Opinion ID: 1899541
Heading Depth: 1
Heading Rank: 9

Heading: Count IVThe Racheau Matter

Text: In February 2001, Brandon Racheau and his fourteen-year old brother, Matthew, were involved in an automobile accident. In March 2001, Brandon, who was of the age of majority, retained respondent to represent him in a claim for damages arising out of the accident. The contingent fee agreement that Brandon signed also purported to cover Matthew's claim for damages; however, Matthew's mother, Tammy Racheau, did not sign the agreement or otherwise consent to respondent's representation of Matthew before the representation commenced. In July 2001, respondent settled Matthew's personal injury claim for $8,500. Ms. Racheau did not consent to the settlement before it was negotiated, and she did not endorse the settlement check, although she was a payee. [11] However, Ms. Racheau did sign the pleadings seeking court approval of the minor's settlement. These pleadings referred to a disbursement statement, which was not attached, but which reflected that respondent retained one-third of Matthew's settlement ($2,833.34) as his attorney's fee, disbursed one-third ($2,833.34) to Iberia Chiropractic Clinic to pay a portion of Matthew's medical bills, and issued a check for the remaining one-third ($2,833.33) to Ms. Racheau on Matthew's behalf. In September 2001, the trial court approved the settlement of Matthew's personal injury claim. Ms. Racheau received Matthew's $2,833.33 check from respondent, but she refused to negotiate it because all of Matthew's medical bills had not been paid, as respondent had promised. In December 2001, Ms. Racheau discharged respondent and retained new counsel. Respondent refused to turn over Matthew's file, despite counsel's repeated requests, and failed to provide an accounting to Ms. Racheau. In January 2002, Ms. Racheau filed a complaint against respondent with the ODC. Thereafter, Ms. Racheau finally received Matthew's file. In February 2002, two months after he was discharged, respondent stopped payment on Matthew's $2,833.33 check. He then filed a pleading in the trial court, purportedly on behalf of Ms. Racheau, to which he attached a Settlement Disbursal Statement that he represented had been inadvertently omitted from the filing in September 2001. However, unbeknownst to the court, respondent had revised the previously prepared disbursement statement to reflect that he retained one-third of Matthew's settlement ($2,833.34) as his attorney's fee, disbursed $4,984.45 to pay Matthew's medical bills (including $3,730 to Iberia Chiropractic Clinic, which had previously agreed to discount its bill to $2,833.33), and issued a check for the remaining $682.21 to Ms. Racheau on Matthew's behalf. Respondent did not discuss this matter with Ms. Racheau beforehand. By letter dated January 6, 2003, the ODC asked respondent for a response to Ms. Racheau's allegation that she did not endorse Matthew's settlement check. On January 8, 2003, respondent stated: I do not know whether Ms. Racheau signed the $8,500 check. However, since the court approved the settlement based on the pleading of Ms. Racheau, the signing of the Settlement Agreement by Ms. Racheau, and the signing of the Distribution Agreement by Ms. Racheau, it would seem that if she did not endorse the back of the settlement check, such would be unnecessary. In its formal charges, the ODC alleged that respondent's conduct violated Rules 1.2(a), 1.4, 1.5(b), 1.5(c), 1.15(a) (safekeeping property of clients or third persons), 1.16(d) (obligations upon termination of the representation), 8.4(a), and 8.4(c) of the Rules of Professional Conduct. Respondent answered the formal charges and denied any misconduct. At the hearing on the formal charges, Brandon Racheau testified that he treated with a chiropractor, Dr. Adel Malahmeh of the Iberia Chiropractic Clinic, for the injuries he sustained in the automobile accident. At his first appointment, Dr. Malahmeh told Brandon that he knew a good guy and could call him if Brandon wanted to hire an attorney. Brandon agreed and respondent came to Dr. Malahmeh's office five or ten minutes later, at which time Brandon discussed his case with respondent and signed a contingent fee agreement. Brandon also told respondent that his younger brother, Matthew, was in the car with him when the accident occurred. Respondent expressed an interest in representing Matthew as well, and asked Brandon whether he could sign the contingent fee agreement for Matthew. Brandon testified that he replied, he isn't of age, should I get my parents or something to sign for him, and [respondent] was like, Oh no, don't worry about it. Tammy Racheau testified that she learned several days after the fact that respondent had been retained to represent Brandon and Matthew. Ms. Racheau had not given permission for respondent to represent Matthew, and he never showed her a copy of the contingent fee agreement, but she said that since he was already there, I figured it was okay. After he was retained, Ms. Racheau met with respondent once to discuss Matthew's medical expenses, and a second time to sign the tutorship papers. At all times respondent assured Ms. Racheau that he would take care of Matthew's medical bills out of any settlement that Matthew received. Ms. Racheau testified that respondent did not contact her about the settlement offer from the insurance company, nor did he seek her approval of the settlement amount before accepting the offer. Ms. Racheau did see a copy of the settlement check when she went to respondent's office to sign the tutorship papers, but she never endorsed the check or gave anyone permission to endorse it on her behalf. The settlement check was cashed nevertheless, and respondent sent Ms. Racheau a $2,833.33 check for Matthew's share of the settlement. Ms. Racheau told respondent that she would not cash the check until all of Matthew's medical bills were paid. For the next several months, Ms. Racheau continued to receive notices from Matthew's medical providers that the bills had not been paid. Ms. Racheau tried to contact respondent to discuss the matter, but he did not return her calls. After she filed the disciplinary complaint, respondent stopped payment on the $2,833.33 check he sent to Ms. Racheau, paid all of Matthew's outstanding medical bills, and sent Ms. Racheau a check for $682.21, representing the remainder of Matthew's $8,500 settlement. Ms. Racheau testified that she never received the $682.21 check, as it was apparently sent to Dr. Malahmeh in error. Ms. Racheau eventually retained New Iberia attorney Edward Landry to address the problems she was having with respondent. Mr. Landry testified that after Ms. Racheau retained him in December 2001, he sent respondent a letter advising of his representation and requesting a copy of Matthew's file. Respondent did not reply to the correspondence, apparently because it was not signed personally by Ms. Racheau. In February 2002, at which time respondent had no authority to represent Ms. Racheau's interests, he submitted a revised settlement disbursement statement to the court in connection with the settlement of Matthew's personal injury claim. In March 2002, respondent sent a letter directly to Ms. Racheau in which he advised that he had been unsuccessful in negotiating any discounts of Matthew's medical bills and that he had revised the disbursement statement and paid the invoices directly. In his testimony, respondent admitted that he did not sign a contingent fee contract with Ms. Racheau. At one point respondent claimed that he relied on the Court's approval for that authority because Matthew was a minor, while at another point he testified that Brandon Racheau appeared to have the apparent authority to sign for his brother. Concerning the settlement check, respondent testified that he did not recall endorsing Ms. Racheau's signature, but conceded the endorsement looks like it could be my handwriting.