IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2002 Term
__________
RELEASED
No. 27051
__________
FILED
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
May 2, 2002
May 3, 2002
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
LAWYER DISCIPLINARY BOARD,
Complainant,
v.
BELINDA S. MORTON, A MEMBER
OF THE WEST VIRGINIA STATE BAR
Respondent
__________________________________________________
Disciplinary Proceeding
Charge Dismissed
__________________________________________________
Submitted: February 27, 2002
Filed: May 2, 2002
Lawrence J. Lewis
Office of Disciplinary Counsel
Charleston, West Virginia
Attorney for the Complainant
Travers R. Harrington
Fayetteville, West Virginia
Attorney for the Respondent
The Opinion of the Court was delivered PER CURIAM.
CHIEF JUSTICE DAVIS and JUSTICE MAYNARD dissent and reserve the right to file
dissenting opinions.
JUSTICE STARCHER concurs and reserves the right to file a concurring opinion.
SYLLABUS BY THE COURT
1. “A de novo standard applies to a review of the adjudicatory record made
before the [Lawyer Disciplinary Board] of the West Virginia State Bar as to questions of law,
questions of application of the law to the facts, and questions of appropriate sanctions; this
Court gives respectful consideration to the [Board’s] recommendations while ultimately
exercising its own independent judgment. On the other hand, substantial deference is given to
the [Board’s] findings of fact, unless such findings are not supported by reliable, probative, and
substantial evidence on the whole record.” Syl. Pt. 3, Committee on Legal Ethics v. McCorkle,
192 W. Va. 286, 452 S.E.2d 377 (1994).
2. “This Court is the final arbiter of legal ethics problems and must make the
ultimate decisions about public reprimands, suspensions or annulments of attorneys’ licenses
to practice law.” Syl. Pt. 3, Committee on Legal Ethics v. Blair, 174 W.Va. 494, 327 S.E.2d
671 (1984), cert. denied, 470 U.S. 1028 (1985).
3. “In the absence of any real risk, an attorney’s purportedly contingent fee
which is grossly disproportionate to the amount of work required is a ‘clearly excessive fee’
within the meaning of [Rule 1.5(a) of the Rules of Professional Conduct].” Syl. Pt. 3,
Committee on Legal Ethics v. Tatterson, 177 W. Va. 356, 352 S.E.2d 107 (1986).
i
4. “If an attorney's fee is grossly disproportionate to the services rendered and
is charged to a client who lacks full information about all of the relevant circumstances, the
fee is ‘clearly excessive’ within the meaning of [Rule 1.5 of the Rules of Professional
Conduct], even though the client has consented to such fee. The burden of proof is upon the
attorney to show the reasonableness and fairness of the contract for the attorney's fee.” Syl.
Pt. 2, Committee on Legal Ethics v. Tatterson, 177 W. Va. 356, 352 S.E.2d 107 (1986).
ii
Per Curiam:
This is a lawyer disciplinary proceeding brought by the Lawyer Disciplinary
Board (hereinafter “Board”) against Ms. Belinda S. Morton (hereinafter “Ms. Morton”), a
member of the West Virginia State Bar. A Hearing Panel Subcommittee (hereinafter “Hearing
Panel”) found that Ms. Morton had violated Rule 1.5(a)(1) of the Rules of Professional
Conduct by obtaining a fee of $1,500 from medical payments obtained on behalf of her client,
Mr. David E. Willis (hereinafter “Mr. Willis”). The Hearing Panel recommends that Ms.
Morton be publicly reprimanded, ordered to repay the client $1,500, and pay the costs of this
proceeding. Based upon thorough consideration of this matter, we reject the recommendation
of the Hearing Panel and dismiss the charge against Ms. Morton.
I. Facts and Procedural History
On October 26, 1995, Mr. Willis was a passenger in an automobile that collided
with a tractor trailer owned by H & W Trucking Company and operated by Mr. Donald F. Reed.1
Mr. Willis sustained injuries as a result of the accident. On October 30, 1995, Mr. Willis
retained Ms. Morton to represent him in a legal action against the trucking company and its
1
The automobile in which Mr. Willis was riding was driven by Mr. Willis’ wife,
Dorothy Willis. Mr. Willis’ son-in-law, Mr. Jimmy Ranson, was also a passenger in the
vehicle. It appears that all three occupants sustained injuries in the accident.
1
driver, Mr. Reed.2 Under the terms of the contingency contract between Ms. Morton and Mr.
Willis, Ms. Morton was to receive thirty percent of all monies recovered from any source
prior to filing a lawsuit.3
In the course of representation of Mr. Willis, Ms. Morton asserts that she
prepared and reviewed the contract of representation and explained its terms to Mr. Willis.
She also explains that she issued an engagement letter including memorialization of the
representation and advice to Mr. Willis concerning maintaining medical bills and the need to
avoid contacts and discussion concerning the accident. Ms. Morton’s other actions included
correspondence with United States Fidelity and Guarantee Company in an effort to place them
2
Ms. Morton was also retained by Mrs. Willis and Mr. Ranson. While the
Hearing Panel commented that a potential conflict of interest existed among the passengers
and the driver, the Hearing Panel did not address that matter since it was not included in the
allegations against Ms. Morton.
3
The retainer contract provided as follows:
[C]lient desires to employ attorney to institute and prosecute a
claim or suit against Donald F. Reed and H & W Trucking Co.
Inc., and such other persons, firms, associations, political bodies,
governmental units or corporations as attorney, in their [sic] sole
discretion, deems desirable or necessary.
Further, the contract provided:
Client employs attorney to represent him and, if
necessary, to institute and prosecute suit and, as compensation
for legal services, client agrees to assign unto attorney thirty
percent (30%) before suit is filed and forty percent (40%) if a
lawsuit is filed of all monies and things of any value recovered in
said claim by a compromise, settlement or suit.
2
on notice of the accident and her representation of Mr. Willis. Ms. Morton also corresponded
with medical doctors, Dr. Anwar and Dr. Kominsky, concerning her representation of Mr.
Willis and his legal claims. Ms. Morton also explained that she corresponded with State Farm
Insurance Company adjuster Elaine Durham, in an effort to prevent State Farm from obtaining
an overly broad medical authorization. Ms. Morton also asserts that she conducted legal
research and investigation regarding Mr. Willis’ claims and conducted several phone calls with
various State Farm adjustors regarding Mr. Willis’ case. Ms. Morton also prepared for and
attended interviews with United States Fidelity and Guarantee claims personnel. Ms. Morton
maintains that her representation of Mr. Willis entailed at least forty hours of legal work,
including interviews with the client and insurance personnel and review of numerous
documents.4
During the course of representation, Ms. Morton contacted State Farm, the
insurer of the automobile in which Mr. Willis was a passenger at the time of the accident, and
asked State Farm to add her name to all medical payment checks issued on behalf of Mr. Willis
4
The Hearing Panel examined Ms. Morton’s contentions regarding work she
performed and concluded that she had not demonstrated that the work was directly related to
the attempt to obtain medical payments and that such medical payments would have been
offered by State Farm even if Ms. Morton had not been involved in the case. Ms. Morton, in
response, contends that the Hearing Panel inappropriately divided her representation of the
client into two separate issues, the medical payment component and the other liability issues.
Ms. Morton maintains that such division is inappropriate, contrary to the terms of the
contingency arrangement, and an unfair method of evaluating the issue of excessiveness of
legal fees.
3
and to forward the checks to her office. The medical payment checks totaled $5,000, and Ms.
Morton retained thirty percent of that amount, $1,500, as her fee.
Ms. Morton’s
representation of Mr. Willis was terminated subsequent to Mr. Willis’ inability to pay a $500
deposit toward costs and expenses as requested by Ms. Morton on September 11, 1996.
Mr. Willis filed an ethics complaint against Ms. Morton on May 15, 1997,
contending that her retention of $1,500 of the $5,000 in medical payments obtained for Mr.
Willis was excessive. An Investigative Panel thereafter charged Ms. Morton with obtaining an
excessive fee in violation of Rule 1.5(a)(1) of the Rules of Professional Conduct.5 A hearing
5
Rule 1.5(a) states, in full, as follows:
(a) A lawyer’s fee shall be reasonable. The factors to be
considered in determining the reasonableness of a fee include the
following:
(1) the time and labor required, the novelty
and difficulty of the questions involved, and skill
requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client,
that the acceptance of the particular employment
will preclude other employment by the lawyer;
(3) the fee customarily charged in the
locality for similar legal services;
(4) the amount involved and results
obtained;
(5) the time limitations imposed by the
client or by the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of
the lawyer or lawyers performing the services; and
(continued...)
4
was held before the Hearing Panel on June 13, 2001, and the Panel subsequently issued its
ruling finding that Ms. Morton had violated Rule 1.5(a)(1) by obtaining a fee “grossly
excessive for the services actually performed.” W.Va. Rules Prof’l Conduct R. 1.5(a)(1). The
Hearing Panel and Board have recommended that this Court publicly reprimand Ms. Morton,
order her to repay Mr. Willis $1,500, and pay the costs of this proceeding. Ms. Morton has
objected to the determination that she violated Rule 1.5(a)(1) and that sanctions should be
imposed upon her.
II. Standard of Review
This Court set out the standard of review of lawyer disciplinary proceedings in
syllabus point three of Committee on Legal Ethics v. McCorkle, 192 W.Va. 286, 452 S.E.2d
377 (1994), as follows:
A de novo standard applies to a review of the adjudicatory
record made before the [Lawyer Disciplinary Board] of the West
Virginia State Bar as to questions of law, questions of application
of the law to the facts, and questions of appropriate sanctions;
this Court gives respectful consideration to the [Board’s]
recommendations while ultimately exercising its own
independent judgment. On the other hand, substantial deference
is given to the [Board’s] findings of fact, unless such findings are
not supported by reliable, probative, and substantial evidence on
the whole record.
5
(...continued)
(8) whether the fee is fixed or contingent.
5
We have also consistently held that “[t]his Court is the final arbiter of legal
ethics problems and must make the ultimate decisions about public reprimands, suspensions
or annulments of attorneys’ licenses to practice law.” Syl. Pt. 3, Committee on Legal Ethics
v. Blair, 174 W.Va. 494, 327 S.E.2d 671 (1984), cert. denied, 470 U.S. 1028 (1985).
III. Discussion
With specific reference to this Court’s responsibility to review the
reasonableness of fees, we observed as follows in Committee on Legal Ethics v. Tatterson,
177 W.Va. 356, 352 S.E.2d 107 (1986):
Contracts for contingent fees, generally having a greater
potential for overreaching of clients than a fixed-fee contract, are
closely scrutinized by the courts where there is a question as to
their reasonableness. This close scrutiny arises from the duty of
the courts to guard against the collection of a clearly excessive
fee, thereby fulfilling the primary purpose of attorneydisciplinary proceedings, specifically, protecting the public and
maintaining the integrity of the legal profession.
6
177 W. Va. at 363, 352 S.E.2d at 114 (citations omitted).6 In syllabus point three of
Tatterson, this Court held that “[i]n the absence of any real risk, an attorney’s purportedly
contingent fee which is grossly disproportionate to the amount of work required is a ‘clearly
excessive fee’ within the meaning of [Rule 1.5(a) of the Rules of Professional Conduct].” 177
W. Va. at 357, 352 S.E.2d at 108. In syllabus point two of Tatterson, this Court further held:
If an attorney's fee is grossly disproportionate to the
services rendered and is charged to a client who lacks full
information about all of the relevant circumstances, the fee is
"clearly excessive" within the meaning of [Rule 1.5 of the Rules
of Professional Conduct], even though the client has consented
to such fee. The burden of proof is upon the attorney to show the
reasonableness and fairness of the contract for the attorney's fee.
6
In Kopelman and Assocs., L.C. v. Collins, 196 W.Va. 489, 473 S.E.2d 910
(1996), this Court observed that “courts in West Virginia will uphold contingency fee
arrangements voluntarily entered into by the parties as long as they are not excessive,
overreaching, and do not take inequitable advantage of a client.” Id. at 496 n.7, 473 S.E.2d at
917 n. 7. In determining whether a contingent fee contract is reasonable or excessive, this
Court has applied the following analysis:
The reasonableness of attorney's fees is generally based on
broader factors such as: (1) the time and labor required; (2) the
novelty and difficulty of the questions; (3) the skill requisite to
perform the legal service properly; (4) the preclusion of other
employment by the attorney due to acceptance of the case; (5) the
customary fee; (6) whether the fee is fixed or contingent; (7)
time limitations imposed by the client or the circumstances; (8)
the amount involved and the results obtained; (9) the experience,
reputation, and ability of the attorneys; (10) the undesirability of
the case; (11) the nature and length of the professional
relationship with the client; and (12) awards in similar cases.
Syl. Pt. 4, in part, Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156
(1986).
7
Id. at 377, 352 S.E.2d at 108.
In the case sub judice, the Board contends that this Court’s decision in Tatterson
supports its position that Ms. Morton obtained an excessive fee and that her fee was grossly
disproportionate to the services she rendered. In Tatterson, however, the attorney had entered
into a contingency fee agreement with an elderly blind woman in a matter concerning the
recovery of life insurance proceeds for the suicide death of the woman’s son. The amount of
the life insurance proceeds was $61,000. After the insurance company paid the full amount
of the insurance proceeds, the attorney deducted his contingency fee of thirty-three percent.
An ethics complaint was subsequently filed against the attorney, charging him with obtaining
an excessive fee, misrepresenting the degree of difficulty in obtaining the life insurance
proceeds, and engaging in unethical conduct while a disciplinary proceeding was pending
against him.
This Court determined in Tatterson that the evidence supported the charges
against the attorney, observing that the attorney did nothing more than assist the woman in
filling out forms to obtain the insurance proceeds. We addressed the matter as follows:
Courts generally have insisted that a contingent fee be truly
contingent. The typically elevated contingent fee reflecting the
risk to the attorney of receiving no fee will usually be permitted
only if the representation indeed involves a significant degree of
risk. The clearest case where there would be an absence of real
8
risk would be a case in which an attorney attempts to collect from
a client a supposedly contingent fee for obtaining insurance
proceeds for a client when there is no indication that the insurer
will resist the claim.
Tatterson, 177 W.Va. at 363, 352 S.E.2d at 113-14.
Similarly, this Court has reasoned that “a contingent fee is clearly excessive if
the skill and labor required of the lawyer are grossly disproportionate to the fee.” Committee
on Legal Ethics v. Gallaher, 180 W.Va. 332, 335, 376 S.E.2d 346, 349 (1988) (citations
omitted). In Gallaher, a lawyer disciplinary proceeding was brought against an attorney who
allegedly obtained an excessive fee from a client. The attorney’s client was an elderly woman
who sustained injuries while a passenger in a car that was involved in an accident. The woman
sustained medical bills in excess of $2,300. The insurance company offered the woman only
$726.65. The offer was rejected, and the woman retained counsel solely for the purpose of
recovering medical payments. The attorney was able to settle the case for $4,500. The
attorney charged a fee of fifty percent of the settlement and, therefore, retained $2,250.
Lawyer disciplinary proceedings were brought against the attorney as a result of the alleged
excessiveness of the fee, and this Court concluded that a fee of fifty percent was indeed
excessive and grossly disproportionate to the services rendered. Consequently, this Court
reprimanded the attorney and ordered the attorney to return $750 to the client. Even in those
circumstances, this Court approved, in effect, a contingent fee of $1,500, constituting thirtythree and one-third percent of the total recovery.
9
We are not persuaded that this Court’s prior decisions support the proposition
that Ms. Morton charged an excessive fee and that the fee was grossly disproportionate to the
services rendered. In contrast to the actions of the attorneys in Tatterson and Gallaher, Ms.
Morton was actively engaged in representing her client in all aspects of his potential claims
for compensation arising from his collision on October 26, 1995, only one aspect of which
was the recovery of medical payments under the State Farm insurance policy.
We are similarly unpersuaded by opinions from other jurisdictions cited by the
Board in support of its position. In In the Matter of Hausen, 488 N.Y.S.2d 742 (1985), the
excessive fee was obtained after the attorney received a contingent fee for assisting a client
in the recovery of no-fault insurance medical payments, despite an express statutory preclusion
of such a fee arrangement. Hausen, therefore, does not provide an analogous situation, since
the case sub judice does not involve a contingency arrangement expressly precluded by statute.
Similarly, we are unpersuaded by Attorney Grievance Commission v. Kemp, 496 A.2d 672
(Md. 1985), cited by the Board. In that case, the attorney had obtained a contingent fee from
medical payments recovered for the client. The court in Kemp appears to have adopted a per
se rule that prohibits attorneys from receiving a contingent fee for medical payments
recovered on behalf of a client. The court explained as follows: “Petitioner essentially argues
that because the services required in filling out a routine, undisputed Med. Pay claim are
perfunctory in nature, contingent fees represent an improper measure of professional
compensation. We agree.” 496 A.2d at 677-78. This Court has not adopted such a rule, and,
10
in fact, we have tacitly approved such arrangements. See Bass v. Coltelli-Rose, 207 W.Va.
730, 536 S.E.2d 494 (2000) (reversing summary judgment for client on issue of whether the
attorney/client contract permitted recovery of a contingent fee contingent fees from recovery
of medical payments). Thus, while Bass presented an opportunity for this Court to prohibit
contingency fee agreements that included medical payments and address the issue of whether
such fees were reasonable and ethical, this Court declined to do so.
The contractual language memorializing the attorney/client relationship in this
case, as quoted above, is not ambiguous. The scope of the agreement is clear in providing for
full legal representation to recover “of all monies and things of any value” from anyone Ms.
Morton deemed “desirable or necessary” to pursue. This language did not limit Ms. Morton’s
role to recovering medical payments for Mr. Willis, and the contract did not preclude Ms.
Morton from acting on behalf of Mr. Willis in obtaining medical payments. Ms. Morton
contracted to provide legal services that empowered her to pursue every source of and right
to recovery to which Mr. Willis may have been entitled, as it pertained to his alleged tortious
injury.
In her legal representation in this case, Ms. Morton has itemized approximately
forty hours of work performed on behalf of Mr. Willis prior to the termination of the legal
representation. As compensation for forty hours of work, Ms. Morton obtained $1,500 as a
11
contingent fee. This translates to roughly $37.50 for each hour of work performed by Ms.
Morton. We fail to see how this fee could be characterized as excessive.
IV. Conclusion
Having examined the language of the agreement between the attorney and client
to ascertain the scope of the work to be performed by the attorney, and having evaluated the
attorney’s explanation of all work performed that may fairly be said to have arisen from the
agreement, we find that the fee received by Ms. Morton was not grossly disproportionate to
the services rendered and was not excessive. This Court believes that in matters involving
professional compensation it is incumbent upon the Lawyer Disciplinary Board to fairly
examine all of the relevant circumstances of a lawyer’s engagement and the professional
services in fact rendered when considering whether compensation is excessive, and that
focusing on a single component of that compensation without consideration of the entire
engagement and services rendered may lead, as it has here, to an unjust conclusion of
impropriety.
Based upon the foregoing, this Court concludes that the evidence was
insufficient to support the Board’s contention that Ms. Morton violated Rule 1.5(a)(1) of the
Rules of Professional Conduct. Consequently, this Court hereby orders that the charge against
Ms. Morton be dismissed.
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Charge dismissed.
13
