Attorney Grievance Commission v. Culver

• Decision Date: 10 October 2002
• Docket Number: No. 32,32
• Citation: 371 Md. 265,808 A.2d 1251
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND, v. Allan J. CULVER, Jr.
• Court: Maryland Court of Appeals

808 A.2d 1251

371 Md. 265

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND, v. Allan J. CULVER, Jr.

No. 32, Sept. Term, 2001.

Court of Appeals of Maryland.

October 10, 2002.

Melvin Hirshman, Bar Counsel and James P. Botluk, Asst. Bar Counsel for the Atty. Grievance Com'n of Maryland, for petitioner.

Byron Warnken, Baltimore, for respondent.

Argued before BELL, C.J., ELDRIDGE, RAKER, WILNER, CATHELL, HARRELL and BATTAGLIA, JJ.

HARRELL, Judge.

In this attorney disciplinary action, the Attorney Grievance Commission of Maryland, Petitioner, acting through Bar Counsel and at the direction of the Review Board, see Maryland Rule 16-709,¹ filed a Petition for Disciplinary Action against Allan J Culver, Jr., Respondent, charging him with violations of Maryland Rules of Professional Conduct ("MRPC") 1.5(c)(Fees)² and 1.15(c)(Safekeeping Property),³ as adopted by Maryland Rule 16-812. Respondent also was charged with violating Maryland Rule 16-607(b)(2) (Commingling of Funds).⁴ We referred the case to the Honorable Emory A. Plitt, Jr. of the Circuit Court for Harford County to conduct a hearing⁵ and to make findings of fact and draw conclusions of law.⁶ Judge Plitt concluded from the facts found that the Respondent violated MRPC 1.5(c) and Rule 16-607(2)(b). As to the charge regarding MRPC 1.15(c), he concluded that, on the facts as he found them to be, the rule overlapped with Rule 16-607(b)(2), and that a finding of violation of the latter rule only was more appropriate.

I.

This case arises out of Respondent's representation of Mr. and Mrs. James D. Blum, III, in a residential landlord-tenant dispute and a subsequent related matter. The Blums initially retained Respondent in September of 1993 to defend them in a rent escrow action brought in the District Court of Maryland by the tenants, the Walkers. The Walkers and Mrs. Blum entered into a written one-year lease on 18 November 1992. According to the record, Mrs. Blum was the sole lessor of the single-family property.⁷ On 15 April 1993, the Walkers wrote to Mrs. Blum and demanded that they be allowed to terminate the lease and vacate the premises. Mrs. Blum refused. Later that same month, the Walkers filed a rent escrow proceeding in the District Court of Maryland. On 10 May 1993, Mrs. Blum, in response, sought repossession of the leasehold premises for the Walkers' alleged failure to pay rent and water and sewage expenses. The Walkers vacated the leased premises in September, allegedly still owing the back rent and water and sewage expenses. The District Court dismissed in November 1993 the rent escrow proceedings filed by the Walkers.

On 29 November 1993, the Blums initiated a suit against the Walkers, and the Walkers' attorney from the rent escrow case, alleging breach of contract and abuse of process in bringing and prosecuting the rent escrow suit. This second suit was settled in January 1998 for $3,500.00 as to the claims against the Walkers. A default judgment was obtained against the Walkers' former attorney.

Culver represented the Blums in both cases involving the Walkers. The Blums originally were represented in the rent escrow matter by other counsel, but, on approximately 8 September 1993, the Blums hired Culver to take over the matter. Although there was no written retainer agreement nor confirmatory writing of the representation received in evidence, it appears from the record that the financial terms of the representation were that Culver was to be paid a flat fee of $750 unless the case ran beyond a specified period of time, at which point billing would be on an hourly basis.⁸

The litigation ran beyond the agreed period, and Respondent began billing the Blums sporadically. Working from the available bills and the ledger kept by the Respondent, Judge Plitt reconstructed the following financial transactions between Culver and the Blums. Between 16 November 1993 and 12 March 1995, Respondent sent bills to Mrs. Blum on a periodic basis summarizing the tasks performed, the time for each, and the amount due based on an hourly rate. The last bill sent to the Blums by Respondent was 1 August 1995. The ledger maintained by Respondent showed that between 8 September 1993 and 17 July 1995, Respondent was paid by the Blums a net total of $4,891.00, after deducting reimbursement for costs advanced of $323.50. There were no entries on the ledger between 14 September 1994 and the last entry of 17 July 1995. The "trust funds" section of the ledger card contained no entries.

In mid-1995, while the second suit was pending, a telephone conversation occurred between Mr. Blum and Respondent in which Mr. Blum initially informed Respondent that he and his wife wished to discontinue the action against the Walkers as its cost outweighed the potential gain. At the end of this conversation, it was agreed that the litigation and Culver's representation would continue. Culver and the Blums disputed before Judge Plitt, however, what the financial terms of that continued representation were to be. The Blums claimed that Culver agreed to forgive the outstanding balance on their account of $2,618.50, owed as of August 1995, and continue representation in the second suit on a contingency fee basis, with 30% of any recovery going to Culver in full payment of his services. Culver claimed that he only agreed to defer collection of the hourly-driven, outstanding balance until after resolution of the Blums' case against the Walkers and their former attorney, and that he merely offered to change his fee arrangements for services to be rendered prospectively to a contingency fee of 40% of any recovery. Culver's position was that, although a discussion of a change to a contingency fee took place, no agreement was ever reached. In either event, the terms of a contingency fee arrangement never were reduced to writing.

On 30 January 1998, the second suit was settled as to the claims against the Walkers for $3,500.00, paid directly to Respondent by a check payable to "Trust Account of Allan Culver." Respondent deposited the check in his escrow account on 2 February 1998. He sent no written statement to the Blums as to the disposition of the $3,500.00 settlement. After not receiving a satisfactory response from Culver regarding the disposition of the settlement funds, the Blums' requested that an attorney-friend of theirs contact him. In response to that inquiry, Respondent sent the Blums a letter, dated 21 February 1998, informing them that it was his opinion that he was entitled to the entire $3,500.00 of the settlement and moreover, the Blums owed him an additional $516.50 for his services. On the same date, Respondent disbursed to himself from his escrow account the entire $3,500.00. No portion of the $3,500.00 was ever paid to the Blums. Combining the $3,500.00 with the $5,214.50 already paid by the Blums as of 17 July 1995, Respondent received a gross amount of $8,714.50 for his overall legal services, leaving outstanding his claim to an additional $516.50.⁹

Judge Plitt penultimately found that Respondent and the Blums agreed on a contingency fee modification to the fee arrangement, but that such agreement was not reduced to writing.

II.

From these facts, and others we shall discuss infra, Judge Plitt concluded, by clear and convincing evidence,¹⁰ that Respondent violated MRPC 1.5(c) and Rule 16-607(b)(2). Respondent filed exceptions with this Court. Regarding Judge Plitt's finding of a modification of the fee agreement from an hourly-driven fee to a contingency fee, Respondent essentially argues that: 1) because there is at least a dispute over the percentage of the contingency fee Judge Plitt should have found that there was no "meeting-of-the-minds" necessary to form a valid modification of the original fee agreement; and 2) there exist alternative interpretations of the facts as found by Judge Plitt which suggest that there never was a modification of the original fee agreement and that, while a change to a contingency fee had been discussed, the parties had not so agreed. The upshot of both arguments is that Respondent's explanation for why the contingency agreement was not reduced to writing as required by MRPC 1.5(c) was that there was no contingency agreement.

III.

This Court has original jurisdiction over all attorney disciplinary proceedings. See Attorney Grievance Comm'n v. Glenn, 341 Md. 448, 470, 671 A.2d 463, 473 (1996)

. The responsibility to make final determinations of an attorney's alleged misconduct is reserved to us. See Md. Rule 16-751(d); Glenn, 341 Md. at 470,

671 A.2d at 473: See also Attorney Grievance Comm'n v. Sheridan, 357 Md. 1, 17, 741 A.2d 1143, 1152 (1999). Additionally, as we recently pointed out in Attorney Grievance Comm'n v. Barneys, 370 Md. 566, 577, 805 A.2d 1040, 1046 (2002) (citations omitted), "in attorney discipline cases, we review the findings of the hearing judge to determine whether they are based on clear and convincing evidence, that the hearing court's findings of fact are prima facie correct and will not be disturbed unless they are shown to be clearly erroneous."

Respondent's first argument invites us to hold that a modification to an oral contract never can be found where the parties subsequently disagree as to the fee or price term in the alleged modification, as such a dispute would support equally a conclusion that no contract was ever formed due to a failure of the parties to reach the "meeting-of-the-minds" necessary to support the modification. We decline Respondent's invitation to run this circuit with him, and point out that it is well established that a subsequent oral modification of a contract may be found if established by the applicable quantum of evidence. See Charles Burton Builders, Inc v. L & S Constr. Co., 260 Md. 66, 87, 271 A.2d 534 (1970)

(preponderance of the evidence in civil claim context); Seybolt v. Baber, 203 Md. 20, 27-28, 97 A.2d 907, 910 (1953)(same). In this case the hearing judge found by...