Opinion ID: 2092308
Heading Depth: 2
Heading Rank: 4

Heading: Accounting, Fees, and Expenses

Text: 1. Weaver's wife, Marilyn, testified that she assisted Respondent on one occasion when one of his secretaries left. She testified that when she first arrived at Respondent's office, the office looked like someone had thrown a party for a four year old. She stated that there were files on the floor and documents were missing. After two days, she was able to sort the NATG files and put them into binders in chronological order. She indicated that there was no evidence that Respondent kept time sheets for the work he did on the NATG case. 2. Marilyn testified that, once Respondent hired a new secretary, she and the new secretary initiated an accounting system for Respondent, but that she was uncertain whether Respondent ever maintained the system. Marilyn also indicated that Respondent fired the new secretary when she refused to send Impero a bill for $7000. Additionally, Marilyn testified that Respondent told her to tell [Impero] he owes us $7000 and $500 in expenses. Marilyn relayed the message to Impero, who requested an accounting of the amount. 3. Despite repeated requests for accounting, Respondent did not provide Weaver or Impero with any formal accounting. 4. A bill dated 25 April 1995 to Impero from Respondent totaled $11,550, less $10,000 already received, for services rendered between 8 March 1995 and 25 April 1995. 5. In a letter dated 1 May 1995, Respondent addressed the scope of his legal representation of Impero and Weaver and his fees for services rendered. He noted his hourly fee of $150, explaining that, [i]n essence, each client is charged $75.00 per hour for all representations, even though in some instances the matters may refer only to one client, and at other instances the matters will refer to the other client. 6. Weaver testified that Impero paid Respondent $50,000 on their behalf over the course of the representation. Impero indicated in a note to Respondent that he had paid Respondent $5000, and that he was sending Respondent a $20,000 check, dated 2 May 1995. He also stated that he would send Respondent $10,000 more by July 1995. 7. In a letter dated 26 June 1995, Respondent informed Impero and Weaver that, as to the Chicago arbitration, Respondent had hired an attorney to assist him for $1000 as a retainer and at the rate of $100 per hour. Respondent also said he had hired an attorney to assist with the Texas action at the rate of $175 per hour. Additionally, Respondent indicated that he had spent approximately 168 hours on legal representation, excluding social hours, to date. He said he also had incurred $3000 in various business expenses, but acknowledged that Impero had already advanced him $32,000 to cover services rendered in the Texas action for him and the Weavers. Respondent did not provide any accounting of his hours or receipts to validate his expenses. 8. In response to Impero's concern over Respondent's fee, Respondent, in a letter dated 5 July 1995, acknowledged that there may have been a colossal misunderstanding on the issue of expenses. He went on to describe client expense accounts in general, noting that such a fund has not been established by this office as the extent of the expenses has not been known at the time of our agreement. He explained that [t]he reason for [his] restraint on that issue is that expenses in general do not depend on the client's attorney only, but is also contingent on the activities of other attorneys as well. He hoped that the year's end expenses would not exceed $15,000, but reminded Impero that the retainers for the indispensable local counsel in Chicago and Houston are set at $6000, [12] the sum considered indeed a tremendous bargain in the legal profession. Telling him that an accounting would follow, Respondent asked Impero to pay the retainer fee to the attorney in Texas in the interim. 9. On 10 July 1995, Impero answered Respondent's letter by explaining his financial situation and by setting forth the fees which he had paid to Respondent and the other attorneys to date. He noted that he had financed this endeavor 100% and that he could only commit to a maximum of an additional $40,000 on top of the $11,000 paid to [his] first attorneys, $10,000 paid to [Respondent] when [he] agreed to [Respondent's] representing [the Imperos], followed by an additional $20,000, with an additional $10,000 to be paid at a later date. Additionally, Impero stated that Biotrace, the other company in the Chicago arbitration, had paid Respondent $2500 for services rendered and another $2500 would be forthcoming. Impero also questioned Respondent's deposition fee ($1080) and travel expense reimbursement requests ($776), as Impero had already paid Respondent $2000 for deposition fees and filing fees in the Maryland action, and $2700 in travel expenses between Chicago and Houston. 10. In an unsigned letter dated 15 August 1995 to the local counsel in Texas, Respondent stated that their arrangement called for a set fee in the amount of $80.00 per hour and a contingent fee of an additional $45.00 per hour, the aggregate hourly fee being $125.00.... [with] any expenses incurred in connection therewith shall be reimbursed to your office, i.e., telephone, secretarial and paralegal services and the like. 11. In a letter to Impero dated 5 October 1995, Respondent stated: In consideration of the Retainer Agreement Provisions, I would like to request the following (a) Commitment to immediately discharge your obligation committed to in June of 1995 and pay to this office $7500.00, $7000.00 being the balance due from the committed payment of $10,000.00 and an additional balance of $500.00 advanced to defray part of the expenses; and (b) Further stipulations that you will fund all assignments with not less than $5000.00 per month to be advanced for fees and expenses on a timely basis. 12. Marilyn Weaver testified that, on or about 1 November 1996, a private investigator who worked for Respondent told her that Respondent wanted the Weavers to pay $150,000 in attorney's fees within 48-hours or Respondent would ruin Weaver and his security clearance, and would bring criminal charges against him. She also testified that Respondent had not only assured her that there would be no charge for my family, the Weavers, [13] but that she had never discussed any fee agreement with Respondent regarding his representation of her husband; in fact, she indicated that the last time she recalled retaining Respondent's services was over 20 years ago. Based upon these findings of fact, Judge North concluded that Respondent violated MRPC 1.1, 1.3, 1.4, 1.5(a), 3.1, 8.4(a), and 8.4(d) regarding his attorney-client relationship with complainant Val Weaver. Respondent excepted generally to Judge North's findings, contending that all his actions in the [Weaver] matter were taken in good faith with an aim to provide strong representation in a highly contentious legal battle. Specifically, he asserted that he had a legal basis for his actions in the Circuit Court for Charles County; that he would have addressed the deficiencies noted in the Maryland federal action in June 1995 by the U.S. District Court for the District of Maryland if the case had not settled in November; and that he was unaware of the hearing for a temporary injunction in the Texas state court when he filed the removal petition in the Maryland federal court. We address Respondent's exceptions below.