A Persuasive Professor

A Florida attorney who sued his clients for alleged unpaid fees ended up with a decision disgorging payments he had already received from the Tennessee Court of Appeals.

It is undisputed that the McMichaels paid Mr. Harris a total of $41,500 and that Mr. Harris demanded an additional $30,000 under the Third Agreement. Prior to the hearing in the instant case, Mr. Harris tendered a statement alleging that the McMichaels owed a balance of $40,027.50, comprised of 50.2 hours of work by Mr. Harris and 33.3 hours of work by a paralegal from August 7, 2014, though October 24, 2014.

The attorney was found to have breached fiduciary duties to the clients with respect to billing and a series of retainer agreements

The McMichaels called University of Tennessee College of Law Professor Paula Schaefer, whom the trial court qualified as an expert in the area of legal ethics. Professor Schaefer testified that: (1) an attorney has the ethical obligation to “make sure that their fee agreements are fair, fully explained, and easily understandable”; (2) “liens must be fair and explained to the client, and there is a presumption that they are voidable”; and (3) “[n]on-refundable retainers still must be earned and are therefore problematic.” Professor Schaefer opined that Mr. Harris breached his fiduciary duty to his clients. The trial court found “this witness to be the most credible of all of the witnesses as she had no financial interest in the outcome of case as well as [due to] her credential[s].”

The breach

Contrary to Mr. Harris’ assertion, the trial court did not hold that Mr. Harris breached his fiduciary duty due to his failure to abide by any Florida rule that required contemporaneous billing; rather, the court held “that [Mr. Harris’] failure to comply with the provisions of his fee agreement was a breach of his duty under the rules of professional conduct.” (Emphasis added). We agree. All three fee agreements provide, “Time billed shall be in increments of one quarter of an hour.”

As to the second and third retainer agreements, the trial court observed

[Mr. Harris] waited for deadlines to be close, at which time he demanded additional funds and promised, but never fully delivered, the representation that he convinced [the McMichaels] that [he] could perform. This created a situation for [the McMichaels] that put them in an unmanageable position after already having been put in a problematic position by [their previous counsel].

The attorney did not keep contemporaneous records

Mr. Harris testified that he: (1) prepared these [detailed billing] statements just prior to the hearing; (2) had not submitted them when he sent the “skinny bills” to the McMichaels; and (3) submitted the detailed bills to the McMichaels shortly before the hearing. This belated and ad hoc compliance with the billing provisions of the parties’ agreements simply does not reflect the promptness, diligence or appropriate communication required of a Florida attorney, or any other attorney. We conclude that the trial court did not err in holding that Mr. Harris’ failure to comply with the terms of his fee agreement constitute a breach of the fiduciary duty he owed to the McMichaels.

Disgorgement

The trial court’s equitable solution was to allow Mr. Harris $5,000, the amount contemplated in the First Agreement, and to disgorge him of the remainder of the fees paid him. Under the specific facts of this case, the trial court’s decision constitutes an acceptable resolution, see Lee Med., Inc., 312 S.W.3d at 524; as such, we conclude that the trial court did not abuse its discretion or otherwise err in allowing Mr. Harris to retain only $5,000.00.

(Mike Frisch)