Opinion ID: 1582319
Heading Depth: 1
Heading Rank: 1

Heading: Schoitz Memorial Hospital.

Text: In June of 1978, Schoitz Memorial Hospital retained respondent to assist it in the collection of delinquent accounts. The party acting for the hospital in initiating this transaction was assistant hospital administrator Claire Canfield. It appears without dispute that the fee arrangement agreed to by Mr. Canfield and respondent at this time was a percentage fee fixed at twenty-five percent of the amount collected. Between June of 1978 and May of 1980, the total sum of $3258.79 was paid to respondent by obligors of these delinquent accounts and, in addition, the sum of $2915.76 was paid directly to the hospital by said obligors. It is not disputed that the base upon which respondent's percentage fee was to be computed is the sum of these figures or $6174.55. Prior to the time of the filing of the complaint against respondent in this disciplinary proceeding, the only remittance made by respondent to the hospital for its share of the account payments which had come into his hands was the sum of $556.13 remitted to the hospital on November 10, 1978, with an explanation that it represented seventy-five percent of collections which had been received up to that time. In mid-November of 1978, Mr. Canfield left his employment with the hospital. His successor arranged to have the Waterloo Credit Bureau handle its collections, and on September 27, 1979, wrote to respondent advising him that he would no longer be handling the hospital collection business. This letter requested that hospital accounts turned over to respondent for collection now be delivered by him to the credit bureau, together with the pertinent files. The hospital offered in this letter to reimburse respondent for any expenses he had incurred in the handling of the accounts which were to be transferred to the credit bureau. Subsequently, Mr. Raymond Burfiend, associate administrator of the hospital, requested an accounting from respondent with respect to hospital funds, if any, in his possession as a result of his collection efforts. When the requested accounting was not forthcoming, the files were not transferred to the credit bureau, and respondent neglected to return Mr. Burfiend's telephone calls, the hospital retained another Waterloo attorney to attempt to obtain respondent's cooperation. Beginning in April of 1980, that attorney attempted to obtain from respondent the desired accounting and transfer of the files with no success. After several oral and written demands were ignored, he contacted the Client Security and Attorney Disciplinary Commission about the matter. That contact resulted in a preliminary audit of respondent's trust account by that commission on May 7, 1980. When questioned by the commission auditor, respondent stated that he had kept the hospital informed of the status of its accounts by periodic telephone calls to a hospital employee named Elinor Kock. Respondent told the auditor that during these conversations, he was advised by Ms. Kock that several obligors of the accounts respondent was collecting had made payments directly to the hospital; that when these payments were reconciled with the sums paid to respondent, it resulted in the hospital owing him money. When pressed for an accounting of the payments upon which this assertion was based, respondent sought to support such claims by means of a fee entitlement of fifty percent of amounts collected. When pressed by the auditor for documentation of a fifty percent fee agreement with the hospital, respondent said that he had a letter to that effect but could not locate it. In contrast to respondent's claims to the auditor, Elinor Kock denied that respondent had ever discussed the status of these accounts with her, and the hospital produced a letter confirming a twenty-five percent fee arrangement with respondent. Following the May 7, 1980, preliminary audit by the Client Security and Attorney Disciplinary Commission, that commission and the hospital, each working independently of the other, determined that respondent, after being credited for fees of twenty-five percent of amounts collected owed the hospital either $1159.12 or $1061.49, depending on how certain out-of-pocket advances by respondent were credited. The commission audit of respondent's trust account reflected that he had retained none of the funds collected for the hospital other than the $556.13 which was transmitted to the hospital on November 10, 1978, and for which credit was given in arriving at the final amount owed. On May 21, 1981, five weeks after the present complaint was filed against the respondent, he remitted the sum of $1061.49 to Schoitz Memorial Hospital. At the hearing before the Grievance Commission, the respondent testified that the percentage fee arrangement with the hospital had been modified from twenty-five percent to fifty percent by an oral agreement between himself and Mr. Canfield in November of 1978. When pressed for the precise time of such agreement, respondent stated that it occurred between the time of his November 10, 1978, accounting to the hospital reflecting a twenty-five percent fee entitlement and Mr. Canfield's departure from the hospital staff in mid-November of 1978. Mr. Canfield testified at the hearing and denied that the twenty-five percent fee arrangement was modified. In addition, some internal records kept in respondent's law office subsequent to Mr. Canfield's departure from the hospital staff continued to reflect a twenty-five percent fee arrangement on Schoitz Memorial Hospital accounts.