Thursday, February 19, 2009

Those Pesky Nonrefundable Fees

The New York Appellate Division for the Second Judicial Depaartment has publicly censured an attorney for neglect and charging a nonrefundable retainer. The court found misconduct on the following facts:

Charge four alleges that the respondent employed an unenforceable and improper retainer containing a provision rendering Hector Sanchez's initial payment nonrefundable, in violation of Code of Professional Responsibility DR 2-110(a)(3), 2-110(b)(4) and 2-106(a) (22 NYCRR 1200.15[a][3], 1200.15[b][4], 1200.11[a]). In July 2005, Hector Sanchez retained the respondent to represent him in a lawsuit against Five Towns Mitsubishi and Chase Auto Finance regarding a disputed auto sale. The retainer agreement contained a flat fee provision of $3,250. The agreement provided, in relevant part:

"We will require an initial retainer payment of $3,250.00 upon the signing of this agreement. This retainer payment is not refundable, even if the case is settled or otherwise disposed of before the full payment is applied in the monthly billing statement."

The court found mitigation in the neglect as the attorney had been preoccupied in caring for his gravely-ill spouse. (MIke Frisch)

Bar Discipline & Process | Permalink

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