Idaho State Bar v. Frazier

• Decision Date: 22 June 2001
• Docket Number: No. 26132.,26132.
• Citation: 28 P.3d 363,136 Idaho 22
• Parties: IDAHO STATE BAR, Plaintiff-Respondent, v. David A. FRAZIER, Defendant-Petitioner.
• Court: Idaho Supreme Court

28 P.3d 363

136 Idaho 22

IDAHO STATE BAR, Plaintiff-Respondent, v. David A. FRAZIER, Defendant-Petitioner.

No. 26132.

Supreme Court of Idaho, Boise, January 2001 Term.

June 22, 2001.

Frederick G. Loats, Coeur d'Alene, for petitioner.

Michael J. Oths, Idaho State Bar Counsel, Boise, for respondent. Michael J. Oths argued.

SCHROEDER, Justice.

David A. Frazier (Frazier) seeks review of findings of fact, conclusions of law and recommended sanctions of the Hearing Committee of the Professional Conduct Board (hearing committee) of the Idaho State Bar (ISB) which recommended that he be suspended from the practice of law for three years for professional misconduct.

I. BACKGROUND AND PRIOR PROCEEDINGS

Frazier was admitted to practice law in Idaho in 1966 and has been in private practice in Coeur d'Alene as a sole practitioner since 1968. He married Donna Frazier (Donna) in 1977. Donna worked in Frazier's law office from 1979 until 1998 and was in charge of the clerical work, including maintaining client records and billing. Donna and Frazier separated in 1995 and were divorced in 1998. Donna allegedly had drug and alcohol problems. As the record reflects, it is apparent that Donna was responsible for some of the problems that confront Frazier in this case.

Frazier was trustee of the Frank C. Weber Trust from 1971 through 1998, when the trust was distributed. Frank Weber was the father of Carol Bastian (Bastian). Following Weber's death, Bastian received $475 per month from a brokerage in Spokane, Washington, called Murphy-Favre. Bastian lived in a house owned by the Weber Trust located in remote Lakeview, Idaho. She had a life estate in the house. Bastian died in 1991, and Frazier became the personal representative of her estate.

Bastian's personal property was located in the house at the time of her death, except for some jewelry and coins that were in a safety deposit box in Coeur d'Alene. Bastian's personal property was worth between $42,000 and $115,000. The estate also included real property worth approximately $15,000 and the security account at Murphy-Favre valued at approximately $400,000.

Frazier stored pieces of Bastian's jewelry in a briefcase under a desk in his office. He locked the office unless a staff member was present. In late 1996 he was told, and later discovered, that some of the items of jewelry had been stolen. Additionally, he left some of Bastian's watches at a local jewelry store for approximately one year for an appraisal.

Following Bastian's death in 1991, Frazier received the monthly $475 check from Murphy-Favre. Frazier testified that he instructed Donna to put the check in the trust account. Approximately thirty-three of the checks were not deposited into the trust account. Some were deposited in other accounts and some were negotiated. Donna cashed one of the checks at a local bar. Several checks were drawn from the trust account and made payable to Frazier with the words "fees and costs owed" written on them.

During the time that Frazier served as personal representative of the Bastian estate he handled a claim submitted against the estate by Richard and Deborah McKinney for services allegedly rendered to Bastian during her lifetime. The claim was eventually settled in 1994 with payment of $5,500 from the estate. Frazier had represented in a letter to the beneficiaries of the estate that he could defend the case at trial for $3,500 and through an appeal for an additional $2,000.

The court handling the Bastian estate removed Frazier as personal representative in February of 1997, pursuant to a petition filed by Edwin and Catherine Fulwider, beneficiaries in Bastian's will. The court concluded that Frazier neglected to perform the duties of personal representative and mismanaged the estate. In the six years following Bastian's death Frazier had not filed an inventory of the estate assets as required by I.C. § 15-3-706. Carolyn Justh (Justh), an attorney in Coeur d'Alene, handled the Fulwider's petition.

Frazier did not prepare a billing statement for his services for the estate until 1997, after his removal as personal representative. That billing statement disclosed a fee of $101,562.50, plus costs of $3,079.79. There is no distinction made in the billing statement between services rendered as a personal representative and those rendered as an attorney. Frazier commonly charged $100 per hour in 1991, but he charged $125 per hour on the billing statement produced for the estate in 1997, dating back to 1991. Dena Brunk (Brunk), a former secretary and billing assistant for Frazier, testified that Donna had her go through the estate records in order to create entries on the billing statement consistent with dates on which the file disclosed there had been activity and to raise the billing time when warranted. Brunk also testified Donna told her to raise the rate to $125 on the account.

A settlement was reached between Frazier and the beneficiaries of the Weber Trust and Bastian estate in August of 1998. The commingling of assets and payments of the Weber Trust obligations by the Bastian estate monies was resolved with the payment of $5,000 from the Bastian Estate to the Weber Trust. Frazier also agreed to pay the sum of $35,000 to the Bastian Estate and its beneficiaries for withdrawal of estate funds which exceeded that to which he was entitled. The agreement provided that it would be disclosed to the ISB.

The ISB filed a complaint on December 17, 1998, alleging Frazier committed professional misconduct. Frazier answered, and a hearing was held August 23 and 24, 1999. The hearing committee determined that Frazier had committed acts of professional misconduct and recommended sanctions to the Professional Conduct Board. Frazier objected to the findings and recommendations of the hearing committee in accordance with Idaho Bar Commission Rule (I.B.C.R.) 511(n).

II. STANDARD OF REVIEW

"In an attorney discipline case, the Idaho State Bar must establish charges of misconduct by clear and convincing evidence." Idaho State Bar v. Tway, 128 Idaho 794, 797, 919 P.2d 323, 325 (1996), citing Idaho State Bar v. Daw, 128 Idaho 80, 82, 910 P.2d 752, 754 (1996). In reviewing a hearing committee decision, this Court conducts an independent review of the record and the evidence. Defendant A v. Idaho State Bar, 132 Idaho 662, 664, 978 P.2d 222, 224 (1999). The Court gives considerable weight to the findings of the hearing committee; however, the Court is not bound by them. Warner v. Stewart, 129 Idaho 588, 592, 930 P.2d 1030, 1034 (1997). The burden is on the attorney petitioner to show that the evidence does not support the hearing committee's findings. Tway, 128 Idaho at 797, 919 P.2d at 325.

III.

THE HEARING COMMITTEE DID NOT ERR BY DENYING FRAZIER'S MOTION TO DISMISS CLAIMS BASED UPON IDAHO RULES OF PROFESSIONAL CONDUCT 1.3, 1.5, 1.7, 1.15.

Frazier claims that because the ISB did not prove that an attorney-client relationship existed between him and the complaining parties, the alleged violations of Idaho Rules of Professional Conduct (I.R.P.C.) 1.3, 1.5, 1.7, 1.15 do not apply, because the rules apply strictly to attorney-client relationship situations. Frazier cites to cases in Colorado and Washington where courts have held that attorney-client relationships do not exist in estate proceedings. However, two of the cases cited deal with malpractice liability,¹ and the third case² is a probate proceeding.

Frazier's case is distinguishable because the complaining party is the ISB, not a beneficiary to an estate or a plaintiff in a malpractice action. This is a disciplinary action, not a civil action. This Court recognized in Warner v. Stewart, 129 Idaho 588, 593, 930 P.2d 1030, 1035 (1997), "there are rules which deal with the relationship between the attorney and the client and there are also rules that apply to the conduct of an attorney apart from the attorney-client relationship." This holding does not stand for the proposition that the rules of professional conduct do not apply to attorneys in certain situations if an attorney-client relationship does not exist. Rather, professional conduct is "defined as all `conduct which occurs within or without the attorney-client relationship which constitutes misconduct or conduct reflecting on a lawyer's fitness to practice law.'" Id., citing I.B.C.R. 501(m). The ISB is simply attempting to use Frazier's conduct in the Bastian estate to evidence his misconduct and fitness to practice law.

In essence what Frazier is asking the Court to find is that once an attorney's client dies, if the attorney has no attorney-client agreement with the beneficiaries of the estate, the attorney has no further obligation under the rules of professional conduct, that is, no obligation to act diligently, to charge the estate a reasonable fee, to manage the estate without conflict or to safely store the property of the estate. Such an interpretation is erroneous. While Frazier argues that he was not acting in an attorney capacity, his answer to the ISB complaint admitted "[t]he allegations that David A. Frazier acted as Personal Representative and attorney in conducting the affairs of the Estate of Carolyn Weber Bastian, commencing March, 1991, are admitted." Frazier testified that he chose to act as both personal representative and attorney for the Bastian Estate. In his fifty-three page bill, Frazier billed all of his services under the heading of "attorney fees," specifically, 812.5 hours at $125 per hour, totaling $101,562.50. There is no differentiation within the billing statement of what tasks were undertaken in Frazier's personal representative capacity or attorney capacity, and there is no differentiation in what Frazier charged for his services. By acting as an attorney for the estate, Frazier necessarily agreed to represent the interests of the beneficiaries, and he charged them for his services by subtracting his fees from the estate that...