Court Opinion

ID: 4250134
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:23:26.144041+00
Date Added: 2024-06-11T14:44:13.158828
License: Public Domain

IN THE SUPREME COURT OF IOWA
                           No. 70 / 07-0385

                         Filed August 31, 2007

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

      Complainant,

vs.

JOHN W. CARTY,

      Respondent.
________________________________________________________________________
      On review of the report of the Grievance Commission.

      Grievance Commission reports that respondent has committed

ethical misconduct and recommends a suspension from the practice of

law. LICENSE SUSPENDED.

      Charles L. Harrington and Wendell J. Harms, Des Moines, for
complainant.

      Brent B. Green and Bradley C. Obermeier of Duncan, Green,

Brown & Langeness, Des Moines, for respondent.
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CADY, Justice.

      The Iowa Supreme Court Attorney Disciplinary Board (Board)

charged John W. Carty with numerous violations of the Iowa Code of

Professional Responsibility for Lawyers.   The Grievance Commission of

the Supreme Court of Iowa (Commission) found Carty violated the Iowa

Code of Professional Responsibility for Lawyers. It recommended Carty

be suspended from the practice of law for a period not less than four

months.      Upon our review, we find Carty violated the Iowa Code of

Professional Responsibility for Lawyers, and we suspend his license to

practice law for a period of sixty days.

      I. Background Facts and Proceedings.

      John W. Carty has practiced law in Winfield, Iowa, since 1952.

During his long career, he was disciplined on one occasion for

professional misconduct. This occurred in 1994 when he was publicly

reprimanded for becoming personally involved in a business interest of a

client.

      At the time of the facts and circumstances that gave rise to this

proceeding, Carty was in the process of limiting his clientele in

contemplation of retirement. His long-time secretary, or legal assistant,

also left her employment during this time, and Carty employed a new

secretary.

      In April 2001, Carty was designated as the attorney for the estate

of Ralph G. Beech, who died testate on March 18, 2001.          Carty had

prepared a will for Beech and performed other legal services for him

shortly before his death.

      The district court eventually ordered that Carty be paid fees for his

ordinary services in the estate in the amount of $19,086.74.      This fee
                                      3

was based on the gross value of the estate, as disclosed by the report and

inventory prepared and filed with the court by Carty.

      Carty subsequently completed the essential legal work in the case

without incident and was preparing to close the estate. He arranged for

the coexecutors to come to his law office to sign the tax returns, final

report and other documents so the closing order could be entered upon

receipt of the tax clearances.

      One of the coexecutors failed to appear at the appointment

scheduled by Carty.      The other coexecutor appeared and signed the

documents.    The coexecutor also issued a check to Carty for his legal

fees in the full amount previously allowed by the district court. Carty

intended to place the check into his trust account, but his new secretary

deposited it in his office account.

      The coexecutor who failed to appear at Carty’s office to sign the

documents died before he was able to execute all of the necessary closing

documents.      Carty then discovered the deceased coexecutor had

submitted documents to him that overvalued Beech’s estate by nearly

$90,000. Consequently, Carty filed an amended inventory with the court

to reflect the reduced value of the estate, together with amended tax

returns and other documents, but never sought to reduce the amount of

the fees for his ordinary services based on the reduced amount of the

gross value of the estate. Instead, Carty eventually sought an allowance

for extraordinary services based on the additional work he was required

to perform to correct the mistake caused by the deceased coexecutor.

      Carty requested extraordinary fees of $23,871.69 based on 182

hours of legal work.     However, a portion of his application for fees

detailed legal services that were duplicative of some of the services
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performed as a part of his ordinary fees. The inclusion of these services

was likely due to miscommunication between Carty and his secretary

during a time when Carty was working from his home after recuperating

from heart surgery.

      The district court approved the application for extraordinary fees

requested by Carty.        Carty was then paid the extraordinary fees

requested in his application, and the estate was closed.       Carty never

sought to return the excessive ordinary fees ($1665), and he did not seek

to return any portion of the duplicative extraordinary fees after they were

discovered.

      II. Board Complaint.

      The Board charged Carty with a variety of disciplinary violations,

and the parties subsequently stipulated to conduct to support a finding

by the Commission that Carty violated the Iowa Code of Professional

Responsibility.      Specifically, the Commission found that Carty:      (1)

collected an illegal fee in violation of DR 2—106(A) when he received his

full ordinary fee prior to the time the final report was filed and the costs

were paid, and (2) charged or collected an illegal or clearly excessive fee

in violation of DR 2—106(A) by failing to amend the ordinary-fee claim

and submitting a claim for extraordinary fees that included duplicative

services. See DR 2—106(A) (“A lawyer shall not enter into an agreement

for, charge, or collect an illegal or clearly excessive fee.”).         The

Commission also found Carty’s conduct violated DR 1—102(A)(1) (lawyer

shall not “[v]iolate a disciplinary rule”) and DR 1—102(A)(6) (lawyer shall

not “[e]ngage in any other conduct that adversely reflects on the fitness

to practice law”).
                                     5

       III. Scope of Review.

       We review attorney disciplinary matters de novo. Iowa Supreme Ct.

Bd. of Prof’l Ethics & Conduct v. Bernard, 653 N.W.2d 373, 375 (Iowa

2002).     We give the findings of the Commission weight, but are not

bound by them. Id.

       IV. Violation.

       A lawyer may not charge or collect an illegal or clearly excessive

fee. DR 2—106(A). Carty violated this rule in three ways.

       First, Carty violated DR 2—106(A) when he accepted a full probate

fee prior to the time he filed the final report and paid the costs, contrary

to the Iowa Rules of Probate Procedure. See Iowa Ct. R. 7.2(4) (“One half

of the fees for ordinary services may be paid when the federal estate tax

return, if required, and Iowa inheritance tax return, if required, are

prepared. . . .    The remainder of the fees may be paid when the final

report is filed and the costs have been paid.”). The collection of the full

fee was illegal.

       Second, Carty violated DR 2—106(A) when he failed to amend his

ordinary fee claim once the gross value of the estate was reduced to

reflect the correct amount.    An attorney may not be compensated for

ordinary services in a probate proceeding in an amount greater than the

fee schedule under Iowa Code section 633.197 (2001). This fee schedule

caps the maximum fee at two percent of the amount of the gross estate

over $5000, as disclosed in the probate inventory, plus $220.           The

collection of a probate fee in excess of the amount permitted by statute is

illegal.

       Finally, Carty violated DR 2—106(A) when he charged and

collected duplicative fees for extraordinary services. Carty submitted a
                                       6

claim for extraordinary services that included ordinary services for which

he had previously been compensated.          He charged and collected an

illegal fee.

       Although the violations resulted in part from miscommunication

between Carty and his secretary, this circumstance does not excuse

Carty from his violations. See Iowa Supreme Ct. Bd. of Prof’l Ethics &

Conduct v. Beckman, 674 N.W.2d 129, 137–38 (Iowa 2004) (alleging an

error was made due to a change in secretaries). Carty violated DR 2—

106(A).        By violating this disciplinary rule, he also violated DR 1—

102(A)(1).       Similarly, Carty also violated DR 1—102(A)(6).    See Iowa

Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Johnston, 732 N.W.2d 448,

454 (Iowa 2007).

       V. Discipline.

       Carty is not the first Iowa lawyer to collect illegal or excessive fees

in a probate proceeding.       In prior cases, the resulting discipline has

ranged from a reprimand to a suspension of various degrees. See Iowa

Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Fleming, 602 N.W.2d 340,

340 (Iowa 1999) (suspension not less than six months); Iowa Supreme Ct.

Bd. of Prof’l Ethics & Conduct v. Evans, 537 N.W.2d 783, 786 (Iowa 1995)

(suspension not less than thirty days); Comm’n on Prof’l Ethics & Conduct

v. Winkel, 415 N.W.2d 601, 602 (Iowa 1987) (reprimand). The case that

best approximates the conduct that occurred in this case is Evans. In

that case, an experienced probate attorney collected fees that were both

premature and excessive. 537 N.W.2d at 784–85.     The attorney was

suspended from the practice of law for thirty days. Id. at 786. However,

we find aggravating circumstances in this case that were not present in

Evans. Carty never took any action to correct the obvious excessive fees
                                     7

for ordinary and extraordinary services once the mistakes were

discovered.   This conduct reflects adversely on Carty and warrants

additional discipline.

      We conclude Carty should be suspended from the practice of law

for sixty days.    Prior to his reinstatement under Iowa Court Rule

35.12(2), Carty shall make restitution in the amount of $6165 to the

trust established under the Beech will for distribution to the beneficiaries

of the trust. We conclude Carty received ordinary fees of $1665 in excess

of the maximum fee permitted under section 633.197, and that $4500 of

his fees for extraordinary services was ordinary services or should have

been included as ordinary services. Carty shall also be responsible for

any fees, expenses, and costs incurred in making the restitution.

      VI. Conclusion.

      We suspend Carty’s license to practice law in Iowa for a period of

sixty days. The suspension imposed applies to all facets of the practice

of law as provided by Iowa Court Rule 35.12(3) and requires notification

of clients as provided in Iowa Court Rule 35.21.         Carty shall make

restitution as provided in this opinion, and no automatic reinstatement,

as provided under Iowa Court Rule 35.12(2), shall be ordered until all

restitution has been made.      The costs of this proceeding are taxed

against Carty pursuant to Iowa Court Rule 35.25(1).

      LICENSE SUSPENDED.