The Florida Bar v. Herzog, 68750

• Decision Date: 17 March 1988
• Docket Number: No. 68750,68750
• Citation: 13 Fla. L. Weekly 219,521 So.2d 1118
• Parties: 13 Fla. L. Weekly 219 THE FLORIDA BAR, Complainant, v. Theodore W. HERZOG, Respondent.
• Court: Florida Supreme Court

Page 1118

521 So.2d 1118

13 Fla. L. Weekly 219

THE FLORIDA BAR, Complainant, v. Theodore W. HERZOG, Respondent.

No. 68750.

Supreme Court of Florida.

March 17, 1988.

John F. Harkness, Jr., Executive Director and John T. Berry, Staff Counsel, Tallahassee, and David G. McGunegle, Bar Counsel, Orlando, for complainant.

Sherman N. Smith, III, Vero Beach, for respondent.

PER CURIAM.

This bar disciplinary proceeding is before us on the complaint of The Florida Bar and the report of the referee. We have jurisdiction under article V, section 15, Florida Constitution, and consider this case pursuant to Rule 3-7.6 of the Rules Regulating the Florida Bar. The referee found respondent guilty of professional misconduct and recommended a private reprimand. We conclude that the appropriate discipline in this case is a ten-day suspension, but otherwise approve the referee's report.

This grievance arises out of disagreements between respondent and Moss, Henderson, & Lloyd (MH & L), the professional association to which he belonged as shareholder for approximately one year beginning in October 1983. No client has complained nor did any client testify at the hearing below. The complaint alleges that respondent: 1) deliberately, knowingly and improperly kept a $150.00 per month retainer during the year he was at MH & L; 2) took with him on business trips a non-lawyer employee who performed no work for clients and whose air fare was intentionally charged to clients; 3) engaged in deceptive billing practices that deprived the firm of an unknown amount of fees estimated to be in excess of $60,000 including costs of over $20,000; and 4) improperly paid to an English stockbroker approximately $14,000 or improperly utilized such funds himself.

The referee found respondent guilty only of the charge of deceptive billing practices but could not determine whether this had deprived MH & L of any attorney's fees or costs:

MH & L utilized a detailed computer billing which could print out an itemized breakdown of hours spent by attorneys and costs incurred in connection with each client account. However, Respondent ordinarily utilized a one-page statement for describing his services rendered in which he described only the total hours and costs. The evidence indicates that Respondent routinely adjusted his bills to lower the amount of costs presented to clients, Harrigan and Sorensen. Respondent testified that he believed that, if presented with a large amount of costs, neither client would authorize or approve the expenditures. Accordingly, he would adjust these bills to lower the face amount of the costs and increase the amount of hours, although Respondent asserts that he never increased the hours to more than the number that he had spent on a particular matter. The result was that the total charge to the client was generally reasonable, but the breakdown or subtotals for attorney's fees and costs was incorrect.

....

I find Respondent's billing practice to be improper and I recommend that Respondent be privately reprimanded for his misconduct. I do find his practice was deceptive in that it misrepresented to the clients what they were actually paying for. Also, it appears that there was no clearly enunciated policy at MH & L with respect to reducing or writing down attorney's fees or client costs and that management of those matters was somewhat lax. While I note that Respondent has paid MH & L at least $10,000 since his departure, there apparently has not been any formal action...