*1 LAWYER DISCIPLINARY
BOARD, Complainant, MORTON,
Belinda a Member S.
of the West
Bar, Respondent. 27051.
No.
Supreme Appeals Virginia. Feb. 2002.
Submitted: 2,May
Decided: 2002.
Dissenting Opinion of Chief Justice 8,May
Davis 2002. Opinion
Concurring of Justice 28, 2002.
Starcher June *2 Lewis, Disciplinary
Lawrence J. Office of Counsel, Charleston, Complainant. for the Harrington, Fayetteville, Travers R. Respondent. PER CURIAM: lawyer disciplinary proceeding This is a by brought Lawyer Disciplinary Board (hereinafter “Board”) against Ms. Belinda S. (hereinafter Morton”), Morton “Ms. a mem- Bar. A ber (hereinafter Hearing Panel Subcommittee Panel”) “Hearing Morton found that Ms. had violated Rule of the Rules of by obtaining a Professional Conduct fee of from obtained on client, behalf of Mr. David E. Willis Willis”). (hereinafter Hearing “Mr. pub- Panel recommends that Ms. Morton be licly reprimanded, repay ordered to $1,500, pro- pay client of this costs ceeding. upon thorough Based consider- matter, reject ation of we the recom- Hearing mendation of the Panel dismiss charge against Ms. Morton. History' I. Facts and Procedural 26, 1995, On October Mr. Willis passenger in an automobile that collided with by Trucking a tractor H trailer owned & W Company operated Mr. Donald F. injuries Mr. Reed.1 sustained as a Willis 30, 1995, sult of the accident. On October represent Mr. Willis Ms. retained Morton him in a legal trucking action driver, company and its Mr. Reed.2 Under the terms of the contract be- riding 1. The in which automobile Mr. Willis was 2. Ms. Morton was also retained Mrs. Willis wife, Hearing .Dorothy and Mr. While the Panel Ranson. com- driven Mr. Willis' Wilhs. potential son-in-law, Ranson, mented that a conflict of interest exist- Jimmy Mr. Willis' driver, among passengers ed and the passenger appears also a in the vehicle. It Hearing Panel did not that matter since address injuries occupants all three sustained the acci- allegations it was included dent. Morton. Willis, prepared tween Ms. Morton and Mr. Ms. Mor- for and attended interviews with thirty percent ton was to of all mo- receive Fidelity United States and Guarantee claims prior filing nies recovered source personnel. Ms. Morton maintains that her a lawsuit.3 representation Mr. of Willis entailed least work, forty including hours of *3 inter- representation the course of Mr. personnel views client and insurance Willis, prepared Ms. Morton asserts that she and review of numerous documents.4 representation and the contract reviewed explained and its terms to Mr. Willis. She During representation, the course of Ms. explains engagement also that she issued an Farm, Morton contacted insurer of including letter repre- memorialization the automobile in which Mr. was a Willis sentation to concerning and advice Mr. Willis passenger accident, time of and maintaining medical bills and the need to asked State Farm to add her name to all avoid and concerning contacts discussion payment checks behalf issued on accident. Morton’s Ms. other actions includ- Mr. Willis and to forward the to checks her correspondence ed with United States Fideli- payment office. The medical cheeks totaled ty Company and Guarantee in an effort to $5,000, thirty per- and Ms. Morton retained place on them notice the accident and her amount, $1,500, of that cent as her fee. Ms. representation of Mr. Willis. Ms. Morton representation Morton’s of Mr. Willis was corresponded doctors, also with medical Dr. subsequent inability terminated to Mr. Willis’ Anwar Kominsky, concerning and Dr. pay deposit to toward $500 costs and ex- representation of Mr. legal and Willis his penses requested by as Sep- Ms. on Morton claims. explained Ms. Morton also that she 11,1996. tember corresponded with State Farm Insurance an Willis ethics complaint filed Durham, Company adjuster in Elaine an ef- May 15,1997, contending Ms. Morton on prevent fort to State Farm obtaining an $1,500 her retention of overly medi- broad medical authorization. Ms. cal Morton obtained for Mr. Willis also asserts that legal she conducted investigation Investigative research An regarding and excessive. Mi*. Panel thereafter charged Willis’ claims and Ms. Morton with phone conducted several exces- adjustors 1.5(a)(1) calls with various State Farm sive fee violation of Rule garding Mr. Willis’ case. Ms. Morton Rules of A hearing also Professional Conduct.5 provided issues, 3. The retainer contract as follows: separate sentation of the client into two payment component the medical and other employ [CJlient desires to to institute liability issues. Ms. Morton that such maintains prosecute and a claim or suit Donald inappropriate, contrary division is to terms of Inc., Trucking F. H & W Reed and Co. and contingency arrangement, and unfair firms, associations, persons, politi- such other evaluating method of the issue of excessiveness bodies, governmental corporations cal units or legal fees. discretion, attorney, in their [sic] sole deems necessary. desirable or Further, states, provided: full, 1.5(a) the contract 5.Rule as follows: employs represent Client to him (a) lawyer's A fee shall be reasonable. and, necessary, prosecute if to and institute determining factors to be considered services, compensation legal suit following: of a fee reasonableness include the agrees assign attorney thirty per- client to unto (1) novelty required, time and labor (30%) forty percent cent suit before is filed and involved, difficulty questions of the (40%) if a lawsuit is filed of all monies and requisite perform skill service things by value said recovered in claim properly; compromise, settlement or suit. (2) likelihood, client, apparent if to the acceptance particular employ- that the Hearing 4. The Panel Ms. examined Morton’s by preclude employment regarding ment will lawyer; other performed contentions work she concluded she had not demonstrated that (3) directly customarily charged the fee the locali- attempt the work related to services; ty obtain for similar and that such medical (4) payments would have been involved results ob- offered State Farm amount tained; even if had not been involved in the Morton, response, imposed case. Ms. contends that the time limitations circumstances; Hearing inappropriately repre- Panel divided her client or 168 problems Hearing on and must make the ultimate Panel June ethics before
was held public reprimands, suspen 2001, subsequently issued about 13, the Panel decisions attorneys’ had violat- finding that Ms. Morton sions or annulments of licenses ruling its 1.5(a)(1) “grossly 3, by obtaining Syl. a fee practice law.” Pt. Committee Le ed Rule actually per- Blair, the services gal Ethics v. denied, Profl Conduct R. W.Va. Rules 470 U.S. formed.” cert. 1.5(a)(1). (1985). Hearing and Board Panel L.Ed.2d 783 S.Ct. publicly that this Court have recommended Morton, repay order her
reprimand Ms.
III.Discussion
$1,500,
pay
the costs
Mr. Willis
specific
With
reference
objected
to the
Morton has
proceeding.
responsibility to review the reason
Court’s
*4
that she
Rule
violated
determination
fees,
of
observed as follows in
ableness
we
upon
imposed
sanctions should be
that
and
Tatterson,
Legal
on
Ethics v.
177
Committee
her.
(1986):
356,
We
is the final arbiter of
further held:
“[t]his Court
(6)
attorney’s
gener-
length
professional
and
fees is
the nature
of the
reasonableness of
client;
(1)
ally
relationship with
based on
factors such as:
the
the
broader
(2)
(7)
ability
novelty
experience, reputation,
required;
time and labor
the
the
(3)
lawyer
difficulty
lawyers performing
questions;
requi-
the
or
the ser-
the skill
the
vices;
(4)
perform
properly;
service
site
(8)
contingent.
preclusion
employment
the fee
other
whether
is fixed or
case; (5)
attorney
acceptance
due
of the
Collins,
fee;
Assocs.,
(6)
Kopelman
customary
196
the fee is
6.
In
L.C. v.
whether
fixed or
489,
(7)
contingent;
imposed by
473
this Court
time limitations
W.Va.
S.E.2d 910
circumstances;
(8)
up-
will
that “courts in
client or the
observed
amount
obtained; (9)
voluntarily
arrangements
expe-
hold
involved and
rience,
results
they
ability
parties
long
reputation,
attorneys;
are
of the
entered into
case;
excessive,
(10)
(11)
overreaching,
inequi-
undesirability
not take
and do
7,
length
advantage
professional
473
table
of a
Id. at 496 n.
nature and
relation-
client."
client;
determining
ship
awards in
S.E.2d at
n. 7. In
whether a
simi-
917
contingent
sive,
exces-
analy-
fee contract is reasonable or
lar cases.
4,
Casualty Surety
following
Syl.
part,
applied
&
this Court has
Pt.
Aetna
Co.
Pitrolo,
190,
(1986).
sis:
176 W.Va.
342 S.E.2d
grossly
attorney’s
dispropor-
If an
fee is
for a client when there is no
indication
is
the insurer will
to the services rendered and
resist
claim.
tionate
lacks full
charged to
client who
informa- Tatterson,
at
tion
all of
relevant
about
circum-
113-14.
stances,
“clearly
fee is
excessive” with-
Similarly, this Court has
that “a
reasoned
meaning
1.5 of
[Rule
the Rules
contingent fee is
if the skill
Conduct],
though
Professional
even
required
lawyer
grossly
and labor
are
client
consented to such fee.
has
The bur-
disproportionate to the fee.” Committee on
proof
upon
attorney
den of
to show
Gallaher,
332, 335,
Legal Ethics v.
180 W.Va.
and fairness of
reasonableness
the con-
(1988) (citations omitted).
attorney’s
tract for the
fee.
Gallaher,
lawyer
In
disciplinary proceeding
brought against
alleged-
an
who
Id. at
would real be an absence of risk would be policy. surance a attempts case in which an to supposedly opinions a a similarly unpersuaded by collect from client contin- areWe gent proceeds jurisdictions fee for insurance from other cited the Board provide to Ms. Morton contracted In the Matter ments. position. support of its
Hausen,
pursue
488 N.Y.S.2d
empowered
A.D.2d
to
services that
(1985),
after
was obtained
recovery
the excessive
to
every
right
source
contingent
attorney received
entitled,
may
Mr. Willis
have
which
been
recovery of no-fault
assisting
in the
a client
injury.
pertained
alleged
his
tortious
despite
payments,
an ex-
insurance
ease,
legal representation in this
In her
ar-
preclusion of such
statutory
press
forty
approximately
Ms. Morton has itemized
Hausen,
therefore,
does
rangement.
performed
situation,
work
on
of Mi'.
hours of
behalf
since
case
analogous
provide an
not involve a
judice
prior
Willis
to the termination of the
sub
does
expressly precluded
statute.
arrangement
forty
representation.
compensation
As
unpersuaded by Attorney
Similarly,
arewe
work,
Ms. Morton obtained
hours
Kemp,
Md.
Commission
Grievance
This translates
as a
fee.
by the Board.
cited
half of Mr. Willis below, dissents and files Morton. For the out Chief Justice DAVIS reasons set I joined by dissenting opinion Justice dissent.
MAYNARD. 7. Ms. Morton was not Retained to Re- ARCHER, Justice, concurring: ST Undisputed Payments ceive Medical 2002) (Filed June Her from Client’s Insurer. simply majority opinion in this case outset, clarify my At let that me dis- lawyer
recognizes
up accept-
who
that a
ends
way
sent
no
should
be viewed as a criti-
$1,500.00
ing
legal
services that
Rather,
my
cism of
dispute
fees.
approximately
per
translates to
hour
$37.50
majority opinion
permits
that it
is
unethical,
for her work is neither
nor should
attorneys in this
state
collect fees from
disciplined
for her actions.
she
they
performed
their clients when
have
abso-
dissent,
intent,
regardless
of its
is an
lutely no services on behalf of those clients.
minority lawyer
provides
on a
attack
who
many
quite
The record
people in
case is
clear. Mr.
services to
her commu-
Willis retained Ms. Morton to
nity
might
go unrepresented.
that
recover com-
otherwise
pensation
injured
party
from the
who
him in
majority opinion,
way,
in no
“under-
accident,
is,
an automobile
H
integrity
legal profession,”
& W
mines the
driver,
Trucking Company and its
Donald
does it
a case in which the re-
F.
nor
involve
Nevertheless,
majority
might
expect
opinion
Reed.
spondent
otherwise
a substan-
contends that the contract
entered into be-
tial
fee.
permitted
tween Mr. Willis and Ms. Morton
This
has no
case
similarities
Committee
percentage
Ms. Morton to retain a
Tatterson,
Legal
Ethics v.
177 W.Va.
dispute
remitted without
lawyer
in which a
In proceeding, Hearing Panel Be- Mr. disputed Subcommittee found that State Farm never Willis’ en- (hereinafter payments linda S. Morton to as referred titlement to medical under his own Morton”) 1.5(a)(1) fact, “Ms. Rule of the In policy. violated Farm never insurance State by obtaining sought payments- Conduct a Rules Professional its or even contest evade $1,500.00 injuries medical legitimacy fee from made of the involved. In Willis, words, client, E. own absolutely to her David his other no services necessary Hearing med-pay por- insurance earner. The rec- to obtain Panel were Thus, publicly rep- ommended that Ms. Morton be tion of Mr. Willis’ to “earn” insurance. rimanded, $1,500.00 repay majority the client ordered fee $1,500.00, pay per- the costs of has in this ordered allowed majority only proceeding. opinion telephoned has act. formed one She State rejected Hearing Panel’s recommenda- Farm and instructed them to add her name charge payment tion and dismissed the Ms. to all issued on checks be- proceeding pending disciplinary a checks while and to forward the Mr. Willis half of against him. This Court found the evidence Morton’s of Ms. The net result to her office. attorney, supported charges to be indebt- was to cause Willis conduct nothing than had more assist providers for the sum who done to his medical ed filling out forms to obtain the med-pay benefits woman $1,500.00 amount of —the Tatterson, proceeds. In we ex- insurance Morton retained. Ms. plained: at understandably upset Mr. Willis was generally insisted that a con- have $1,500. Courts providers having pay his truly contingent. typi- tingent be premiums enti- paid had insurance He reflecting cally contingent fee full, elevated paid in to have his medical bills tled him receiving no fee will risk to the provided unequivocally Farm had State usually permitted only represen- if the However, money. a result him with the degree significant a tation indeed involves fee, debt to Mr. Willis incurred Ms. Morton’s where there of risk. The clearest case providers that would otherwise his medical risk would be would be an absence real paid this insurance. have been attorney attempts to in which an case complaint filed an ethical Mr. Willis supposedly contin- collect from a client Investigative An Panel against Ms. Morton. proceeds gent obtaining insurance fee for charged Ms. Morton with obtain- thereafter indication that for a client when there is no fee in violation of Rule ing an excessive will the claim. the insurer resist Con- of the Rules Professional risk, real absence eventually Hearing Panel issued duct.1 The grossly purportedly contingent fee which is finding that decision its recommended amount of work disproportionate 1.5(a)(1) by obtaining a Morton violated Rule required “clearly excessive fee” within is for services actual- “grossly meaning of [the rules]. finding Hearing ly performed.” The Panel’s Tatterson, at 177 W.Va. S.E.2d correct. (citations omitted). Plainly, in- 113-114 have of this case should The resolution type perfect example stant case is guided this Court’s decision Com- been that was con- fee misconduct Legal mittee on Ethics of demned Tatterson. Tatterson, v. 177 W.Va. Bar (1986).2 jurisdictions attorney in decisions from other Tatter- Several improper similarly agree- conclude son into entered ment, woman, collecting un- attorneys to fees for elderly with an blind that in- demand from proceeds. disputed then- clients’ recovery of insurance volved life example, Attorney insurers. For Griev- proceeds insurance were The life Kemp, 303 Md. of the woman’s son. The ance Commission suicide death attorneys charged A.2d 672 two were proceeds insurance amount of the life $61,000.00. company with an excessive fee then* After the insurance attorneys represented paid client. The the client *8 out the full amount of the insurance injuries woman, in an attorney as a result of she received proceeds to the the deduct- attorneys had a contingency An ethical automobile accident. The ed his fee of 33%. agreement complaint subsequently against the contract with the was filed prosecuting During course of the attorney charging obtaining him with an ex- client. the claim, fee, attorneys degree of tort the obtained one-thud misrepresenting cessive the pro- of medical the client received difficulty obtaining of the life insurance the ceeds, complaint from An ethical was engaging in unethical conduct her insurer. perform requisite the service 1. skill Rule states as follows: properly[.] (a) lawyer's A reasonable. The fee shall be determining the factors to be considered in disciplinary proceeding where 2. Tatterson was a following: of a fee include the reasonableness attorney’s novelty was made that the required, a recommendation the time and labor involved, difficulty questions license be annulled. attorneys agreed hearing panel, for Illinois with eventually filed both retaining one-third of the client’s commented: Appeals payments. Maryland Court merit, greater opinion, There is in our found that the fee was excessive and issued panel’s hearing position that no was
reprimand against attorneys. both recovery pursuant due unless occurred to a court reasoned follows: “judgment.” Obviously or “settlement” Pay depen- [I]t is manifest that Med. is not judgment, no there was and a settlement dent, part, upon skills of a for most normally presupposes a dispute or dis- lawyer. uncertainty The risk of recov- Here, agreement. the insurer did not is, therefore, ery indeed. low Under these question complainant’s right to the insur- circumstances, it rare would ease proceeds. routine, payment ance Its was attorney properly an could resort to where found, hearing panel complain- as the payment fee for the Med. ant would have received same amount it, Pay. As we see the better course would at the same time had she never seen lawyers supply be for the insurer with spondent. unques- Given that the fact Pay requisite Med. documentation as tioned, payment routine here does subject an accommodation to the client or within come the normal definitions of a charge. to a minimal settlement, and did judg- not result from a view, ... our because there was no ment, disagree ... we cannot with the Pay dispute payment as to under Med. panel’s finding that terms of con- payment upon because insurer made respondent tract do not entitle to a fee. receipt completed benefit form and Teichner, 552, 470 83 Ill.Dec. N.E.2d at 977 report, charged by respon- (internal omitted).4 citations dents was and thus in 2-106(A). violation of DR case, In the instant there has no been Kemp, A.2d at 679. opposed indication State Farm Supreme Illinois’ decision on behalf Mr. Willis. Teichner, 552, Thus, In re 104 Ill.2d 83 Ill.Dec. there no “risk” involved 972, (1984) supports 470 N.E.2d also justify obtaining would a contin- position. lawyer disciplinary Teichner awas gency fee for monies which she had absolute- attorney charged matter wherein the ly for recovering no role in Mr. Willis. The attor excessive fee.3 Clearly, Tatterson, Kemp, under and Teich- ney his client had entered into contin ner, Ms. Morton was not entitled to obtain gency agreement recovery for of $1,500.00 payment. from Willis’ medical death client’s benefits deceased hus insurer, prosecuting band’s and for related Spent Pursuing HI. Time a Tortfeasor products'liability agreement per claim. The Attorney’s Justify does not Fees mitted to receive one-fourth Collecting Undisputed Pay- Medical judg or amount recovered settlement ments. benefits; ment from the death and one-third justify In order to Ms. Morton’s exchange the amount recovered majority opinion fees in had liability
representation products on the claim. oranges.” “apples and combine Payment There of the death never benefits was dispute proceeding Nevertheless, no in this that Ms. Mor- dispute. issue of when the roughly $27,598.71, put forty working ton hours paid over insurer the sum Mr. Willis’ claim Be- proceeds. retained tortfeasor. one-fourth *9 litigate cause to ease complaint against An ethical she retained was later filed tortfeasor, attorney. against oppose hearing panel A the I do not Ms. disciplinary monies, receiving upon found the fee from the bene Morton based her obtained death contract, Supreme contingency fits The Court In- was excessive. fee for this work. charge converting 3. There was also a and 4. The was disbarred. commingling client funds.
174
unjustified
court,
majority
payments.
commingling is
deed,
along with
This
our
courts,
consistently upheld
majority opinion
contin
unsupportable. The
has
and
other
Court,
Kopelman
As
prior
See
nor
gency fee contracts.
to no
of this
cited
decision
489,
Collins,
7,
socs.,
496 n.
196 W.Va.
country,
L.C. v.
in
combined
any court
that has
(“[C]ourts
(1996)
910,
n. 7
917
473 S.E.2d
work
under a
legitimate
hours
uphold
Virginia will
improper
West
fee contract
voluntarily
into
arrangements
entered
payments.
retention
a client’s
excessive,
they
long
are not
parties
inequitable
Opinion
overreaching,
Majority
and do
take
IV. The
Undermines
client.”).
v.
advantage
Integrity
Legal
of a
Accord Johnson
of the
85,
Ratcliff, Ark.App.
72
34
Guardianship
Profession.
(2000);
Ins.
Brunswick v.
S.W.3d 749
Safeco
ma
greatest
I
problem
have with
699,
(1998);
Co.,
711
1202
Conn.App.
A.2d
48
im
long-term negative
jority opinion is the
(Fla.Dist.
Siedlecki,
175 arrangement opinion, priety majority of a fee for in situations where a payments as follows: not dispute coverage, client’s insurer does lawyer every may lawyers pick up It this state now is most unusual for to seek telephone fact, say payments. fees to their client’s from medical insur- er, majority plaintiffs’ money.” wrong. bar does not “send me is take This payment fee medical case, In this Ms. Morton received from their coveries obtained client’s own simply saying money.” “send theme insurer. happens What when client’s medical bills Bass, 730, 3, 207 n. W.Va. 735 536 S.E.2d $100,000 more, are or and the client’s insurer curiam) 494, J., (Davis, (per 499 n. 3 pay dispute? intends to the bills without concurring dissenting). proprietary client will outstanding be saddled with an I expressed expanded concerns were Bass that, debt opinion but for the in this upon dissenting opinion of Justice paid would by have in full been Scott follows: public client’s insurer. The should not be Unfortunately, majority it deemed subjected to overreaching by legal such unnecessary engage in discussion profession. Kenelly, See Anderson v. or reasonableness excessiveness of fee 217, 260, (1976) (“Ca- Colo.App. 547 P.2d charged... It is clear to me that these emptor legal veat is not a maxim attributable fees should have been found to be exces- attorney-client relationship.”). Nor Basically, lawyer] charged sive. [the legal should the profession allowed received an exorbitant amount of attor- conduct itself on such a low ethical level ney’s collecting medical payments fees for permitting type this of client abuse. coverage a contract under which was not stated, For the I reasons dissent. I am dispute paid and which was the insurer authorized to state that Justice MAYNARD major controversy. without joins dissenting opinion. me only Not contingent is the unreasonable, case potentially is unethi-
cal well. Rule 1.5 of the Virginia West Conduct,
Rules of gov- Professional which general,
erns fees in dictates comprise what elements reasonable provision professional ser- THE BOARD OF OF THE EDUCATION vices[.] WOOD, COUNTY OF West Statutory Corporation, Petitioner Be- professional Under the[] rules of con- low, Appellee, duct, as as the well standards enunciated rules, interpreting this Court those charged by lawyer] [the AIRHART, al., Respondents et William excessive, unreasonable, at a mini- Below, Appellants. mum, question raises said fee No. 30103. might only be unethical as well. Not time, labor, legal experience skills and Supreme Appeals put lawyer] forth [the receive Virginia. minimis, payment proceeds de at Submitted Feb. 2002. best; but, simply fee was not based upon any contingent event. April 2002. Decided Bass, 736-738, at Concurring Dissenting Opinion of (Scott, J., dissenting). 500-502 July Justice McGraw 2002. public profession Neither nor by allowing lawyers is served collect
percentage pay- of noncontested medical
ments from them client’s insurer. Under the