Stephen King And The Necessities Of Life

Panel E of the Maine Board of Bar Overseers found no misconduct based on charges brought against an attorney who had advised a divorce client to move funds into a sole account

The heart of the Board’s complaint is that Attorney Libby counseled his client to violate the Preliminary Injunction and thus the law by having her withdraw funds from a joint bank account without permission from the court or opposing counsel so that she could pay his legal fees.

Charges dismissed

There is no dispute that the Preliminary Injunction applied to both parties in the divorce. Nor is there disagreement that Ms. Deutsch transferred marital funds from a joint account to her own personal account. The Board points out that the Stipulated Report of Findings and Order of Panel E of the Grievance Commission in Board v. Van Dyke, GCF-14-476, found that an attorney failed to properly counsel a divorce client, who transferred funds from the marital estate to herself and a third party without permission, which a court determined was a violation of the Preliminary Injunction. That matter is distinguishable from the present case because Ms. Deutsch did not transfer funds to herself and a third party, potentially putting the funds outside of the control of the divorce court, nor is there evidence that she failed to limit her spending to the necessities of life, nor did she lie in her discovery responses or fail to identify financial accounts. Similarly, the Board cites King v. King, 2013 ME 56, ¶6, ¶9, 66 A.3d 593, which the Panel finds is distinguishable from the present case because the transfer of marital assets was to a third party. In this case, Attorney Libby specifically advised his client, who was financially insecure because her husband controlled most of the finances and had stopped making payments to her, that she could transfer funds so that she could pay her legal fees as called for in a written contract.

Assuming without deciding that the transfer from the joint savings account to the sole personal checking account was a “transfer” for purposes of the Preliminary Injunction, the controlling question is whether this transfer was for the payment of the necessities of life, which is not defined in the statute and the case law. Hence, the Panel had to draw on common sense principles, which dictate that certain types of expenditures qualify as “necessities of life” such as food, shelter, and medical care. Even these categories, however, are not clear-cut because the statute does not indicate how much money one can spend on such a necessity. Depending on the circumstances of the party, a necessity of life may or may not involve eating a meal at a fine dining establishment such as Fore Street Restaurant in Portland’s Old Port, staying at boutique lodging such as the Black Point Inn at Prouts Neck in Scarborough, having elective medical procedure such as LASIK eye surgery as opposed to just buying prescription glasses at the Maine Mall, or visiting a child in Hawaii as Dr. Deutsch actually did during the pendency of the divorce. A necessity of life for Stephen King, the famous author of Carrie and other horror stories who lives in Bangor, might be a Waterman fountain pen hand assembled in France. Arguably, a necessity of life for Joan Benoit Samuelson, the first female gold medalist in the marathon event at the 1984 Summer Los Angeles Olympics who resides in Freeport, might be custom running shoes made by Nike. A person temporarily residing in the Oxford Street Shelter in Portland might need a pay-as-you-go cell phone plan from T-Mobile to survive and find a job.

Perhaps the legislature was wise not to define the term “necessities of life”, because it would thwart the equitable nature of divorce proceedings and the ability of the court to balance those equities. The evidence shows that Dr. Deutsch, who had access to unrestricted funds for his legal fees, stopped making deposits to the bank account that Ms. Deutsch used to pay her legal fees and other living expenses. Expert Witness Kristin Gustafson, Esq., who has exclusively been practicing family law since 1992 and was a former member of the legislatively-created Maine Family Law Advisory Commission, opined at the hearing that Ms. Deutsch’s transfer did not violate the preliminary injunction

[b]ecause it was not a transfer that took the asset outside the jurisdiction of the marital estate. It was a transfer from a joint account of the marriage to an individual account of the marriage that would be fully accounted for in the ultimate distribution, much as Mr. Deutsch’s accounts that he was spending money out of if there was any issue about that there — that would have been fully accounted for.

In the Board’s closing argument, it conceded the following: “To the extent that the parties’ attorney’s fees may be considered as ’necessities of life’ in this case, the marital injunction would allow for their ’purchase’”.

In the Deutsch divorce case, the court never reached the decision of whether or not Ms. Deutsch’s legal fees were a necessity of life, which places the onus on this Panel to make a determination based on the evidence presented by the parties. The Panel finds that Ms. Deutsch’s legal fees were a necessity of life for her. Ms. Deutsch was a real estate agent and not an attorney experienced with domestic relations law. Given the complexities of family law involving a $2 million dollar plus marital estate, Ms. Deutsch needed an experienced attorney, especially because her husband initially retained Robert Mittel, Esq., a highly respected family law attorney, to represent him. There is an old saying: you do not go to a potential gunfight without a gun.

Melvyn Zarr, a legendary professor of civil procedure at the University of Maine School of Law, taught generations of students the acronym LLDP, i.e., Law is a Lawyer Driven Process, meaning that it is up to the client’s attorney to shape the law procedurally into something useful much as a potter takes clay and turns it into a vase. See Melvyn Zarr, Recollections of My Time in the Civil Rights Movement, 61 Me. L. Rev. 366, 369 (2009). In this case, it was Attorney Libby’s ethical duty to diligently solve his client’s very real quandary of having her access to funds throttled. See M.R. Prof. Conduct 1.7 cmt. (1) (“A lawyer should pursue a matter on behalf of a client despite opposition, obstruction or personal inconvenience to the lawyer, and take whatever lawful and ethical measures are required to vindicate a client’s cause or endeavor.”).

Attorney Libby decided not to wait for the court to act upon his Motion Pending because he had a procedural tool, which allowed him to advise his client that she could transfer funds for the payment of the necessities of life. Professor Zarr lectured his students, including many future jurists, that a trial attorney’s job is to functionally define the law, i.e., in the present case, make the law favorably bend towards the client, of course, without stepping over any ethical lines. Expert witness Kristin Gustafson confirmed that waiting for the court to act would was not practical because the “the hearing time is so limited for these magistrates and judges who are doing back to back to back dealing with things a lot more important than people that have plenty of money, that it is very difficult to get any kind of hearing time to get this kind of — a request for attorney’s fees heard.” In other words, in the real world, hearing dates set forth in court orders are not carved in Deer Isle-quarried granite, which is understandable given the court system’s limited budgetary resources. Under the circumstances, the facts show that the purpose of Ms. Deutsch’s transfer of funds from a joint account to her own account was to pay for her necessities of life, which did not run afoul of the Preliminary Injunction.

The Board further argued that Attorney Libby did not have the right to receive his fees in accordance with the terms of his fee agreement until the end of the divorce case. The Panel disagrees with this theory and finds it to violate the heart of Anglo-American contract law, i.e., I perform a service for you and in turn you agree to pay me in a timely fashion. Furthermore, while Rule 1.5 of the Maine Rules of Professional Conduct makes it unethical for an attorney to collect an unreasonable fee, it is silent about demanding prompt payment from a client. Practically speaking, Attorney Libby incurred his own costs such as support staff, not to mention more mundane ones such as electricity and internet to provide legal services to Ms. Deutsch. Attorney Libby would violate state and federal labor law by failing to pay his support staff. See, e.g., 26 M.R.S. § 621-A., regarding timely and full payment of wages. The legal industry would break down if the payment of a client’s legal fees was treated as something that could be deferred to an uncertain future date in spite of contractual terms.

In general, people and businesses have the right to be paid for their services or not provide them. Attorney Libby could have filed a motion with the court to withdraw from the case if he was not timely paid. See M.R. Prof. Conduct 1.16(b)(6), which allows an attorney to withdraw if the representation causes an unreasonable financial burden on the attorney. This would have forced Ms. Deutsch to hire new counsel, costing her even more money to bring another attorney up to speed. It is not for this Panel to second-guess Ms. Deutsch’s decision to hire Attorney Libby for her divorce and enter into a service for fee agreement with him. The Panel determined that Attorney Libby has no conflict by requesting that he be timely paid; if that were the case, most members of the bar would have an inherent conflict with their clients by demanding that they promptly pay their bills.

The Board also argued in closing that Attorney Libby improperly charged Ms. Deutsch for work done to defend himself against the bar complaint. See Formal Ethics Opinion #139, Charging Client for Defending Attorney Before Board of Overseers of the Bar issued June 1, 1994, which concluded that the charging of such fees is per se unreasonable. Attorney Libby testified billing his client for this work was an oversight and that he subsequently wrote off these fees. There appears to be a dispute about the timing of the write-off. The Panel did not consider this alleged violation of Rule 1.5 of the Maine Rules of Professional Conduct because the Board failed to put Attorney Libby on notice of any such violation in its Formal Disciplinary Charges Petition dated August 20, 2018. See M. Bar R. 13(e) detailing the process of a Formal Charges Hearing (“If a matter is to be resolved by a formal proceeding, Bar Counsel shall prepare formal charges in writing that give fair and adequate notice of the nature of the alleged misconduct.”).

(Mike Frisch)