Kentucky Bar Ass'n v. Earhart
2012 Ky. LEXIS 13
| Ky. | 2012Background
- KBA petitions Kentucky for reciprocal discipline under SCR 3.435 after Indiana imposed a 30-day suspension on Earhart.
- Indiana findings: Earhart was paid $10,000 as a nonrefundable retainer; client died soon after; Earhart refused refund, claiming earned fees; later tendered full amount.
- Indiana found violations of Indiana RPC 1.5(a) (unreasonable fee) and 1.16(d) (unearned fee refund) and suspended Earhart for 30 days beginning Dec 29, 2011, with costs.
- Kentucky proceedings treat Indiana findings as conclusive for reciprocal discipline unless substantial evidence shows lack of jurisdiction, fraud, or substantially different discipline is warranted.
- Kentucky recognizes SCR 3.130-1.5 and 3.130-1.16(d) as controlling; Kentucky Ethics Opinion E-380 governs reasonable non-refundable retainers.
- The Kentucky Supreme Court concludes the Indiana misconduct would be unethical in Kentucky and imposes identical reciprocal discipline (30-day suspension) and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is reciprocal discipline warranted? | KBA: Indiana findings establish misconduct; reciprocal discipline appropriate. | Earhart: argues nuances of Kentucky ethics could justify different treatment. | Yes; reciprocal discipline warranted. |
| Was the $10,000 retainer a reasonable non-refundable fee under Kentucky law? | KBA/Ethics Opinion E-380: non-refundable retainers must be reasonable; circumstances here render it unreasonable given client death. | Earhart: retainer was classical in Kentucky; Indiana allowed nonrefundable retainers in limited circumstances. | No; fee not reasonable, supporting reciprocal discipline under SCR 3.130-1.5 and 3.130-1.16(d). |
Key Cases Cited
- In re Thonert, 682 N.E.2d 522 (Ind.1997) (fee nonrefundable expectations and reasonableness considerations cited by Indiana)
- Kendall v. Indiana, 804 N.E.2d 1152 (Ind.2004) (nonrefundable retainers must be justified and reasonable)
- O’Farrell, 942 N.E.2d 799 (Ind.2011) (related to Indiana’s treatment of nonrefundable retainers)
- McKenzie Const., Inc. v. Maynard, 758 F.2d 97 (3d Cir.1985) (reasonableness and fairness in fee disputes)
- Earhart, 957 N.E.2d 611 (Ind.2011) ( Indiana Supreme Court's decision underlying reciprocal discipline)