Opinion ID: 2040056
Heading Depth: 1
Heading Rank: 4

Heading: recommendations and finding

Text: In this case the Disciplinary Commission of the Supreme Court of Indiana contends that the Respondent charged and collected from one Bette Jane White for representing her in a divorce case an illegal or clearly excessive fee in violation of DR 2-106(A) and (B) of the Code of Professional Responsibilities for Attorneys at Law, Burns Indiana Statutes Annotated, Court Rules, Book 2, pps. 692-693, which reads: DR 2-106. Fees for Legal Services.  (A) lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee. (B) A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee. Factors to be considered as guides in determining the reasonableness of a fee include the following: (1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly. (2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer. (3) The fee customarily charged in the locality for similar legal services. (4) The amount involved and the results obtained. (5) The time limitations imposed by the client or by the circumstances. (6) The nature and length of the professional relationship with the client. (7) The experience, reputation, and ability of the lawyer or lawyers performing the services. (8) Whether the fee is fixed or contingent. The total fee charged by the Respondent was $19,900, which was made up as follows: (a) $200.00 paid by the wife at or near the time the attorney was employed by the wife; (b) $4,700.00 paid by the husband pursuant to an order entered by a successor Special Judge, in whom retained jurisdiction was vested to hear and determine the property rights of the parties (including alimony) in the original Special Judge's decree granting the husband a divorce. (c) $15,000.00 paid by the wife out of the husband's initial payment of $32,622.25 on the judgment awarded the wife. The services rendered by the Respondent are described in his testimony and in the findings of the Hearing Officer hereinabove set forth, and included consultations with the client, the preparation and filing of pleadings, discovery proceedings and depositions as to the nature and extent of the plaintiff's (husband's) property, negotiations as to settlement of the defendant's (wife's) alimony and property rights, the trial of the divorce case in the Gibson Circuit Court, subsequent research and consideration of the situation resulting from the decree entered by the original Special Judge in the case, a subsequent trial of the case before the successor Special Judge of the question of alimony and property division, and a trip to Vincennes to argue matters before a successor Special Judge. The recovery for the client in the case was approximately $100,000.00 on a present value basis. The increase over the offer was approximately $60,000.00 on a present value basis. There was no evidence introduced at the hearing in this case as to what an appropriate fee would have been in the case, nor was there any testimony that the fee charged was clearly excessive. By this is meant that no person testified who was qualified as an expert on the matter of attorneys fees customarily charged in the Gibson Circuit Court or in any other court, and no opinions were offered or admitted into evidence as to the proper charge for the services rendered by the Respondent in the case. The Hearing Officer does not consider the fact that Respondent, after the disciplinary proceeding was filed and after he had consulted counsel, refunded the $15,000 fee constituting the element (c) of his charge, as set forth above, to the client as proof that the fee was clearly excessive. The two remaining grounds upon which proof that the fee charged in this case was clearly excessive could be: (1) A consideration of the fee by the Hearing Officer under the evidence and the criteria contained in DR 2-106(B), or (2) Consideration of the fee allowed by the successor Special Judge in the judgment awarding the defendant (wife) alimony and the right to certain property. In considering the first ground immediately hereinabove set forth, the Hearing Officer is aware of the holding of the courts in Indiana that a judge has the power to make an award of attorneys fees (where proper) without any evidence whatsoever by merely relying upon his own knowledge of what a reasonable attorney's fee should be. In this connection the Hearing Officer has attempted to review every case in the State of Indiana which might have any relevance upon the matter of the fee charged in this case. Very few cases in Indiana contain information about the reasonableness of fees in divorce cases. We do have one case which has some relevancy by way of dicta. In Barelli v. Levin, 144 Ind. App. 576, 247 N.E.2d 847 (1969) the Appellate Court of Indiana, in holding a contingent fee contract in a divorce case void as against public policy, stated: In holding the fee contract in the case at bar is void, we are making no judgment as to its fairness or how it should be interpreted. It is void simply because it violates the public policy of this State. The contract in that case called for a 15% contingent fee. The services of the wife's attorney from the report of the case may be considered mainly as negotiating the property settlement. The evidence in the trial court in that case included the minimum fee schedules of several bar associations. ... In each schedule introduced, divorce fees are stated in terms of the percentage of the amount recovered. The percentages range upward from a fixed minimum fee plus 5% of the first $60,000 (in the schedule suggested in 1965 by a committee of the Indiana State Bar Association) to a straight 25% (in the schedule of the Gary, [Indiana] Bar Association) of the entire recovery. The Schedule of the Hammond [Indiana] Bar Association ... calls for 15%, Barelli v. Levin (supra) page 581, 247 N.E.2d page 849. This Hearing Officer knows of no other expression of the courts of last resort in this state commenting on the reasonableness of fees in divorce cases, and although the Barelli opinion is not of much help, it does not criticize the amount of the fee in that case. Just why the Appellate Court made a statement of the kind quoted above in the Barelli case can only be the subject of a guess, but it at least declined to say that a 15% contingent fee was unfair. If this, in fact, was the feeling of the Appellate Court in the Barelli case, it is difficult to see how a Hearing Officer (although of forty-three years total experience in the matter) can categorically state that a fee of approximately 20% of the recovery in a divorce case of the type involved in this proceeding is clearly excessive. As to the second ground under which the fee might be considered as excessive, that is, the consideration of the fee allowed by the successor Special Judge, several facts should be taken into consideration. First, no authority has been submitted to the Hearing Officer that it is unethical under the rules in the State of Indiana for an attorney to charge a fee in addition or in excess of a fee allowed by the court where he feels that his services are thereby insufficiently compensated. In this case the evidence is that the attorney at some time during the pendency of the matters advised the client that if he felt that the fee allowed by the court was insufficient, he would charge her an additional fee. The award made by the successor Special Judge, as far as the evidence before this Hearing Officer is concerned, was made without any request therefor, was not based upon any pleading on file in the case, had no testimony as to the services performed upon which it could be based, and was less than the fee provided by any bar schedule that this Hearing Officer has had access to or information about. If this fee was to be a fee in full for the services of the Respondent, the Disciplinary Commission no doubt could have established such an intent by the testimony of the successor Special Judge, but such testimony was not forthcoming before the Hearing Officer. By reason of the foregoing, the undersigned, the Hearing Officer in this cause, now within thirty days after the conclusion of the hearing as the date of such conclusion was fixed by agreement of the parties in this cause, determines that misconduct on the part of the Respondent has not been proven by a preponderance of the evidence, and now recommends to the Supreme Court that this case be disposed of by the same being dismissed, and that the request of the Disciplinary Commission that the Respondent be publicly reprimanded for his conduct in this case be denied. Dated this 6th day of November, 1973. (s) Paul R. Schnaitter Hearing Officer and Judge On November 30, 1973, the Disciplinary Commission filed a Petition for Review. This Petition is overruled. And now the Court being duly advised in the premises accepts the Findings of Fact and the Recommendations of the Hearing Officer. The cause is accordingly dismissed.