Court Opinion

ID: 5151690
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:58:33.285997+00
Date Added: 2024-06-11T08:25:05.482244
License: Public Domain

BAR PROCEEDING
¶ 0 The Complainant alleges the Respondent, Robert S. Flaniken, violated Rule 1.5(a) of the Oklahoma Rules of Professional Conduct. In a probate case, the Respondent's client rejected an hourly fee agreement in favor of a contingency fee. Although both Respondent and client anticipated the probate would be contested, it was not. After the client paid the fee, she filed a complaint with the Bar Association, which investigated and filed a bar complaint. The Complainant failed to meet its burden of proof regarding this allegation.
 COMPLAINT DISMISSED ON THE MERITS.
¶ 1 The Complainant alleges that the Respondent, Robert S. Flaniken charged an unreasonable fee to a client, Peggy Hepler. A hearing was held before the Trial Panel of the Professional Responsibility Tribunal (PRT) on April 24, 2003. In their report of May 21, 2003, the PRT concluded the OBA failed to meet its burden of proof in the matter. We agree.
 Background Information
¶ 2 Peggy Hepler was named personal representative and sole beneficiary in the Last Will and Testament of Dewey Lawrence Hughes. When the will was executed, Hughes was blind and infirm and living in a nursing home. Several times in the years preceding his death, he was a client of the Adult Protective Services Division of the Department of Human Services under complaints of exploitation. Hughes died unmarried, without any surviving children or grandchildren. His heirs at law were nieces and nephews residing in other states. Following his death, one nephew and the nephew's mother expressed concern about the propriety of the will, Hughes' competence and Hepler's inheritance. Hepler was not a relative of Hughes. She met him at the bank where she was employed and he was a customer.
¶ 3 The attorney who drafted Hughes' will was convinced through his observations that Hughes was competent. Hepler met with the Respondent concerning legal representation in the probate. Hepler rejected Respondent's proposal of an hourly rate fee with a retainer. The circumstances of Hughes' will and Hepler's inheritance were unique and peculiar and Respondent reasonably believed a will contest was inevitable and imminent. Shortly following the initial discussions and the rejection by Hepler of Respondent's proffered retainer and hourly fee, Respondent and Hepler entered into a contingency fee agreement. The parties stipulate that the Respondent's representations in entering into the fee agreement did not involve any fraud, misrepresentation or concealment. *Page 826 
¶ 4 After Hepler agreed to the fee, Respondent filed the will probate case, handled the necessary matters including negotiations with creditors and concluded the estate administration and distribution. The will was not contested. With the final estate accounting and distribution order, Respondent and Hepler sought and received court approval for separate fees for Respondent's services to the Personal Representative.
¶ 5 After the order was entered to distribute the remaining liquid assets to Hepler, Respondent received the amount of his one-third contingency fee agreement. After subtracting the court-awarded fee from estate assets, Hepler paid the Respondent $108,199.85. The total value of the real and personal property she inherited was $451,413.54. The Respondent maintains an attorney lien claim against the unliquidated real property.
¶ 6 The trial panel concluded that the Respondent's conduct did not merit discipline, and made such a recommendation to this Court. The trial panel's recommendations are entitled to great weight, but are merely advisory in nature. In attorney disciplinary matters, this Court does not sit in review of the panel's recommendations, but instead exercises original jurisdiction. Matter of Page, 1993 OK 165, ¶ 3, 866 P.2d 1207, 1209.
 Tests for Reasonableness of Fees
¶ 7 In their Joint Stipulated Case Presentation, the parties agree to two tests for judging the reasonableness of fees. The first test involves the fee setting stage when the attorney and client initially agree to a fee arrangement. If during this fee setting stage, the contingency fee agreement was based on fraud, mistake, undue influence, or suppression of facts, or is contrary to public policy, then the attorney has secured an unwarranted premium for a risk that did not realistically exist. This test is apparently taken from a footnote in Oklahoma Turnpike Authorityv. New Life Pentecostal Church of Jenks, 1994 OK 9, ¶ 13, n. 17,870 P.2d 762, 766, n. 17. The second test is based on outcome analysis. This test is codified in 5 O.S. 2001 § 7[5-7], and limits an attorney in a contract for a percentage of a client's cause of action or claim to no more than 50 percent of the client's net recovery, whether by judgment or compromise.
¶ 8 Although the Bar agrees that the contingency fee passes these two tests, it nevertheless asserts the fee was both excessive and unreasonable, and therefore a violation of Rule 1.5(a), ORPC. The OBA submits that "reasonableness" is a legal concept always subject to judicial scrutiny and evaluated on a case-by-case basis. The Bar offers that fee reasonableness can be determined by a third test: upon reflection. This means that a fee should also be judged in hindsight as to whether it is reasonable in accordance with the eight factors listed in Rule 1.5(a).1 The OBA interprets the factors set out in Rule 1.5(a) in light of the outcome and conclusion that no formal will contest materialized. The Bar concludes that the Respondent cannot justify his fee in accordance with the reasonable standards set out above, regardless of the level of risk he undertook at the time of contracting. But the Respondent argues that this position misinterprets the application of Rule 1.5(a) by creating an additional test not found or articulated in Oklahoma law. He notes that factor 8 in Rule 1.5(a) addresses whether the fee is fixed or contingent — a clear indication that contingency fees cannot be weighed upon factors of time, novelty or expertise. *Page 827
 Attorney Discipline for an Unreasonable Fee
¶ 9 We must observe that we are not deciding a fee dispute. We express no opinion concerning how a district court should resolve a dispute between a client and attorney over the fee contract. Before us is an attorney discipline matter. The Rules Governing Disciplinary Proceedings require that charges be established by clear and convincing evidence.2 5 O.S. 2001, ch. 1, app. 1-A, Rule 6.12(c), State ex rel. Oklahoma Bar Ass'n v. Eakin,1995 OK 106, ¶ 16, 914 P.2d 644, 650. The burden of proof in a contract dispute is preponderance of the evidence.3Tibbets Pleasant v. Martin, 1925 OK 142, ¶ 5, 233 P. 698, 699.
¶ 10 Contingent fee contracts have a long history of acceptance in this country. Such contracts may be the only way some litigants can secure legal services. But the right to contract for a contingent fee has never been thought to be unrestrained.Abel v. Tisdale, 1980 OK 161, ¶ 16, 619 P.2d 608, 611. For example, this Court has held that the trial court may consider factors other than the provisions of a contingent fee contract when it is executed by a parent on behalf of a minor. Sneed v.Sneed, 1984 OK 22, 681 P.2d 754.
¶ 11 The eight factors listed in Rule 1.5(a), are analogous to the factors listed in State ex rel. Burk v. City of OklahomaCity, 1979 OK 115, 598 P.2d 659, where courts were instructed on the method for awarding attorney fees at the conclusion of a case and against an opponent. That case involved setting criteria for a reasonable attorney's fee in the absence of a contract or statute fixing the amount. Oliver Sports Center, Inc. v.National Standard Ins. Co., 1980 OK 120, ¶ 7, 615 P.2d 291, 294. The Oliver Sports Center case also involved setting a fee against an opponent. Those cases are not particularly helpful in deciding the reasonableness of a fee contract voluntarily entered into between an attorney and client.
¶ 12 In considering the facts before this Court in this bar matter, we hold that the Complainant has failed to meet its burden of proving by clear and convincing evidence that the Respondent has charged an unreasonable fee pursuant to Rule 1.5(a). The Respondent gave the client a choice between an hourly fee and a contingent fee. No evidence has been presented that shows impropriety involved in the execution of the contract between the Respondent and Hepler. The evidence shows that when the probate took less time and did not involve the anticipated will contest, the client became dissatisfied with the bargain she had made. Whether she has legal grounds to amend the contract in a civil action is not before this Court. We reject the proposed "hindsight" test of the Bar Association where a lawyer has lawfully contracted for a percentage of a client's recovery, and reject the Complainant's recommendation of discipline for the Respondent.
 COMPLAINT DISMISSED ON THE MERITS.CONCUR: WATT, C.J., OPALA, V.C.J., LAVENDER, HARGRAVE,WINCHESTER, EDMONDSON, JJ.
CONCURS IN PART; DISSENTS IN PART: HODGES, J.
DISSENT: KAUGER (joins BOUDREAU, J.), BOUDREAU, JJ.
1 "(a) A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
 "(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
 "(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
 "(3) the fee customarily charged in the locality for similar legal services;
 "(4) the amount involved and the results obtained;
 "(5) the time limitations imposed by the client or by the circumstances;
 "(6) the nature and length of the professional relationship with the client;
 "(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
 "(8) whether the fee is fixed or contingent."
2 The burden of proving a proposition by clear and convincing evidence is expressed in the Oklahoma Uniform Jury Instructions, Instruction No. 3.2, as "highly probable and free from serious doubt."
3 Preponderance of the evidence is expressed in the Oklahoma Uniform Jury Instructions, Instruction No. 3.1, as "greater weight of the evidence." Henderson v. State, 1977 OK CR 238, ¶ 4, 568 P.2d 297, 298.