Court Opinion

ID: 9577882
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:39:06.015658+00
Date Added: 2024-06-11T13:21:24.535388
License: Public Domain

PER CURIAM.

Attorney disciplinary proceeding; attorney’s license suspended.

Attorney Arthur W. Guenther, Jr., appealed from the referee’s findings and conclusions that he engaged in conduct involving dishonesty, fraud, deceit or misrepresentation by charging a client for his services on a basis other than that to which they had agreed and by charging another client fees computed on an hourly basis exceeding the number of hours actually spent on the *477client’s matter, that he failed to return client funds upon request, that he charged a client a clearly excessive fee, and that he took a second mortgage from a client in a divorce matter to secure a note for his fees, notwithstanding a court order prohibiting his client from encumbering the property involved. Attorney Guenther also appealed from the referee’s recommendation that his license to practice law be suspended for one year for his misconduct and that he be required to pay the costs of the disciplinary proceeding.
The referee’s findings of fact are not clearly erroneous, and we accept them; with one exception, discussed below, we accept his conclusions concerning Attorney Guenther’s misconduct. We determine that a one-year suspension of Attorney Guenther’s license to practice law in Wisconsin is appropriate discipline under the circumstances of this case. It is also appropriate, as recommended by the referee, that Attorney Guenther be required to return to his client that portion of the fees he collected which exceeded the amount to which he was entitled.
Attorney Guenther was admitted to practice law in Wisconsin in 1951, and he practices in Campbellsport. He has not previously been the subject of an attorney disciplinary proceeding.
In 1980, a woman named Hatch, who had been a client of Attorney Guenther for 20 years, consulted him concerning the sale of her farm. Prior to that time, Attorney Guenther routinely charged Mrs. Hatch a fee of one percent of the sale price for his services in representing her in the sale of her property. In this instance, however, Attorney Guenther charged her $3,847.50, an amount purportedly based on an hourly rate of $65 for Attorney Guenther’s time on the matter and a rate of $25 per hour for the work of his paralegal assistant. In the sales transaction, Mrs. Hatch herself negotiated the terms of the sale; Attorney Guenther conducted the *478closing. Attorney Guenther collected his fee from es-crowed funds held for his client in his trust account.
Attorney Guenther’s time records produced in the disciplinary proceeding would have justified a bill of $2,778 on the basis of the stated hourly rates, some $600 less than the fee he charged and collected. Attorney Guen-ther maintained that the discrepancy was the result of some of his time records having been lost. The time records he produced included five conferences with the buyer’s attorney, for a total of 11.8 hours; however, the buyer’s attorney produced his records and testified that no such conferences took place. Also, Attorney Guenther’s records showed a charge of 2.3 hours for the closing, whereas the buyer’s attorney testified that the closing took approximately three-quarters of an hour.
Attorney Guenther maintained that at some time during the 20 years that he had been representing Mrs. Hatch, he changed from a percentage-of-sale-price billing to an hourly rate of $65 or percentage-of-sale-price, whichever was greater, but he testified that he did not recall ever having told Mrs. Hatch of that change. His paralegel assistant, however, testified that she mentioned the change to Mrs. Hatch as Mrs. Hatch was leaving Attorney Guenther’s office after the closing of some transaction, but there was no testimony that Mrs. Hatch agreed to that new method of billing.
The referee, Attorney Robert P. Harland, found that the fee agreement existing between Mrs. Hatch and Attorney Guenther as to the farm sale was on the basis of one percent of the sale price. He also found that Attorney Guenther’s time records were totally inadequate and unreliable to support a fee based on time spent on the matter.
This same problem occurred in Attorney Guenther’s representation of Mrs. Hatch in the sale of cattle and farm equipment, which sold for $23,000. Attorney Guen-ther charged her $935, which he collected from her funds *479in his trust account, even though his time records in the matter totaled only $578.50. Here, again, the referee found that the fee agreement was the customary one percent of the sale price, that is, $230. The referee concluded that Attorney Guenther engaged in misrepresentation, in violation of SCR 20.04(4),1 by billing Mrs. Hatch for his services in both sales at an hourly rate based on inadequate time records.
A third matter involving Mrs. Hatch concerned Attorney Guenther’s failure to return to her those funds he retained in his trust account, specifically, the $5,000 held in escrow in connection with the farm sale. It was from these funds that Attorney Guenther collected his fees. The only fact in dispute was whether Mrs. Hatch asked Attorney Guenther to return the money. Mrs. Hatch testified that she asked him for it shortly after the closing and that Attorney Guenther told her he had not yet calculated his bill for services. She made another attempt to obtain the money shortly thereafter, but again Attorney Guenther told her he had not completed the billing.
Attorney Guenther, on the other hand, testified that Mrs. Hatch never requested the return of her money held in trust and that he held the trust funds to “protect” his fees. His paralegal assistant testified that she mailed a copy of Attorney Guenther’s bill for the sale of the farm and for the cattle and equipment, as well as a letter notifying her that Attorney Guenther was holding $5,000 of hers in his trust account, asking whether she would like to have his fees deducted from the trust monies or a check for the full amount. Mrs. Hatch denied ever having received either the bill or the statement concerning the money held in trust.
*480In finding that Mrs. Hatch requested the return of her money, the referee noted that Attorney Guenther delayed eight months from the date of closing before sending his bill to his client, offsetting his fees against the $5,000 held in trust for her. The referee concluded that Attorney Guenther’s delay in returning his client’s funds violated SCR 20.50(2) (d) ,2
In another matter, a man named Houdek retained Attorney Guenther in August of 1980 to represent him concerning a listing contract he had entered into for the sale of his property. The client had changed his mind about selling, and he wanted to avoid the obligation to sell his property under the terms of the contract. The realtor had accepted contingent offers on the property, but the contingencies were never resolved, and the listing contract expired on October 10, 1980.
At the time of retainer, the client had agreed to Attorney Guenther’s charging $65 per hour for time spent on the matter. When he received a bill for $2,120, the client complained to Attorney Guenther, and an installment payment arrangement was agreed upon. Mr. Hou-dek paid $1,300 but then refused to make further payment.
The referee found Attorney Guenther’s time records deficient to the extent that it was virtually impossible for him to defend or explain the nature of his services performed in the matter. The referee also found, from the time records, that Attorney Guenther billed his client for eight hours of time spent after the listing contract had expired. The referee concluded that Attorney Guen-ther’s billing to his client constituted misrepresentation, in violation of SCR 20.04(4).
*481In another matter, Attorney Guenther charged a clearly excessive fee to a client in a divorce matter. Attorney Guenther and the Board of Attorneys Professional Responsibility (Board) stipulated that the findings of the state bar’s district fee arbitration committee be deemed to constitute the referee’s findings in this matter. That committee found that the reasonable value of services and disbursements provided by Attorney Guenther in the matter should not have exceeded $9,500. Attorney Guenther, however, charged his client over $32,000. On the basis of the committee’s findings and conclusions, the referee concluded that Attorney Guenther violated SCR 20.04(4).
In a final matter, Attorney Guenther admitted that he took a promissory note from a divorce client in the amount of $11,500 for legal fees to be earned in her representation in that action and that he also took a mortgage on marital property to secure that note, notwithstanding that the court had entered a temporary restraining order prohibiting both his client and the opposing party from encumbering marital property during the pendency of the action. The referee concluded that Attorney Guenther disregarded a court order, in violation of SCR 20.40(1).3 The referee noted that, as of the date of the disciplinary hearing, Attorney Guen-ther had neither released the mortgage nor obtained a modification of the court’s order.
Attorney Guenther offered in mitigation of the seriousness of his misconduct his 33-year “unblemished” practice of law. On that basis, he contended that his misconduct merits only a public reprimand. It appears, *482however, that the referee took that fact into consideration in making his recommendation for discipline.
The referee noted that Attorney Guenther’s attitude at the disciplinary hearing was to defend his unsupported fees and that he showed an unwillingness to correct his mistakes when his questionable practices were challenged. The referee questioned Attorney Guenther’s continuing in his position regarding the mortgage of marital property to secure a note for his fees and his refusal to release that mortgage and apologize to the court for violating its order. It should be noted that, in his brief, Attorney Guenther alleged that he has released that mortgage of record, thereby making it unnecessary for this court to accept the referee’s recommendation that he be ordered to do so.
The referee's findings of fact, based in large part on the credibility of the witnesses testifying at the disciplinary hearing, are not clearly erroneous, and we accept them. With the exception of that relating to the excessive fee matter, the referee’s conclusions are accepted as supported by the evidence. Concerning Attorney Guenther’s having charged an excessive fee in the divorce matter, the referee concluded that Attorney Guenther thereby violated SCR 20.04(4), which proscribes an attorney’s engaging in misrepresentation. This, we believe, was an inadvertent error on the part of the referee. The Board had alleged that, by charging an excessive fee, Attorney Guenther violated SCR 20.12 (1), which provides: “A lawyer may not enter into an agreement for charge or collect an illegal or clearly excessive fee.” Accordingly, we modify the referee’s conclusion and determine that Attorney Guenther violated SCR 20.12(1) by charging an excessive fee.
We determine that a one-year suspension of Attorney Guenther’s license to practice law is appropriate discipline in light of the seriousness of his misconduct, taking into account his having practiced for more than *48330 years without being the subject of a disciplinary proceeding. It is also appropriate that Attorney Guen-ther return to his client, Mrs. Hatch, that portion of the fees collected which exceeded the percentage-of-sale-price in the two transactions. Our order for restitution does not affect the client’s recourse to whatever civil remedy she might have.
IT IS ORDERED that the license of Attorney Arthur W. Guenther, Jr., to practice law in Wisconsin is suspended for a period of one year, commencing August 1, 1985.
IT IS FURTHERED ORDERED that Attorney Arthur W. Guenther, Jr., return to his client, Mrs. Hatch, the fees collected in excess of those to which the referee found he was entitled.
IT IS FURTHER ORDERED that within 120 days of the date of this order Attorney Arthur W. Guenther, Jr., pay to the Board of Attorneys Professional Responsibility the costs of this disciplinary proceeding, provided that if the costs are not paid within the time specified and absent a showing by Attorney Guenther of his inability to pay the costs within the time specified, the license of Attorney Arthur W. Guenther, Jr., to practice law in Wisconsin shall be suspended until further order of the court.
IT IS FURTHER ORDERED that Attorney Arthur W. Guenther, Jr., comply with the provisions of SCR 22.26 concerning the requirements of a person whose license to practice law in Wisconsin has been suspended.

 SCR 20.04(4) provides: “A lawyer shall not: . . .
“(4) Engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”

 SCR 20.60(2) (d) provides: “A lawyer shall: . . .
“(d) Promptly pay or deliver to the client as requested by a client the funds, securities or other properties in the possession of the lawyer which the client is entitled to receive.”

 SCR 20.40(1) provides:
“(1) A lawyer may not disregard or advise a client to disregard a standing rule of a tribunal or a ruling of a tribunal made in the course of a proceeding, but the lawyer may take appropriate steps in good faith to test the validity of the rule or ruling.”