Robarge’s matter and made one automated teller withdrawal in the amount of $100, the purpose of which was not discovered.

It was learned that Attorney Pelecky kept no independent records of the location of the Robarge funds. Moreover, no deposits into or withdrawals from his trust account were noted on check stubs and checks were written on the account when there were insufficient funds to pay them. In addition, Attorney Pelecky commingled his mother’s social security payments with client funds in his trust account and paid out of that account her nursing bills and other expenses, in addition to withdrawing funds for himself.

[55]*55The second matter considered in this proceeding concerned Attorney Pelecky’s representation of a couple, Mr. and Mrs. Hubert, in the purchase and management of a rental property in 1979. The Hu-berts retained Attorney Pelecky to represent them in the purchase and to manage the property, including collecting rent, handling upkeep, making mortgage payments, providing accounting to the owners, disbursing profits to them, communicating with the lender, tenants and tax authorities and, ultimately, assisting the couple in selling the property. Although he argued that, after the purchase, he was acting merely as a friend, the referee found the relationship between Attorney Pelecky and the Huberts to be that of attorney and client.

In December, 1984 the Huberts sent Attorney Pelecky $10,000 to prepay a portion of principal on the mortgage. Attorney Pelecky acknowledged receipt of that money but admitted that he did not pay it to the mortgagee and was unable to account for the disbursement of those funds. He took the $10,000 check to his bank, deposited $8500 of it into his trust account and took the remaining $1500 in cash. He made no explanation as to the use of the $1500. At the time of the deposit, his trust account’s balance was $85.52; in January, 1985, he wrote a check on that account in the amount of approximately $12,000 to an attorney in a matter unrelated to the Huberts, thereby overdrawing the account.

During 1982, 1983 and 1984 the mortgagee wrote to the borrowers in care of Attorney Pelecky informing them that mortgage payments were in arrears. In August, 1984 the mortgagee demanded full payment of the loan. A foreclosure action was commenced; when no answer was filed, default judgment was [56]*56granted and the property was sold to the mortgagee at a sheriffs sale. Throughout this time, Attorney Pe-lecky failed to notify the Huberts of any of the 15 letters he had received from the mortgagee between April, 1982 and August, 1984. He admitted that he had received notices from the mortgagee concerning the foreclosure action and had not told the Huberts that the action had been commenced. Attorney Pe-lecky also had refused to tell the mortgagee where the Huberts were and misrepresented their whereabouts.

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Bluebook (online)
420 N.W.2d 53, 143 Wis. 2d 51, 1988 Wisc. LEXIS 9, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-disciplinary-proceedings-against-pelecky-wis-1988.