Fee Dispute Draws Suspension
The Florida Supreme Court ordered a one-year suspension without restitution in a case that involved a fee dispute
On February 21, Respondent replied to O’Rourke’s e-mail stating that he would be happy to answer the questions if they were being asked in good faith. He then conditioned his decision to fully respond to the questions on the clients paying $18,240 toward the December invoice. Respondent stated that if the clients did not pay that amount, he would not believe they were questioning the bill in good faith. He also informed the clients that he would either enforce the contract as written and seek the $25,040 or charge the clients a higher rate which would result in a $125,000 bill. Furthermore, Respondent warned that if he believed there was no good faith on the clients’ part, he would make a claim for bad faith, misrepresentation, and punitive damages, seeking treble damages in the amount of $375,000.
McCool sent Respondent an e-mail on February 26, asking questions about the December invoice. That same day, Respondent replied to his e-mail and sent Invoice #95 to the clients, requesting payment in the amount of $126,650. In this invoice, Respondent billed the clients an additional $150 an hour for attorney time and $25 an hour for paralegal time for a total of 1,032.5 hours, representing all the hours that Respondent had previously billed. The effect of this bill was to retroactively and unilaterally increase the hourly rate, above that in the engagement letter, for all the work Respondent’s firm previously performed and for which the clients had previously paid. The engagement letter between the parties did not provide for this penalty.
The next day, McCool notified Respondent by e-mail that he had authorized his bank to pay $25,040, the full amount of the December invoice. On March 7, Respondent sent McCool an e-mail thanking him for payment of the December invoice.
However, on March 20, Respondent sent the clients a statement showing that the $25,000 retainer had been deducted from Respondent’s trust account and that the clients owed an overdue balance of $101,834.95 based on Invoice #95 (applying a retroactive increase in the hourly billing rates). On April 9, McCool sent an e-mail to Respondent requesting the return of the $25,000 retainer.
Litigation ensued
Ultimately, in a separate civil action, the clients sought return of the $25,000 retainer fee from Respondent’s firm, arguing that it amounted to a double payment of the December 2017 invoice. On May 31, 2022, the court granted summary judgment in favor of the clients and a final judgment was entered, ordering that the clients were entitled to the return of their retainer fee.
The court
we conclude that Respondent had no basis to demand this payment from his clients. As such, Respondent’s attempt to collect this amount by invoicing the clients for the total and then refusing to remit the retainer balance to the clients constituted a clearly excessive and unconscionable fee in violation of th[e ethical] rule.
Sanction
we conclude that considering the aggravating and mitigating circumstances reflected in the record, the recommended sanction of a one-year suspension has a reasonable basis in the Standards.
LABARGA, J., concurring in part and dissenting in part
The facts presented during the evidentiary hearing before the referee revealed a hotly contested fee dispute between a lawyer and his clients—a situation not uncommon in our judicial system. Ultimately, the matter was litigated in court where the trial judge granted summary judgment in favor of the clients and Respondent was ordered to return the $25,000 retainer in question. After losing his appeal of the trial court’s ruling, Respondent returned the retainer to his former clients as ordered by the trial court and the case came to an end.
In considering the appropriateness of the referee’s recommendation, I find it significant that Respondent has been a member of The Florida Bar since September 30, 1999— approximately 25 years. It is even more significant that he has never been disciplined by this Court. While Respondent’s actions in his pursuit of legal fees in this case may have been overly aggressive and without legal support, I do not believe his actions warrant a one-year suspension. I would instead impose a public reprimand to be administered by the President of The Florida Bar before the Board of Governors.
(Mike Frisch)