835 N.W.2d 836
N.D.2013Background
- In 2008 Wilkinson hired Lee to represent him in oil/gas litigation under a 10% contingent fee, but the fee agreement was not written.
- The litigation was complex, with multiple actions in federal, state, and tribal courts; Wilkinson had a prior 50% contingent fee with another attorney and liens were involved.
- As part of a global settlement, Wilkinson would not owe the Texas judgment, receive a $140,000 bonus, and receive a share of an overriding royalty; Lee’s 10% contingent fee would be paid from the $140,000 and from the royalty.
- Lee deposited the $140,000 into his trust account and immediately withdrew $14,000, then withdrew the full amount; Disciplinary Counsel alleged the fee dispute was unresolved.
- The hearing panel found violations of 1.5(b) and (c) and 1.15(a), (d), and (e), but not 1.5(a), 8.4, or related disciplinary rules, and recommended a 60-day suspension and costs of $7,147.51.
- Disciplinary Counsel objected, arguing the fee was unreasonable and reporting other possible violations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lee charged an unreasonable fee under 1.5(a) | Disciplinary Counsel argues Lee’s ultimate collection exceeded the agreed fee. | Lee contends no Rule 1.5(a) violation since there was a good-faith dispute over the fee scope. | Disciplinary Counsel failed to prove an unreasonable fee under 1.5(a). |
| Whether Lee violated 1.5(b)/(c) and 1.15(a),(d),(e) in handling settlement funds | Disciplinary Counsel asserts improper communication, failure to hold disputed funds, and improper disbursement. | Lee argues there was a legitimate fee dispute and that he acted in good faith within the misunderstanding. | Lee violated 1.5(b) and (c) and 1.15(a), (d), and (e). |
| Whether Lee’s conduct violated 1.2A(2)/(3) dishonesty or criminal misapplication | Disciplinary Counsel contends Lee’s retention of $126,000 for personal use was dishonest and a misapplication of entrusted funds. | Record showed a good-faith fee dispute; credibility favoring Lee over Wilkinson on the fee issue. | Lee did not violate 1.2A(2) or (3). |
| What discipline is appropriate | Disciplinary Counsel seeks disbarment or long suspension based on the alleged misconduct. | Lee argues the misconduct is limited to mismanaging funds with a 60-day suspension appropriate. | A 60-day suspension and costs of $7,147.51 are imposed. |
Key Cases Cited
- Disciplinary Bd. v. Stensland, 2011 ND 110 (ND 2011) (deference to hearing panel credibility and findings in disciplinary review)
- Disciplinary Bd. v. McDonagh, 2013 ND 20 (ND 2013) (special concurrence on disciplinary process authority)
- Disciplinary Bd. v. Wolff, 2010 ND 175 (ND 2010) (discussion of disciplinary scope and proportional sanctions)