Opinion ID: 1595333
Heading Depth: 1
Heading Rank: 4

Heading: Failure to Disclose Attorney Fees

Text: The referee found that Fuller failed to disclose his attorney fee arrangement on the Imprint bankruptcy and concluded that this failure violated Fed. R. Bankr.P. 2014. Rule 2014 requires that when a bankruptcy petitioner wishes to employ a professional to assist with the bankruptcy, the petitioner must apply to the court and disclose, among other things, any proposed arrangement for compensation. Fed.R.Bankr.P.2014. The referee also concluded that Fuller violated Minn. R. Prof. Conduct 1.5(a), 3.3(a), 3.4(c), and 8.4(c) & (d). To support these conclusions, the referee found that Fuller knowingly failed to disclose the source of his Imprint fees, lied to the bankruptcy court in asserting that he was not requesting fees, and misled the bankruptcy court by failing to disclose that he had a relationship with Hanson because Hanson was paying his attorney fees. Fuller does not deny that he failed to disclose his fee arrangement. However, he justifies his conduct on the ground that the prior course of conduct of Hanson's other attorney, together with the bankruptcy court's and the OLPR's tacit acceptance of that arrangement, satisfied him that it must be acceptable. Regardless of any tacit acceptance of the practice, Fuller's failure to disclose the source of his Imprint attorney fees violated the bankruptcy rules and the Rules of Professional Conduct. We agree with the referee's findings that Fuller failed to disclose or obtain approval for his bankruptcy fees and, therefore, we conclude that the referee's conclusion that Fuller violated Minn. R. Prof. Conduct 3.3(a), 3.4(c), and 8.4(c) & (d) was not clearly erroneous. Minn. R. Prof. Conduct 1.5(a) requires that attorney fees be reasonable and provides a number of factors to be considered, including time and labor required, the customary fee for such service, time limitations, and the expertise required. See Minn. R. Prof. Conduct 1.5(a). The referee made no factual findings to support his conclusion that Fuller's fee was unreasonable. The only related finding was that Hanson paid Fuller $290 a week for his services on the Imprint bankruptcy, but there is nothing in the record explaining the work performed in exchange for the fee. Therefore, we find no basis for the referee's conclusion that Fuller's fee violated Minn. R. Prof. Conduct 1.5(a).