Opinion ID: 835208
Heading Depth: 2
Heading Rank: 3

Heading: Violation of DR 2-106(A) in the Burch Matter

Text: The accused seeks review of the trial panel's decision that he violated DR 2-106(A) by charging his client, Burch, a clearly excessive fee in the trespass action against Thompson. DR 2-106(A) provides that [a] lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee. The parties agree that, if the accused had an agreement with Burch to charge him fees in the trespass case on an hourly basis, then the fees that he charged were not excessive, but that, if the accused's agreement with Burch was that he would charge his fees in that matter on a contingency basis, then the fees were clearly excessive. See In re Sassor, 299 Or. 720, 725, 705 P.2d 736 (1985) (lawyer violates DR 2-105(A) by charging more than the agreed-upon fee). The Bar argues that the written contingency fee agreement is clear and convincing evidence that the parties agreed to those terms. Relying on In re Balocca, 342 Or. 279, 151 P.3d 154 (2007), the Bar argues that the accused bears the burden of proving that that contract was modified. The Bar contends that the accused failed to meet that burden and points to the fact that Burch could not recall entering into a new agreement, that the accused could not produce any written documentation of the new agreement, and that no subsequent correspondence between Burch and the accused referred to the new agreement. The accused takes the position that the Bar bears the burden to prove the terms of his fee agreement with Burch and that the fees that the accused charged varied from those terms. The accused asserts that the evidence establishes that he had ample reason to separate the trespass action from the assault and battery action, that he explained the modification of the fee agreement to Burch both over the phone and in his office, and that Burch agreed to it, although Burch's memory is now unclear. The accused also relies on the fact that the billing statements reflect a change in the fee agreement, that Burch paid many of the hourly bills for the trespass matter, and that Burch objected to the hourly billing only after a collection action was filed. We conclude that the Bar bears the burden of proof and that it has failed to produce clear and convincing evidence to meet it. To establish that the accused charged Burch excessive fees, the Bar must show that it is highly likely that Burch did not agree to pay hourly fees and that the accused nevertheless charged his time on that basis. Although the Bar argues that Balocca holds that the burden shifts to the accused to prove the existence of a fee agreement, that case is inapposite. That case involved a lawyer's assertion that money that he had received from a client did not have to be deposited into a trust account. This court noted there that client funds must be deposited into a lawyer trust account unless a written agreement provides that the funds are nonrefundable and are deemed earned upon receipt. 342 Or. at 288, 151 P.3d 154 (emphasis in original omitted; emphasis added). [7] The case before us presents a different problem: evidence of the terms of an hourly fee agreement when there is no requirement that an hourly fee agreement be in writing. Where the law does not require that the agreement between the lawyer and client be in writing, it is the Bar, and not the accused, that bears the burden to prove that the lawyer charged the client fees that were not authorized by the terms of the agreement. Although the Bar's proof that the parties originally entered into a written contingency fee agreement is significant, the accused also provided evidence that he and Burch had agreed orally to substitute an hourly fee agreement and that Burch had made payments in accordance with that modified agreement. We conclude that the Bar failed to prove by clear and convincing evidence that the accused charged Burch excessive fees for the Thompson trespass action. The Bar also alleged that the accused charged an excessive fee when he billed Burch for late fees in excess of the legal rate of interest without obtaining Burch's written agreement to pay those charges. [8] Because the accused concedes that violation, we conclude that the accused violated DR 2-106(A) in that regard.