Court Opinion

ID: 9626333
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:08:49.271018+00
Date Added: 2024-06-11T15:00:13.924580
License: Public Domain

*314TYSON, Judge,
concurring in part and dissenting in part.
I concur with parts I, II, III, IV, V, and VII of the majority’s opinion. I respectfully dissent from part VI for two reasons: (1) the Disciplinary Hearing Commission’s (“DHC”) conclusions are inconsistent regarding simultaneous violations of the Industrial Commission’s order, and (2) the DHC’s findings of fact and conclusions of law regarding defendant’s use of CD-ROMs are not supported by the evidence.
The practice of law is a property right requiring due process of law before it may be impaired. In re Burton, 257 N.C. 534, 126 S.E.2d 581 (1962); Sonek v. Sonek, 105 N.C. App. 247, 255, 412 S.E.2d 917, 922 (1992); North Carolina State Bar v. DuMont, 52 N.C. App. 1, 15, 277 S.E.2d 827, 836 (1981); In re Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33 (1972).
I. Pologruto Fee Agreement
The DHC order concluded that defendant violated the Revised Rules of Professional Conduct (“Rules”) “[b]y retaining $30,000 of the $60,000 lump settlement in the Pologruto case for his own use and benefit .... [and by failing] to disburse funds as directed by the client.”
The DHC’s conclusions are inconsistent. The DHC could not have logically and simultaneously concluded that defendant violated both of the above. On 14 October 1998, the Industrial Commission issued an order awarding defendant $15,000 of the lump sum award of $60,000. The remaining $45,000 was issued for Pologruto’s care of defendant. The order also provided that defendant would receive every fourth monthly annuity check in the amount of $1,455 as an additional attorney fee for sixty months.
Presuming that defendant violated the Industrial Commission’s order by retaining the $30,000 and that defendant wrongfully entered into an agreement with Pologruto whereby defendant would forgo every fourth check and give all annuity checks to Pologruto, it was error for the DHC to also conclude that defendant violated the Rules by failing to disburse the February 1999 annuity check as directed by Pologruto.
The only basis for Pologruto to lay claim to the fourth check that belonged to defendant pursuant to the Industrial Commission’s order was for Pologruto to have agreed for defendant to retain the $30,000. *315DHC cannot find that it was a violation of the Rules for defendant to retain $30,000 and also subject him to discipline for failing to deliver the fourth check.
As the majority opinion correctly states, the February annuity check was a “fourth” check. The Industrial Commission’s order expressly provided that every fourth check belonged to defendant. Defendant’s retention of the fourth check was pursuant to the Industrial Commission’s order. Defendant cannot logically be disciplined for retaining the $30,000 check in violation of the Industrial Commission’s order, entering a wrongful agreement to disburse every fourth check in violation of the Industrial Commission’s order, and then be disciplined for retaining every fourth check pursuant to the Industrial Commission’s order. I would vacate this portion of the DHC’s order and remand.
The majority’s opinion upholds the DHC’s conclusion that defendant wrongfully retained the $30,000. Nothing prevents an attorney and client from entering into a new fee arrangement for another case after the Industrial Commission’s case is concluded. The better practice would have been for defendant to disburse $45,000 to Pologruto and have her write him a check for $30,000, if such a retainer fee agreement was reached pursuant to another matter.
Furthermore, presuming that defendant and Pologruto entered into an agreement for defendant to disburse his fourth check to her, a nineteen day delay, standing alone, is insufficient to support the DHC’s conclusion that defendant “failed to disburse funds as directed by the client.” I concur with that portion of the majority’s opinion that defendant “misappropriated a portion of the $1,455 February check” by using those trust funds for personal and or business purposes.
II. Munavallis’ Computer Research Agreement
I disagree with the majority’s characterization that defendant was not disciplined for a fee dispute, but for conduct “related to his breach of fiduciary duty of full disclosure to, and fair dealing with, his clients by failing to disclose material facts to them resulting in a benefit to himself at his clients’ expense.”
The DHC’s order concluded that:
By charging the Munavallis for three CD-ROMs which he retained in his law office library, without first obtaining his clients’ approval for the expense, Gilbert engaged in a conflict of interest *316in violation of Rule 1.7(b) and prejudiced his clients, in violation of Rule 8.4(g). . . .
Defendant represented Munavallis in a medical malpractice case in which defendant obtained a settlement of $65,000. Defendant’s agreement was a twenty-eight (28) percent contingency, based upon recovery, with Munavallis remaining responsible for costs and “computer research.” The uncontested evidence at the hearing showed that defendant normally charged a contingent fee of thirty-three and a third (3314) percent of recovery. Defendant reduced his normal contingent fee upon Munavallis’ request.
The DHC’s order found as fact that:
27. Gilbert testified that he needed the CD-ROMs to prosecute the Munavallis case, as he had never handled a personal injury action prior to undertaking the Munavallis’ matter.
29. Gilbert did not consult with the Munavallis before incurring the $4,627.43 expense for the CD-ROMs.
30. The fee contract which Gilbert entered into with the Munavallis did not state that the Munavallis would be responsible for the cost of purchasing CD-ROMs.
31. Although the Munavallis disputed the amount of the bill which Gilbert sent to them on April 20, 1998, they ultimately paid to him $6,800 in costs, which included the full price of the CD-ROMs.
The undisputed evidence at the hearing showed that: (1) defendant had not previously represented a client with a medical malpractice claim, (2) defendant needed to become competent in medical malpractice litigation in order to properly represent Munavallis, (3) defendant purchased CD-ROMs to aid in his representation of Munavallis, (4) the CD-ROMs purchased and used by defendant were solely for Munavallis’s case, (5) the CD-ROMs were consumables that expired in one year, (6) Munavallis agreed to be responsible for costs associated with computer research, (7) Munavallis knew that defendant used Westlaw research, (8) Munavallis did not know how much Westlaw research defendant would perform, and she did not authorize each use, (9) no evidence existed that defendant used the CD-ROMs for any work other than for Munavallis’ medical malpractice case, (10) initially Munavallis complained to defendant about the *317amount of the “costs” defendant had billed her, (11) defendant and Munavallis reached a subsequent agreement regarding the proper amount of costs, (12) Munavallis testified that she was satisfied with the agreement that she reached with defendant, (13) Munavallis did not complain to the North Carolina State Bar about her bill for costs and expenses, and (14) there is no evidence that defendant bene-fitted himself at the expense of Munavallis.
I would hold that the written agreement, which expressly provided for “computerized research,” between defendant and Munavallis sufficiently informed Munavallis about the CD-ROM research, and that there was no evidence presented at the hearing that showed that defendant did not use the CD-ROMs on Munavallis’ case or that he used them on other client’s cases to benefit himself. Any dispute over the proper amount of costs, although not contested by Munavallis now, is better suited for resolution through the procedures set forth in Subchapter D, Section .0700 of the Rules. NCAC 1 D.0700 et seq. If any wrongdoing had been disclosed during arbitration, it could have been a basis for an order of discipline. I would vacate the order of the DHC and remand for a redetermination of discipline. I concur in part and respectfully dissent in part.