In re Martin, 2013 D.C. App. LEXIS 96

Background

Enterprise Solutions, Inc. retained Martin in February 2000 with hourly fees; later, a 45% contingency fee was added in December 2001 for the Cannon Florida litigation.
A settlement of $2.2 million was reached with Cannon, but collection targeted Rowen House and Montville NY accounts; Martin oversaw related disputes and engaged NY counsel.
A parallel federal forfeiture action against those accounts created overlapping claims by the government and ESI, with $656,464.30 to ESI after division and subsequent distribution proposals in February 2003.
In February 2003 Martin proposed a distribution allocating his own $68,959.80 hourly fees plus a $295,409 contingency fee; disputes arose when Bragagnolo objected to payments to others.
Martin disbursed funds from the settlement in February 2003; a dispute led Bragagnolo to instruct not to pay certain parties; the dispute escalated, and the ARB later awarded ESI $165,313 in May 2003.
Martin pursued extensive post-award challenges (ACAB, federal court, and state court) and ultimately settled in January 2005 with ESI, requiring him to dismiss the Bar Complaint as a condition, while continuing the ethics investigation.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was the fee charged reasonable under Rule 1.5(a)?	Martin represented ESI in a single matter; the combined fees were reasonable given risks.	The Florida action, New York collection, and U.S. forfeiture were a single matter; and the total fees exceeded reasonableness.	Fee unreasonable; multiple-fee structure in a single matter violated 1.5(a).
Did Martin violate 1.15(a) and (c) by comingling disputed funds with his own?	Disbursement occurred after dispute; funds should have been placed in a separate account.	Dispute timing contested; funds could have been disbursed before dispute was known.	Substantial evidence shows awareness of dispute before disbursement; comingling violated 1.15(a) and (c).
Did Martin violate 1.16(d) by failing to promptly return unearned fees after arbitration?	Martin resisted arbitration and appealed, delaying payment owed to ESI.	Contest and appeal were permissible challenges to an arbitration result.	Rule 1.16(d) violated; undue delay and withholding of award harmed client.
Did Martin violate 8.4(c) by dishonest misrepresentation regarding advice from the Ethics Hotline?	Martin claimed Lindberg advised not to return disputed funds to trust; this was false.	Credibility of the Hotline-advice claim is disputed; legal advice not clearly established.	Violation of 8.4(c); false statements evincing dishonesty.
Did Martin violate 8.4(d) by requiring ESI to withdraw its bar complaint as part of the settlement?	Settlement compelled withdrawal of Bar Counsel’s action; interfered with justice.	Settlement was permissible; not a direct interference with the disciplinary process.	Violation of 8.4(d); settlement condition tainted administration of justice.

Key Cases Cited

In re Micheel, 610 A.2d 231 (D.C. 1992) (ultimate-fact review; attorney fees matters involve legal consequence)
In re Pierson, 690 A.2d 941 (D.C. 1997) (board/ Hearing Committee findings; de novo review of ultimate facts)
In re Anderson, 778 A.2d 330 (D.C. 2001) (de novo review of questions of law and ultimate facts)
In re Haar, 667 A.2d 1350 (D.C. 1995) (consideration of discounting fees; proportionality in fee disputes)
International Travel Arrangers, Inc. v. Western Airlines, Inc., 623 F.2d 1255 (8th Cir. 1980) (aggregate fees in joint representations; reasonableness standard)
Korotki, 569 A.2d 1224 (Md. 1990) (contingent fee reasonableness; client-protective rules)
In re Hessler, 549 A.2d 700 (D.C. 1988) (fiduciary liability for commingling funds; client funds risk)
In re Ukwu, 926 A.2d 1106 (D.C. 2007) (dishonesty; protracted misconduct; aggravating factors)
In re Hager, 812 A.2d 904 (D.C. 2002) (disbarment-like sanctions for serious dishonesty)
In re Tun, 26 A.3d 313 (D.C. 2011) (eighteen-month suspension for dishonesty and related conduct)
In re Midlen, 885 A.2d 1280 (D.C. 2005) (eighteen-month suspension for dishonesty and misappropriation)
In re Kitchings, 857 A.2d 1059 (D.C. 2004) (eighteen-month suspension for protracted misconduct)
In re Hallock, 702 A.2d 1258 (D.C. 1997) (eighteen-month reciprocal action for fees and dishonesty)
In re Morrissey, 648 A.2d 185 (D.C. 1994) (reciprocal discipline; dishonesty and multiple violations)
In re Lenoir, 585 A.2d 771 (D.C. 1991) (eighteen-month suspension for repeated dishonesty)
In re Edwards, 870 A.2d 90 (D.C. 2005) (discretion in sanctioning and the Board’s wide range of acceptable outcomes)