Court Opinion

ID: 5151693
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:58:33.296439+00
Date Added: 2024-06-11T13:52:40.151388
License: Public Domain

¶ 1 Respondent structured the contingency fee agreement with his client in a manner that allowed respondent to recover a large fee in connection with an inheritance which passed by law and without a will contest. In my view, the agreement, which allowed respondent to recover a contingency fee in a probate proceeding absent an actual challenge to the will, violated Rule 1.5(a) of the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S. 2001, Ch. 1, App. 3-A, which mandates that a lawyer's fee be reasonable. The fee agreement was unreasonable on its face because it allowed respondent to collect a large fee for efforts not related to the *Page 829 
defense of his client's testate share of the estate's assets but rather for routine probate services.
¶ 2 Peggy Hepler employed respondent to represent her as both the personal representative of the estate of Dewey Lawrence Hughes and as the beneficiary of that estate. Respondent and Hepler initially believed a will contest was probable. Respondent and Hepler entered into a contingency fee agreement in which Hepler agreed to pay respondent one third of the gross estate "upon the finalization of the probate of the will". The agreement also provided that Hepler would pay respondent forty percent of the gross estate in the event of a challenge to her testate share of the estate's assets. No challenge materialized and Hepler received her inheritance, without incident, under the will. Hepler paid Respondent $108,199.85, a third of the value of the liquid assets she inherited and respondent currently maintains an attorney lien claim against the unliquidated real property inherited by Hepler. If respondent is successful in maintaining his attorney lien claim to the real property, he will receive approximately $150,000 for his services to Hepler.
¶ 3 It is clear that contingency fee contracts may be utilized in probate proceedings. See Southard v. MacDonald, 1961 OK 72,360 P.2d 940, 944 (while the statute appears to limit contingency fees to two types of cases, those arising ex contractu and ex delicto, the court refused to find such a contract void because it involved a probate proceeding). Nevertheless, contracts for contingent fees, generally having a greater potential for overreaching of clients than hourly fees, must be closely scrutinized by the court in furtherance of its duty to safeguard the interests of the public and maintain the integrity of the legal profession. See Committee on Legal Ethics v. Tatterson,352 S.E.2d 107, 114 (W.Va. 1986). Our duty to scrutinize contingency fee contracts applies to their use in probate cases.
¶ 4 An analysis of a contingency fee agreement between an attorney and his client must begin with the general rule that an attorney's fee be reasonable. Rule 1.5(a), ORPC. It has been long established that contingency fee agreements are subject to this reasonableness standard. Amount of Fee, ABA/BNA Lawyers' Manual on Professional Conduct, 41:901 (1994 Supp.).
¶ 5 A contingent fee is to be collected only if an attorney successfully champions the legal rights and claims of his client, with the result that the client is compensated through a settlement with, or judgment against, those who denied his claims. In re Gerard, 548 N.E.2d 1051, 1056 (Ill. 1989). Seealso Pocuis v. Halvorsen, 195 N.E.2d 137, 139 (Ill. 1963) (an attorney's collection of a contingent fee depends upon the success or failure to enforce a supposed right). In this case, respondent did not successfully champion or enforce the legal rights of his client. It is undisputed that Hepler, as the beneficiary under the will, was entitled to the inheritance by operation of law. Respondent contributed nothing to establish or augment Hepler's recovery. His efforts, if any, were unrelated to the decision of the relatives not to contest the will.1
He sat back, waited and "stressed over an expected claim", hoping that the will contest would never arise.
¶ 6 This contingency fee agreement which allowed respondent to recover in excess of a $150,000 for routine probate services, which the court valued at $13,000, is not a reasonable one. It is not unreasonable simply because it allowed respondent to receive a lot of money for a little work. The mere fact that a case involved less difficulty in work than was believed necessary at the outset will not render the fee unreasonable or unfair. SeeFletcher v. Fletcher, 591 N.E.2d 91, 95 (Ill.App. 4 Dist. 1992). It is unreasonable because respondent's one third percentage was not conditioned upon an actual challenge to the will and accordingly allowed respondent to collect a large fee for *Page 830 
efforts not related to the defense of his client's testate share of the estate's assets but rather for routine probate services.
¶ 7 In my view, respondent certainly could have structured the contingency fee agreement to comply with Rule 1.5(a)'s requirement of reasonableness. The agreement simply needed to provide that his client was obligated to pay him the percentage fee in the event he successfully defended an actual challenge to the will pressed by one of the heirs at law. The agreement should have stated that if the client was merely provided with her already vested testate share of the assets without a challenge, the client should have been obligated to pay an hourly rate.2 By setting an actual challenge to the will as a condition precedent to the effectiveness of the contingency fee agreement, respondent would have eliminated the possibility that he would recover a substantial fee without doing anything to establish or augment his client's recovery.
¶ 8 In summary, when a client retains an attorney to both represent the client as personal representative and to protect the client's testate or intestate share of the estate's assets, a contingency fee agreement should be allowed only when there is an actual challenge to the client's share of the estate's assets. Without a challenge, the attorney's services amount to nothing more than representing the client in the administration of the estate. In my view, a contingency fee agreement, such as this one, which allows an attorney to recover a substantial share of the estate's assets without an actual challenge violates Rule 1.5(a) on its face. By sanctioning such an agreement, this Court invites attorneys to enter into contingency fee agreements which allow them the possibility of recovering a significant portion of their client's estate assets without providing the client with services that establish or augment their recovery.
¶ 9 I am also of the view that it could have been determined that the contingency fee agreement was unreasonable based on the circumstances of the case at the time the contract was made.3 Accordingly, I would a) administer a public reprimand to respondent, b) order that he pay the costs of this proceeding not later than 30 days after this Court's opinion becomes final, c) order respondent to make restitution to Peggy Hepler of all amounts he received beyond the probate court ordered attorney fees within 30 days of this Court's opinion becoming final, and d) order respondent to release his attorney's lien on Peggy Hepler's real property within 30 days of this Court's opinion becoming final.
1 In his brief respondent stated that his services to Hepler consisted of accumulating evidence, researching legal issues, preparing a plan, and thinking and stressing over expected claims. He makes no assertion that there was a causal connection between these efforts and the decision of the relatives not to contest the will.
2 While respondent offered to handle both the administration of the estate and a potential challenge to her testate share of the estate on an hourly basis, Hepler declined. In my view, respondent's fiduciary duty obligated him to offer his client the option of an hourly contract if there was no actual challenge to the probate of the will and a contingency fee contract if a challenge materialized. I am also convinced that he was obligated to inform her that this fee arrangement was in her financial interest. The attorney-client relationship is one of highest trust and confidence and requires that the attorney's dealings with the client be characterized by the utmost candor and fairness. State ex rel. Oklahoma Bar Association v. Hatcher,1969 OK 42, 452 P.2d 150, 153.
3 The parties have stipulated that you could not tell the contingency fee contract was unreasonable at the time of contracting. However, "[w]henever this Court is called upon to function in its constitutional capacity as the state's exclusive licensing authority for legal practitioners, its decisions are made de novo. All facts responsive to the issues formed before the panel must be independently redetermined." State ex rel.Oklahoma Bar Association v. Cantrell, 1987 OK 17, 734 P.2d 1292, 1292 (Okla. 1987). See also State ex rel. Oklahoma BarAssociation v. Miskovsky, 1997 OK 55, 938 P.2d 744, 747.