Saturday, August 12, 2017

Excessive Fee: Attorney Censured For Charging $250 Per Hour To Talk To Plumber

A censure has been imposed by the New Jersey Supreme Court for misconduct described in a letter opinion of the Disciplinary Review Board

...respondent represented "X,’’ a ninety-two-year old nursing home resident, retired World War II naval officer, and retired Madison Avenue advertising executive. Although respondent had served as X’s counsel since 1997, the relevant period in this matter runs from February 15, 2010 to August 30, 2012. During that time, respondent billed X $92,122.50 in fees, of which $19,522.50 represented charges for non-legal services. X died in September 2015.

The attorney's spouse was the daughter of a close friend of X and was granted authority as attorney-in-fact.

At the time, X, a single person, had no friends or relatives able or willing to serve as attorney-in-fact. Thus, the POAs named respondent’s wife, Michelle, and their son, Matthew, as attorneys-in-fact. X had known Michelle, the daughter of X’s long-time friend, for many years -- much longer than X had known respondent...

The parties stipulated that, between February 2010 and August 2012, respondent billed X a total of $92,122.50 in fees. Of this amount, $19,522.50 represented fees charged for non-legal services. In determining that the fees charged, as a whole, were unreasonable, the Board attributed significance to several billings and invoices. First, during the two-week period between February 15, 2010, when X was admitted to HUMC, and February 28, 2010, when X executed the POAs, respondent billed $4,150, representing 16.6 hours at $250 per hour. The bill included numerous charges for non-legal work relating to X’s condominium, such as $1,375 (5.5 hours at $250 per hour) for a conference with a plumber, a neighbor, and a house cleaner at X’s residence, in anticipation of listing the condominium for sale, in addition to the review of documents there.

Second, respondent charged an excessive amount of fees after X had made the decision to apply for Medicaid, which required X to "spend down" his assets. Specifically, on March 8, 2010, respondent introduced X to Jacqueline Saltzman, MSW, C-ASWCM, an elder care services provider. From that date until July 2010, Saltzman served as X’s geriatric care manager. Saltzman was paid $1,800 from X’s accounts for her services.

The board rejected a number of stipulated violations but found the attorney had charged excessive fees

The Board rejected the stipulated violations of RPC 1.7(b), RPC 1.15(a), and RPC 8.4(c). Although the parties stipulated that respondent violated RPC 1.15(a) by dissipating X’s assets in the form of excessive fees, the Rule applies to funds already in the possession of an attorney, who, as a consequence, must see that the funds are safeguarded. Further, the Board did not view RPC 8.4(c) to apply, in light of the absence of any evidence that the bills submitted to X were fabricated or fraudulent. Finally, the Board considers RPC 1.7(b) as identifying the procedures with which an attorney must comply to avoid violation of RPC 1.7(a). The Board does not view subsection (b) to provide a separate basis of violation...

Respondent acknowledged that "most" of the work that he had done for X was for non-legal services, which he had billed at his hourly legal fee rate. Indeed, respondent was concerned that X was depleting his assets in ways that were not prudent or wise. Yet, respondent maintained, X felt that he had no control over his life and that no one was listening to him. Thus, X was willing to spend money to ensure that someone was "standing up and taking care of things that [X] would normally do." Despite what may have been respondent’s good intentions, the Board found that his fees, as a whole, were unreasonable, in violation of RPC 1.5(a).


Although the Board considered, in aggravation, that respondent’s conduct involved a vulnerable and elderly client, the extensive mitigation rendered the imposition of a term of suspension inappropriate. In this regard, the Board took into consideration respondent’s unblemished disciplinary record of forty-three years; his cooperation in the disciplinary investigation; his ready admission of wrongdoing; his contrition and remorse; his good character and reputation; and the likelihood that he will not repeat the misconduct. Moreover, the Board considered that respondent has implemented several changes to his practice to guard against similar misconduct: (i) he no longer represents clients in elder law matters or drafts POAs for clients who have no family or friends to serve as attorney-in-fact; (2) he obtains signed retainer agreements from clients; and (3) he no longer bills clients for non-legal services, even at the client’s request.

(Mike Frisch)

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