STATEWIDE GRIEVANCE COMMITTEE
George K. Maljanian, Complainant vs. Warren D. Kealey, Respondent
Grievance Complaint #02-0108
Pursuant to Practice Book §2-35, the undersigned, duly-appointed reviewing committee of the Statewide Grievance Committee, conducted a hearing at the Superior Court, 1061 Main Street, Bridgeport, Connecticut on March 12, 2003. The hearing addressed the record of the complaint filed on August 1, 2002, and the probable cause determination filed by the Stamford/Norwalk Judicial District Grievance Panel on October 7, 2002, finding that there existed probable cause that the Respondent violated Rule 1.5(b) and (c) of the Rules of Professional Conduct.
Notice of the hearing was mailed to the Complainant and to the Respondent on February 5, 2003. Both the Complainant and the Respondent appeared and testified at the hearing. The Complainant was represented by Attorney Deborah J. Cantrell and Student Interns Tina Charoenpong and Ankur Srivastava of the Yale Law School Lawyering Ethics Clinic.
This reviewing committee finds the following facts by clear and convincing evidence:
On or around August 14, 2001, the Complainant retained the Respondent to represent him in the sale of residential property he owned in Norwalk, Connecticut. The Complainant paid the Respondent $1000 towards an agreed upon $1800 retainer on August 14th. The balance of $800 was paid on or around August 29, 2001. The Complainant received receipts from the Respondent following both payments. The second receipt noted a “completion of payment of retainer.” The Respondent never reduced to writing the scope of the legal matter to be undertaken or the legal fee to be charged. The Respondent did tell the Complainant that the $1800 retainer would cover the “lion’s share” of his legal fees.
The Complainant’s property was to be sold to French-Norwalk LLC as part of an urban renewal plan for the City of Norwalk. The city had threatened to commence eminent domain proceedings if an agreed upon price could not be reached. Prior to retaining the Respondent, the Complainant had begun negotiating an acceptable sale price with representatives of French-Norwalk. The Complainant understood that he would negotiate the sale price and the Respondent would represent him in the closing.
In or around November of 2001, the City of Norwalk commissioned an appraisal of the Complainant’s property. The property was appraised at $360,000. The Complainant, at that time, was seeking approximately $700,000 for the property. In late November 2001, the Complainant contacted a representative of French-Norwalk LLC to discuss the appraisal and after negotiating the matter, French-Norwalk increased its offer to $400,000, which was still unacceptable to the Complainant. The Complainant and the representative of French-Norwalk continued to negotiate through the beginning of 2002.
On or around January 9, 2002, the Complainant learned that the Respondent was going to meet with representatives of French-Norwalk at his office to discuss the purchase. Although the Complainant did not want the Respondent to negotiate the price, French-Norwalk increased its offer following the meeting to $432,000. The Complainant continued to negotiate the price and by March 13, 2002, reached an agreement with French-Norwalk to sell the property for $487,500. French-Norwalk placed a deposit of $48,750 with the Respondent. The closing occurred on May 30, 2002.
On February 7, 2002, the Respondent wrote to the Complainant and his wife and, among other things, informed them that he would be changing the fee arrangement to take thirty (30) percent of the difference between the final sale price of the Complainant’s property and the original City of Norwalk appraisal ($360,000). The Respondent did not offer an explanation to the Complainant for the change in the fee arrangement. Following the closing, on June 4, 2002, the Respondent sent a handwritten accounting to the Complainant calculating his fees to be $38,250, but crediting the Complainant $6800 due to the original $1800 retainer paid and because “trial did not become necessary.” Accordingly, the Respondent claimed a fee of $31,450, which the Complainant immediately disputed. Although the Respondent thereafter reduced the claimed fee twice in response to the Complainant’s protests, he maintained that he was due some percentage of the difference between the sale price and the original appraisal. The Respondent took his claimed fee from the $48,750 deposit held by him. This grievance complaint followed.
After the local grievance panel determined that there was probable cause of misconduct, the Respondent returned all of the disputed fee to the Complainant on November 22, 2002. With the returned fee, the Respondent enclosed a release, which he asked the Complainant and his wife to sign. The release provided that the Complainant and his wife would “waive, release and discharge all claims which we have or have had, or which we have filed or asserted to the Grievance Committee and/or Panel, against Attorney Warren D. Kealey. . . .” The Complainant refused to sign the release but deposited the funds that accompanied it.
This reviewing committee concludes by clear and convincing evidence that the Respondent violated Rule 1.5(b) and (c) of the Rules of Professional Conduct. The Complainant and the Respondent agreed that the Respondent would represent the Complainant in the sale of the Complainant’s property. The agreed upon retainer was $1800, which the Complainant paid. The Respondent did not set forth in writing the scope of the representation and the manner in which the Complainant would be charged. This conduct clearly violated Rule 1.5(b). We note that the record reflects confusion regarding the respective roles to be played by the Complainant and the Respondent in the negotiation process and the extent to which the $1800 retainer would cover the Respondent’s fees. Rule 1.5(b)’s writing requirement is designed to address these issues at the commencement of the representation in order to avoid exactly what happened here.
We conclude by clear and convincing evidence that the Respondent’s attempt to change the fee agreement to one based on a contingency violated Rule 1.5(c) since there was no agreement and no writing. We see nothing in the record to support a claim that the original fee arrangement was supplanted by a contingency agreement. The Respondent’s February 7, 2002 letter to the Complainant and his wife was a unilateral attempt to change the agreement. Since there was no meeting of the minds, and thus no agreement, there was never compliance with Rule 1.5(c).
Finally, although it was not the subject of a probable cause finding, and we do not discipline the Respondent for it, the Respondent’s attempt to release himself of liability before the Statewide Grievance Committee and the grievance panel was clearly improper. It is not appropriate for a grieved attorney to attempt to settle and release his or her grievance matter. We are critical of the Respondent for this conduct, but conclude that in light of our disciplinary order, below, no further action is warranted.
The Respondent is reprimanded for violating Rule 1.5(b) and (c).
Attorney Raymond B. Rubens
Attorney Dominick Rutigliano
Mr. Thomas J. McKiernan