In re James F. QUAID.
No. 94-B-1316.
Supreme Court of Louisiana.
November 30, 1994.
Rehearing Denied February 16, 1995.
646 So.2d 343 (1994)
DENNIS, Justice.
Joseph N. Marcal, III, New Orleans, James F. Quaid, Jr., Metairie, for respondent.
DENNIS, Justice.*
The Disciplinary Board of the Louisiana State Bar Association has brought charges against Respondent James F. Quaid arising from his representation of Johnnie E. Parker before the Social Security Administration (“SSA“) in a claim for disability benefits. In connection with that representation, the SSA charged Respondent with violating federal regulations governing the collection of attorney‘s fees. Following an administrative hearing conducted by the SSA, Respondent was found guilty of chаrging excessive and unauthorized fees and misrepresenting material facts to the SSA and was barred from further practice before the SSA.
FACTS
Respondent commenced representing Mr. Parker in the spring of 1985 in connection with Mr. Parker‘s claim for renewed disability benefits following their termination by the SSA. Respondent had previously represented Mr. Parker, to an extent not ascertainable in this record, in litigation brought by his former wife, Ruth Lambert Nunez, to collect child support. Following a change in the law that voided the SSA‘s initial denial of renewed benefits, Mr. Parker was found to be disabled. He and his beneficiaries were awarded benefits retroactive to May 1984.
The SSA has promulgated regulations governing representation before it and the fees that may be charged for such representation. These regulations provide in pertinent part as follows:
20 C.F.R. § 404.1720 Fee for a representative‘s services.(a) General. A representative may charge and receive a fee for his or her services as a representative only as provided in paragraph (b) of this section.
(b) Charging and receiving a fee. (1) The representative must file a written request with us before he or she may charge or receive a fee for his or her services.
(2) We decide the amount of the fee, if any, a representative may charge or receive.
(3) A representative shall not charge or receive any fee unless we have approved it, and he or she shall not charge or receive any fee that is more than the amount we approve. This rule applies whether the fee is charged to or received from you or from someone else.
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20 C.F.R. § 404.1740 Rules governing representatives.No attorney or other person representing a claimant shall—
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(b) Knowingly charge or collect, or make any agreement to charge or collect, directly or indirectly, any fee in any amount in excess of that allowed by us or by the court;
(c) Knowingly make or participate in the making or presentation of any false statemеnt, representation, or claim about any material fact affecting the rights of any person under title II of the Act;
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On June 25, 1986, the SSA sent Respondent a Notice to Representative of Claimant Before the Social Security Administration. This notice informed Respondent that under law he was required, after completion of his
Following the determination of Mr. Parkеr‘s disability, in accordance with federal regulations, the SSA reserved certain amounts of the retroactive benefits payable to Mr. Parker and his beneficiaries pending its authorization of attorney‘s fees. Out of the $21,811.53 in retroactive benefits payable to Mr. Parker personally, the SSA retained $6,985.47. Out of the $7,464.00 payable to Mr. Parker‘s adopted children from his second marriage, the SSA withheld $2,160.00. Out of the $10,191.00 payable to Ruth Lambert on behalf of Mr. Parker‘s children from his first marriage, the SSA withheld $3,069.00. By award letters dated March 22, 1987 and June 20, 1987, Mr. Parker was informed of the lump sum payments awarded to him and his adopted children and of the amounts withheld pending determination of attorney‘s fees. Ruth Lambert was similarly informed by letter dated June 20, 1987 of the lump sum payment awarded her children and the amounts withheld pending the award of attorney‘s fees. The award letters all stated that attorney‘s fees were subject to a 25 percent cap, that the claimant‘s representative had to petition to obtain a fee, and that any fee awarded had to be approved by the SSA. The SSA sent copies of these award letters to Respondent.
On June 25 and July 3, 1987, Respondent wrote the SSA directing it to release the amounts withheld in connection with the benefits payable to Mr. Parker and his adopted children, stating that “[a]rrangements have been made directly with the claimant.” On July 3, 1987, Respondent also filed a form petition to obtain approval of a fee “only in so far as Ruth Lambert for the children of Johnnie E. Parker is concerned.” The petition sought a fee of $3,069.00. It further stated that payment was expected from an escrow or trust account holding $3,069.001 and that Respondent would or had charged $3,500.00 in connection with related matters before State or Federal Court. Attached to the fee petition was a time sheet, captioned “Client: Johnnie E. Parker, SSN XXX-XX-XXXX,” detailing some 106 hours of professional time purportedly spent on this matter.
On September 9, 1987, the SSA sent Mr. Parker a letter, copied to Respondent, informing him that it would soon mail him a check in the amount of $6,985.47 in payment of an amount previously due or withheld. There is no comparable letter in the record regarding release of the $2,061.00 withheld in connection with the benefits payable to Mr. Parker‘s adopted children, which Respondent had directed the SSA to release to Mr. Parker. However, the sum of the amounts withheld in the two claims equals $9,145.47.
On September 16, 1987, Mr. Parker issued Respondent a check for $9,145.47, purportedly in compromise of а bill, dated September 15, 1987, for professional services by Respondent in connection with “Social Security Hearings 34th JDC Parker v. Parker No. 44-095.”
On November 12, 1987, Regional Chief Administrative Law Judge Helsper of the SSA authorized a fee of $2,500.00 for Respondent‘s services on behalf of Johnnie Parker in the disability claims. The authorization informed Respondent that he could request a review of the fee by sending a letter within 30 days to the Chief Administrative Law Judge. The authorization letter further stated:
The approved fee is for all services performed for the claimant and the family.
The amount of time charged for conferences, reviеw, and research is not commensurate with the level of complexity of this case. I have also disallowed ¾ hour charged on June 25, 1987, relating to waiver of direct payment in this case. The
issues were not significantly complex, and the services rendered were routine in nature. Accordingly, I have reduced your requested fee to the amount shown above. Since Mr. Parker has deposited $3,069.00 in your trust account, a refund of $569.00 plus interest, if any, is due Mr. Parker. Please furnish this office with a copy of your check refunding the above amount to Mr. Parker.
A copy of the fee authorization was copied to Mr. Parker.
Respondent failed to do anything upon receipt of the authorization letter, either to challenge the amount awarded, to reimburse Mr. Parker, or to explain why he should not have to do so.
On January 30, 1989, the Office of Special Counsel for the SSA wrote Respondent stating that the SSA was informed that Mr. Parker had paid Respondent $9,145.47 and had received no refund from Respondent of any amount in excess of the authorized fee of $2,500.00. The letter also stated that documentation submitted to the SSA indicated that Respondent had violated section 206(a) of the Social Security Act and
In May 1989, the SSA charged Respondent with violating section 206(a) of the Social Security Act (
An administrative hearing regarding the SSA charges was held on May 14-15, 1990, at which time Respondent was given the opportunity to be represented by counsel, to present evidence and to cross-examine witnesses. At the hearing, Respondent testified on direct that his conduct in obtaining fees for the SSA matters was based on extensive telephone conversations with an employee of the SSA, Mrs. Price, regarding hоw to obtain his fees and that the fee Judge Helsper approved was only based on documentation submitted with respect to the claim on behalf of Ruth Lambert‘s children. On cross-examination, Respondent testified that he had made arrangements with Mr. Parker that his other legal fees would be paid out of the SSA benefits and that the $13,000 bill was for services provided before the SSA and in the state-court child support matters. In contrast to the defense set forth in his answer to the SSA complaint, Respondent admitted that he never intended to petition the SSA for fees in connection with the claims made on behalf of Mr. Parker аnd his adopted children, as he understood the SSA‘s practice of withholding funds for attorney‘s fees to be intended to protect the attorney‘s interests, and this was only necessary with respect to the payments due Ruth Lambert‘s children. Respondent further testified that he could not distinguish between the professional time spent on SSA and non-SSA matters, but that the $3,500.00 set forth in his fee petition to the SSA was based on an “arbitrary breakdown” of what was due for services rendered
Following the hearing and the submission of post-hearing briefs by the parties, the Administrative Law Judge found that Respondent had violated
Upon learning of Respondent‘s disqualification before the SSA, the Louisiana State Bar Association charged Respondent with violating the following Rules of Professional Conduct: Rule 1.3 (Diligence), Rule 1.4 (Communication), Rule 1.5 (Fees), Rule 1.15 (Safekeeping Property), Rule 1.16(d) (Declining or Terminating Representation), Rule 3.3(a)(1) & (4) (Candor Towards the Tribunal) and Rule 8.4(a)(b)(c) & (d) (Misconduct). The Board also charged Respondent with violating
Following briefing by the parties, a disciplinary hearing was conducted on August 17, 1993. Disciplinary Counsel, over Respondent‘s оbjections, submitted the entire certified copy of the SSA proceedings as its case in chief. In defense, Respondent testified on his own behalf, but called no other witnesses. Respondent‘s testimony before the Committee was substantially the same as his earlier testimony before the administrative law judge in that he admitted that he had not filed fee petitions for fees due from Johnnie Parker and his adopted children‘s claims and that, although he could not have broken down the bill for his services between what he had done for Mr. Parker and his two sets of children, the payment of $9,145.47 was a compromise of the $13,000 bill for services in сonnection with the disability claims and other services over a number of years of representation. In response to questioning from the Committee, Respondent testified that at the time Judge Helsper awarded him the $2,500.00 fee, the judge did not know that Respondent had collected a $9,145.47 fee from Mr. Parker. However, Respondent insisted that the $2,500.00 fee award was only addressed to the claim for Ruth Lambert‘s children and did not cover the other claims. Moreover, when asked why he had not refunded any money to Mr. Parker following the SSA‘s directive to do so, Respondent explained that “It wasn‘t a judgment. The Social Security Administration didn‘t gеt a judgment against me to say refund X number of dollars or Y number of dollars.... I don‘t know if I‘d have refunded Johnny Parker any money.” Additionally, Respondent testified that his claim for money in connection with the benefits paid Ruth Lambert‘s children was triggered by Mr. Parker‘s insistence, at the time he and Respondent “compromised” the $13,000 bill, that Respondent go after his former wife for the remaining money, even though Respondent had filed a petition for fees from the Lambert award two months before he drafted and submitted the $13,000 bill to Mr. Parker.
MISCONDUCT
Bar disciplinary matters come within the original jurisdiction of this Court.
Unlike a criminal conviction, the SSA‘s determination that Respondent violated federal law is not conclusive of Respondent‘s guilt as to those matters. See La.Sup. Ct.R. 19, § 19(E). Nonetheless, there is more than ample evidence in the record to support a finding, under the clear and convincing standard, that Respondent obtained an unauthorized and excessive fee in violation of
Other than gross incompetence or carelessness, it is difficult to imagine an explanation for Respondent‘s conduct other than his decision to disregard the legal process in order to obtain a fee far in excess of what he was entitled to by law. Respondent moreover never sought to have his fee award re-evaluated and has failed to this date to remedy the situation by refunding any part of the monies owed Mr. Parker. In addition, his defense before both the SSA and the Hearing Committee consisted largely of uncorroborated, self-serving claims that lack credibility.
Having found by clear and convincing evidence that Respondent charged an illegal fee under
We also find that the record contains sufficient evidence that Respondent made material false statements in documents submitted to and testimony given before the SSA, in violation of
Having found that Respondent violated the Rules of Professional Conduct, we find that he is in violation of Rule 8.4(a). In addition, because Respondent‘s misconduct involves dishonesty, fraud, deceit or misrepresentation, and is prejudicial to the administration of justice, we find that Respondent additionally has violated Rule 8.4(c) and (d).
SANCTIONS
The purpose of lawyer discipline proceedings is to protect the public and the administration of justice from lawyers who have not discharged, will not discharge, or аre unlikely to properly discharge their professional duties to clients, the public, the legal system, and the legal profession. ABA Standards for Imposing Lawyer Sanctions, § 1.1 (1991); see also LSBA v. Amberg, 553 So.2d 448, 450 (La.1990); LSBA v. Drury, 455 So.2d 1387 (La.1984); LSBA v. O‘Halloran, 412 So.2d 523 (La.1982). A court imposing sanctions for lawyer misconduct should consider (1) the ethical duty or duties the lawyer violated; (2) the lawyer‘s mental state related to his ethical violation; (3) the extent of the actual or potential injury caused by the lawyer‘s misconduct; and (4) the existence of aggravating or mitigating circumstances. ABA Standards, § 3.0; LSBA v. Wilkinson, 562 So.2d 902, 904 (La.1990). To determine the appropriate sanction, we look to the recommended baseline set forth in the ABA Standards, as determined by the type of duty violated, the lawyer‘s mental state and the extent of the injury caused; and then adjust the sanction in accordance with the aggravating and mitigating factors present. See ABA Standards.
Respondent has violated ethical duties owed to the client, to the public, to the legal system, and to the profession.
In charging and retaining fees several thousands of dollars in excess of those authorized by the SSA, and advising Mr. Parker of his right to do so, Respondent deceived his client in order to obtain a pecuniary benefit for himself at the expense of his disabled client. It is difficult to find this conduct inadvertent, particularly as Rеspondent has failed to date to remedy the situation, despite demand by the SSA that he do so and, indeed, sanctions by that agency. Such intentional lack of candor towards his client merits disbarment as the baseline sanction. ABA Standards, §§ 4.61 and 7.1.
Respondent in his conduct before the SSA, moreover, demonstrated a lack of candor not only to his client but to the administrative tribunal. Disbarment is generally appropriate when a lawyer makes a false statement with the intent to deceive a court and causes actual or potential serious injury to a party or adverse effect on the legal procеeding. ABA Standards, § 6.11. Here, Respondent filed verified pleadings that he later admitted were inaccurate, and offered contradictory and misleading testimony before the administrative law judge. Respondent presumably engaged in such deception in order to protect his own situation as an attorney and to safeguard for himself the fees he had improperly collected from his client. Such conduct violates the most fundamental duty of an officer to the court. Respondent‘s deceitful conduct before the SSA, moreover, reveals his failure to maintain personal integrity and constitutes a violation оf the duties owed to the public that adversely reflects on his fitness to practice law to an extent meriting disbarment. ABA Standards, § 5.11.
The ABA Standards list the following as factors that may be considered in aggravation of the misconduct:
(a) prior disciplinary offenses;
(b) dishonest or selfish motive;
(c) a pattern of misconduct;
(d) multiple offenses;
(e) bad faith obstruction of the disciplinary proceeding by intentionally failing to
comply with rules or orders of the disciplinary agency; (f) submission of false evidence, false statements, or other deceptive practices during the disciplinary process;
(g) refusal to acknowledge the wrongful nature of conduct;
(h) vulnerability of victim;
(i) substantial experience in the practice of law;
(j) indifference to making restitution.
ABA Standards, § 9.22.
We find that several of these aggravating factors are present in the instant case. Respondent‘s misconduct was motivated by a dishonest and selfish reason, namely to make money by taking advаntage of his disabled client. Respondent, moreover, has appeared less than truthful during the course of these proceedings, has refused to acknowledge the wrongful nature of his conduct, and has maintained an attitude of utmost indifference to making restitution to Mr. Parker. In addition, Respondent has on three prior occasions been subjected to disciplinary sanctions. In 1970, Respondent received a formal private reprimand from the Louisiana State Bar Association in connection with charging an excessive fee in one case and failing to perform services in another. In 1979, Respondent was disbarred by this Court following his 1973 Georgia conviction for burglary, a felony for which he was sentenced to 10 years at hard labor. LSBA v. Quaid, 368 So.2d 1043 (La.1979). Respondent was reinstated to practice law in Louisiana in May 1983. In re Quaid, 433 So.2d 179 (La.1983). Subsequently, in 1987, he received a second formal private reprimand from the Louisiana Bar Association, this time for failure to take action in a lawsuit and failure to withdraw from a case at the client‘s request.
Respondent objects to the admission of prior disciplinary sanctions on the grounds that his first two sanctions occurred more than ten years ago and thus are inadmissible under La.C.E. art. 609. This claim is without merit. First, the prior disciplinаry sanctions have not been introduced to impeach the credibility of any witness and therefore article 609 is inapplicable. Second, the determination of sanctions in a lawyer discipline proceeding is in the nature of a sentencing hearing and is thus not governed by the Code of Evidence. See La.C.E. art. 1101(C)(4).
The remoteness of prior offenses, however, is a factor to consider in mitigation of Respondent‘s sanction. ABA Standards, § 9.32(m). We do not, however, find that this mitigating circumstance carries much weight. Although Respondent was disbarred more than ten years ago, it took him a mere four years from the date of his reinstatement to once again receive disciplinary sanctions. Respondent has not submitted evidence of any other mitigating factors. In light of the record before us, we find that the aggravating factors in this case far outweigh the single mitigating factor weakly present.
DECREE
For the reasons assigned, it is ordered that the name James F. Quaid be stricken from the roll of attorneys and that Respondent‘s license to practice law in the State of Louisiana be revoked and cancelled at his cost. It is further ordered that Mr. Quaid must demonstrate diligent and good faith efforts to make full restitution to Mr. Johnnie E. Parker upon making any applicаtion for readmission pursuant to Rule 19, § 24 of the Louisiana Supreme Court Rules.