Title: In re Benett
Citation: N/A
Docket Number: S34639
State: Oregon
Issuer: Oregon Supreme Court
Date: November 9, 2000

Filed:  November 9, 2000
IN THE SUPREME COURT OF THE STATE OF OREGON

In re Complaint as to the Conduct of
EDWARD J. BENETT,
	Accused.
(OSB 96-90, 96-184; SC S34639)

	En Banc
	On review of the decision of a trial panel of the
Disciplinary Board.
	Argued and submitted January 6, 2000.
	Edward J. Benett, pro se, argued the cause and filed the
briefs.
	Mary A. Cooper, Assistant Disciplinary Counsel, Lake Oswego,
argued the cause and filed the briefs for the Oregon State Bar.
	PER CURIAM
	The accused is suspended from the practice of law for 180
days, commencing 60 days from the filing date of this decision.
		PER CURIAM
		In this lawyer disciplinary proceeding, a trial panel
of the Disciplinary Board found that the accused violated Code of
Professional Responsibility Disciplinary Rule (DR) 1-102(A)(3)
(prohibiting conduct involving dishonesty, fraud, deceit, or
misrepresentation) while representing his client Moore and
violated DR 2-106(A) (prohibiting excessive fees) and DR 9-101(C)(4) (requiring prompt return of client property) in dealing
with his clients Chesney.  The trial panel found that the accused
had not violated DR 1-102(A)(3) in the Chesney matter.  The trial
panel suspended the accused for 120 days, with 30 days stayed. 
The Oregon State Bar (Bar) and the accused both sought review in
this court.  ORS 9.536(1); Bar Rule of Procedure (BR) 10.1 and BR
10.3.  On de novo review, ORS 9.536(3); BR 10.6, we conclude that
the accused committed the three violations that the trial panel
found.  We further conclude that he also violated DR 1-102(A)(3)
in the Chesney matter.  We impose a 180-day suspension.
I. FACTS
	
		We find the following facts by clear and convincing
evidence.  BR 5.2. 
		In 1995, Moore agreed to purchase a car from CJC Auto
Sales (CJC) for $9,995.  He paid $1,000 down and took possession
of the car.  Moore intended to finance the remainder of the
purchase price, but his financing was not approved.  CJC
repossessed the car, but did not refund Moore's $1,000 down
payment.  Moore hired the accused to assist in resolving the
dispute, and CJC hired lawyer Davidson.  
		The accused filed a complaint against CJC on Moore's
behalf, alleging fraud and unlawful trade practices.  The accused
sent Davidson a settlement offer of $3,000, payable by CJC in two
installments of $1,500 each, which Davidson accepted on his
client's behalf.  In November 1995, Davidson sent the accused a
mutual release, two $1,500 checks from CJC, and a stipulated
judgment of dismissal.  The release stated that Moore agreed to
settle the matter for $3,000 and that the release contained the
parties' entire agreement.  In December, the accused deposited
the checks.  Although the first check cleared the bank, the
second did not.  In January 1996, the accused notified Davidson
that one of the $1,500 checks had been returned for insufficient
funds.  The accused threatened to file an action for breach of
contract and treble damages.  
		Shortly thereafter, the bank notified the accused that
the second check had cleared.  Although the accused now had 
$3,000 from CJC, he did not inform Davidson of that fact. 
Davidson continued to believe that the bank had not honored the
second $1,500 check.  Consistent with that belief, Davidson wrote
to the accused that CJC would pay $1,500 in three installments of
$500.  In January 1996, Davidson sent the accused $500.  A week
later, Davidson sent the accused $500 more.  The accused then
wrote Davidson acknowledging that Moore had been paid in full. 
At that time, however, the accused had received $4,000 from CJC.
		When Davidson later discovered that the bank had paid
CJC's previously dishonored check, he demanded the return of the
$1,000 overpayment.  In response, the accused wrote to Davidson,
stating:
	"I regret the misunderstanding over our collection of
$4,000 instead of $3,000 in settlement of our claims
against your client.  I had regarded your client's NSF
checks as a breach of the original settlement agreement
(dealing with the [unlawful trade practices act]
claim), and his willingness to pay the additional money
as an offer to settle additional claims under ORS
30.700 [since repealed, which provided a cause of
action to recover damages for an insufficient funds
check after a 30-day notice period].  If you had
prepared a writing reflecting that, I would have signed
it."
The accused refused to return the $1,000.  Davidson promptly
complained to the Bar that the accused improperly had converted
funds belonging to CJC.  The Bar filed a complaint alleging that
the accused's conduct in the Moore matter violated DR 1-102(A)(3). 
		The Chesneys purchased a motor home that they claimed
was defective.  They retained the accused, and, in 1996, he
settled the case and deposited the settlement funds in his trust
account.  In February 1996, the Chesneys complained to the
accused that they had not received all of their settlement funds. 
They also disputed the amount of the accused's fee and whether
his fee statements were correct.  The accused withheld both the
disputed and the undisputed portions of the settlement funds that
remained in the trust account.  In May 1996, the Chesneys
terminated their representation by the accused and asked that he
send them the undisputed portion of those funds.  He did not do
so.
		The Chesneys then retained another lawyer, Quenelle, to
represent them in their dispute with the accused.  Quenelle 
asked the accused to send the Chesneys the undisputed portion of
the settlement funds.  The accused refused to do so, contending
that the undisputed portion of the funds had not yet been
calculated.  The accused then sent the Chesneys a detailed bill
for his services and expenses as of August 7, 1996.  In that
bill, the accused sought compensation for time he had spent
disputing the bill with the Chesneys.  At that time, the accused
also sent the Chesneys $6,885 in undisputed funds.
		In October 1996, Quenelle requested the Chesneys' file
from the accused.  The accused responded by questioning whether
Quenelle was the Chesneys' lawyer (for the purpose of requesting
the file) and whether Quenelle had a release for the file from
the Chesneys.  The accused also asserted that the Chesneys
already had copies of everything in the file.  Quenelle provided
the accused with a release and again demanded the file.  Later,
Quenelle sent a letter to the accused stating that Quenelle had
made arrangements to have the file picked up, copied, and
returned at the Chesneys' expense.  The accused responded that he
was too busy with other cases.  He also refused to make the file
available on the ground that Quenelle was being "discourteous."
		In July 1997, a lawyer representing the accused sent
Quenelle a check for $1,575, purporting to correct "errors in the
billing statement."  The letter accompanying the check stated
that the Chesneys still owed the accused $10,441 in fees and
asserted an attorney's lien on the Chesneys' file.  The letter
stated that the accused would agree to copy the file if the
Chesneys agreed that he would not be waiving his attorney's lien
by doing so.  That offer was made nine months after Quenelle
first requested the Chesneys' file.
		Sometime in 1996, the accused contacted the Bar about
his dispute with the Chesneys.  The precise nature and extent of
the communication between the accused and the Bar is not
explained in the record of this case.  However, in August 1997,
the accused wrote to an investigator for a Local Professional
Responsibility Committee:
		"I now understand that it was improper for me to
bill for much of the time between April 3 and August 7,
1997 [sic] and I have therefore released an additional
$1,575 to the Chesneys as 'undisputed funds.'  Even
though my withholding of those funds was not done for
the purpose of charging an excessive fee, I admit that
my doing so under the circumstances did in fact
constitute 'charging an excessive fee' under DR 2-106(A).
		"* * * * *
		"For the same reasons explained in my answer * * *
above, I admit also violating DR 9-101(C)(4) by not
releasing funds for certain work performed by me
between April 3 and August 7, 1996.  Because I
mistakenly believed I was entitled to these fees, I
held funds for them as well."
	In November 1997, the accused filed a complaint in
circuit court against the Chesneys, seeking $10,441 in damages. In March 1998, Quenelle wrote to the accused's lawyer,
complaining that the accused still owed his clients $1,000 in
addition to the $1,575 already paid.  The accused's lawyer
reviewed Quenelle's letter with the accused.  
		According to Quenelle, the Chesneys grew tired of
fighting with the accused and paying Quenelle to attempt to
recover the balance of the funds to which they believed they were
entitled.  Quenelle testified that the Chesneys had paid him
between $5,000 and $8,000 for his services in disputing the
accused's fees.  In June 1998, the parties reached a settlement
in which the accused retained virtually the entire disputed
amount.  The Bar thereafter amended its complaint to allege that
the accused's conduct in the Chesney matter violated DR 1-102(A)(3), DR 2-106(A) and DR 9-101(C)(4).
II.  PROCEEDINGS BELOW

		The accused did not testify at the hearing before the
trial panel.  Regarding the Moore matter, the accused's lawyer
admitted at the hearing that, when the $500 checks started
arriving, the accused had an obligation to contact Davidson to
clarify the situation and that the accused's failure to do so was
a "passive misrepresentation" in that the accused did not reveal
information to Davidson that he was obligated to reveal.  The
trial panel found that, although the accused might have believed
that the settlement was for $4,000, the correspondence between
the accused and Davidson put the accused on notice that there was
a misunderstanding as to the terms of the settlement.  The trial
panel concluded that the accused's conduct in the Moore matter
violated DR 1-102(A)(3) by misrepresentation.
		Regarding the Chesney matter, the accused's lawyer
admitted that the accused billed for matters that he should not
have and that he retained client funds too long.  The trial panel
agreed, finding that the accused violated DR 2-106(A) (excessive
fee).  The trial panel also found that the accused failed to
return the Chesneys' file or to make it available to them for
copying in violation of DR 9-101(C)(4) (duty to return client
property).  Regarding the amount billed that the accused
eventually refunded, the trial panel found that the accused
violated DR 9-101(A)(2). (1)  The trial panel further found,
however, that the accused did not violate DR 1-102(A)(3)
(prohibiting dishonesty, fraud, deceit, or misrepresentation)
regarding that amount, because the Bar did not prove that the
accused was dishonest or deceitful in originally billing for
those activities. 
		The trial panel found no violation regarding the amount
billed for disputing the fee that the accused did not refund:
	"As previously noted, the accused sued the Chesneys for
$10,441, which included this [unrefunded] $1,100.  The
Chesneys have entered into a settlement, release and
dismissal which has the legal effect of making that
$1,100 the accused's money.  The bar has cited no
authority which would support the proposition that it
is a violation of any disciplinary rule to retain funds
which, as a result of a settlement, are, as a matter of
law, the funds of the accused."
The trial panel suspended the accused  for 120 days with 30 days
stayed.
III.  DISCUSSION 

	As noted, the standard of proof in lawyer discipline
proceedings is clear and convincing evidence, BR 5.2, which
requires evidence establishing that the truth of the facts
asserted be highly probable.  In re Johnson, 300 Or 52, 55, 707
P2d 573 (1985). (2) 
A.   Moore
	DR 1-102(A)(3) provides that it is "professional
misconduct for a lawyer to [e]ngage in conduct involving * * *
misrepresentation."  Under DR 1-102(A)(3), misrepresentation
requires a knowing misrepresentation, which includes
misrepresentation by nondisclosure.  See In re Gustafson, 327 Or
636, 647, 968 P2d 367 (1998) (so stating); In re Weidner, 310 Or
757, 762 n 2, 801 P2d 828 (1990) (misrepresentation is broad term 
encompassing nondisclosure of material fact).  Evaluating
misrepresentation involves a two-part inquiry:  (1) whether the
lawyer knew that the lawyer's statement was a misrepresentation;
and (2) whether the lawyer knew that the misrepresentation was
material.  Gustafson, 327 Or at 648.  A material
misrepresentation involves information that, if the decision-maker had known of it, "would or could have influenced the
decision-making process significantly."  Id. at 649.  A lawyer's
failure to correct a false impression created by a nondisclosure
of a material fact constitutes misrepresentation under DR 1-102(A)(3).  Id. at 651; see also In re Boardman, 312 Or 452, 457,
822 P2d 709 (1991) (failure to correct false impression made by 
unintentional misstatement also is misrepresentation). 
		We conclude that the accused engaged in
misrepresentation by nondisclosure.  Davidson paid the accused
$1,000 more than was due Moore before the accused informed
Davidson that he already had paid $3,000 in full settlement
according to the parties' agreement.  The accused had a duty to
tell Davidson that full payment had been made when he learned
that the second $1,500 check had cleared or, at the latest, when
Davidson offered to send more money.  We conclude that the
accused could not have harbored a reasonable belief that the two
$500 checks were another settlement offer, because the accused
had demanded $1,500 from Davidson to substitute for the amount of
the insufficient-funds check.  We reject as untenable the
accused's later-asserted justification that he believed that the
settlement amount was $4,000 rather than $3,000.  We hold that
the Bar has proved by clear and convincing evidence that the
accused violated DR 1-102(A)(3) in the Moore matter.
B.	The Chesneys
		DR 2-106(A) provides that "[a] lawyer shall not * * *
charge or collect an illegal or clearly excessive fee."  A fee is
excessive under the circumstances when "a lawyer of ordinary
prudence would be left with a definite and firm conviction that
the fee is in excess of a reasonable fee."  DR 2-106(B).  On this
record, the accused was representing only his own interests in
his fee dispute with the Chesneys and he could not properly bill
the Chesneys for that time.  See In re Potts/Trammell/Hannon, 301
Or 57, 66-74, 718 P2d 1363 (1986) (charging for firm's time spent
defending fee claim constitutes charging an excessive fee); see
also In re Stauffer, 327 Or 44, 64, 956 P2d 967 (1998) (charges
for defending against Bar complaints constituted excessive fee). 
We hold that the Bar has proved by clear and convincing evidence
that the accused violated DR 2-106(A) in the Chesney matter.
		DR 9-101(C)(4) provides that "[a] lawyer shall * * *
promptly pay or deliver to a client as requested by the client
the funds, securities or other properties in the possession of
the lawyer which the client is entitled to receive."  We hold
that the Bar has proved by clear and convincing evidence that the
accused violated DR 9-101(C)(4) when he failed to return promptly
the fees that he had not earned. 
		The Bar next argues that the accused was dishonest in
the Chesney matter for overcharging the Chesneys and not
returning their money promptly.  As noted above, DR 1-102(A)(3)
prohibits dishonesty, which is conduct consistent with a
disposition to lie, cheat, or defraud, and includes conduct
suggesting character traits of untrustworthiness and lack of
integrity.  In re Hockett, 303 Or 150, 158, 734 P2d 877 (1987).
  		The accused asserted fees long after he knew that they
were inappropriate.  The accused admitted in August 1997 that he
knew that he was not entitled to charge his clients additional
fees for disputing his bill.  Despite that realization, the
accused refunded only a portion of the charges that related to
time spent disputing fees.  As noted, in March 1998, Quenelle
wrote to the accused's lawyer and pointed out that, despite
releasing the $1,575, the accused still was holding $1,000 of the
Chesneys' money.  The accused's lawyer reviewed that letter with
him, but the accused did not withdraw his assertion that the
Chesneys still owed him the unrefunded fees.  At that point, his
refusal to return the Chesneys' money became dishonest, in
violation of DR 1-102(A)(3).  Forcing the Chesneys into
litigation to recover his fees and managing to force them into
settlement did not cleanse the accused of his misconduct.  We
turn to the appropriate sanction.
IV.  SANCTION
		This court looks to the American Bar Association's
Standards for Imposing Lawyer Sanctions (1991) (amended 1992)
(ABA Standards) for guidance in determining the appropriate
sanction for lawyer misconduct.  In re Schaffner, 323 Or 472,
478, 918 P2d 803 (1996).  Guided by the ABA Standards, this court
initially weighs three considerations in determining the
appropriate sanction:  the duty violated; the accused lawyer's
mental state; and the actual or potential injury caused by the
accused lawyer's misconduct.  In re Devers, 328 Or 230, 241, 974
P2d 191 (1999); ABA Standard 3.0.  We then examine any
aggravating or mitigating circumstances to determine if the
sanction should be adjusted.  Devers, 328 Or at 241; ABA Standard
3.0.  Finally, we compare prior Oregon cases and the sanctions
imposed in them.  Devers, 328 Or at 241. 
		We find that the accused violated several duties. 
First he violated his duty to his clients to preserve their
property.  ABA Standard 4.1.  See also In re Kenneth W. Stodd,
279 Or 565, 567, 568 P2d 665 (1977) ("Nothing less than the most
scrupulous probity in dealing with the funds of others is
compatible with admission to the practice of law.").  He also
violated his duty as a professional to refrain from charging
improper fees.  ABA Standard 7.0.  In addition, the accused
violated his duty to his clients and to the public to maintain
personal integrity and honesty.  ABA Standards 4.6 and 5.1. 
		We turn to the accused's mental state.  The ABA
Standards set out three mental states: intentional, knowing, and
negligent.  ABA Standards at 7.  We conclude that the accused
acted intentionally, i.e., with a conscious objective or purpose
to accomplish a particular result, in charging an excessive fee,
failing to return client property promptly, misleading Davidson
into paying additional funds, and dishonestly charging fees. 
		Moving on to injury, we note that, under the ABA
Standards, injury may be actual or potential.  ABA Standards at
7.  We find that there was substantial actual injury in this
matter.  The accused never repaid Davidson or CJC the $1,000. 
The Chesneys had to wait months before receiving some funds, and
they surrendered other funds in settlement.  The accused also
obstructed their access to their file. 
		The accused's misconduct implicates several ABA
Standards.  Suspension generally is appropriate:  (1) when a
lawyer knows or should know that he or she is dealing improperly
with client property and causes injury to a client (ABA Standard
4.12); (2) when a lawyer knowingly deceives a client and causes
injury to the client (ABA Standard 4.62); or (3) when a lawyer
knowingly engages in conduct that is a violation of a duty owed
as a professional and causes injury to a client, the public, or
the legal system (ABA Standard 7.2).  
		Under the foregoing standards, a significant suspension
is appropriate in this case. 
		We turn to a discussion of applicable aggravating and
mitigating factors.  Aggravating circumstances are any
considerations or factors that may justify an increase in the
degree of discipline to be imposed.  ABA Standard 9.1.  We find
the following aggravating factors in this case:  a dishonest or
selfish motive (ABA Standard 9.22(b)); a pattern of misconduct
(ABA Standard 9.22(c)); multiple offenses (ABA Standard 9.22(d));
refusal to acknowledge wrongful nature of conduct (ABA Standard
9.22(g)); substantial experience in the practice of law (ABA
Standard 9.22(i)) (the accused has been a member of the Bar since
1982); and indifference to making restitution (ABA Standard
9.22(j)). 
		Mitigating circumstances are any considerations or
factors that may justify a reduction in the degree of discipline
to be imposed.  ABA Standard 9.3.  In mitigation, the accused
does not have a prior record of discipline.  ABA Standard
9.32(a).  A witness also testified as to his good character.  ABA
Standard 9.32(g).  
		In his respondent's brief, the accused argues that he
sought ethics advice from the Bar regarding his dispute with the
Chesneys.  According to the accused, that fact should be
considered in mitigation.  The ABA Standards do not accord any
weight to seeking such advice.  Assuming, arguendo, that seeking
timely ethics advice from the Bar may provide mitigation in a
particular case, the record in this case provides no comfort to
the accused.  As noted, the accused did not testify at the
hearing, and the record here contains no definitive evidence of
the nature or extent of any communications between the accused
and the Bar in the Chesney matter.  Because the record does not
support the accused's argument, we give no weight to that
particular claim of mitigation.
		We conclude that the aggravating circumstances
significantly outweigh the mitigating ones.
		We find two Oregon disciplinary cases useful.  First,
in In re Binns, 322 Or 584, 910 P2d 382 (1996), this court
disbarred a lawyer who lied to his clients about payments
actually made to another lawyer under the clients' fee
arrangement, which resulted in an excessive fee, lied to the
Bar's investigators, and supplied false documents to the Bar.  In
that case, the lawyer actually paid the disputed funds out of the
trust account, and a conversion took place.
		Second, in In re Boothe, 303 Or 643, 740 P2d 785
(1987), this court suspended a lawyer for six months when, inter
alia, the lawyer refused to comply with a client's request to
turn over a will, forged his client's signature on a check, and
withdrew disputed funds.  In that case, however, the court noted
the lawyer's generally good reputation, lack of previous
disciplinary action, and his cooperation with the investigating
committee. 
		We conclude that this case more closely resembles
Boothe.  After considering the relevant factors and this court's
case law, we conclude that a 180-day suspension is appropriate in
this case.
		The accused is suspended from the practice of law for
180 days, commencing 60 days from the date of filing of this
decision.

1. 	DR 9-101(A)(2) provides that a lawyer may not withdraw
disputed funds from a trust account as a fee until the dispute is
resolved.  DR 9-101(C)(4) provides that a lawyer must disburse
promptly undisputed funds to the client.  The Bar did not allege
a violation of DR 9-101(A)(2) in its amended complaint.  We
conclude that the trial panel meant DR 9-101(C)(4) instead of DR
9-101(A)(2).

2. 	The accused contends that the trial panel committed
several procedural errors that prejudiced his ability to receive
a fair hearing.  We have considered those procedural challenges
and reject them without discussion.