Akron Bar Assn. v. Carr

[Cite as Akron Bar Assn. v. Carr, 131 Ohio St.3d 210, 2012-Ohio-610.]

AKRON BAR ASSOCIATION v. CARR.

[Cite as Akron Bar Assn. v. Carr, 131 Ohio St.3d 210, 2012-Ohio-610.]

Attorney misconduct—Charging a clearly excessive fee—Six-month suspension

stayed on conditions.

(No. 2011-0803—Submitted August 8, 2011—Decided February 22, 2012.)

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 10-047.

__________________

Per Curiam.

{¶ 1} Relator, Akron Bar Association, filed a complaint against

respondent, Jeffrey A. Carr, Attorney Registration No. 0081745, for violating the

Rules of Professional Conduct, specifically Prof.Cond.R. 1.4(a)(2) and (b)

(requiring that an attorney reasonably consult with the client about how the

client’s objectives are to be achieved and that he explain the matter to the client so

that the client can make informed decisions), 1.5(a) (prohibiting an attorney from

charging or collecting an illegal or clearly excessive fee), 1.5(b) (requiring an

attorney to communicate the nature and scope of the representation to the client

and the rate of the fee, preferably in writing, before or within a reasonable time

after commencing the representation), and 8.4(a), (c), (d), and (h) (prohibiting

conduct that violates the Rules of Professional Conduct, conduct involving

dishonesty, conduct prejudicial to the administration of justice, and any other

conduct that adversely reflects on the lawyer’s fitness to practice law). The

panel’s findings, which were adopted by the Board of Commissioners on

Grievances and Discipline, were that Carr had charged a clearly excessive fee in

violation of Prof.Cond.R. 1.5(a) but that the other charges had not been proved.

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The panel recommended a six-month suspension, all stayed on five conditions.

The board adopted the panel’s recommendation, and we concur.

Factual Background

{¶ 2} After a career in school construction and construction arbitration,

Carr became licensed to practice law in Pennsylvania in 2003 and in Ohio in

2007. At the time of the hearing in this matter, Carr was employed as a college

instructor, and his bar registration status was—and remains—inactive.

{¶ 3} This case arises from Carr’s representation of Silas Pearson, who

had purchased a home in Akron and who asserted that he had been misled into

making the purchase by the representation that the annual property taxes on the

home would be lower than they turned out to be. Engaged to represent Pearson in

December 2008, Carr charged $240 per hour for his efforts over a ten-month

period to prosecute a lawsuit against Coldwell Banker Hunter Realty (“Coldwell

Banker”) and the real-estate agent involved in the purchase. The record contains

monthly invoices for December 2008 through September 2009 (there is no

invoice for August 2009). The invoices for work through July totaled $13,944 for

58.1 hours of work, and Carr had received $6,750 in payments from Pearson over

that period.

{¶ 4} At a mediation conference in September, the case was settled for

$7,500. On the invoice for September 2009, the final invoice, Carr billed for 4.0

hours for the mediation and 0.4 hours for “dismissal,” for a total of $1,056 in

additional fees related to the mediation and settlement. The invoice then brought

forward the previous balance of $7,194, for a new balance of $8,250. Next, Carr

allowed a $1,000 fee reduction, which brought the balance to $7,250. Finally,

Carr offset the $7,250 balance against the $7,500 settlement proceeds and

indicated that Pearson would receive $250.

{¶ 5} The settlement check was made out to Carr. Carr sent a check for

$250 to Pearson and retained $7,250 for payment of his fees. Thus, Pearson paid

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$14,000 in fees and received a $250 check, reflecting 3.3 percent of the settlement

proceeds.

Disciplinary Proceedings

{¶ 6} Based on its investigation of a grievance filed by Pearson, relator

filed its complaint against Carr with the board on June 14, 2010, and the case was

heard before a panel on December 15, 2010. At the hearing, Carr testified, as did

Pearson. In addition, the deposition of attorney R. Scott Haley was admitted into

evidence as expert testimony on the subject of the reasonableness of the fees

charged. Pearson’s wife, who had written the checks to Carr to pay the attorney

fees and who was the primary contact between Pearson and Carr, was deceased at

the time of the hearing.

{¶ 7} Conflicting testimony was offered concerning the initial meeting

between Carr and the Pearsons. Carr testified that he had met with the couple at

the Akron Bar Association headquarters in late November 2008. By contrast,

Pearson testified that he had met with Carr on three occasions, but never at the

bar-association headquarters.

{¶ 8} Carr testified regarding the invoices he had sent to Pearson, which

set forth the time he had spent on Pearson’s case in hour and tenth-of-an-hour

increments. For December 2008, Carr billed 12.8 hours, consisting of 4.9 hours

for drafting and filing the complaint, 4.2 hours for drafting interrogatories, and 3.7

hours for case strategy and research. The invoice totaled $3,072 for the hours,

plus $250 for the filing fee for the complaint. Carr testified that the December

invoice included a review of documents supplied by the Pearsons, a conversation

with a real-estate agent concerning real-estate law, review of documents at the

county fiscal office to determine the property taxes charged, and online research

on the Ohio Association of Realtors website regarding the liability of Coldwell

Banker as opposed to the individual agent. Carr testified that he had kept track of

his time for invoicing purposes by writing on his desk-pad calendar and that he

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had torn off and discarded the calendar’s monthly page at the end of each month.

Thus, he could not produce documentation to substantiate the time he had

indicated on the invoices. Carr also had no evidence of the fruits of the time spent

on research.

{¶ 9} Carr stated that he had met with Pearson’s wife on three occasions

after the initial meeting in November 2008, once in February, once in March, and

once in April 2009. He claimed that the March and April meetings had been at a

McDonald’s restaurant. Carr explained that because Pearson was ill, he was not

at the meetings. Pearson testified that during the relevant period, he spent

weekdays in Wilmington, where he was employed. Pearson had contracted spinal

meningitis and spent six months in a nursing facility beginning in April 2008.

Pearson testified that his wife did not drive, so he would have had to have taken

her to meetings with Carr, and he never took her to a meeting with Carr at

McDonald’s.

{¶ 10} Carr testified that he had prepared and sent a fee agreement to

Pearson, but it had never been sent back, and he had not retained a copy for

himself. Pearson testified that he had never received a fee agreement.

{¶ 11} With respect to the settlement money, Carr claims that he

explained to the Pearsons that they owed more than the $7,500 settlement amount

in fees but that he would accept the proceeds as full satisfaction. Pearson asserts

that he did not know that any of the $7,500 would go toward fees.

{¶ 12} Relator elicited the testimony of R. Scott Haley, an Akron

attorney, as an expert on real-estate litigation and associated legal fees. A

deposition of Haley was offered as evidence at the hearing, and Carr stipulated to

its admission as evidence. Haley testified that the property tax on any particular

parcel is readily available to any member of the public either at the Summit

County Fiscal Office or online. Thus, Carr could not reasonably charge for much

time to research that information.

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{¶ 13} Haley testified that the time Carr charged for drafting and filing the

complaint, 4.9 hours, was unreasonably high for the complaint that was filed.

Haley opined that the complaint does not even properly plead a claim of fraud,

because it does not contain specific facts, as required by the Civil Rules.

Moreover, the fraud claim was intrinsically weak because the taxes on the

property were a matter of public record, so Pearson could have checked what they

were before purchasing the property.

{¶ 14} When asked about specific increments of time that Carr had billed

for legal research and case strategy—he billed a total of 12.1 hours over three

months—Haley stated that it would be typical for an attorney to print out cases

and make notations for such extensive research, and he found no such print-outs

or notes in reviewing Carr’s file. As for interrogatories, Haley testified that 4.2

hours was a reasonable amount of time for Carr to have spent drafting the original

set of interrogatories, but with regard to the 2.8 hours billed for preparation of a

second set of interrogatories, Haley stated that that amount of time was both

excessive and unreasonable. Haley based that opinion on the fact that the second

set of interrogatories contained only one question.

{¶ 15} Haley verified that there were no depositions held in the

underlying case and opined that billing 13.1 hours for preparing for depositions

was unreasonable. Overall, Haley opined that the amount billed, given the

inherent weakness of the case and the $7,500 settlement, was clearly excessive.

Disposition

{¶ 16} The panel found that Carr had charged a clearly excessive fee in

violation of Prof.Cond.R. 1.5(a). As mitigating factors, the panel found that Carr

has no prior disciplinary record and that he fully and freely cooperated in the

prosecution of this matter. See BCGD Proc.Reg. 10(B)(2)(a) and (d). As

aggravating factors, the panel found that Pearson was a vulnerable client and had

suffered harm as a result of Carr’s misconduct. See BCGD Proc.Reg.

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10(B)(1)(h). Additionally, the panel found that Carr’s misconduct was driven by

a selfish motive and that his failure to acknowledge the wrongful nature of his

conduct and failure to make restitution were also aggravating factors. See BCGD

Proc.Reg. 10(B)(1)(b), (g), and (i). The panel recommended as a sanction that

Carr be suspended from the practice of law for six months, with the entire six-

month suspension stayed on five conditions: first, that Carr commit no further

misconduct; second, that he complete at least six hours of continuing legal

education; third, that he submit to the monitoring of his practice by an attorney

designated by relator during the entire term of the six-month suspension; fourth,

that he make restitution to Pearson in the amount of $7,250; and fifth, that he pay

the costs associated with this matter. Because Carr’s registration status is

currently inactive, the panel recommended that the stayed suspension take effect

upon his being restored to active status but that restitution be made and costs be

paid prior to his being restored to active status. The board agreed with the panel’s

findings and recommended sanction, and we adopt both.

{¶ 17} A six-month stayed suspension falls within the range of sanctions

that we have imposed in connection with the charging of excessive fees. In

Disciplinary Counsel v. Smith, 124 Ohio St.3d 49, 2009-Ohio-5960, 918 N.E.2d

992, a public reprimand was issued to a relatively inexperienced attorney who,

when disbursing payments from an insurance company to his clients, deducted a

contingent fee from the payment despite the fact that the controlling law

prohibited the collection of contingent fees from such payments. In deducting the

fee, the attorney acted under the order of his boss. Because the respondent had

been acting under a senior lawyer’s directions, had no prior disciplinary record,

and had cooperated in the disciplinary process, we found a public reprimand to be

the appropriate sanction.

{¶ 18} In the absence of that type of mitigation, we have imposed a six-

month, suspension stayed on conditions, on attorneys who have charged a clearly

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excessive fee. See Toledo Bar Assn. v. Johnson, 121 Ohio St.3d 226, 2009-Ohio-

777, 903 N.E.2d 306; Cleveland Bar Assn. v. Character-Floyd (1998), 83 Ohio

St.3d 306, 699 N.E.2d 922.

{¶ 19} Accordingly, Carr is suspended from the practice of law for six

months, with the entire six-month suspension stayed on five conditions: first, that

Carr commit no further misconduct; second, that he complete at least six hours of

continuing legal education; third, that he submit to monitoring of his practice by

an attorney designated by relator during the entire six-month suspension; fourth,

that he make restitution to Pearson in the amount of $7,250; and fifth, that he pay

the costs associated with this matter. Because Carr’s registration status is

currently inactive, the stayed suspension shall take effect upon his being restored

to active status, but he must make restitution and pay the costs associated with

this matter before being restored to active status.

{¶ 20} Costs are taxed to Carr.

Judgment accordingly.

O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,

LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.

__________________

Milton C. Rankins and Vincent J. Alfera, for relator.

Jeffrey A. Carr, pro se.

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