Attorney Grievance Commission v. Edib

ADKINS, J.,

concurring, in which BATTAGLIA, J., joins.

I concur with the judgment of the majority. I write separately, however, because I see some troubling implications arising from the majority opinion, which may or may not have been intended.

I.

The majority indicates in its discussion of the facts that the fee contract “had a provision that established Respondent’s compensation ‘based on the greater of either Three Hundred Dollars ($300) per hour for services rendered or a flat legal commission of fifteen percent (15%) of the gross value for all assets (personal or real property) received and handled through my office or escrow account for your benefit.’ ” Maj. Op. at 702, 4 A.3d at 961. Thus, under the contract Respon *724 dent would be paid $300 per hour for work performed, even if 15% of the value of the “assets ... received and handled” was less than that sum.

Yet, in its opinion the majority refers to it as a “contingent fee[,]” Maj. Op. at 709, 4 A.3d at 965, and seems to premise a portion of its analysis on the concept that the risk inherent in a contingency fee justifies a larger fee paid to the attorney. For example, the majority emphasizes that the “amount of time and effort that would be required to resolve the matters concerning Decedent’s assets (probate and non-probate), to advise and assist Ms. Kismir in managing and disposing of those assets, and in performing the other tasks she required, was entirely unknown at the inception of this relationship.” I do not completely agree with this analysis. Certainly, the nature and extent of the work was unknown, but Respondent knew that, whatever the work, he would be paid his hourly rate. Thus, Respondent had the benefit of both the hourly rate guarantee and the upside potential to receive a fee greater than his hourly rate. Although a fee agreement calling for the greater of a percentage or an hourly rate is perfectly acceptable, when a court is asked to evaluate that fee for reasonableness within the context of Maryland Lawyers’ Rules of Professional Conduct (“MRPC”) 1.5, this hybrid fee arrangement does not justify a rate higher than that which would otherwise be reasonable. This is unlike a straight percentage fee, in which the lawyer runs the risk of performing work for which the lawyer is not paid.

II.

The majority is dismissive of the AGC’s contention that the fee charged by Respondent was unreasonable because it vastly exceeded that which could be recovered were Respondent to be handling a probate estate in Maryland, 1 and that which was *725 recommended as a reasonable fee in Virginia for estate matters. 2 As I compute it, his fee was at least three times what is *726 called for under both of these fee schedules. 3 To be sure, since the fees in question were for properties outside of probate, these fee schedules (one statutory, one not) are not directly applicable. Yet, the work is quite similar to that which an attorney might do in Maryland when hired by a personal representative to handle an estate. Unlike the majority, I submit that it is often the case that an attorney handling an estate will spend time visiting banks to determine what might be in a safe deposit box there, and/or whether the decedent may have accounts there. Investigating brokerage accounts and negotiating with tenants or handling other property matters is also quite typical, and in Maryland would not normally justify a fee higher than the formula set forth in Md.Code (1974, 2001 ReplVol.), Section 7-601 of the Estates & Trusts Article (“E.T.”). I would not be so dismissive of these indicia of reasonableness. Indeed, although the AGC had the burden to show by clear and convincing evidence that the Respondent violated MRPC 1.5(a), in my view, a percentage fee three times the amounts approved in Maryland and Virginia for similar work in probate estates (without the requirements of preparing an accounting) should be given heavy weight in determining unreasonableness. I disagree with the majority opinion in its implication (by its dismissive treatment of the AGC’s argument), that these fee schedules are not significant yardsticks in a situation like this one.

I shall not go into the nitty-gritty question of whether Respondent’s efforts were such as to justify a fee greater than these scheduled fees. This would require close examination of the record, and perhaps a determination of whether Respon *727 dent had the burden to show how much work he did to justify exceeding these schedules, or whether the AGC had the burden to seek discovery of his time records and introduce them into evidence. I leave that question for future determination 4 because in this case, even were the fee unreasonable, I would nonetheless agree with the majority that a reprimand is the correct sanction for Mr. Edib.

Judge BATTAGLIA authorizes me to state that she joins in the views expressed in this opinion.

. To determine the appropriate attorney’s fee, one must review two separate provisions of the Estates and Trusts Article of the Maryland Code. First, Md.Code (1974, 2001 Repl.Vol.) Section 7-602 of the Estates & Trusts Article ("E.T.”) provides:

*725 (a) General.—An attorney is entitled to reasonable compensation for legal services rendered by him to the estate and/or the personal representative.

(b) Petition.—Upon the filing of a petition in reasonable detail by the personal representative or the attorney, the court may allow a counsel fee to an attorney employed by the personal representative for legal services. The compensation shall be fair and reasonable in the light of all the circumstances to be considered in fixing the fee of an attorney.

(c) Considered with commissions.—If the court shall allow a counsel fee to one or more attorneys, it shall take into consideration in making its determination, what would be a fair and reasonable total charge for the cost of administering the estate under this article, and it shall not allow aggregate compensation in excess of that figure.

(Emphasis added). E.T. § 7-601 provides:

(a) Right to compensation.—A personal representative or special administrator is entitled to reasonable compensation for services ...

(b) Computation of compensation.—Unless the will provides a larger measure of compensation, upon petition filed in reasonable detail by the personal representative or special administrator the court may allow the commissions it considers appropriate. The commissions may not exceed those computed in accordance with the table in this subsection.

If the property subject to The commission may not exceed: administration is:

Not over $20,000 9%

Over $20,000

(Emphasis added).

$1,800 plus 3.6% of the excess over

$20,000.

. Virginia provides that executors of an estate may receive “reasonable compensation” subject to the approval of the Virginia Commissioner of Accounts. See Va.Code Ann. § 26-30 (2010). The Virginia Commissioner of Accounts has set forth guidelines for a reasonable fee as follows:

[T]he Commissioner, in the absence of unusual circumstances, will allow a fee based upon the following:

(1) Income—5% of income receipts (not including capital gains) realized during each accounting period.

2. Principal—A fee based upon the inventory value, including amended inventories, of the decedent’s probate assets in accordance with the following schedule:

First $400,000.00 5%

Next $300,000.00 4%

Next $300,000.00 3%

*726 Office of the Commissioner of Accounts, Fiduciary Compensation Schedule—Executors and Administrators 1 (2007), available at: http://www. fairfaxcommissionerofaccounts.org/open/docs/resource.Hdcomp.estate fidcomp.pdf (last visited September 14, 2010).

. With the increasingly popular use of inter vivos revocable trusts people avoid probate, but not necessarily attorneys' fees. Their assets will pass directly to the designated beneficiaries, without the formalities of an estate, but attorneys will still have much to do. This work will include, e.g., identifying property by searching safety deposit boxes; contacting banks, insurance companies and other institutions; conveying title from the trustee to the beneficiaries; recovering on insurance policies; determining amount of taxes, etc. Cases may arise in which we are asked to decide what fee is reasonable in this context, and the fee schedule for probate estates would be useful as a comparison.

. The Respondent received a fee of $143,970, or 15% of $959,800, the total sale value of the three properties. Under the Maryland statute, the Respondent’s maximum fee would have been slightly over $35,000 for similar services in probate, and under the Virginia guidelines, a reasonable probate fee would have been just under $40,000.