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Board of Prof. Resp., Wyoming State Bar v. Casper

Supreme Court of Wyoming

February 19, 2014

Stacy E. CASPER, WSB No. 6-3431, Respondent.

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[Copyrighted Material Omitted]

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MARILYN S. KITE, Chief Justice.

[¶ 1] This matter comes before the Court upon a Report and Recommendation for 30 Day Suspension stipulated to by Petitioner, the Board of Professional Responsibility of the Wyoming State Bar (the Board); and Respondent, Stacy E. Casper. Although Respondent has stipulated to the violation and discipline, and the Court accepts the stipulated recommendation, the Court writes this opinion rather than simply adopting the Board's recommendation because these are matters of considerable importance to members of the Wyoming State Bar. Having considered the Report and Recommendation; having reviewed the Board's record, including the parties' stipulation and Respondent's Affidavit of Factual Basis; and being fully advised in the matter, the Court finds and concludes:


[¶ 2] This is an attorney discipline case that arose out of Respondent's billing excessive legal fees and her subsequent improper

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attempts to collect those fees. Respondent entered into a Legal Services Agreement (LSA) with her client in December 2011, and thereafter entered her appearance on the client's behalf in a divorce and child custody proceeding. The LSA provided:

MINIMUM BILLINGS: CLIENT understands that when ATTORNEY is in the office, ATTORNEY charges a minimum of one quarter hour (15 minutes) for CLIENT'S case, including telephone calls, except for reviewing and signing letters which will be billed for one-quarter hour.

[¶ 3] The LSA also authorized Respondent to file a lien on all property of the client to secure fees and costs, and it permitted Respondent to " file and record this LIEN and/or file this Agreement."

[¶ 4] The client paid Respondent a $5,000.00 retainer, and Respondent represented the client through the first day of trial, October 12, 2012. The proceedings were adjourned and subsequently reset for a second day of trial, April 19, 2013. In January 2013, Respondent filed a motion to withdraw because the client had not paid her fees. That motion was granted by the district court, and the client completed the trial without assistance of counsel. The Decree of Divorce, entered April 30, 2013, identified certain real property as marital property and ordered the parties to sell it.

[¶ 5] On May 13, 2013, Respondent caused to be filed of record with the Natrona County Clerk a " Lien Statement" which indicated that her client owed her $18,717.05. The Lien Statement identified the real property as being subject to the lien and it indicated that it was being filed pursuant to Wyo. Stat. Ann. § 29-1-312 (LexisNexis 2013). Attached to the Lien Statement were a copy of the LSA between Respondent and her client and a copy of the " Client Ledger," which sets forth, in some detail, the tasks completed by Respondent and her staff, the charges therefore, and the disbursements made on the client's behalf.

[¶ 6] The client's ex-husband was the record owner of the property. Respondent did not notify him or his agent of her intent to file the lien or of filing the lien. The ex-husband's attorney contacted Respondent to question the propriety of the lien, but Respondent took no action to correct it. The ex-husband then filed a Complaint with bar counsel, and this matter was initiated. Respondent and the Board have stipulated that Respondent violated Rules 1.5 (Fees), 1.9(c) (using confidential information to the disadvantage of a former client), and 8.4(c) (engaging in conduct involving dishonesty, fraud, deceit or misrepresentation) of the Wyoming Rules of Professional Conduct for Attorneys at Law.


[¶ 7] The purpose of a state bar disciplinary procedure is to maintain " the integrity of the bar and to prevent the transgressions of an individual lawyer from bringing its image into disrepute," In re Clark, 613 P.2d 1218, 1221 (Wyo.1980) (quoting Attorney Grievance Comm'n of Maryland v. Walman, 280 Md. 453, 374 A.2d 354, 361 (1977)), and to " protect the public and the administration of justice." Bd. of Prof'l Responsibility v. Davidson, 2009 WY 48, ¶ 17, 205 P.3d 1008, 1015 (Wyo.2009). The Wyoming Supreme Court is charged with adopting rules of court practice having the effect of law, Wyo. Stat. Ann. § 5-2-113 (LexisNexis 2013), and with adopting rules governing the professional conduct of attorneys, establishing the bar association, and establishing rules for attorney discipline. Wyo. Stat. Ann. § 5-2-118 (LexisNexis 2013).

[¶ 8] Membership to the bar is by petition to the Wyoming Supreme Court, Wyo. Stat. Ann. § 33-5-104 (LexisNexis 2013), and attorneys are " subject to the exclusive disciplinary jurisdiction of this Court and the Board...." Disciplinary Code for the Wyoming State Bar, § 1(a). As this Court held in 1938, disciplinary proceedings are " necessarily incident to the inherent power of courts to control properly their own affairs." State Bd. of Law Examiners v. Brown, 53 Wyo. 42, 49, 77 P.2d 626, 628 (Wyo.1938).

[T]he Board is an arm of this Court whose purpose is to investigate allegations of professional misconduct and to report its findings

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and recommendations to the Court, which is the ultimate decision-maker in attorney disciplinary matters. Sections 21(c)(iii) and (iv) of the current Disciplinary Code make it clear that the Court's determination of appropriate discipline is its own, but that the determination must be made upon the evidence that was presented to the Board at the hearing.

Davidson, 2009 WY 48, ¶ 8, 205 P.3d at 1012, citing Mendicino v. Whitchurch, 565 P.2d 460, 465-66, 475 (Wyo.1977). As this Court explained in Meyer v. Norman, 780 P.2d 283, 288 (Wyo.1989), the Board is " an ancillary body structured by the court and has no independent power, jurisdiction, or authority other than that specifically delegated to it in accordance with the Disciplinary Code." [1] The Court gives due consideration to the findings and recommendations of the Board, but the " ultimate judgment in these cases is vested in this Court." Mendicino, 565 P.2d at 466; see also Davidson, 2009 WY 48, ¶ 1, 205 P.3d at 1012; In re Disciplinary Action Against Hellerud, 714 N.W.2d 38, 41 (N.D.2006).


Excessive fees— Wyo. R. Prof. Conduct 1.5

[¶ 9] Respondent has stipulated to the following facts regarding her billing in this matter:

19. ... the fee agreement was signed by [her client], on December 8, 2011. Respondent's first billing entry, on December 12, 2011, describes .25 hours spent by Respondent in reviewing the fee agreement. There is an identical entry on December 14, 2011. Thus, Respondent incorrectly billed her client .5 hours (or $100) for reviewing the fee agreement prepared by Respondent's staff and signed by the client several days earlier. Respondent acknowledges that this time should not have been billed, and certainly not billed twice.
20. Respondent's billing practice for the case was to write down tasks as she completed them. These tasks were then billed pursuant to a fee schedule that billed Respondent's time spent on cases in minimum increments of .25 hours. Respondent did not keep track of the amount of time she actually spent on certain tasks performed under the minimum billing increment.
21. The billing record contains 106 different entries for Respondent's one-quarter hour minimum increment. Respondent acknowledges that few if any of those tasks would reasonably require a quarter hour of her time. For example, Respondent routinely billed .25 hours each to sign such documents as subpoenas, stipulated orders and pleadings.
22. Furthermore, of the 106 entries for Respondent's minimum, quarter-hour increment, 75 are for " review" of some document. Respondent routinely billed .25 hours each for review of such things as the fee agreement, one-or two-page pleadings, subpoenas, a one-page order for mediation, a one-page notice of setting, and numerous one-page letters. Respondent acknowledges that these billing practices constituted an abuse of the minimum time increment feature of the fee agreement.
23. There are instances in which Respondent billed twice for the same activity. In several instances, Respondent billed .25 hours to review a document and another .25 hours to sign the same document.
24. In one instance, Respondent billed her client for time spent on a motion to continue that was necessitated by Respondent's scheduling conflict. In this instance, the proper exercise of billing judgment demanded that Respondent's client should not have been billed.
25. In numerous instances, the time recorded on Respondent's billing record came several days after the document to which it relates, which resulted in the appearance that Respondent was doing " after the fact" billing for tasks already completed. In fact, this appearance was caused by a problem with how time was entered by Respondent's support staff

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[¶ 10] Respondent acknowledges that this conduct violated Rule 1.5 of the Wyoming Rules of Professional Conduct.[2] The stipulated facts indicate that she billed for tasks she did not perform, billed twice for the same activity, and billed for tasks already completed days before. Billing for work not done is a clear violation of Rule 1.5's prohibition of making an agreement for, charging, or collecting an unreasonable fee. " [A] lawyer who has undertaken to bill on an hourly basis is never justified in charging a client for hours not actually expended." ABA Comm. on Ethics & Prof'l Responsibility, Formal Op. 93-379, at 5 (1993). In re O'Brien, 130 N.M. 643, 29 P.3d 1044, 1048 (2001) (" Any fee is excessive when absolutely no services are provided." ).

[¶ 11] Use of billing with minimum time increments does not necessarily result in an unreasonable fee. The Court recognizes that use of minimum billing increments is a useful tool which is not, in and of itself, unethical. The Task Force on Lawyer Business Ethics has explained:

For convenience, lawyers generally keep track of the time spent using standard increments of time, commonly six minutes (0.1 hour), ten minutes (1/6 hour) or fifteen minutes (1/4 hour). This approach is essential and should not be objectionable unless the increments are unreasonably large or are used in an abusive manner. It would not be practical to keep track of time in constantly varying measurements, and minimum increments serve the practical needs of both lawyers and clients. On the other hand, the practice should not be abused. Legitimate use of a minimum time increment may depend on how the lawyer records the balance of the increment. Two fifteen-minute charges for two five-minute calls within the same fifteen-minute period seem inappropriate; some balancing should be used.

Task Force on Lawyer Business Ethics, Statement of Principles, 51 Bus. Law. 745, 760 (1995-1996). A necessary companion to the requirement that a lawyer bill clients only for work done is the requirement that the lawyer's invoices accurately describe the legal services and amounts charged to the client. ABA Formal Op. 93-379, at p. 9.[3]

[¶ 12] In this case, Respondent had specifically contracted with her client to bill in minimum increments of fifteen minutes. This Court does not hold that such an agreement is unreasonable. Contractual clauses for payment of attorneys' fees are " generally a matter of agreement between the lawyer and client." In re Hellerud, 714 N.W.2d at 41. However, " [t]he reasonableness of a fee is not measured solely by examining its value at the outset of the representation; indeed an otherwise-reasonable fee can become unreasonable if the lawyer fails to earn it." Attorney Grievance Comm'n of Maryland v. Garrett, 427 Md. 209, 46 A.3d 1169, 1178 (2012). Attorneys' duties to clients can exceed the duties of parties under contract law. This is because the attorney-client relationship is a fiduciary relationship of trust and confidence.

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Lee v. LPP Mortg. Ltd., 2003 WY 92, ¶ 21, 74 P.3d 152, 160 (Wyo.2003); Bevan v. Fix, 2002 WY 43, ¶ 53, 42 P.3d 1013, 1029 (Wyo.2002). Although Respondent may have billed in compliance with the LSA terms, she failed to ensure that her charges were reasonable.

[¶ 13] The reasonableness of attorneys' fees can be determined by application of the " lodestar" concept adopted by the United States Supreme Court in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); and adopted by this Court in UNC Teton Exploration Drilling, Inc. v. Peyton, 774 P.2d 584, 594 (Wyo.1989). The " lodestar" test requires a two-step process: " (1) whether the fee charged represents the product of reasonable hours times a reasonable rate; and (2) whether other factors of discretionary application should be considered to adjust the fee either upward or downward." In re NRF, 2013 WY 9, ¶ 7, 294 P.3d 879, 882 (Wyo.2013), citing UNC Teton Exploration Drilling, 774 P.2d at 595.[4] See also, Wyo. Stat. Ann. § 1-14-126(b) (LexisNexis 2013), which lists factors a trial court may consider when exercising its discretion in awarding attorneys' fees.

[¶ 14] The second step requires the application of " billing judgment," which usually is demonstrated " by the attorney writing off unproductive, excessive, or redundant hours." In re NRF, 2013 WY 9, ¶ 9, 294 P.3d at 883 (quoting Green v. Adm'rs of Tulane Educ. Fund, 284 F.3d 642, 662 (5th Cir.2002)). " Billing for legal services ... should not be a merely mechanical exercise.... A reasonable fee can only be fixed by the exercise of judgment, using the mechanical computations simply as a starting point...." Copeland v. Marshall, 641 F.2d 880, 888 (D.C.Cir.1980), cited in In re NRF, 2013 WY 9, ¶ 9, 294 P.3d at 883.

[¶ 15] Respondent in this case billed in fifteen-minute increments, in accordance with the contractual terms, times a reasonable rate.[5] However, her practice of billing fifteen minutes for such tasks as signing subpoenas, stipulated orders, and one-page letters demonstrated a complete failure to exercise business judgment, which would have required her to write off unproductive, excessive, or redundant hours.

[¶ 16] The Court finds the record supports the stipulation; Respondent's actions violated Wyo. R. Prof. Conduct 1.5.

Misrepresentation in filing the lien statement— Wyo. R. Prof. Conduct 8.4(c)

[¶ 17] Attorneys may have liens on certain assets of their clients. Wyo. Stat. Ann. § 29-9-102 (LexisNexis 2013) provides:

(a) For professional services performed on behalf of a client, an attorney shall have a lien for compensation due him from the time of giving notice of the lien. The attorney's lien attaches upon:
(i) Any papers or money of his client which have come into his possession;
(ii) Money due his client and in the possession of an adverse party.
(b) Notice as required by subsection (a) of this section to be given to any person against whom the lien is asserted shall be given by certified mail, return receipt requested.

[¶ 18] Respondent did not file a lien under the attorney lien statute, but instead under Wyo. Stat. Ann. § 29-1-312, which by its terms applies to improvements to real property. She provided no notice of the lien filing to the ...

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