Attorney Grievance Com'n of Maryland v. Korotki

Decision Date21 February 1990
Citation318 Md. 646,569 A.2d 1224
PartiesATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Abraham Paul KOROTKI. 24 Sept. Term 1988
CourtMaryland Court of Appeals

Melvin Hirshman, Bar Counsel, and Walter D. Murphy, Jr., Deputy Bar Counsel, for Atty. Grievance Com'n of Maryland.

Paul D. Bekman, Baltimore, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE and ADKINS, JJ., and CHARLES E. ORTH, Jr., Associate Judge of the Court of Appeals (retired, Specially Assigned).

RODOWSKY, Judge.

This professional discipline matter arises out of the personal injury claims of five persons, asserted in a single action. Plaintiffs' counsel in that action, the respondent herein, Abraham Paul Korotki (Korotki), charged his clients a contingent fee of seventy-five percent of the gross amount recovered after trial and appellate review. Two of the clients were charged fees totaling $471,424.36 on their combined gross recoveries of $628,565.81. Their complaints to Bar Counsel led to charges against Korotki which were heard before Judge Dana M. Levitz of the Circuit Court for Baltimore County. He found "that the manner and circumstances surrounding the modification of the contingent fee agreement ... from 40 percent, [to 60 percent,] to 75 percent make the fee ultimately charged clearly excessive," in violation of then governing Disciplinary Rules 2-106 and 5-103(A). See Maryland Rules (1986), Court Administration Rule 1230, Appendix F, Code of Professional Responsibility, DR 2-106 and DR 5-103(A). We shall sustain the findings and conclusion of Judge Levitz over Korotki's exceptions. Because this is a particularly aggravated case of greed overriding professionalism, this Court suspends Korotki from the practice of law for eighteen months.

DR 2-106(A) provides that "[a] lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee." Under subsection (B) of DR 2-106 "[a] fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee." The rule lists eight "[f]actors to be considered as guides in determining the reasonableness of the fee...." We set forth those guides in the margin. 1 DR 5-103(A) states:

"A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client, except that he may:

(1) Acquire a lien granted by law to secure his fee or expenses.

(2) Contract with a client for a reasonable contingent fee in a civil case."

On the facts of the instant matter, there is essentially only one issue presented. If Korotki's contingent fee was clearly excessive in violation of DR 2-106, then he also has failed to stay within the exception to the prohibition of DR 5-103(A) against acquiring a proprietary interest in the clients' causes of action.

Judge Levitz's report is tightly written. The vast majority of Korotki's numerous exceptions to that report complain of the omission of details which Korotki deems to be favorable. In our statement of facts we shall include most of the matter sought by Korotki, thereby denying general readers the mercy shown to them by Judge Levitz.

Korotki's clients in the action underlying these grievances were Baltimore City fire fighters. 2 On February 27, 1979, there was a fire at the premises of Cambridge Iron & Metal Co. (Cambridge) in Baltimore City. Among the responding fire fighters were Henry A. Hartman, Jr. (Hartman), Lieutenant Charles H. Brown (Brown), Glenn Wilson (Wilson), Hance L. Morgan (Morgan) and Vernon G. Sauer (Sauer). In the course of fighting the fire these individuals suffered personal injuries when an explosion occurred that apparently emanated from a metal yard box containing approximately 125 cubic feet of magnesium fines and scraps. It came to pass that Korotki was engaged to represent each of these five fire fighters as claimants for workers' compensation. 3

Korotki obtained awards of workers' compensation for his clients. Hartman, who was later to obtain a $300,000 third party action judgment against Cambridge, was awarded permanent partial disability benefits of $2,886. Brown, who recovered a $200,000 judgment against Cambridge, was awarded permanent partial disability benefits of $2,960. 4

Judge Levitz found on sufficient evidence that, after the workers' compensation claims were concluded, Korotki

"suggested to the firefighters that he file suit on their behalf against Cambridge Iron and Metal.... He told them that it would be a very difficult case to win. He informed them that no other firemen had won such a case but this might be a chance to change the law of Maryland."

The five fire fighters filed suit through Korotki in the Eighth Judicial Circuit on May 6, 1980.

Under Maryland law at that time a fire fighter who entered premises to put out a fire was

"a licensee and not an invitee.... [O]wners and occupants of property owe licensees only the duty of abstaining from wilful or wanton misconduct or entrapment.... [U]nder Maryland law this encompassed a duty to warn of any hidden dangers, where there was knowledge of such danger and an opportunity to give warning."

Sherman v. Suburban Trust Co., 282 Md. 238, 243, 384 A.2d 76, 79-80 (1978).

"[S]o long as a fireman is injured by the flames or gases of the fire, apart from unusual factors operative after the fire began, and apart from a failure to warn of hidden dangers, he cannot recover from the owner since fighting the fire, however caused, is his occupation."

Id. at 244, 384 A.2d at 80. Sherman derived the above-quoted statements of Maryland law from the only two prior decisions of this Court dealing with the "fire fighters' rule," Aravanis v. Eisenberg, 237 Md. 242, 206 A.2d 148 (1965) and Steinwedel v. Hilbert, 149 Md. 121, 131 A. 44 (1925). The appellants in Sherman sought to present, but had failed to preserve for appeal, the argument that the duties owed by an occupier of premises should be based on ordinary negligence principles and not be based upon common law classifications of invitees, licensees and trespassers. Two members of this Court, dissenting in Sherman, would have adopted the rule advocated by that appellant.

When Korotki undertook the representation in the claim against Cambridge, he knew that the evidence would be that the plaintiffs entered the premises in order to fight a magnesium fire and that the defense would contend that the explosion was an explosion caused by magnesium. Thus, Korotki knew, or was chargeable with knowledge, that there were probably only three liability theories under which he could obtain judgment in favor of the plaintiffs in a contested case. First, there might be wanton and willful conduct on the part of Cambridge. It was extremely doubtful, however, that the evidence measured up to that standard, and this evaluation was shared by other attorneys with whom Korotki reviewed the proof. Second, Korotki might effect a change in the law by convincing this Court to grant certiorari on a judgment adverse to his clients and then to hold that the duty owed by an occupier of land to fire fighters is determined by general negligence law. If Korotki succeeded in effecting a change in the law, a retrial would probably have been required in order to determine liability under the new standard and, if so determined, to fix damages. Third, there might be a recovery under existing law if the facts gave rise to a duty on Cambridge to warn of a hidden danger.

When undertaking the representation, Korotki entered into written fee agreements with his clients. In March 1984, approximately one month before trial, Korotki was unable to locate those agreements. He obtained confirmations of the fee agreements in the form of written powers of attorney which included the promise of each client "to pay unto said Attorney for his services the sum of 33- 1/3% of all monies collected by way of settlement before suit is instituted, or 40% of all monies collected after suit is instituted, plus unreimbursed legal expenses."

Trial to a jury presided over by Judge David Ross was had April 2-6, 1984. Four of the claims for loss of consortium and the issue of punitive damages were decided on motion in favor of the defendant. 5 Although Judge Ross commented that the evidence was "razor thin" to establish liability, he was satisfied that there was sufficient evidence from which the jury could find that the fire fighters should have been warned about magnesium in the yard box which was remote from the obvious fire, underneath a truck, which the fire fighters were seeking to extinguish. Korotki, assisted by another attorney who had prepared the plaintiffs' requested instructions, excepted to the jury's having been instructed on distinctions between licensees and invitees. The jury returned verdicts totaling $618,000 consisting of $300,000 for Hartman, $200,000 for Brown, $100,000 for Wilson, $13,000 for Sauer, and $5,000 for Morgan. Post trial motions by Cambridge were denied, and judgment nisi on the verdicts was extended to judgment absolute. Had the judgments been paid at that moment, Korotki's fee would have been $247,200.

Cambridge appealed to the Court of Special Appeals, and, on June 5, Korotki noted an appeal in order to claim error in the circuit court's refusal to submit the issue of punitive damages to the jury.

Korotki also called a meeting of his clients which was held in Korotki's office on June 23. At that meeting the clients respectively signed documents headed "APPELLATE FEE AGREEMENT" which read:

"WE, the undersigned, do hereby employ Abraham Paul Korotki to represent our interest with reference to an Appeal from the Circuit Court For Baltimore City case number 1980/716/22542, in which the Cambridge Iron & Metal Company was the Defendant.

"WE AUTHORIZE AND EMPOWER our Attorney to prosecute and/or defend...

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