Lawrence J. Lewis
Office of Disciplinary Counsel Fayetteville, West Virginia
Charleston, West Virginia Attorney for the Respondent
Attorney for the Complainant
The Opinion of the Court was delivered PER CURIAM.
CHIEF JUSTICE DAVIS and JUSTICE MAYNARD dissent and reserve the right to
file dissenting opinions.
JUSTICE STARCHER concurs and reserves the right to file a concurring opinion.
1. A de novo standard applies to a
review of the adjudicatory record made before the [Lawyer Disciplinary Board]
of the West Virginia State Bar as to questions of law, questions of application
of the law to the facts, and questions of appropriate sanctions; this Court
gives respectful consideration to the [Board's] recommendations while ultimately
exercising its own independent judgment. On the other hand, substantial deference
is given to the [Board's] findings of fact, unless such findings are not supported
by reliable, probative, and substantial evidence on the whole record.
Syl. Pt. 3, Committee on Legal Ethics v. McCorkle, 192 W. Va. 286,
452 S.E.2d 377 (1994).
2. This Court is the final arbiter of legal
ethics problems and must make the ultimate decisions about public reprimands,
suspensions or annulments of attorneys' licenses to practice law. Syl.
Pt. 3, Committee on Legal Ethics v. Blair, 174 W.Va. 494, 327 S.E.2d
671 (1984), cert. denied, 470 U.S. 1028 (1985).
3. In the absence of any real risk, an attorney's purportedly contingent fee which is grossly disproportionate to the amount of work required is a 'clearly excessive fee' within the meaning of [Rule 1.5(a) of the Rules of Professional Conduct]. Syl. Pt. 3, Committee on Legal Ethics v. Tatterson, 177 W. Va. 356, 352 S.E.2d 107 (1986).
4. If an attorney's fee is grossly disproportionate
to the services rendered and is charged to a client who lacks full information
about all of the relevant circumstances, the fee is 'clearly excessive' within
the meaning of [Rule 1.5 of the Rules of Professional Conduct], even though
the client has consented to such fee. The burden of proof is upon the attorney
to show the reasonableness and fairness of the contract for the attorney's fee.
Syl. Pt. 2, Committee on Legal Ethics v. Tatterson, 177 W. Va. 356, 352
S.E.2d 107 (1986).
This is a lawyer disciplinary proceeding brought
by the Lawyer Disciplinary Board (hereinafter Board) against Ms.
Belinda S. Morton (hereinafter Ms. Morton), a member of the West
Virginia State Bar. A Hearing Panel Subcommittee (hereinafter Hearing
Panel) found that Ms. Morton had violated Rule 1.5(a)(1) of the Rules
of Professional Conduct by obtaining a fee of $1,500 from medical payments
obtained on behalf of her client, Mr. David E. Willis (hereinafter Mr.
Willis). The Hearing Panel recommends that Ms. Morton be publicly reprimanded,
ordered to repay the client $1,500, and pay the costs of this proceeding.
Based upon thorough consideration of this matter, we reject the recommendation
of the Hearing Panel and dismiss the charge against Ms. Morton.
In the course of representation of Mr. Willis, Ms.
Morton asserts that she prepared and reviewed the contract of representation
and explained its terms to Mr. Willis. She also explains that she issued an
engagement letter including memorialization of the representation and advice
to Mr. Willis concerning maintaining medical bills and the need to avoid contacts
and discussion concerning the accident. Ms. Morton's other actions included correspondence with United States Fidelity and Guarantee Company
in an effort to place them on notice of the accident and her representation
of Mr. Willis. Ms. Morton also corresponded with medical doctors, Dr. Anwar
and Dr. Kominsky, concerning her representation of Mr. Willis and his legal
claims. Ms. Morton also explained that she corresponded with State Farm Insurance
Company adjuster Elaine Durham, in an effort to prevent State Farm from obtaining
an overly broad medical authorization. Ms. Morton also asserts that she conducted
legal research and investigation regarding Mr. Willis' claims and conducted
several phone calls with various State Farm adjustors regarding Mr. Willis'
case. Ms. Morton also prepared for and attended interviews with United States
Fidelity and Guarantee claims personnel. Ms. Morton maintains that her representation
of Mr. Willis entailed at least forty hours of legal work, including interviews
with the client and insurance personnel and review of numerous documents.
(See footnote 4)
During the course of representation, Ms. Morton
contacted State Farm, the insurer of the automobile in which Mr. Willis was
a passenger at the time of the accident, and asked State Farm to add her name to all medical payment checks issued
on behalf of Mr. Willis and to forward the checks to her office. The medical
payment checks totaled $5,000, and Ms. Morton retained thirty percent of that
amount, $1,500, as her fee. Ms. Morton's representation of Mr. Willis was
terminated subsequent to Mr. Willis' inability to pay a $500 deposit toward
costs and expenses as requested by Ms. Morton on September 11, 1996.
Mr. Willis filed an ethics complaint against Ms.
Morton on May 15, 1997, contending that her retention of $1,500 of the $5,000
in medical payments obtained for Mr. Willis was excessive. An Investigative
Panel thereafter charged Ms. Morton with obtaining an excessive fee in violation
of Rule 1.5(a)(1) of the Rules of Professional Conduct.
(See footnote 5) A hearing was held before the Hearing Panel on June 13, 2001, and the
Panel subsequently issued its ruling finding that Ms. Morton had violated
Rule 1.5(a)(1) by obtaining a fee grossly excessive for the services
actually performed. W.Va. Rules Prof'l Conduct R. 1.5(a)(1). The Hearing
Panel and Board have recommended that this Court publicly reprimand Ms. Morton,
order her to repay Mr. Willis $1,500, and pay the costs of this proceeding.
Ms. Morton has objected to the determination that she violated Rule 1.5(a)(1)
and that sanctions should be imposed upon her.
We have also consistently held that [t]his
Court is the final arbiter of legal ethics problems and must make the ultimate
decisions about public reprimands, suspensions or annulments of attorneys'
licenses to practice law. Syl. Pt. 3, Committee on Legal Ethics v.
Blair, 174 W.Va. 494, 327 S.E.2d 671 (1984), cert. denied, 470
U.S. 1028 (1985).
177 W. Va. at 363, 352 S.E.2d at 114 (citations omitted).
(See footnote 6) In syllabus point three of
Tatterson, this Court held that [i]n the absence of any real risk,
an attorney's purportedly contingent fee which is grossly disproportionate to
the amount of work required is a 'clearly excessive fee' within the meaning
of [Rule 1.5(a) of the Rules of Professional Conduct]. 177 W. Va. at 357,
352 S.E.2d at 108. In syllabus point two of Tatterson, this Court further
If an attorney's fee is grossly disproportionate to the services rendered and is charged to a client who lacks full information about all of the relevant circumstances, the fee is "clearly excessive" within the meaning of [Rule 1.5 of the Rules of Professional Conduct], even though the client has consented to such fee. The burden of proof is upon the attorney to show the reasonableness and fairness of the contract for the attorney's fee.
Id. at 377, 352 S.E.2d at 108.
In the case sub judice, the Board contends that
this Court's decision in Tatterson supports its position that Ms. Morton
obtained an excessive fee and that her fee was grossly disproportionate to
the services she rendered. In Tatterson, however, the attorney had
entered into a contingency fee agreement with an elderly blind woman in a
matter concerning the recovery of life insurance proceeds for the suicide
death of the woman's son. The amount of the life insurance proceeds was $61,000.
After the insurance company paid the full amount of the insurance proceeds,
the attorney deducted his contingency fee of thirty-three percent. An ethics
complaint was subsequently filed against the attorney, charging him with obtaining
an excessive fee, misrepresenting the degree of difficulty in obtaining the
life insurance proceeds, and engaging in unethical conduct while a disciplinary
proceeding was pending against him.
This Court determined in Tatterson that the evidence supported the charges against the attorney, observing that the attorney did nothing more than assist the woman in filling out forms to obtain the insurance proceeds. We addressed the matter as follows:
Courts generally have insisted that a contingent fee
be truly contingent. The typically elevated contingent fee reflecting the risk
to the attorney of receiving no fee will usually be permitted only if the representation
indeed involves a significant degree of risk. The clearest case where there
would be an absence of real risk would be a case in which an attorney attempts
to collect from a client a supposedly contingent fee for obtaining insurance
proceeds for a client when there is no indication that the insurer will resist
Tatterson, 177 W.Va. at 363, 352 S.E.2d at 113-14.
Similarly, this Court has reasoned that a contingent fee is clearly excessive if the skill and labor required of the lawyer are grossly disproportionate to the fee. Committee on Legal Ethics v. Gallaher, 180 W.Va. 332, 335, 376 S.E.2d 346, 349 (1988) (citations omitted). In Gallaher, a lawyer disciplinary proceeding was brought against an attorney who allegedly obtained an excessive fee from a client. The attorney's client was an elderly woman who sustained injuries while a passenger in a car that was involved in an accident. The woman sustained medical bills in excess of $2,300. The insurance company offered the woman only $726.65. The offer was rejected, and the woman retained counsel solely for the purpose of recovering medical payments. The attorney was able to settle the case for $4,500. The attorney charged a fee of fifty percent of the settlement and, therefore, retained $2,250. Lawyer disciplinary proceedings were brought against the attorney as a result of the alleged excessiveness of the fee, and this Court concluded that a fee of fifty percent was indeed excessive and grossly disproportionate to the services rendered.
Consequently, this Court reprimanded the attorney and ordered the attorney
to return $750 to the client. Even in those circumstances, this Court approved,
in effect, a contingent fee of $1,500, constituting thirty-three and one-third
percent of the total recovery.
We are not persuaded that this Court's prior decisions
support the proposition that Ms. Morton charged an excessive fee and that
the fee was grossly disproportionate to the services rendered. In contrast
to the actions of the attorneys in Tatterson and Gallaher, Ms.
Morton was actively engaged in representing her client in all aspects of his
potential claims for compensation arising from his collision on October 26,
1995, only one aspect of which was the recovery of medical payments under
the State Farm insurance policy.
We are similarly unpersuaded by opinions from other
jurisdictions cited by the Board in support of its position. In In the
Matter of Hausen, 488 N.Y.S.2d 742 (1985), the excessive fee was obtained
after the attorney received a contingent fee for assisting a client in the
recovery of no-fault insurance medical payments, despite an express statutory
preclusion of such a fee arrangement. Hausen, therefore, does not provide
an analogous situation, since the case sub judice does not involve a contingency
arrangement expressly precluded by statute. Similarly, we are unpersuaded
by Attorney Grievance Commission v. Kemp, 496 A.2d 672 (Md. 1985),
cited by the Board. In that case, the attorney had obtained a contingent fee
from medical payments recovered for the client. The court in Kemp appears to have adopted a per se rule that prohibits attorneys from receiving a
contingent fee for medical payments recovered on behalf of a client. The court
explained as follows: Petitioner essentially argues that because the
services required in filling out a routine, undisputed Med. Pay claim are
perfunctory in nature, contingent fees represent an improper measure of professional
compensation. We agree. 496 A.2d at 677-78. This Court has not adopted
such a rule, and, in fact, we have tacitly approved such arrangements. See
Bass v. Coltelli-Rose, 207 W.Va. 730, 536 S.E.2d 494 (2000) (reversing
summary judgment for client on issue of whether the attorney/client contract
permitted recovery of a contingent fee contingent fees from recovery of medical
payments). Thus, while Bass presented an opportunity for this Court
to prohibit contingency fee agreements that included medical payments and
address the issue of whether such fees were reasonable and ethical, this Court
declined to do so.
The contractual language memorializing the attorney/client
relationship in this case, as quoted above, is not ambiguous. The scope of
the agreement is clear in providing for full legal representation to recover
of all monies and things of any value from anyone Ms. Morton deemed
desirable or necessary to pursue. This language did not limit
Ms. Morton's role to recovering medical payments for Mr. Willis, and the contract
did not preclude Ms. Morton from acting on behalf of Mr. Willis in obtaining
medical payments. Ms. Morton contracted to provide legal services that empowered
her to pursue every source of and right to recovery to which Mr. Willis may have been entitled, as
it pertained to his alleged tortious injury.
In her legal representation in this case, Ms. Morton
has itemized approximately forty hours of work performed on behalf of Mr.
Willis prior to the termination of the legal representation. As compensation
for forty hours of work, Ms. Morton obtained $1,500 as a contingent fee. This
translates to roughly $37.50 for each hour of work performed by Ms. Morton.
We fail to see how this fee could be characterized as excessive.
Client employs attorney to represent him and, if necessary, to institute and prosecute suit and, as compensation for legal services, client agrees to assign unto attorney thirty percent (30%) before suit is filed and forty percent (40%) if a lawsuit is filed of all monies and things of any value recovered in said claim by a compromise, settlement or suit.