Opinion ID: 2518069
Heading Depth: 1
Heading Rank: 9

Heading: Count 1: violation of former RPC 1.5(a)

Text: ¶ 27 In count 1, the WSBA alleged that Preszler charged an unreasonable fee in violation of former RPC 1.5(a), which provides, A lawyer's fee shall be reasonable. The hearing officer found the WSBA met its burden of proof, and Preszler does not dispute this finding. ¶ 28 Applying step one of our sanctions analysis, we begin with the nature of the duty violated. A violation of former RPC 1.5(a) is a breach of an ethical duty owed as a legal professional, and so the presumptive sanction is supplied by standard 7.0. The severity of the presumptive sanction depends on the lawyer's state of mind at the time of the conduct and the gravity of the harm caused: 7.1 Disbarment is generally appropriate when a lawyer knowingly engages in conduct that is a violation of a duty owed as a professional with the intent to obtain a benefit for the lawyer or another, and causes serious or potentially serious injury to a client, the public, or the legal system. 7.2 Suspension is generally appropriate when a lawyer knowingly engages in conduct that is a violation of a duty owed as a professional, and causes injury or potential injury to a client, the public, or the legal system. 7.3 Reprimand is generally appropriate when a lawyer negligently engages in conduct that is a violation of a duty owed as a professional, and causes injury or potential injury to a client, the public, or the legal system. 7.4 Admonition is generally appropriate when a lawyer engages in an isolated instance of negligence that is a violation of a duty owed as a professional, and causes little or no actual or potential injury to a client, the public, or the legal system. ABA STANDARDS at 14. ¶ 29 The hearing officer found that Preszler knowingly charged an unreasonable fee for the negligible amount of work he did in Mrs. Gerrard's personal injury claim and that Preszler acted [w]ith the intent of benefitting himself at the expense of creditors in the Gerrard bankruptcy. DP at 25, ¶ 51. The hearing officer concluded that standard 7.1 dictated a presumptive sanction of disbarment. The Board agreed that Preszler acted knowingly, but the Board found the record supported a finding of only an injury or potential injury to Kinnie, but not a serious or potentially serious injury. DP at 39. The Board concluded standard 7.2 called for a presumptive sanction of suspension. Preszler argues that both the hearing officer and the Board are wrong and that the appropriate presumptive sanction for count 1 is reprimand or admonishment. Preszler claims that he did not know the fee was unreasonable, so at most he was negligent. Preszler does not challenge the finding that he caused an injury or potential injury, but the WSBA contends that the potential injury to Kinnie was serious and that the presumptive sanction is therefore disbarment. ¶ 30 The ABA Standards define `[k]nowledge' as the conscious awareness of the nature or attendant circumstances of the conduct but without the conscious objective or purpose to accomplish a particular result. ABA STANDARDS Definitions at 17. An attorney's knowledge may be inferred from the facts. See In re Disciplinary Proceeding Against Anschell, 141 Wash.2d 593, 611, 9 P.3d 193 (2000). `Negligence' is the failure of a lawyer to heed a substantial risk that circumstances exist or that a result will follow, which failure is a deviation from the standard of care that a reasonable lawyer would exercise in the situation. ABA STANDARDS Definitions at 17. An attorney's mental state is a factual determination and the hearing officer's finding is given great weight. Longacre, 155 Wash.2d at 744, 122 P.3d 710. [S]ometimes there is a fine line between negligence and knowledge. In re Disciplinary Proceeding Against Stansfield, 164 Wash.2d 108, 127, 187 P.3d 254 (2008). Because the hearing officer is in the best position to determine the attorney's state of mind, we defer to the hearing officer's findings unless it is not supported by substantial evidence. Longacre, 155 Wash.2d at 744, 122 P.3d 710. ¶ 31 Preszler claims he did not knowingly seek to charge an unreasonable fee. Opening Br. of Resp't Preszler at 22. Preszler does not seriously argue that the fee was actually reasonable; rather, he cites several reasons for him having a good faith belief that the fee was reasonable. He says the Gerrards pressured him to take the case and treated him like their attorney, and he points out that he participated in the settlement process. He felt he was indemnifying the Gerrards by risking malpractice, and he contends the statute of limitations prevented further negotiations or inquiry into Kinnie's injuries. Finally, in his mind, the contingency fee agreement was illusory or informal because he knew that the bankruptcy trustee would have to agree to the fee. ¶ 32 But the issue is not whether Preszler's objective was to charge an unreasonable fee. Preszler confuses knowledge with intent. Unlike with intent, to act with knowledge, Preszler did not need to be acting with the conscious objective or purpose to accomplish a particular result. ABA STANDARDS Definitions at 17. Standards 7.1 and 7.2 require only that a lawyer knowingly engages in conduct that is a violation of a duty owed as a professional. The knowledge element relates to the attorney's underlying conduct, not to the legal conclusion that the conduct is an ethical violation. As we said in In re Disciplinary Proceeding Against Egger, 152 Wash.2d 393, 416, 98 P.3d 477 (2004), consciousness that particular conduct violates the RPCs is not a prerequisite for a finding of knowledge. To prove that Preszler acted with knowledge, the WSBA needed to show only that he had the conscious awareness of the nature or attendant circumstances of [his] conduct. ABA STANDARDS Definitions at 17. Preszler's claim that he believed the fee was reasonable is irrelevant. We rejected this same argument in In re Disciplinary Proceeding Against Brothers, 149 Wash.2d 575, 585, 70 P.3d 940 (2003), where an attorney who collected an unreasonable contingency fee claimed that he did not know his fee would be unreasonable, and therefore he could not have acted with knowledge. Because he knew that he had done very little legal work for a very large fee, we concluded he was consciously aware of the nature of his conduct. Id. Preszler simply needed to be consciously aware of the circumstances that made his fee unreasonable. ¶ 33 Substantial evidence supports the hearing officer's finding that Preszler acted with knowledge. At the August 18, 2003, meeting, Preszler insisted that Kinnie sign an intake form in which she provided basic contact information, noted the date of the car crash, and acknowledged the disclaimer, stated in bold lettering above her signature, I recognize that I am not a client until I sign a fee agreement and have paid a retainer. Ex. 1 (boldface type omitted). Preszler testified that at the August 19, 2003, follow-up meeting, he said to Kinnie, I do not want to be involved with this case. Tr. at 830. Substantial evidence established that before August 22, 2003, the Gerrards, the adjuster, and Preszler all understood that Preszler's actions were courtesies and that Preszler volunteered to make phone calls and receive faxes without representing the Gerrards. ¶ 34 Preszler testified, however, that at the August 22, 2003, meeting, Kinnie wanted Preszler to represent her and that she came up with the idea that Preszler could be paid with a portion of the settlement that would otherwise go to the creditors. Kinnie offered testimony contradicting Preszler's, saying that it was Preszler who asked her to enter the contingency fee agreement and convinced her that he deserved the fee. Kinnie testified that she wanted to be sure the fee could not be used to assist with the Gerrards' bankruptcy plan and agreed to the fee only after consulting with her husband. The hearing officer observed all the witnesses and is the best judge of their veracity. Kinnie's testimony supports the officer's finding of knowledge. Further, the identity of the person who suggested the fee has no bearing on Preszler's knowledge of the nature of his conduct, because a client's acquiescence to an unreasonable fee does not absolve misconduct. Egger, 152 Wash.2d at 407, 98 P.3d 477. Preszler acknowledges that he did very little work. He knew he was charging a one-third contingency fee for a case where no contingency existed. The case had already settled when Preszler handwrote a guarantee that Kinnie would receive $17,425. These facts provide substantial evidence to support the hearing officer's inference that Preszler was aware of the nature of his conduct and the circumstances. ¶ 35 Next, we consider the actual or potential injury suffered by Kinnie as a result of Preszler's violation of former RPC 1.5(a). The procedural record is unclear on this point. The hearing officer applied standard 7.1 to conclude the presumptive sanction is disbarment, but his findings do not expressly state that he thought the injury or potential injury was serious. The hearing officer stated only that Preszler's action could have resulted in loss to the Gerrards if Mr. Hames had not intervened. DP at 25, ¶ 51. The Board found the record supported an ordinary actual injury or potential injury rather than a serious actual or potential injury. DP at 39. The WSBA argues the Board erred. ¶ 36 We conclude substantial evidence could support a finding of either ordinary or serious injury. On one hand, the evidence supports the Board's finding of ordinary actual or potential injury because the amount of money involved was not too high. On the other hand, evidence also supports the finding that Preszler's misconduct caused a serious actual or potential injury because Kinnie repeatedly asked Preszler if there was some way the money could be used in the bankruptcy plan and Preszler knew that the Gerrards were on a tight budget and in bankruptcy. Without a clear statement from the hearing officer, however, we are reluctant to find that the actual or potential injury was serious. ¶ 37 Because Preszler acted with knowledge and caused an ordinary actual or potential injury, we apply standard 7.2 and conclude suspension is the presumptive sanction for count 1.