In re Petition for Disciplinary Action Against French, A14–0143.

Decision Date03 June 2015
Docket NumberNo. A14–0143.,A14–0143.
Citation864 N.W.2d 183
PartiesIn re Petition for DISCIPLINARY ACTION AGAINST William L. FRENCH, a Minnesota Attorney, Registration No. 131945.
CourtMinnesota Supreme Court

Martin A. Cole, Director, Siama Y. Chaudhary, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, MN, for petitioner.

Kay Nord Hunt, Phillip A. Cole, Lommen Abdo, P.A., Minneapolis, MN, for respondent.

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility filed petitions for disciplinary action against respondent William L. French, alleging that French committed professional misconduct in three client matters. Following an evidentiary hearing, the referee concluded that French did not commit professional misconduct in the first two matters, but that he did violate Minn. R. Prof. Conduct 1.3, 1.4(a)(3), 1.4(a)(4), and 1.15(a) in the third matter. We conclude that the referee's findings and conclusions are not clearly erroneous and that a public reprimand with 1 year of supervised probation is the appropriate discipline for French's misconduct.

French has been licensed to practice law in Minnesota since October 30, 1981. The Director filed a petition for disciplinary action against French, alleging violations in his separate representations of J.T. and J.B./M.B. The Director later filed a supplementary petition for disciplinary action, alleging violations in French's representation of K.L., and a second supplementary petition for disciplinary action, alleging violations based on attorney's lien notices French filed during the pendency of this disciplinary action. We appointed a referee to make findings of fact and conclusions and to recommend appropriate discipline. We will address the facts of each client matter in turn.

J.T. Matter

Beginning in September 2007, French represented J.T. in a lawsuit J.T. had commenced against attorney T.M. In 2010, summary judgment was granted in favor of T.M. with respect to J.T.'s claims. French agreed to represent J.T. in an appeal from the judgment, but required J.T. to pay him $1,200. J.T. paid French $1,200 on February 3, 2010, and the memo portion of his check stated “Cover Fees for Appeal.” French did not put the $1,200 in his trust account. French paid costs related to the appeal totaling $1,404.75, including a cost bond of $500. The appeal was unsuccessful, and French withdrew from J.T.'s representation in August 2010. In January 2011, French received a $500 check refunding J.T.'s cost bond. French deposited the $500 in his operating account and did not notify J.T. of his receipt of the refund.

The parties dispute whether J.T.'s $1,200 payment was meant to cover costs, attorney fees, or both. The Director alleged that the payment was exclusively for costs, and that by keeping the cost bond refund, rather than placing it in his trust account, French misappropriated client funds and failed to communicate with J.T. about the refund, in violation of Minn. R. Prof. Conduct 1.4(a)(3),1 1.15(a) and (c)(1),2 and 8.4(c) and (d).3 French, for his part, claimed that the payment was a “flat fee” and that he had no obligation to place any portion of the payment in his trust account or to notify J.T. of the cost bond refund. French notes that after the $500 cost bond refund was deducted from J.T.'s appellate costs paid by French, the remaining appellate costs were $904.75. And when this amount is subtracted from J.T.'s $1,200 payment, French was left with $295.25, which he kept as a fee for the legal work he performed on the appeal.

The referee found that the $1,200 was a “flat rate to cover fees and expenses.” According to the referee, all of the money “had either been earned or expended by the time the $1,200 came into Mr. French's possession,” and therefore the $1,200 constituted French's own funds. Although French did not deposit the $500 cost bond refund in his trust account, the referee found that French's conduct “was the product of his understanding that the refund check was his money, a belief that was, in good faith, justified by the facts of the transaction with the client.” The referee found that the cost bond refund was French's property, and therefore concluded that the Director had not proven that French had committed misconduct.

Additionally, during the pendency of these disciplinary proceedings, French filed and served upon J.T. a notice of attorney's lien, claiming entitlement to $500 as fees and costs due to him. The lien action was French's attempt to establish that he was legally entitled to the $500 cost bond refund. The district court granted the lien, and French filed a satisfaction of judgment. The Director alleged that this lien notice was a frivolous claim and that it represented an attempt to collect unreasonable fees, in violation of Minn. R. Prof. Conduct 1.5(a),4 3.1,5 and 8.4(d). The referee concluded that the notice of attorney's lien, “while perhaps unnecessary, especially in light of these pending proceedings, does not rise to the level of a violation of the Rules of Professional Conduct.”

J.B./M.B. Matter

Beginning in April 2007, French represented J.B. and M.B. in litigation regarding an easement. J.B. and M.B. lost the case, and French sent a letter to them, dated December 2, 2008, stating, “I am willing to handle an appeal at no additional cost for attorney fees provided that the outstanding bill [attached to the letter ($3,100.68) ] plus $1,100 (for expenses) is paid on or before an appeal is undertaken.” French claims that J.B. and M.B. did not agree to the terms of this offer, but that they came to a new agreement over the phone, pursuant to which J.B. and M.B. would pay French a total of $5,000 in attorney fees, inclusive of the $3,100.68 outstanding, with $2,500 paid before the filing of the notice of appeal and $2,500 paid in 30 days. There is a dispute, however, over whether J.B. and M.B. actually agreed to these terms.

On December 9, 2008, J.B. and M.B. paid French $2,500. French filed the notice of appeal and advanced $1,126.67 in appellate costs, including a $500 cost bond, from his own funds. On January 19, 2009, French sent a letter to J.B. and M.B. stating, “Just a reminder that the second payment of $2,500 is due, as per our agreement. Once that has been paid, your account will be paid in full.” The letter did not mention the $1,126.67 in costs, but French testified that the $2,500–plus–$2,500 agreement was only for attorney fees, and did not include expenses. J.B. sent French a check for $1,700.68 on January 31, 2009 marked “Pmt in Full.” J.B. and M.B. paid French a total of $4,200.68, which is the same amount reflected in French's December 2 letter, but approximately $800 short of the agreement French claims the parties reached over the phone.

J.B. and M.B. lost their appeal, and French received a partial cost bond refund of $145.21.6 French did not deposit the refund into his trust account, but instead deposited it in his operating account, and did not notify J.B. and M.B. that he had received a refund. Based on his handling of this cost bond refund, the Director alleged the same misconduct as in the J.T. matter: violations of Minn. R. Prof. Conduct. 1.4(a)(3), 1.15(a) and (c)(1), and 8.4(c) and (d).

The referee found that [t]he weight of the evidence on the fee agreement between [J.B. and M.B.] and [French] supports [French]'s claim that he had agreed with his clients to take the appeal for a $5,000 fee inclusive of payment of the balance due him prior to the appeal of $3,100.6[0].” The $145.21 refund was therefore French's money, the referee concluded, and “reduced his cost outlay ... from $1,126.67 to $981.46 and allowed him to apply the refund to the outstanding fee balance per the $5,000 agreement.” The referee therefore concluded that the Director had not proven that French had committed misconduct with respect to the J.B./M.B. matter.

As he did with J.T., during the pendency of these disciplinary proceedings, French filed and served upon J.B. and M.B. a notice of attorney's lien claiming entitlement to $800 as fees and costs due to him, in an attempt to establish that he was legally entitled to the $145 cost bond refund. The Director alleged that this lien notice was a frivolous claim and that it was an attempt to collect unreasonable fees. The referee again concluded that the notice of attorney's lien was perhaps unnecessary but did not violate the Rules of Professional Misconduct.

K.L. Matter

On December 18, 2009, French told K.L. that he would require a $1,200 retainer to represent her in a dispute with a bank regarding its handling of her father's trust. K.L. sent French a check for $1,500 (according to K.L., the extra $300 was included as a show of good faith on her part for French's services). Based on a $200 per hour rate, French had billed K.L.'s account $400 at the time he received the $1,500 payment. He deposited the entire payment into his operating account and at no point retained the unearned balance in a trust account. French applied the funds as intended by K.L. to pay for his legal services, and he later refunded the entire sum when she expressed her dissatisfaction with his services.

The Director alleged that French violated Rules 1.15(a), 1.3, and 1.4(a)(3) and (4) for his conduct in the K.L. matter. The referee found that by depositing K.L.'s check in his operating account, French failed to safeguard client funds and violated Rule 1.15(a). The referee concluded that French's failure was careless but was not done with intent to use the funds for any purpose other than for what K.L. had intended. The referee also found that between December 18, 2009 and January 29, 2014, French did little or no substantive work on K.L.'s case and did not adequately communicate with K.L. regarding the case. The referee concluded that French's failure to communicate with K.L. and to work diligently on her case violated Minn. R. Prof. Conduct 1.3 and 1.4(a)(3) and (4). Neither party has...

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