STATEWIDE GRIEVANCE COMMITTEE
Howard Jacobs, Complainant vs. John B. Oestreicher, Respondent
Grievance Complaint #96-0483
Pursuant to Practice Book '27J, the undersigned, duly-appointed reviewing committee of the Statewide Grievance Committee, conducted a hearing at the Superior Court, 95 Washington Street, Hartford, Connecticut on September 11, 1997. The hearing addressed the record of the complaint filed on December 4, 1996, and the probable cause determination rendered by a reviewing committee of the Statewide Grievance Committee on April 18, 1997, finding that there existed probable cause that the Respondent violated Rule 1.15(b) of the Rules of Professional Conduct. The reviewing committee's probable cause determination was contrary to the determination of no probable cause filed by the New Haven Judicial District, Geographical Areas 7 & 8 Grievance Panel on February 11, 1997.
Notice of the hearing was mailed to the Complainant and to the Respondent on July 1, 1997. The Complainant and the Respondent appeared and gave testimony. Exhibits were received into evidence.
This reviewing committee finds the following facts by clear and convincing evidence:
In July of 1993, the Complainant was retained to represent Ms. Sally Wojtkiewicz in connection with an injury she sustained in an automobile accident. Ms. Wojtkiewicz executed a written retainer agreement with the Complainant on July 26, 1993. Thereafter, in October of 1993, Ms. Wojtkiewicz discharged the Complainant and retained the Respondent to represent her interests. By letters dated November 3, 1993 and November 10, 1993, the Respondent agreed to protect the Complainant's fee in accordance with Connecticut Bar Association Revised Formal Opinion No. 31. The Respondent's November 3, 1993 letter stated the following:
It is expressly understood that this office will hold in our Clients' Fund Account proceeds from any settlement or award sufficient to pay you what you would have been entitled to under your contingency fee agreement, plus the amount you promised to pay any physicians on settlement until the fee dispute is resolved by a court or otherwise.
The case against the tortfeasor was settled for $25,000.00 in March of 1994. The Respondent placed $7,222.22 in his trustee account to cover the Complainant's legal fees. By letter dated March 22, 1994, the Respondent advised the Complainant of the settlement and requested a bill from the Complainant. The Respondent also advised the Complainant that he was pursuing an underinsured motorist claim. The Complainant refused to provide a bill until he received information regarding the underinsured motorist claim. The Respondent disputed the Complainant's claim for a portion of fees from the underinsured motorist claim. The underinsured motorist claim was settled in May of 1996. The Respondent disbursed $42,184.73 to himself in payment of his legal fees.
The Complainant and the Respondent subsequently met and attempted to reach an agreement regarding the division of fees. The Respondent provided the Complainant with a copy of the settlement statements for the claim against the tortfeasor and the underinsured motorist claim. By letter dated June 6, 1996, the Complainant requested that the Respondent confirm in writing that he was holding $49,406.95 in his clients' funds account for legal fees owed to the Complainant. The Complainant and the Respondent were unable to resolve the fee dispute and the Complainant filed a proceeding with the Connecticut Bar Association's Lawyer to Lawyer Dispute Resolution Program. By letter dated November 12, 1996, the Complainant requested that the Respondent provide documentation that he was holding $49,406.95 in his clients' funds account for legal fees owed to the Complainant. By letter dated November 18, 1996, the Respondent advised the Complainant that he would not provide any further documentation.
On February 4, 1997, the arbitrator awarded $7,000.00 to the Complainant. By letter dated February 12, 1997, the Respondent forwarded the Complainant a check for $7,000.00.
The committee also considered the following evidence:
The Complainant testified that he believed that the July 26, 1993 fee agreement entitled him to a fee in both the case against the tortfeasor and the underinsured motorist case. Accordingly, the Complainant believed that he was entitled to a fee of $49,406.95. The Complainant further maintained that pursuant to Rule 1.15, the Respondent was required to escrow the $49,406.95 fee claimed by the Complainant until the fee dispute was decided by an arbitrator.
The Respondent maintained that he believed that the Complainant's fee agreement limited him to a fee from the case against the tortfeasor. The Respondent did not believe that the Complainant had earned any fee in connection with the underinsured motorist claim. Accordingly, the Respondent escrowed $7,222.22 from the case against the tortfeasor and did not escrow any sums on behalf of the Complainant from the underinsured motorist settlement.
This reviewing committee finds by clear and convincing evidence that the Respondent violated Rule 1.15(c) of the Rules of Professional Conduct. We conclude that once the Respondent was placed on notice of a dispute concerning the Complainant's and Respondent's respective interests in the legal fees collected by the Respondent, the Respondent was required, pursuant to Rule 1.15(c), to hold the disputed funds in escrow until the dispute was resolved. It is our opinion that it was improper for the Respondent to unilaterally determine the amount of funds owed to each party. We, therefore, recommend that the Statewide Grievance Committee issue a reprimand against the Respondent for violating Rule 1.15(c) of the Rules of Professional Conduct.
Attorney Anne R. Hoyt
Attorney Kerry A. Tarpey
Ms. Mary Ellen Smith