BOARD OF PROFESSIONAL RESPONSIBILITY, WYOMING STATE BAR, Petitioner,
BRUCE S. ASAY, WSB # 5-1739, Respondent.
ORDER OF PUBLIC CENSURE
E. JAMES BURKE CHIEF JUSTICE.
[¶1] This matter came before the Court upon a "Report and Recommendation for Public Censure, " filed herein February 25, 2016, by the Board of Professional Responsibility for the Wyoming State Bar. The Court, after a careful review of the Board of Professional Responsibility's Report and Recommendation, the "Affidavit of Costs and Expenses, " the "Brief of Respondent, Bruce S. Asay, " the "Wyoming State Bar's Response to Respondent's Objections to Report and Recommendation, " the "Reply Brief of Respondent Bruce S. Asay, " and the file, finds that the Report and Recommendation should be approved, confirmed, and adopted by the Court, and that Respondent, Bruce S. Asay, should be publicly censured for his conduct. It is, therefore, [¶2] ADJUDGED AND ORDERED that the Board of Professional Responsibility's Report and Recommendation for Public Censure, which is attached hereto and incorporated herein, shall be, and the same hereby is, approved, confirmed, and adopted by this Court; and it is further
[¶3] ADJUDGED AND ORDERED that Bruce S. Asay is hereby publicly censured for his conduct, which is described in the Report and Recommendation for Public Censure; and it is further;
[¶4] ORDERED that, pursuant to Rule 25 of the Wyoming Rules of Disciplinary Procedure, Mr. Asay shall reimburse the Wyoming State Bar the amount of $7, 026.42, representing the costs incurred in handling this matter, as well as pay the administrative fee of $750.00. Mr. Asay shall pay the total amount of $7, 776.42 to the Wyoming State Bar on or before August 31, 2016; and it is further
[¶5] ORDERED that the Clerk of this Court shall docket this Order of Public Censure, along with the incorporated Report and Recommendation for Public Censure, as a matter coming regularly before this Court as a public record; and it is further
[¶6] ORDERED that, pursuant to Rule 9(b) of the Wyoming Rules of Disciplinary Procedure, this Order of Public Censure, along with the incorporated Report and Recommendation for Public Censure, shall be published in the Wyoming Reporter and the Pacific Reporter; and it is further
[¶7] ORDERED that the Clerk of this Court cause a copy of this Order of Public Censure to be served upon Respondent, Bruce S. Asay.
[¶8] DATED this 11th day of May, 2016.
IN THE MATTER OF BRUCE S. ASAY, WSB # 5-1739
WSB NO. 2015-007
REPORT AND RECOMMENDATION FOR PUBLIC CENSURE
THIS MATTER came on for hearing before the Board of Professional Responsibihty on January 25 and 26, 2016, in Cheyenne, Wyoming, with Mark W. Gifford, Bar Counsel, appearing on behalf of the Wyoming State Bar and Respondent appearing in person and by and through his counsel, Stephen H. Kline. The Board, having heard the testimony of certain witnesses, having reviewed the exhibits received into evidence, having heard the arguments of counsel and being fully advised in the premises, FINDS and RECOMMENDS as follows:
FINDINGS OF FACT
1. Respondent is a member of the Wyoming State Bar, licensed to practice since 1980. He practices law in Cheyenne with other attorneys under the firm name Associated Legal Group, LLC (ALG).
2. On January 20, 2015, Laramie resident Zack Koch ("Koch") submitted a complaint to the Office of Bar Counsel against Respondent who represented Koch in various matters relating to Koch's employment with the Hilton Garden Inn (HGI) in 2009 and his termination from that employment in December of that year.
3. Koch worked in the construction trades for many years prior to taking employment in January of 2008 as Lead Engineer on the maintenance staff at HGI. A year after he began employment with HGI, Koch was passed over for a promotion to Chief Engineer. On May 1, 2009, Koch filed a charge of age discrimination with the Wyoming Department of Employment.
4. On June 17, 2009, Koch and his wife met with Respondent for advice on how to proceed with the discrimination charge. Respondent testified that he advised Koch to maintain his employment and that it was better to be employed than have a lawsuit. Prior to the meeting at Respondent's office, Koch completed a "New Client Information Sheet" on which he provided contact information. Under "Reason for Visit, " Koch wrote, "Advice on discrimination case." Koch signed the sheet as "Client" beneath the following small print:
The Client will be billed monthly for costs and all Attorney's fees above the minimum fee. Full payment is due at the conclusion of the case or as agreed with Attorney. If not paid in full, the balance will be delinquent and will earn interest at the rate of 1/12% (sic) per month until paid in full. If the balance is not paid, Attorney may also request payment through use of a major credit card. The Attorney may file an action to compel payment of all amounts due to the Attorney under this contract. The Client, in the event such suit is filed, shall pay all costs of collection incurred by the Attorney including reasonable Attorney's fees and Court costs.
The Intake Form did not state an hourly rate or how costs were to be charged.
5. Consistent with the Intake Form, Respondent's first invoice to Koch, dated June 30, 2009, was for 1.9 hours spent on June 17, 2009, described as follows: "Review message; Meet w/ Mr. Z. Koch and review facts of complaint w/ Hilton; Review draft of response." That invoice, in the amount of $345.90, was paid on August 3, 2009. Respondent next invoiced Koch on August 31, 2009. That bill, in the amount of $281.78, consists of .4 hours for "Conf w/ Zack Koch about ongoing working conditions, " and 1.2 hours "Meeting w/ client; Review documents; Prepare possible letter in response; T conf w/ client; Forward to client." Koch paid the bill September 29, 2009. Although the Kochs paid the first two bills, they did not make another payment for fees billed on an hourly basis.
6. Mr. and Mrs. Koch testified that at a meeting with Respondent in the summer of 2009, he agreed to handle all work on a contingency fee basis. Koch's wife testified that she attended the meeting because of her concern about cost. She stated that Respondent told them that the case would be on a contingency basis and explained that "if we win, he gets paid and if we lose, he gets nothing." Respondent denied this and explained that Mr. Koch remained employed so he was not interested in taking the matter on contingency. Thereafter, Respondent represented Mr. Koch at a mediation with HGI in October, 2009 with the Wyoming Department of Employment that was not successful.
7. Mrs. Koch testified that they continued to receive bills and inquired of Respondent as to the reason. According to Mrs. Koch, Respondent stated that the bills were being generated to make a record, and that the fees would be collected from HGI if they prevailed.
8. On December 10, 2009, Koch was terminated by HGI. Koch contacted Respondent, and with Respondent's help, Koch thereafter filed another charge of discrimination with the Wyoming Department of Employment; this complaint was for retaliatory discharge.
9. After Koch was terminated, the billing statements sent by Respondent included interest charges added to the outstanding balance. This resulted in compounding the interest.
10. Koch also applied for unemployment compensation. Initially, the determination went in his favor and he began receiving monthly unemployment benefits. However, HGI objected to the initial determination and requested a contested case hearing. At this point, Koch contacted Respondent to assist with the hearing. A hearing before a hearing examiner was held on April 27, 2010 with Respondent appearing on behalf of Koch.
11. At this point Respondent continued to bill hourly for the employment advice and assistance in the hearing. By early May 2010, Koch's unpaid legal bills exceeded $5, 000. The parties did not discuss the fees due or those to be incurred. The parties did not discuss the potential recovery in the unemployment matter.
12. When the hearing examiner's decision went in favor of Koch, unbeknownst to Respondent, HGI demanded a hearing before the Employment Security Commission. Neither HGI nor the Commission provided notice of the appeal to Respondent, and neither Respondent nor Koch attended the hearing.
13. Without Koch or his counsel at its meeting on June 22, 2010, the Commission reversed the hearing examiner's ruling and determined that Koch was discharged for misconduct connected with his work. As a result, Koch's unemployment compensation stopped. Koch had to that point received $6, 890 in benefits.
14. Upon being advised of the reversal of the award of unemployment benefits, Koch again contacted Respondent for assistance. Respondent contacted the Commission and raised the issue of lack of notice, but he was denied relief by the UIC. In July 2010, Respondent filed a Petition for Review in the Albany County District Court raising the procedural issue of the failure of the UIC or HGI to notify him of the appeal. The parties did not discuss fees or the potential recovery in going forward with the appeal.
15. Respondent continued to send monthly statements for his time. Although the parties did not discuss payment, one of the hearing exhibits before the Disciplinary Committee was a handwritten exchange between Respondent and his bookkeeper written on a printout of Koch's outstanding invoices dated June 4, 2010, at which time Koch's unpaid bill was $5, 361.18. The bookkeeper wrote, "Bruce, This guy only paid the 1st and 2nd invoices sent to him totaling $627.68. No payments since then. Continue to send stmts?" Under the note is Respondent's handwritten answer: "Yes."
16. Respondent's partner at the time, Keith Burron, testified that Respondent often provided services without receiving full payment when a client "needed help".
17. On November 15, 2010, Respondent filed the petitioner's brief in the Albany County District Court seeking an order requiring the UIC to provide Koch an opportunity for a rehearing on the appeal.
18. By the end of 2010, Koch's unpaid legal bills exceeded $11, 000, and were accruing finance charges at the rate of approximately $150 per month. Respondent stated that the bills were accurately prepared and that the interest was accurately computed as shown on the bills. Respondent did not pursue payment.
19. Respondent prepared and filed a reply brief in district court in January 2011. He requested a hearing on the petition.
20. On March 9, 2011, while the request for a hearing on the unemployment appeal was before the District Court, the Wyoming Department of Employment, Fair Employment Program, issued its determination on Koch's two discrimination charges. With respect to the original claim regarding age discrimination in being passed over for the Chief Engineer position, the hearing examiner found that there was no probable cause to support the claim. However, with respect to the retaliatory discharge claim, the hearing examiner found probable cause to believe that retaliation occurred as a result of Koch's filing of the age discrimination claim. The matter was referred to the EEOC. On June 17, 2011, the EEOC issued a Right to Sue Letter on both charges.
21. In the unemployment matter, the hearing on Respondent's Petition for Review in the unemployment compensation matter was held in late April 2011. In June 2011 the District Court reversed the Commission's decision and remanded the case for a new hearing. The order on remand was entered in mid-July 2011, and the new hearing before the Commission was set for August 23, 2011.
22. On remand, the Commission again found in favor of HGI (finding again that Koch was terminated for misconduct connected with his work) and ordered no benefits paid. After discussions between Koch and Respondent, it was agreed that Respondent would proceed with another appeal on Koch's behalf. The parties did not discuss fees or any potential for recovery in going forward with the unemployment matter. Andy Losasso, the Deputy Administrator with the Wyoming Department of Workforce Services, testified that the total possible unemployment benefits that Koch could recover was $12, 190. In other words, if successful, Koch would only be able to recover $12, 190 less the $6, 890 in benefits he had already received. Respondent testified that he did not think the amount of recovery was relevant.
23. By the end of August 2011, unpaid fees were $22, 365.44 and finance charges were accruing at the rate of more than $300 per month.
24. In September 2011, the deadline to file a retaliatory discharge case loomed. Respondent requested to meet with Mr. and Mrs. Koch. Mrs. Koch wrote a $4, 000 check to Respondent. Mr. and Mrs. Koch testified that this payment was required by Respondent to cover the costs of going forward with the discrimination and retaliatory discharge case (the "discrimination case"). Respondent disputed this and testified instead that if he was to proceed ahead with the case in Federal Court that he needed a payment by the Kochs toward the fees and costs associated with services and costs previously advanced by his office. The $4, 000 payment was not described in any written agreement produced into evidence. Respondent did not recall any discussion with the Kochs concerning the outstanding invoices in the unemployment matter or the two different "tracks" concerning his services (the unemployment case purportedly billed on an hourly basis and now the discrimination case taken on a contingency fee.)
25. Although the parties agree that the discrimination case filed in federal court was to proceed on a contingent basis, they dispute whether or not a written contingent fee agreement was prepared. Respondent testified that he knew he had an obligation to have a written contingent fee agreement for the discrimination lawsuit and that he believed one was signed but has been misplaced. Respondent, Keith Burron, and their paralegal all testified that Respondent's firm had a policy of never proceeding forward in a contingency fee case without a written agreement. Koch denied that he ever saw such an agreement and none was produced.
26. The $4, 000 check contains Respondent's handwriting on the memo line indicating that the payment was for "lawsuit." The $4, 000 payment was deposited into Respondent's trust account on September, 2011. At this time, the $4, 000 payment was not applied to the outstanding fees and costs previously advanced by ALG.
27. During the investigation of Koch's complaint, Bar Counsel posed the following question to Respondent: "Mr. Koch says he paid you $4, 000 to file the discrimination case. Do you agree? If so, how was that payment applied?" Respondent's counsel responded:
Mr. Asay agrees that $4, 000 was paid to the firm. The payment was placed in the trust account and expenses including expert fees were applied against it. After the close of the proceedings, on April 28, 2014, the balance was transferred to the operating account and applied against the fees owed.
28. On September 26, 2011, after consultation with his client, Respondent filed a second Petition for Review of the Commission's denial of unemployment compensation benefits in the Albany County District Court. There was no evidence that Respondent discussed outstanding fees or any potential recovery with Koch.
29. Initial disclosures were made in the discrimination case. One of the attorneys for HGI, Mitchell Edwards, testified at the hearing that it was only after the initial disclosures were produced that his firm realized that there was an arbitration provision in Koch's employee handbook. HGI filed a motion to amend its answer which Respondent objected to as untimely and inappropriate. On January 13, 2012, HGI filed a motion to stay the discrimination case and to compel Koch to seek arbitration pursuant to the HGI Employee Handbook provision.
30. Respondent testified that this was possibly the first time that he saw the complete employment handbook that Mr. Koch was given upon his employment with HGI although he had been provided at least portions of the handbook by Koch earlier in the unemployment case. Respondent testified he could have received it earlier and put it in a box. He would not have read the entire manual upon receipt. In any event, Respondent acknowledged that he did not have any conversation with Koch about the arbitration clause prior to the Motion to Compel Arbitration.
31. Ten days after HGI filed its January 13, 2012 motion to compel arbitration, Respondent filed an expert designation in the discrimination case consisting of a damage calculation prepared by a University of Wyoming economics professor.
32. Also during January 2012, Respondent prepared and filed Koch's brief in the Petition for Review before the District Court seeking review of the denial of unemployment benefits. There was no testimony or evidence that the parties discussed the outstanding amounts owed or potential recovery in this matter at this time.
33. On March 14, 2012, Respondent sent the following email to Koch: "Attached is a Reply Brief that was filed in the Albany County District Court. It relates to the claim for Unemployment Insurance. On the other front, the Federal District Court is considering the arbitration issue and the remaining deadlines are suspended."
34. On March 27, 2012, the Albany County District Court Judge issued his decision letter affirming the Commission's denial of unemployment compensation to Koch. Respondent testified he filed a Notice of Appeal to the Wyoming Supreme Court in the unemployment compensation case because Koch requested that the matter proceed. Koch testified that he only did what Respondent advised at every juncture, and it didn't really matter to him because everything was being done on a contingent fee basis.
35. It appears from Respondent's records that on March 31, 2012, he transferred $905.64 from Koch's $4, 000.00 in the ALG trust account to the ALG operating account in payment of an invoice for some costs. The expenses reimbursed included $700.00 paid to the expert economist, $36.49 for a FedEx charge that may have related to the unemployment case, and a couple hundred dollars for photocopies and postage. However, it did not include the $350.00 filing fee paid to the U.S. District Court for the discrimination case or the $50.00 payment to the Albany County Sheriff for service of process upon HGI. This left a balance remaining in trust for Koch's account of $4, 000.00 - $905.64 = $3, 094.36. The balance remained there until May of 2014.
36. On April 4, 2012 Judge Skavdahl of the U.S. District Court issued an order granting HGI's motion to compel arbitration in the discrimination case. Respondent testified that in his opinion this ended the federal case as Koch could not fund an expensive arbitration proceeding, particularly if he had to proceed in Michigan as he perceived was required by the arbitration provision. Respondent testified that after considering the potential cost of the arbitration, he met with Koch and they agreed to not proceed with the suit. In contrast, Koch testified that the last he knew, Respondent was going to find an arbitrator, although Koch acknowledged that he and his wife would not spend any more money on costs for an arbitrator.
37. As the appeal of the unemployment compensation claim worked its way through the Wyoming Supreme Court, the bill continued to grow. By October 2012, the bill exceeded $50, 000 and was accruing finance charges at the rate of $800 per month.
38. The unemployment compensation claim would consume more than three years with Koch ultimately losing when on January 31, 2013, the Wyoming Supreme Court issued its opinion affirming Judge Donnell's decision upholding the denial of unemployment compensation to Koch. See Koch v. Department of Employment, 294 P.3d 888 (Wyo. 2013).
39. On March 11, 2013, HGI filed a motion to dismiss the discrimination case, citing Respondent's failure to comply with Judge Skavdahl's April 4, 2012 order that Koch was to initiate arbitration arrangements within 30 days. On March 13, 2013, Judge Skavdahl issued an order dismissing the discrimination case without prejudice for non-activity. At no time from April of 2012 through March of 2013 was there any written communication regarding a status update on the arbitrator or potential dismissal of the discrimination (retaliatory discharge) case.
40. On June 8, 2013, Respondent's office sent an invoice to Koch that contained the following handwritten note from Respondent: "Zack- This bill is very high. I don't expect you to pay it all but what arrangements can we make to resolve it." The amount of the invoice was $57, 318.04. There is no evidence that Koch responded. The evidence showed that this was Respondent's first effort to collect past due amounts.
41. On July 10, 2013, Respondent sent an email concerning the outstanding fees. On July 10, 2013 Respondent sent the following email to Koch under the subject line "Attorneys Fee Bill to Resolve": "We need to talk about the bill for attorney's fees, I have a partial offer to make to you but need to hear from you." Koch did not respond.
42. On October 22, 2013, Respondent sent another email with the same subject line: "Please give me a call to discuss." There is no evidence that Koch responded. Koch testified that he may have called Respondent's office but that Respondent was not available. Respondent testified that no calls were made by Koch to his office and that even in his absence he would have received a record of such a call.
43. On April 28, 2014, the balance of the Koch's funds in Respondent's trust account were transferred to the ALG operating account and applied against the fees invoiced. Respondent produced five invoices stamped "PAID 04/28/2014." These five invoices total $2, 570.31. Respondent testified that as the case was completed, he would have authorized the bookkeeper to transfer the funds from the Trust Account as fees and costs were owed by Koch to Respondent. Respondent's bookkeeper applied the funds to the first fees accrued leaving costs still unpaid.
44. After he received an invoice from ALG dated 5/17/2014 in the amount of $63, 447.60, Koch sent the following email to Respondent:
I would like for you to stop sending bills to me. As per are conversation in your office my wife asked you what these two issues were going to cost? Your response and I quote. "If we win these cases I get paid, If we don't, then you (Zack & Sharon) owe me (Bruce) NOTHING! All you said you needed was, X amount of money to get this going and we will go from there." We paid you the money you wanted to get started. We "LOST" and I OWE you NOTHING MORE. I'm tired of people who lie and then make it to be the TRUTH.. ..in their own little Courtroom....! This is my ONLY and LAST communication on this matter.
Your comments are inaccurate and misconstrue our conversations. You also could have responded earlier to my calls, notes and prior emails.
You had two cases ongoing. The one case related to your wrongful termination-which was dismissed. You also had a case on your claim for unemployment insurance. The first case was a contingency case and the latter was an hourly matter. In regard to the UIC case; there was a hearing, an appeal to the UIC, an appeal to the District Court ...