Opinion
No. 2008-SC-000695-KB.
November 26, 2008.
OPINION AND ORDER
Movant, Kelly H. Fowler, moves this Court pursuant to SCR 3.480(2) to enter an order of public reprimand, subject to certain conditions, for his violations of SCR 3.130-1.4(b), 1.5(a), 3.3(a)(1), and 3.4(c). Fowler's KBA member number is 23135, and his bar roster address is 313 Frederica Street, Suite 400, PO Box 952, Owensboro, Kentucky 42302. Fowler was admitted to practice law in Kentucky on May 20, 1977, and has not been the subject of any prior attorney disciplinary proceedings. The Kentucky Bar Association (KBA) states that it has no objection to the motion and proposed sanction. Because we adjudge that the sanction of a public reprimand is inadequate in light of the attorney's misconduct, the motion is denied.
Fowler was retained to represent Marilyn Stafford in a workers' compensation case in 1993. A fee contract was signed on June 7, 1993, providing that the Respondent would receive a contingency fee of 20% of the first $25,000, 15% of the next $10,000, and 5% of the remainder of the amount recovered by Fowler for Ms. Stafford. On July 2, 1998, Ms. Stafford was awarded benefits totaling $712,571.64. That award was later appealed and affirmed. On April 13, 1999, Fowler filed a motion for approval of attorney's fees in the amount of $40,378.58 in accordance with the fee contract with Ms. Stafford. The Administrative Law Judge (ALJ) declined to approve the requested fee, and entered an order on May 5, 1999, approving fees in the case in the amount of $30,000, of which the defendant/employer was to pay 70% and and the Special Fund was to pay 30%. These amounts were to be paid in a lump sum directly to Fowler.
Past due benefits were paid to Ms. Stafford in a lump sum in the amount of $83,528.48 in April of 1999. Despite the ALJ's order limiting the fee to $30,000 to be paid by the employer and the Special Fund, Fowler took a fee in the amount of $40,378.58, plus expenses, from that lump sum settlement. According to Fowler, Ms. Stafford had to be aware of the ALJ's order limiting the fee because he had sent her courtesy copies of the order. In his answer to the charges, Fowler claimed that the additional $10,378.58 paid by Ms. Stafford was a gift to him because of his able representation of her. However, in Ms. Stafford's affidavit in the record, she stated that she never received a copy of the ALJ's order limiting the attorney fee and was not otherwise aware of said order. She further stated that she never agreed to pay the additional $10,378.58 to Fowler as a gift.
On July 18, 2005, Fowler was charged by the Inquiry Commission with a violation of SCR 3.130-1.4(b), 1.5(a), 3.3(a)(2), 3.4(c), and 8.3(c) in regards to his representation of Ms. Stafford. Subsequently, Fowler filed a motion to amend the charges to reflect a violation of SCR 3.130-3.3(a)(1), instead of SCR 3.130-3.3(a)(2), on grounds that no fraud was committed with regard to any statement or representation Fowler made to the court. The motion also asked the Inquiry Commission to delete the alleged violation of SCR 3.130-8.3(c) on grounds that there was no evidence that Fowler perpetrated a fraud on any tribunal or against Ms. Stafford. On September 14, 2007, the Inquiry Commission entered an order granting the motion to amend the charges.
On September 23, 2008, Fowler filed a motion pursuant to SCR 3.480(2) asking that this Court impose the sanction of a public reprimand for his violations of SCR 3.130-1.4(b), 1.5(a), 3.3(a)(1), and 3.4(c), subject to the following conditions:
(1) Fowler would refund Ms. Stafford $10,378.58, plus interest at the rate of 6% compounded annually for eight years, for a total of $16,163.30. As Fowler has already paid $10,378.58 to Ms. Stafford, he would pay the balance of $6,163.30 within forty-five (45) days of the entry of this Court's order.
(2) Fowler would attend the Ethics and Professionalism Enhancement Program (EPEP) to be held on April 17, 2009, and pass the test given at the end. Movant agrees that he will not register or apply for any Continuing Legal Education Requirements or credits regarding his attendance at the EPEP.
(3) Fowler will pay all costs associated with the disciplinary investigation as will be certified to the Supreme Court by the Disciplinary Clerk.
The KBA's response to Fowler's motion states that it has no objection to the sanction of a public reprimand, subject to the above conditions, for the charged violations related to Fowler's representation of Ms. Stafford.
Fowler admits in his motion that he violated SCR 3.130-1.4(b) (explaining matters to clients so as to permit informed decisions), SCR 1.130-1.5(a) (reasonable attorney's fee), SCR 1.130-3.3(a)(1) (false statement of a material fact to a tribunal), and SCR 1.130-3.4(c) (knowingly disobeying an obligation under the rules of a tribunal) in his representation of and collection of a fee from Ms. Stafford, and in failing to inform the ALJ that he had collected a greater fee than the amount awarded. Indeed KRS 342.320(1) provides that all attorney's fees in workers' compensation cases "shall be subject to the approval of an administrative law judge pursuant to the statutes and administrative regulations." And in KBA E-282, the Ethics Committee determined that an attorney is bound by the fee set by the court or administrative agency.
This Court, upon reviewing this case, finds the proposed sanction of a public reprimand with the stated conditions to be inadequate given the seriousness of the charges and the deceptive conduct relative to the Movant's client and the ALJ. SCR 3.480(2) provides that his Court "may approve the sanction agreed to by the parties, or may remand the case for hearing or other proceedings specified in the order of remand."
ACCORDINGLY, IT IS HEREBY ORDERED that the motion for public reprimand is DENIED and the case is remanded for further disciplinary proceedings.
All sitting. All concur.