Opinion ID: 2611450
Heading Depth: 1
Heading Rank: 2

Heading: the disciplinary court's rulings

Text: The disciplinary court ruled that the contingency fee arrangement violated rules 1.4(b) and 1.5 of the Rules of Professional Conduct. Rule 1.4(b) requires attorneys to make explanations adequate to assist clients in making informed decisions, [4] and rule 1.5 prohibits clearly excessive fees. [5] The court held that Babilis had violated rule 1.4(b) by failing to explain the capacity in which he was acting. Babilis had essentially set himself up as the attorney for Thomas Kerns both in Kerns' capacity as a claimant and in Kerns' capacity as personal representative of the estate  a clear conflict of interest. The disciplinary court also ruled that Babilis charged a clearly excessive fee. Unable to decide the capacity in which Babilis acted, the disciplinary court addressed this issue in the alternative. If Babilis were acting as personal representative of the estate, then the contingency fee was unlawful because he was entitled by statute to a reasonable fee, see Utah Code Ann. § 75-3-718; Utah Code J. Admin. Rule 6-501, an amount far less than what he actually claimed. [6] If, on the other hand, Babilis acted as attorney for Thomas Kerns in his capacity as one having an inheritance interest, then according to the disciplinary court, a contingency fee was at least theoretically justifiable. Nevertheless, the disciplinary court held that the contingency fee was excessive because there was little or no risk that Thomas Kerns would not recover as a claimant. The disciplinary court also found that Babilis had violated rule 1.13, [7] which requires the safekeeping of client property, because Babilis took funds from the Kerns estate account without proper authorization and used those funds for his own benefit. He violated rule 8.4(c), which prohibits dishonest dealings, fraud, deceit, or misrepresentation, [8] because he converted and misappropriated estate funds, billed for nonexistent costs, and charged paralegal time as his own. He violated rule 7.1(a), which prohibits false or misleading communications about the lawyer's services, [9] because he falsely represented the extent of his probate experience. He violated rule 3.3, which requires candor toward any tribunal, by making false material representations to the probate court as to the extent of the estate's assets and as to the existence of time records. [10] The disciplinary court suspended Babilis from the practice of law for three years, the maximum term of suspension, and awarded the Bar costs of $4,358.89. The court refused to award restitution to the Kernses because of their prior settlement agreement with Babilis. On this appeal, the Bar argues that the court misapplied the Standards for Imposing Lawyer Sanctions in ordering suspension rather than disbarment. The Bar asserts that the disciplinary court improperly selected suspension as the presumptively applicable penalty and, in dealing with aggravating and mitigating factors, improperly considered as mitigating factors the delay in bringing the case to trial and Babilis' personal and emotional problems. The Bar also urges this Court to adopt a bright line rule that disbarment is the appropriate sanction for intentional misappropriation of client funds absent compelling mitigating factors. Finally, the Bar appeals the court's refusal to award restitution. On his cross-appeal, Babilis contends that under the revised disciplinary rules, the Bar has no right of appeal to this Court from the disciplinary court's ruling and that a three-year suspension was too severe.