Opinion ID: 1653481
Heading Depth: 1
Heading Rank: 1

Heading: the alexander succession matter

Text: The following specifications of misconduct were made: That you were retained originally by Foster Cambre, in connection with his claim to land belonging to his deceased uncle, Camille Alexander. Said land was purchased by Camille Alexander between his first and second marriage and devolved to Camille Alexander's second wife, and then to other parties. Your uncle, Foster Cambre, contended that the property in question was the separate property of his uncle, Camille Alexander. Thereafter, you were retained by approximately 11 of 26 heirs claiming ownership of said property. You undertook to represent the group of heirs on an hourly basis to be paid from the proceeds from any litigation. The litigation resulted in the 26 heirs receiving one half interest in the property [in] indivision with two defendants. The two defendants purchased one parcel and agreed to list the other parcel of the sale. The sale of said parcel was on June 22, 1984, and yielded $50,000.00 in sales proceeds which you retained as part of your fee. Your [sic] charged the heirs which you represented $52,445.19, leaving a balance owed to you in the amount of $2,445.19 after said sale. The Committee is of the opinion that the above and foregoing conduct is in violation of Disciplinary Rules 1-102 and 2-106(A) and (B) of the Code of Professional Responsibility of the Louisiana State Bar Association. [1] That you failed, refused and neglected to advise the heirs of the receipt of $50,000.00 and failed, refused and neglected to furnish an accounting to the heirs upon receipt of the $50,000.00 sales proceeds. That you commingled and converted $50,000.00 to your own use as evidenced by your receipt of the sum of $50,000.00, your refusal to furnish an accounting to the heirs upon receipt of said funds and your failure to place the sum of $50,000.00 in a trust account upon receipt of same. The Committee is of the opinion that the above and foregoing conduct is in violation of Disciplinary Rule 1-102 and Disciplinary Rule 9-102(B)(3) of the Code of Professional Responsibility of the Louisiana State Bar Association. [2] The record establishes that in April of 1979, Foster Cambre contacted Gross concerning the Alexander Succession matter. Cambre believed that he and several other individuals were entitled to an interest in certain parcels of land involved in the Succession of Camille Alexander. Alexander acquired a one-half interest in the property in dispute between his first and second marriages. The property was purchased between 1902 and 1904. Later, after his marriage to his second wife, Arcise Jacob, he acquired the remaining one-half interest in the disputed property. Only this onehalf interest was community property. Alexander died intestate on May 10, 1961. He was survived by his wife. Alexander had no ascendants or descendants. On January 6, 1964, his wife died testate, leaving all of her property to Mr. and Mrs. Lawrence J. Keating. The successions of Mr. and Mrs. Alexander were combined and settled in one proceeding. The judgment of possession that resulted was rendered May 28, 1964. Cambre, a collateral heir, sought to be recognized as a legal heir of Camille Alexander with a property interest in the separate property that Mr. Alexander purchased prior to his marriage to Arcise Jacob. Respondent researched and verified Cambre's claim. It was determined that there were as many as 27 Alexander heirs with a potential claim to the succession property. Gross met with Cambre and several other heirs in September 1979, and agreed to accept the case on an hourly fee basis at his prevailing rate which was then $50.00 per hour, with a $5,000.00 retainer in advance. [3] Cambre agreed to contact all of the potential heirs in an effort to collect the retainer. Only $3,500.00 of the retainer fee was collected, with several heirs indicating that they did not wish to participate in the proceedings. After accepting the case, Gross assigned Tony Tillman, an attorney employed by respondent, the task of researching and preparing the case. Tillman described some of the efforts he made to this end. He was required to conduct title searches to determine what property was owned by Alexander and the disposition of that property from 1902 to the present. There were issues of prescription and the question of the proportional interest of each heir in the disputed property. Tillman estimated that he spent 452 hours on this case, but believed this to be a conservative estimate. John L. Diasselliss III was also assigned to work on this case. He also stated that his estimate of 34 hours was a conservative estimate. Gross estimated his own time at 160 hours. The litigation of this matter was extensive and complicated. During about five years of litigation, the succession proceeding progressed to the appellate level twice and had writs denied by this court once. See Keating v. Cambre, 407 So.2d 787 (La. App. 4th Cir.1981); Keating v. Cambre, 446 So.2d 326 (La.App. 5th Cir.), writ denied 446 So.2d 1222 (La.1984). At the conclusion of these proceedings, Gross prevailed and the 26 heirs were declared owners of a one-half interest in the disputed property. Keating, supra at 329. The land was appraised as follows: Parcel one was valued at either $33,600.00 or $15,000.00 (the lower value being due to a lease on the property which ran through July of 1993); Parcel two was valued at $25,000.00; Parcel three was valued at $15,500.00; and Parcel four was valued at $85,000.00. The clients' half interest in parcels one and four were sold for $50,000.00. [4] The sale was funded by two $25,000.00 cashier's checks dated June 18 and June 20, 1984. These checks were endorsed to Gross as attorney for the heirs of Camille Alexander, pursuant to a provision in the act of sale signed by all heirs authorizing payment of the sale proceeds to Gross. The proceeds were not placed in a trust account and were deposited in respondent's operating account as payment of his fee. Gross had not kept contemporaneous time records, but reviewed his files, talked to Tillman, and decided the fee he had earned was at least $50,000.00. According to Gross, he discussed the fee with Foster Cambre, who approved the amount. Almost two years later, by letter dated February 19, 1986, eight of the heirs demanded payment of any money held by respondent. On April 17, 1986, respondent mailed a statement to the heirs, which billed $56,000.00 in attorney's fees. The proceeds from the sale and the $3,500.00 retainer were deducted from this amount, leaving a balance of $2,500.00 owed by the heirs. Several of the heirs filed a complaint with the Bar Association. Gross prepared a more detailed statement after receiving a letter from the Committee. He admits that contemporary time sheets were never kept and that the bill was devised from memory. Respondent's reconstruction of the time spent by him and his associates totals over 640 hours. His regular hourly rate increased over the years during which the litigation continued. The fee charged would calculate out at about $83.00 per hour for the hours shown. Respondent is accused of charging a clearly excessive fee and commingling and converting his clients' funds. We will first consider the allegation concerning excessive fees. The issue is whether, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee charged by Gross is in excess of a reasonable fee. To determine this, various factors must be considered. See DR 2-106, Louisiana Code of Professional Responsibility. The facts indicate that Gross was entitled to a substantial legal fee for his work in this matter. The legal questions involved were novel and complicated, and the title research was complicated and time-consuming. A high degree of skill was required and demonstrated by Gross and his associates. Gross was both diligent and competent in his representation, although the prospect of a favorable outcome was doubtful. He prevailed after protracted and exacting litigation, obtaining an interest of over $70,000.00 for his clients. This court also takes notice of the peculiar fee arrangement in this case. Although the parties entered into an hourly fee agreement, only $3,500.00 of the $5,000.00 retainer fee was paid to respondent. It is evident that no further fee would have been paid by the clients except out of recovered assets. The payment of fees in this case was clearly contingent upon a successful resolution of the case. Respondent faced the considerable risk of receiving only $3,500.00 for the exhaustive legal services provided to his clients. This risk is magnified by respondent's belief that it was doubtful his clients would prevail in this litigation. Based upon the combination of these facts, we find that although the fee charged was substantial and perhaps not fully documented, it was not clearly excessive as defined in the Disciplinary Rule. The violation of DR 2-106 was not established by clear and convincing evidence. When it is established that an attorney fails to keep his client's funds in an identifiable trust account separate from the attorney's own funds, the burden is placed on the attorney to show that there was no conversion of the client's funds. Louisiana State Bar Association v. Williams, 512 So.2d 404 (La.1987). Gross admitted that the proceeds in question were never deposited into a trust account. He candidly acknowledged that he took the entire $50,000.00 as a fee. Respondent claims that he had earned the fees and, therefore, no conversion took place. He also claims that Foster Cambre, who was the leading representative of the client group approved the amount of the fee. Although this argument has some merit, it does not relieve him of his duties under DR 9-102(A)(2) of the Rules of Professional Responsibility. This rule provides that funds belonging in part to a client and in part to the lawyer or law firm must be deposited into a trust account, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally resolved. Although respondent may have been entitled to a fee equal to the sale proceeds, he had a duty to place the proceeds in a trust account and notify all clients of his intention to retain the funds as a fee. Respondent failed to do this initially. Once he became aware that his clients disputed his entitlement to the full $50,000.00 in fees, respondent had the duty to place any disputed amount in a trust fund until the dispute was finally resolved. We find that respondent violated DR 9-102(A)(2).