Court Opinion

ID: 9701909
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:43:08.294604+00
Date Added: 2024-06-11T18:21:30.692004
License: Public Domain

*511
Levine, J.,

dissenting:

The majority concludes today that even if an attorney’s fee of over $105,000 is unreasonable in this note collection case, the Court will not exercise its power to lower that fee to a reasonable level absent a clear showing of overreaching. Since I believe the Court does possess such power and should exercise it here, I dissent.
The Court tacitly concludes that a contract provision providing for an attorney’s fee should be treated in the same manner as any other provision in a contract; for example, an attorney’s fee provision is void only if there is clear evidence of overreaching. I believe, however, that provisions for attorneys’ fees fall in a separate category because of our supervisory role over attorneys, who are, after all, officers of the Court. The majority, of course, recognizes that because attorneys are officers of the Court, the Court possesses the power to uphold the highest standards of professional conduct and to protect the public from imposition by the practitioner. This power should be exercised when necessary to merit “the respect and confidence of.. . the society which [an attorney] serves.” American Bar Association, Code of Professional Responsibility, Preamble (1975). Achievement of this objective compels, in circumstances such as are present here, special treatment for contracts for attorneys’ fees.
The Code of Professional Responsibility provides the touchstone against which we should measure an attorney’s conduct:
“(A) 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... .” Code of Professional Responsibility, Disciplinary Rule 2-106 (A), (B), Maryland Rules App. F (emphasis added).
*512These rules are mandatory in character and state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action. American Bar Association, Code of Professional Responsibility, Preliminary Statement (1975). The majority apparently would permit attorneys to collect excessive fees, while not permitting them to enter into unconscionable agreements for excessive fees. I doubt that the public will draw such fine distinctions in assessing its confidence in attorneys.
The Court in the past has interposed its disapproval of an attorney’s fee exceeding $100,000. In Meyer v. Gyro Transp. Systems, 263 Md. 518, 530-33, 283 A. 2d 608 (1971), Meyer appealed entry of a confessed judgment against him on a note, but did not contend that entry of costs of $101,831.25 as attorney’s fee was error. The note provided for payment of reasonable attorney’s fees, but the issue of whether the amount which the creditor asked the court clerk to enter was reasonable arose only at oral argument. This Court affirmed the judgment but, remanded for a determination of reasonable attorney’s fees. Since the Court does not ordinarily decide any point not plainly appearing to have been tried and decided below, Rule 885, the extraordinary action taken there reflects our attitude toward awarding excessive attorney’s fees.
On an earlier occasion this Court disbarred an attorney for using slugs in parking meters on the grounds that such conduct is “prejudicial to the administration of justice.” Maryland Code (1957, 1976 Repl. Vol.) Art. 10, § 16. Fellner v. Bar Ass’n, 213 Md. 243, 247, 131 A. 2d 729 (1957). I question whether exacting a fee which, as the majority states, is as “grossly disproportionate to the amount of work involved” as this one is not as likely to destroy public confidence. Our duty to foster public confidence in the administration of justice therefore warrants our intervention here, to the extent that we should remand the case for determination of a reasonable fee.
I see yet another defect in the majority’s approach. The Court concludes that an indemnity contract requires the debtor to pay all expenses that the creditor actually incurs, *513rather than those that he reasonably incurs. The majority reaches this conclusion in reliance on Weiner v. Swales, 217 Md. 123, 126, 141 A. 2d 749 (1958), Legum v. Farmers Nat. Bank, 180 Md. 356, 360-61, 24 A. 2d 281 (1942), and Webster v. People’s Loan Etc. Bank, 160 Md. 57, 62-63, 152 A. 815 (1931). None of those cases, however, decided that issue. Weiner simply held that an attorney who collects his own note may not collect any attorney’s fee. Legum resolved an evidence question and now stands for the proposition that a judgment for attorney’s fees may be entered without production of any evidence that the creditor has already paid the attorney. Finally, Webster held that a creditor in possession of both mortgages and a confessed judgment note may pursue the remedy on the note without first exhausting the remedy on the mortgages. The Court then held that attorney’s fees should be taxed as costs rather than be included in the judgment. Although these cases correctly viewed stipulations for attorneys’ fees as contracts of indemnity, none stands for the proposition for which they are cited by the majority.
A requirement of reasonableness for attorney’s fees, moreover, has been widely, if not uniformly, adopted in cases where notes or contracts provided for fixed or percentage fees.1 Since, it must be remembered, the legal profession “is a branch of the administration of justice and not a mere money-getting trade,” American Bar Association, *514Canons of Professional Ethics, Cannon 12 (1908), I would hold that a note which stipulates that a fixed percentage shall be recovered from the debtor as attorney’s fees may be enforced only to the extent of the reasonable fees necessarily incurred by the creditor to collect his debt.

. See, e.g., Waterman v. Sullivan, 156 Colo. 195, 397 P. 2d 739, 741 (1964); American Service and Supply Company v. Raby, 348 Mass. 720, 206 N.E.2d 94, 96 (1965); Campbell v. Worman, 58 Minn. 561, 60 N. W. 668, 669 (1894); Bergen Builders, Inc. v. Horizon Developers, Inc., 44 N. J. 435, 210 A. 2d 65, 66 (1965); Equitable Lbr. Co. v. IPA Land Devel. Corp., 38 N.Y.2d 516, 344 N.E.2d 391, 381 N.Y.S.2d 459, 463-64 (1976); Coley v. Coley, 94 S. C. 383, 77 S. E. 49, 50 (1913); Dole v. Wade, 510 S.W.2d 909, 911-12 (Tenn. 1974); Kuper v. Schmidt, 161 Tex. 189, 338 S.W.2d 948, 950 (1960); Grand Piano Co. v. Lewis, 179 Va. 281, 19 S.E.2d 86, 88-89 (1942); Home Bank v. Becker, 48 Wis. 2d 1, 179 N.W.2d 855, 863 (1970). See also 5 Williston, Law of Contracts § 786 at p. 747 (3d ed. Jaeger 1961); 2 Speiser, Attorneys’ Fees § 15.44 (1973); Annots. 18 A.L.R.3d 733, 742-43 (1968), 17 A.L.R.2d 288, 307-11 (1951), and 1915B L.R.A. 928, 938-42. See generally Restatement, Restitution, § 80, § 80 Comment a (1937).
As the majority readily concedes, an attorney may recover only reasonable fees despite a percentage stipulation where the debtor is bankrupt. Chestertown Bank of Maryland v. Walker, 163 F. 510, 512 (4th Cir. 1908); Johnson v. Phillips, 143 Md. 16, 26, 122 A. 7 (1923).