State v. Friesen, SCBD 6333

• Decision Date: 25 October 2016
• Docket Number: SCBD 6333
• Parties: State of Oklahoma ex rel. Oklahoma Bar Association, Complainant, v. Larry Douglas Friesen, Respondent.
• Court: Oklahoma Supreme Court

384 P.3d 1129

2016 OK 109

State of Oklahoma ex rel. Oklahoma Bar Association, Complainant,

v.Larry Douglas Friesen, Respondent.

SCBD 6333

Supreme Court of Oklahoma.

FILED OCTOBER 25, 2016

Rehearing Denied December 5, 2016

Gina L. Hendryx, General Counsel, Oklahoma Bar Association, Oklahoma City, Oklahoma, for Complainant.

Mack K. Martin and Amber B. Martin, Oklahoma City, Oklahoma, for Respondent.

COMBS, V.C.J.:

¶ 1 On November 13, 2015, the Complainant, Oklahoma Bar Association (OBA), commenced these proceedings pursuant to Rule 6 of the Rules Governing Disciplinary Proceedings (RGDP), 5 O.S. 2011, ch. 1, app. 1–A, and charged the Respondent, Larry Douglas Friesen (Friesen), with one count of misconduct. In Count I, the OBA alleged Friesen failed to represent his clients, Alma and Oscar Nevarez, with competence and diligence, failed to keep them informed about the representation and failed to promptly comply with reasonable requests for information. In addition, the OBA alleged he failed to safe keep his clients' funds from his own funds and he charged an unreasonable fee. These actions, the OBA asserted, constituted violations of Rules 1.1, 1.3, 1.4, 1.5, and 1.15 of the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S. 2011, ch. 1, app. 3–A and Rule 1.3 RGDP.

I. FACTS AND PROCEDURAL HISTORY

¶ 2 The Trial Panel held a hearing and heard evidence on May 4, 2016. On June 13, 2016, the Trial Panel submitted a written report which found there was clear and convincing evidence Friesen violated Rules 1.1, 1.3, 1.4, 1.5, and 1.15 ORPC and Rule 1.3 RGDP, and recommended a one-year suspension of Friesen's license to practice law. At the hearing, the OBA presented evidence to support the following set of facts.

¶ 3 On June 21, 2009, Alma Nevarez and her husband Oscar Nevarez hired Friesen to represent them in a wrongful death action and executed an attorney-client agreement. Their 11–year–old daughter had died in an automobile accident earlier that month. The Nevarezes live in Goodwell, Oklahoma. She is a cafeteria worker for a local school and Oscar is a truck driver. The Nevarezes had little experience with attorneys and Friesen was recommended to them. On February 18, 2010, the wrongful death case was settled at mediation for $675,000.00. Alma speaks both Spanish and English. Oscar speaks Spanish and is not fluent in English nor can he read English; Alma must translate for him. At mediation, Friesen obtained a translator for Oscar Nevarez. This was done because Alma indicated she could not translate everything well. The Nevarezes were also presented a settlement proposal that included a structured settlement offer for the benefit of their three surviving children. It included examples of how a college fund/annuity (hereinafter college account) could be set up for each of their children and also included a brochure on structured settlements. Nothing was done with the structured settlement at mediation. On March 15, 2010, the settlement check for $675,000.00 was deposited into another attorney's trust account.¹ After attorney fees ($209,500.00) and reimbursement of litigation costs ($3,062.00), the Nevarezes recovered $462,438.00.

¶ 4 On May 23, 2010, the Nevarezes met with Friesen in Woodward to discuss what to do with the settlement proceeds. The testimony reflects they discussed opening various bank accounts with $350,000.00 of the settlement proceeds and discussed creating college accounts for the three children similar to what was presented to the Nevarezes at mediation. The testimony differed as to how this would be done. Alma Nevarez testified she thought the remaining $97,438.00² would be used to create the college accounts and pay for any costs. Her intention was to have approximately $30,000.00 of the $97,438.00 placed in an account for each child and the remainder would be used to provide an offset so that each child would receive the same amount of money due to their differing ages. She believed any leftover money would be used to pay applicable costs to establish these college accounts. Friesen testified the Nevarezes wanted to use the $97,438.00 as an attorney fee to pay Friesen to create five wills, four trusts, three annuities and to protect their $350,000.00 if the need should arise.³ He testified one trust was to be a family trust made for Alma and Oscar Nevarez and one trust was to be made for each child when they turned eighteen years of age. The three college accounts were to be created to allow the three children to go to college. He believed any college accounts were to be established from a portion of $300,000.00 in the bank accounts. In addition, Alma testified once the various bank accounts had been established she wanted Friesen to receive the bank statements and mail them to her in a different envelope. She was concerned people in her community would find out about the settlement proceeds.

¶ 5 On September 20, 2010, the Nevarezes met with Friesen in Oklahoma City. They went with Friesen to three separate banks and opened three bank accounts for the purpose of depositing $350,000.00 of the settlement proceeds. They deposited $150,000.00 in two separate bank accounts, one under Alma's name and the other under Oscar's name, and $50,000.00 into another account under both of their names. The record reflects Friesen's legal assistant kept meticulous time records which showed that for the most part they complied with Alma's wishes concerning the mailing of bank statements. Friesen also had the Nevarezes sign a new attorney-client agreement (second attorney-client agreement). This agreement states in pertinent part:

Legal Fees

Prior to this date, you have received checks of $12,000.00 on May 27, 2010 and $3,000.00 on July 28, 2010. Today we are going to be placing $350,000.00 into various financial institutions on your behalf for a total distribution for you of $365,000.00. It is your wish by your signatures on this contract to pay the Law Offices of Doug Friesen the remainder of your settlement, $97,438.00, as a flat fee.

The purpose for this additional attorney-client agreement is to keep the Law Offices of Doug Friesen continuously hired to help us (Oscar and Alma Nevarez) keep the money protected from the people associated with us until after the youngest child has turned 18. Until that time we are desirous of a trust being created to protect our assets and when the youngest child turns 18 we wish to create a trust for each of the children. Additionally, we may want an annuity created for the children for college purposes, but we do not want it to be with the insurance company with whom the settlement was made. We understand that there is a provisions in the settlement which says we have to use that specific company, but have been advised by Doug Friesen that since they did not get us the money by the required time, we are not bound by this provision and we do not trust the insurance company because they took so long to pay us after the settlement agreement. The amount of this contract is to prepay Doug Friesen for all of these services to be provided.

The second attorney-client agreement also contained a non-refundable clause. It states the Nevarezes “have the right to discharge me as your attorney” but if that should occur “the initial retainer will not be refunded.” Alma confirmed that she and Oscar signed the second attorney-client agreement. The agreement was in English and Friesen did not hire an interpreter for Oscar. Alma testified Friesen would tell her what was in the agreement and she would translate the information to Oscar. She also testified that she did not recall reading the agreement when she signed it nor did she receive a copy of it. Alma only remembered that she had to sign some documents so that Friesen could set up the college accounts for her children. She believed the $97,438.00 would be used to set up these accounts, not that they would be used to pay Friesen a second legal fee.

¶ 6 On May 12, 2011, Alma Nevarez began calling Friesen's office inquiring about the children's college accounts. Alma testified she was mainly concerned with these accounts for her children and when she would call she would be told either they were sending her information, or the accounts were set up or there was a problem; she never could get any meaningful information about these college accounts.⁴ After a long period of receiving no information, Oscar became agitated and accused Alma of taking the $97,438.00.⁵ Alma testified Oscar had even left the house because he thought she had somehow taken the money. Sharon Orth, OBA Investigator, reviewed Friesen's law office time records and found approximately ten entries showing Alma was calling about the children's college accounts.⁶ She notes these calls were made over several years. The investigator also noted Friesen's time records during this period did not indicate he created any wills or trusts or set up any college accounts for the children. The only work he performed for the Nevarezes was reviewing their bank statements each month and mailing those statements to them. At the hearing, Friesen confirmed he did not perform any estate planning nor did he set up any college accounts for the Nevarezes. An October 3, 2013, law office time record indicates Friesen was going to forward information to Alma from an insurance company as soon as he received it. Complainant's Exhibit 12 contains a Spanish version of the brochure presented to the Nevarezes at mediation over three years earlier and includes an envelope stamped December 11, 2013. Alma testified all she received from Friesen were bank statements and this brochure. Friesen testified he had sent other annuity proposals to her but could not find the information in his files nor is there any indication in the time records they were sent.

¶ 7 In December 2013, Alma contacted an attorney in Guymon, Oklahoma, Cory Hicks, to help her locate the missing $97,438.00. Hicks contacted the settlement company who...