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In re Melvin Fink
Citations: 189 Vt. 470; 2011 VT 42; 22 A.3d 461; 2011 Vt. LEXIS 40Docket: 2010-164
Court: Supreme Court of Vermont; April 15, 2011; Vermont; State Supreme Court
Original Court Document: View Document
The Vermont Supreme Court reviewed a decision by the Professional Responsibility Board regarding Melvin Fink, Esq., who was found to have violated Vermont Rules of Professional Conduct 1.5 (c) and 8.4 (a). The violations pertained to Fink’s failure to provide a written contingent fee agreement and his attempt to charge an unreasonable fee. The Board recommended a public reprimand and probation for Fink. The case originated from a complaint by a client, a quadriplegic man injured in a trampoline accident, who had previously engaged another attorney for a personal injury case involving a complex situation with multiple defendants. Fink was later hired to assist with family court matters, including a divorce, after the client’s relationship with his wife deteriorated. Fink, a sole practitioner since 1969, agreed to represent the client without an initial retainer, despite the client’s inability to sign a fee agreement due to his condition. Although Fink was attentive to the client’s family court issues, he did not bill for his services. Disciplinary counsel argued for a suspension of Fink’s license, while Fink contended that he had not violated any rules and that any potential violation warranted only a private admonition. The Court upheld the Board's findings, concluding that Fink's actions merited the recommended public reprimand and probation. During consultations regarding the divorce, complainant discussed his personal injury case with respondent between June 2006 and February 2007. Respondent facilitated communication between complainant and his Burlington attorney due to geographic proximity. He obtained complainant's signature on a "Covenant Not to Sue" without compensation. Complainant grew dissatisfied with his Burlington attorney and sought respondent's assistance to have the attorney withdraw from representing his wife. In February 2007, a meeting was held with all parties, during which respondent stated he would only assist in the personal injury matter for a fee of twelve percent of complainant's gross recovery, separate from his hourly charges for domestic issues. The personal injury claim had a potential value of over two million dollars but carried significant risks. The panel found respondent believed this fee was justified due to the high risk involved, the difficulties of working with complainant, and his previous experience with the Burlington attorney in a prior case. In that case, respondent had shared a contingency fee arrangement with the attorney, who acted as lead counsel. Respondent anticipated a role beyond communication facilitation in the current personal injury case but did not discuss this with the Burlington attorney. Upon arrival of the Burlington attorney, he was informed of the fee agreement but had no intention of involving respondent in the litigation beyond facilitating communication. The attorney’s notes confirmed this limited role, stating that communication with complainant would occur through respondent. Respondent requested a written confirmation of the fee agreement from the Burlington attorney, who declined, citing discomfort with the amount but did not convey this to either respondent or complainant. Respondent failed to execute a written contingent fee agreement with complainant after a Burlington attorney's refusal, despite having a standard form available. He claimed a written agreement would be unenforceable without the complainant's signature, as the complainant was unable to sign documents and no one was available to sign on their behalf. From February to July 2007, respondent facilitated communication between the complainant and the Burlington attorney, reviewing documents but not formally entering an appearance in the personal injury case, and he could not estimate the time spent on this case. In July 2007, the complainant terminated respondent's representation in the divorce case, prompting respondent to file a motion to withdraw from that case, although he did not file anything for the personal injury case due to not having entered an appearance. The complainant worried about potential fees from respondent after termination, leading to a complaint against him. The personal injury case later settled for $682,500, which would have resulted in an $81,900 fee for respondent had he been entitled to it. The case was heard by the Professional Responsibility Board on July 21, 2009, focusing on the merits of the charges, while sanctions would be addressed separately. Testimony was provided by the respondent, complainant, and the Burlington attorney, along with seven additional witnesses who had no knowledge of the specific agreement with complainant but attested to the fairness and clarity of respondent’s fees in their own cases. At the hearing's conclusion, the panel chair inquired about addressing sanctions, to which the respondent expressed a desire to reserve the right to a hearing if needed. On April 27, 2010, a panel concluded that the respondent violated Rule 1.5(c) by failing to provide a written contingent fee agreement, as well as Rules 8.4(a) and 1.5(a) by attempting to charge an unreasonable fee. The panel recommended a public reprimand, although one member dissented, arguing that there was insufficient evidence to support violations and that no enforceable agreement existed, thus negating the need for a written document. The court chose to review the case independently, giving deference to the panel’s factual findings unless clearly erroneous. The court examined whether the respondent violated Rule 1.5(c) regarding the requirement for a written contingent fee agreement. The rule, at the time, mandated that such agreements must be in writing to clarify the obligations of both parties and minimize potential misunderstandings. The respondent admitted to not providing a written fee agreement but contended that it was unnecessary due to the complainant’s inability to sign. The court rejected this argument, stating that the previous version of the rule did not require a signature, and emphasized that a written document was essential for outlining the terms clearly, regardless of whether a signature was obtained. Complainant's signature was deemed essential for a written fee agreement, yet alternatives existed for obtaining written approval, such as having another individual sign on complainant's behalf or witnessing a verbal agreement. The respondent, aware of these options due to prior actions, failed to pursue any of them and did not document the agreement, violating Rule 1.5(c). The court referenced a precedent where a conservator properly established a fee agreement for an incapacitated client. Respondent's claim of no harm due to clarity about the fee was rejected; significant uncertainties regarding the scope of services, expense allocation, and settlement fees existed. The requirement for a written agreement aims to clarify these issues, and without it, the intent of the rule was not met. Respondent's failure to document the contingent fee agreement constituted professional misconduct. Additionally, the panel found that the respondent attempted to charge an unreasonable fee, combining violations of Rule 8.4(a) and Rule 1.5(a). The panel asserted that the twelve percent contingent fee for merely facilitating communication was unreasonable, leading to further misconduct by the respondent. The reasonableness of the twelve percent fee is assessed based on eight factors outlined in Rule 1.5(a), including the time and labor required, the novelty and difficulty of the legal questions, customary fees in the locality, the results obtained, and the nature of the lawyer's role. The hearing panel determined that the complainant’s case involved specialized skills and a high risk of no recovery, justifying a high contingent fee for the legal team overall. However, it found that the respondent's specific role did not warrant such a large fee due to the limited time and effort he contributed, which did not require specialized legal experience. The panel concluded that the fee was excessive relative to the tasks performed, which primarily involved facilitating communication. The respondent argued that the fee was justified due to the uncertain recovery and the usefulness of his work, asserting that he did not bill the complainant for his time, thus causing no harm. Nonetheless, the panel rejected this rationale, emphasizing that the risk of no recovery alone does not justify the fee and that his work did not involve significant legal tasks. The respondent's claim that his role might expand if the case progressed was also dismissed, as past case circumstances were notably different, highlighting the inappropriateness of comparing the two situations. The panel maintained that the extent of harm caused would be considered during the sanction phase, but this did not excuse the respondent's actions. Respondent entered complainant’s case at the request of the complainant, not due to any unique expertise. He was to serve solely as a communication facilitator, without altering the responsibilities of the Burlington attorney, who had not solicited his assistance or made any arrangements for his involvement in the case. Respondent’s fee structure was added to the Burlington attorney's, indicating no expectation of sharing the attorney's workload. The meeting focused only on communication tasks, and respondent did not file any court documents, reinforcing that his role was limited. Respondent argued against discipline by claiming he did not attempt to collect a fee and that the reasonableness of any fee could only be assessed after litigation concluded. He suggested his role could have expanded during trial preparation and maintained he should not be penalized for an untested hypothesis due to his termination. However, this view reflects a misunderstanding of his obligations, as he had agreed to a twelve percent fee based solely on a limited communication role. He was required to set a fee that accurately reflected the work he agreed to perform, protecting the client’s interests. The fact that respondent did not bill the complainant for the twelve percent fee does not mitigate his violation of the rules regarding reasonable fees. By agreeing to an excessive fee, he violated Rule 1.5(a) and Rule 8.4(a), similar to prior disciplinary cases. Thus, respondent is accountable for the agreed-upon fee structure, which did not correspond to the limited role he accepted. The panel affirmed the violations and addressed sanctions, noting the respondent's claim of due process denial due to the lack of a separate sanctions hearing. Disciplinary counsel countered that a remand was unnecessary since the respondent did not indicate any additional relevant evidence he would present. Vermont disciplinary proceedings afford basic due process rights to attorneys, allowing them to explain alleged offenses and offer mitigating testimony. However, these rights must be balanced against the public interest in swiftly resolving misconduct complaints. The panel concluded that no due process violation occurred, as the respondent had already presented substantial evidence regarding sanctions and did not specify further noncumulative evidence. The respondent had testified about his community service and provided character witnesses, but he failed to articulate new evidence to be presented in a second hearing. Although the panel acknowledged the procedural oversight in not bifurcating the proceedings, it deemed a further hearing unnecessary given the cumulative nature of the proposed evidence and the light sanction imposed— a public reprimand— which was justified despite the respondent's claims for lesser punishment. The panel found the respondent's actions serious and intentional, warranting the reprimand rather than a suspension or private admonition. The American Bar Association’s Standards for Imposing Lawyer Sanctions provide a framework for determining appropriate sanctions for lawyers. Key considerations include: (a) the violated duty, (b) the lawyer’s mental state, (c) the actual or potential injury caused by the misconduct, and (d) any aggravating or mitigating factors. The severity of the sanction is influenced by the importance of the violated duty, the level of culpability, and the extent of harm, with a presumptive sanction established that can be adjusted based on other factors. The primary aim of sanctions is to protect the public and maintain confidence in the legal profession, rather than to punish attorneys. In the present case, the respondent is found to have violated professional duties by failing to provide a written contingent fee agreement and by potentially charging unreasonable fees, although no actual injury to the complainant occurred since the fee was not collected. However, there was a potential for harm to the complainant and broader public distrust of the legal profession due to these violations. The main dispute revolves around the respondent's mental state regarding culpability, which can range from intent (most culpable) to knowledge, and finally to negligence (least culpable), according to the ABA Standards. The distinguishing factor between negligent and knowing conduct in legal violations is whether a lawyer had conscious awareness of the conduct leading to the violation or failed to recognize a significant risk of such a violation. Knowing conduct implies awareness of the circumstances surrounding the violation, while negligent conduct indicates a lack of awareness despite failing to meet the accepted standard of care. The determination of these states of mind is fact-dependent, and courts often defer to panels' assessments of an attorney's mental state. In this case, the hearing panel found that the respondent's failure to document his contingent fee was a knowing violation, as he was aware of the requirement for a written agreement and did not have one in this instance. Evidence supported this conclusion, including the respondent's prior practice of using a written form and his request for another attorney to draft a letter to memorialize the agreement. Conversely, regarding the respondent's attempt to charge an unreasonable fee, the panel concluded that he acted negligently. Although disciplinary counsel argued for a knowing violation, the panel determined that the respondent did not consciously recognize the unreasonableness of the twelve percent fee and erroneously believed he would provide substantial service for that fee. This lack of awareness led to a finding of negligence rather than conscious wrongdoing. The standard for determining mental state in relation to sanctions is focused solely on the respondent's conduct. The respondent's subjective belief about the services he was to provide does not excuse the violation, as objective facts indicate his role was limited to communication. In sanctions context, "knowing" conduct does not include constructive knowledge; extending the definition would imply that no misconduct could be deemed negligent. Good faith but unreasonable beliefs of non-misconduct do not excuse violations but may influence the discipline imposed. The ABA Standards suggest that knowing violations typically involve a pattern of misconduct, while the respondent's actions were considered isolated. The panel concluded that the respondent's conduct was negligent, resulting in actual and potential harm. A knowing violation warrants a presumptive suspension, while a negligent violation typically results in a reprimand. Aggravating factors identified include the respondent's substantial legal experience, prior disciplinary action for excessive fees, selfish motive, refusal to acknowledge wrongdoing, and the complainant's vulnerability. The panel found the complainant's vulnerability and the respondent's experience particularly concerning. Although the respondent contested some aggravating factors and proposed mitigating factors, the panel ultimately determined that a reprimand was the most appropriate sanction, aligning with the ABA Standards. Courts generally issue reprimands for attorneys who charge excessive or improper fees. In this case, the respondent's actions were deemed particularly egregious due to the complainant's vulnerability and the respondent's extensive legal experience. Previous disciplinary actions against the respondent were considered irrelevant due to their remoteness. The arguments regarding the respondent's selfish motive and lack of remorse were not addressed, as the sanction of a public reprimand was deemed appropriate regardless. The respondent's reputation for conscientious service to financially disadvantaged clients was acknowledged but did not outweigh significant aggravating factors. The respondent's request to lessen the sanction based on the hearing panel's delay in decision-making was rejected, as the timeline for issuing decisions is directory without specific penalties for delays, and no prejudice was demonstrated by the respondent. The respondent, Melvin Fink, was publicly reprimanded for violating Vermont Rules of Professional Conduct by failing to document a contingent fee and attempting to charge an unreasonable fee, and he was placed on probation as per the panel's conditions. A dissenting panel member argued that there was no professional misconduct due to an incomplete contract, but this argument was not considered as it was not raised during the original proceedings. Finally, the requirement for expert testimony in disciplinary cases was clarified, indicating that such testimony is not necessary unless it addresses specialized issues beyond the understanding of the fact finder. In this case, the nature of the respondent's work and fee was deemed straightforward enough not to require expert input.