Opinion ID: 1866152
Heading Depth: 1
Heading Rank: 2

Heading: Second Count: Misrepresentations to the Court and Unreasonable Fees

Text: After respondent filed a Final Account and Amended Final Account listing attorney fees, and after hearing on the matter, the district court approved the accounting and the probate estate was closed. In June 1988, after securing new counsel, Peterson filed an order to show cause on the appropriateness of the fees. Respondent testified at the hearing to show cause before the district court that $72,500 was charged as attorney fees; that he had maintained records of his withdrawals from the trust accounts; that the fee charged was directly related to the number of hours spent on the estate; and that he had the exact numbers at his office. Respondent also stated at the hearing to show cause that he would provide the court with a record of disbursements from the trust. Respondent later filed an affidavit and accounting with the court. He did not provide the court with the number of hours spent on the estate. As the referee found, and respondent concedes, the accounting with the court was false and misleading: The accounting did not show that withdrawals were made by Visa charges against the CMA. The accounting did not show that some disbursements were made to respondent or Gray individually, instead representing that all withdrawals from trust were to the law firm business account. The accounting also did not show transfer of funds from the trust account to the CMA account or to the Norwest Bank savings account although respondent testified he did not believe this omission was false or misleading. Respondent concedes that these misrepresentations to the court violated Minn.R. Prof.Conduct 3.3(a)(1), (4), 8.4(d). After the hearing to show cause, the court held that the attorney fees of $72,500 were excessive and unreasonable. The court ordered respondent to refund $36,250 to Peterson. In the court's findings of fact and conclusions of law, it found that the fees were neither justified by the time and labor spent on the project nor warranted by the experience and expertise of respondent. The court found that the fees were in excess of that which is customarily charged for such services. After the order, respondent and Peterson, who was represented by independent counsel, executed a settlement whereby the order was compromised requiring a refund by respondent to Peterson of $15,000 in exchange for full release of all claims. Respondent concedes, at least to the extent of the $15,000 settlement, that the fees were excessive and unreasonable in violation of Minn.R.Prof.Conduct 1.5