NEWMAN, Associate Judge:
In its Report and Recommendation dated May 12, 1986, the Board on Professional Responsibility (hereinafter “the Board”) found that John Waller had violated three disciplinary rules of the Code on Professional Responsibility: DR2-110(B)(4) (failing to withdraw from employment after being discharged), DR2-106(A) (charging a clearly excessive fee), and DR9103(B)(4) (failing to deliver to a client papers which the client was entitled to receive). The Board recommended a sanction of 30 days’ suspension. Waller challenges the Board’s decision as to each of these violations, as well as the recommended sanction. We conclude that the Board’s findings are supported by substantial evidence of record, and that the recommended sanction is not inconsistent with other dispositions for comparable conduct, or otherwise unwarranted. D.C. Bar R. XI § 7(3). We accordingly adopt the Report and Recommendation of the Board, which is appended to this opinion. However, we consider Waller’s contentions as to the excessive fee violation to merit discussion, particularly in light of the dissenting opinion by a minority of the Board.1
Waller entered into a one-third contingency fee agreement with Beverly Houston to represent her in a personal injury action against her employer. Several months later, Houston discharged Waller. The Board assumed, without deciding, that the discharge was without cause; so do we. Up to that point, Waller had done negligible work on the case. Despite his discharge, Waller continued to work on Houston’s case, requesting information from her physicians, and attempting to negotiate a settlement with her employer’s insurance carrier. He succeeded in obtaining a settlement offer of $3500 from the insurance carrier, but did not relay the offer to Houston. Houston, meanwhile, had secured the services of another attorney.
Waller subsequently sent letters to Houston claiming fees of one-third of the insurance company's offer. He later explained at his disciplinary hearing that he thought he had substantially performed under his contract by negotiating a settlement with the insurance company, and that under this court’s holding in Kaushiva v. Hutter, 454 A.2d 1373 (D.C.), cert. denied, 464 U.S. 820, 104 S.Ct. 83, 78 L.Ed.2d 93 (1983), his substantial performance entitled him to his contingency fee.2 The Board disagreed, finding that although he had performed the services that he should have prior to his discharge, “the services were not substantial in furtherance of securing benefits for the client” as specified in Kaushiva. The contingency fee claimed by Waller was therefore, clearly excessive. Report, infra p. 754.
A minority of the Board dissented. The dissent argued that the majority had used a test of quantitative substantiality, or sub-stantiality in absolute terms, which was not the meaning of “substantial performance” specified in Kaushiva. The dissent felt that by doing all he should have done up to [750]*750the time of discharge, Waller had “substantially performed,” so that he could legitimately claim one-third of the settlement proffered shortly after his discharge, or any other settlement offer made within a reasonable period after his discharge and attributable to his efforts. Dissenting Opinion, infra p. 756-57.
Urging upon us the view of the dissenting members of the Board, Waller would have us interpret “substantial performance” to mean only that the attorney has made the efforts which could be expected of him in the time before discharge, even if these efforts were negligible, and regardless of whether they benefited the client by contributing to the result finally obtained. Taking this view to its extreme, an attorney who entered into a contingency fee agreement, made a preliminary phone call for the client, then was discharged without cause immediately thereafter, would be entitled to his full fee if a settlement later resulted. We recognize that there are jurisdictions which have taken this position. See, e.g., Dombey, Tyler, Richards, & Grieser v. Detroit, Toledo & Ironton Railroad Co., 351 F.2d 121, 127 (6th Cir.1965) (under Ohio law, discharged attorney may recover full contingency fee though he has done nothing whatever to earn his fee); Goldberg v. Perlmutter, 308 Ill.App. 84, 31 N.E.2d 333 (1941) (same). However, guided by our precedent and principles of equity, as well the usual meaning of “substantial performance” in other areas of contract law, we are led to a different conclusion.
In Kaushiva, we held that “an attorney who enters into a contingency fee agreement with his client, substantially performs, and is then prevented by his client from completing performance is entitled to the full amount specified in the fee agreement. Only where an attorney renders less than substantial performance will quantum meruit be the appropriate measure of damages.” Id. at 1374.
In Kaushiva, the attorney, engaged in connection with an arbitration matter, did, in fact, represent his client at three arbitration hearings before being discharged. In Mackie v. Howland, 3 App. D.C. 461 (1894), cited by us in Kaushiva, the attorneys had performed substantial services over several years in an attempt to collect amounts due on certain bonds, but were discharged shortly before payments were received, whereupon substitute counsel completed the transaction. In both of these cases then, the attorneys had performed extensive services in pursuit of the client’s objective, services which contributed to the client’s actual recovery. As the facts of these cases indicate, our use of the term “substantial performance” in Kaushi-va in the context of contingency fee agreements between attorney and client, meant that the attorney must have performed valuable services contributing to the results finally obtained by the client. Where an attorney, before discharge, has performed only inconsequential services of little benefit to the client, even if these services were all that could have been expected of him, he may recover only in quantum meruit. Friedman v. Harris, 81 U.S.App. D.C. 317, 318, 158 F.2d 187, 188 (1946) (attorney who had merely filed suit entitled only to quantum meruit).3
This interpretation accords with the meaning of “substantial performance” in other areas of contract law, where the use of the term presupposes not only that the promisor has substantially performed his part of the bargain, but that the promisee has received substantial benefits from the performance. “[T]he right to recover on such theory depends on whether or not the adverse party has received, to all intents and purposes, all the benefits which he could reasonably anticipate receiving under the contract.” 17A C.J.S. Contracts § 508, at 816 (1963) (citations omitted). See Newcomb v. Schaeffler, 131 Colo. 56, 279 P.2d 409 (1955) (en bane) (construction contract; substantial performance means that party “has received substantially the benefit he expected”); Joray Mason Contractors v. Four J’s Construction Corp., 61 Ill.App.3d 410, 18 Ill.Dec.
Free access — add to your briefcase to read the full text and ask questions with AI
NEWMAN, Associate Judge:
In its Report and Recommendation dated May 12, 1986, the Board on Professional Responsibility (hereinafter “the Board”) found that John Waller had violated three disciplinary rules of the Code on Professional Responsibility: DR2-110(B)(4) (failing to withdraw from employment after being discharged), DR2-106(A) (charging a clearly excessive fee), and DR9103(B)(4) (failing to deliver to a client papers which the client was entitled to receive). The Board recommended a sanction of 30 days’ suspension. Waller challenges the Board’s decision as to each of these violations, as well as the recommended sanction. We conclude that the Board’s findings are supported by substantial evidence of record, and that the recommended sanction is not inconsistent with other dispositions for comparable conduct, or otherwise unwarranted. D.C. Bar R. XI § 7(3). We accordingly adopt the Report and Recommendation of the Board, which is appended to this opinion. However, we consider Waller’s contentions as to the excessive fee violation to merit discussion, particularly in light of the dissenting opinion by a minority of the Board.1
Waller entered into a one-third contingency fee agreement with Beverly Houston to represent her in a personal injury action against her employer. Several months later, Houston discharged Waller. The Board assumed, without deciding, that the discharge was without cause; so do we. Up to that point, Waller had done negligible work on the case. Despite his discharge, Waller continued to work on Houston’s case, requesting information from her physicians, and attempting to negotiate a settlement with her employer’s insurance carrier. He succeeded in obtaining a settlement offer of $3500 from the insurance carrier, but did not relay the offer to Houston. Houston, meanwhile, had secured the services of another attorney.
Waller subsequently sent letters to Houston claiming fees of one-third of the insurance company's offer. He later explained at his disciplinary hearing that he thought he had substantially performed under his contract by negotiating a settlement with the insurance company, and that under this court’s holding in Kaushiva v. Hutter, 454 A.2d 1373 (D.C.), cert. denied, 464 U.S. 820, 104 S.Ct. 83, 78 L.Ed.2d 93 (1983), his substantial performance entitled him to his contingency fee.2 The Board disagreed, finding that although he had performed the services that he should have prior to his discharge, “the services were not substantial in furtherance of securing benefits for the client” as specified in Kaushiva. The contingency fee claimed by Waller was therefore, clearly excessive. Report, infra p. 754.
A minority of the Board dissented. The dissent argued that the majority had used a test of quantitative substantiality, or sub-stantiality in absolute terms, which was not the meaning of “substantial performance” specified in Kaushiva. The dissent felt that by doing all he should have done up to [750]*750the time of discharge, Waller had “substantially performed,” so that he could legitimately claim one-third of the settlement proffered shortly after his discharge, or any other settlement offer made within a reasonable period after his discharge and attributable to his efforts. Dissenting Opinion, infra p. 756-57.
Urging upon us the view of the dissenting members of the Board, Waller would have us interpret “substantial performance” to mean only that the attorney has made the efforts which could be expected of him in the time before discharge, even if these efforts were negligible, and regardless of whether they benefited the client by contributing to the result finally obtained. Taking this view to its extreme, an attorney who entered into a contingency fee agreement, made a preliminary phone call for the client, then was discharged without cause immediately thereafter, would be entitled to his full fee if a settlement later resulted. We recognize that there are jurisdictions which have taken this position. See, e.g., Dombey, Tyler, Richards, & Grieser v. Detroit, Toledo & Ironton Railroad Co., 351 F.2d 121, 127 (6th Cir.1965) (under Ohio law, discharged attorney may recover full contingency fee though he has done nothing whatever to earn his fee); Goldberg v. Perlmutter, 308 Ill.App. 84, 31 N.E.2d 333 (1941) (same). However, guided by our precedent and principles of equity, as well the usual meaning of “substantial performance” in other areas of contract law, we are led to a different conclusion.
In Kaushiva, we held that “an attorney who enters into a contingency fee agreement with his client, substantially performs, and is then prevented by his client from completing performance is entitled to the full amount specified in the fee agreement. Only where an attorney renders less than substantial performance will quantum meruit be the appropriate measure of damages.” Id. at 1374.
In Kaushiva, the attorney, engaged in connection with an arbitration matter, did, in fact, represent his client at three arbitration hearings before being discharged. In Mackie v. Howland, 3 App. D.C. 461 (1894), cited by us in Kaushiva, the attorneys had performed substantial services over several years in an attempt to collect amounts due on certain bonds, but were discharged shortly before payments were received, whereupon substitute counsel completed the transaction. In both of these cases then, the attorneys had performed extensive services in pursuit of the client’s objective, services which contributed to the client’s actual recovery. As the facts of these cases indicate, our use of the term “substantial performance” in Kaushi-va in the context of contingency fee agreements between attorney and client, meant that the attorney must have performed valuable services contributing to the results finally obtained by the client. Where an attorney, before discharge, has performed only inconsequential services of little benefit to the client, even if these services were all that could have been expected of him, he may recover only in quantum meruit. Friedman v. Harris, 81 U.S.App. D.C. 317, 318, 158 F.2d 187, 188 (1946) (attorney who had merely filed suit entitled only to quantum meruit).3
This interpretation accords with the meaning of “substantial performance” in other areas of contract law, where the use of the term presupposes not only that the promisor has substantially performed his part of the bargain, but that the promisee has received substantial benefits from the performance. “[T]he right to recover on such theory depends on whether or not the adverse party has received, to all intents and purposes, all the benefits which he could reasonably anticipate receiving under the contract.” 17A C.J.S. Contracts § 508, at 816 (1963) (citations omitted). See Newcomb v. Schaeffler, 131 Colo. 56, 279 P.2d 409 (1955) (en bane) (construction contract; substantial performance means that party “has received substantially the benefit he expected”); Joray Mason Contractors v. Four J’s Construction Corp., 61 Ill.App.3d 410, 18 Ill.Dec. 864, 378 N.E.2d 328 (1978) [751]*751(construction contract; whether there has been receipt and enjoyment of the benefits is important factor); In Re Kinney Aluminum Co., 78 F.Supp. 565 (S.D.Cal.1948) (employment contract; same).
Our view also finds support in the law of other jurisdictions. Although courts vary widely on the issue of the compensation due an attorney after discharge without cause, recovery of the full contingency fee is most likely in cases in which the attorney has, before discharge, fully performed,4 substantially performed,5 or contributed substantially to the results finally obtained by the client.6 Contra, Dombey, supra; Goldberg, supra.
For these reasons, we subscribe to the view, implicit in Kaushiva, that unless the attorney has performed valuable services contributing to the benefit finally obtained by the client, he has not “substantially performed,” and is only entitled to quantum meruit recovery. This was essentially the standard applied by the Board, which found, based upon substantial evidence of record, that the services performed by Waller were “not substantial in furtherance of securing benefits for the client.”
We note that the Board did not base its conclusion on the Kaushiva rationale alone; neither do we. This is not a case where there was an honest and reasonable dispute as to “substantial performance” under Kaushiva. As the Board points out at pages 753-54 of the attached Report, Waller’s shifting fee demands demonstrates that he was not in good faith in his assertion that he was entitled to his contingency fee pursuant to Kaushiva. We agree.
Accordingly, it is ORDERED that Waller shall be suspended from the practice of law in the District of Columbia for thirty days, effective thirty days from the date of this opinion.
DISTRICT OF COLUMBIA COURT OF APPEALS BOARD ON PROFESSIONAL RESPONSIBILITY
Bar Docket Number: 459-84
In the Matter of: John
WALLER, RESPONDENT.
REPORT AND RECOMMENDATION OF THE BOARD ON PROFESSIONAL RESPONSIBILITY
This matter is before the Board on Professional Responsibility for review of the report of Hearing Committee Number Seven (“the Hearing Committee"), which conducted an evidentiary hearing on July 17, 1985.
I. BACKGROUND
Ms. Beverly Houston met with Respondent John Waller on April 28,1982, seeking legal assistance with regard to personal injuries that were sustained when she slipped on a wet floor while on a job assignment. Ms. Houston entered into a one-third contingency fee agreement with Respondent to represent her in her “claim for damages for injuries received on or about April 26, 1982.” Bar Exhibit 1. At the April 28 meeting, Ms. Houston asked Respondent to represent her in a lawsuit against whomever was responsible for the wet floor on which she had slipped. Ms. Houston was unaware of any rights she might have had under Worker’s Compensation. At their meeting, Respondent did not [752]*752advise Ms. Houston of her rights under Worker’s Compensation.
In May 1982, Ms. Houston telephoned Respondent, inquiring as to whether she could obtain Worker’s Compensation. Respondent stated that obtaining Worker’s Compensation benefits would not be worth his time.
In August 1982, Ms. Houston telephoned Respondent, requesting that he seek Worker’s Compensation benefits for her. Respondent stated that he would pursue only the third-party claim.
Ms. Houston wrote Respondent on August 10 and 20, 1982, discharging him as her lawyer and requesting that he return her papers. Although Ms. Houston discharged Respondent because he would not pursue the Worker’s Compensation claim, she did not state in her letters to Respondent her reason for discharging him. Respondent urged that he had not been discharged for cause, and that thus, Ms. Houston was required to reach an agreement with respect to his fee before the discharge was effective.
Respondent communicated with Ms. Houston three times after his discharge, indicating that he was still representing her. After Respondent had been discharged, he also wrote to Ms. Houston’s doctor requesting a medical report. In addition, he submitted evidence of Ms. Houston’s damages to the third party carrier after his discharge. Finally, after his discharge, the third party carrier communicated to Respondent a settlement offer, which Respondent never communicated to Ms. Houston or her new attorney.
Respondent never returned Ms. Houston’s papers. He asserted a retaining lien on the papers and an attorneys fee charging lien to Ms. Houston and the third party carrier. The amount that Respondent claimed varied.
Meanwhile, Ms. Houston retained a new attorney, Mr. George Schmeidigan, to assist her with respect to her claims for injuries sustained from her fall. Mr. Schmeidi-gan obtained for Ms. Houston Worker’s Compensation benefits and a $40,000 judgment from a civil suit. The third party carrier placed Respondent’s name on the settlement check because of Respondent’s asserted lien, which caused a delay in the proper distribution of the settlement.
The Hearing Committee concluded that: (1) Respondent had violated DR2-110(B)(4) by failing to withdraw from employment after he was discharged; (2) Respondent had violated DR9-103(B)(4) by failing to deliver to his client papers which his client was entitled to receive; and (3) Respondent had violated DR2-106(A) by charging a clearly excessive fee.
II. THE VIOLATIONS
A. DR2-110(B)(4): Failure to Withdraw.
Bar Counsel alleged, and the Hearing Committee found, that Respondent failed to withdraw from employment after his client discharged him. Respondent stated to Ms. Houston that he was still representing her on three separate occasions after she had discharged him. Respondent also communicated with Ms. Houston’s doctor and to the third party carrier as Ms. Houston’s attorney after his discharge. Respondent contended that Ms. Houston could only discharge him for cause or after a fee agreement was reached.
The Board agrees with the Hearing Committee’s findings and conclusions with respect to Respondent’s failure to withdraw after his discharge. A client has an absolute right to discharge an attorney at any time. Moreover, a client need not demonstrate cause prior to discharging an attorney. The reasons for the discharge, however, may affect the fees owed to the attor[753]*753ney. See Kaushiva v. Hutter, 454 A.2d 1373 (D.C.), cert. denied, [464 U.S. 820], 104 S.Ct. 83 [78 L.Ed.2d 93] (1983).
Respondent’s communications concerning Ms. Houston with her doctor and the third party carrier after his discharge by Ms. Houston evidence his failure to withdraw from employment in violation of DR2-110(B)(4). The Hearing Committee credited Ms. Houston’s testimony that she had discharged Respondent and rejected Responds contrary testimony. The Board concludes that the record contains clear and convincing evidence that Respondent violated DR2-110(B)(4).
B. DR2-106(A): Charging an Excessive Fee
Bar Counsel alleged, and the Hearing Committee found, that Respondent charged a clearly excessive fee. Respondent claimed at different times that his fee was: 1) $3,500 based on one-third of the amount that the third party carrier had offered; 2) $3,000 based on quantum meruit; 3) and one-third of any settlement. Respondent testified that his claimed fee was only a negotiating position. H.Comm.Rpt. 4 and 9.
Respondent relied on the Kaushiva decision in determining his fee.** In Kaushi-va, the court stated that “an attorney who enters into a contingency fee agreement with his client, substantially performs, and is then prevented by his client from completing performance is entitled to the full amount specified in the fee agreement.” 454 A.2d at 1374. The court further stated “only where an attorney renders less than substantial performance will quantum me-ruit be the appropriate measure of damages.” Id. The Kaushiva court held that the attorney was entitled to his contingency fee. The attorney in that case had represented his client at three days of arbitration hearings and was drafting a final brief concerning the arbitration when his client discharged him due to a personality conflict.
In Kaushiva, the court cited in support of its holding Mackie v. Howland, 3 D.C. App. [App.D.C.] 461 (1894). Mackie involved an attorney who was authorized by a representative of an estate to collect from Venezuela monies due on bonds. A contingent fee arrangement was agreed to. The collection took many years during which time the attorney had performed services of great value in attempting to collect the monies. The attorney was discharged without cause shortly before the money was received. The court held that the discharged attorney was entitled to the contingent fee because the new attorney had done little toward collection of the monies and the discharged attorney had substantially performed.
A more recent case from this jurisdiction than Mackie, not cited in Kaushiva, is Friedman v. Harris, 81 U.S.App.D.C. 317, 158 F.2d 187 (1946). In Friedman the attorney was hired to file a personal injury suit under a contingent fee contract. He was discharged by the client, although it was unclear whether he was discharged before or after the suit was filed. The court reversed because the facts were unresolved as to when the attorney was discharged. The court stated, however, that the discharged attorney was entitled only to the value of his services; “otherwise his client’s right to choose her own lawyer would have little practical value.” 158 F.2d at 188.
Friedman and Kaushiva can be read together. Friedman stands for the principle that an attorney discharged without cause who has not substantially performed is not entitled to recover under the contract but only is entitled to quantum meruit.
Assuming that Respondent in the instant case was not discharged for cause, the issue is whether Respondent substantially performed.*** While Respondent per[754]*754formed the services that he should have prior to his discharge, the services were not substantial in furtherance of securing benefits for the client. See Mackie, supra; Friedman, supra. Thus, Respondent was not entitled to a one-third contingency fee.
In addition, Respondent’s claim of a $3,500 fee based on one-third of the amount that the third party carrier had offered was improper. Respondent’s negotiations, which were allegedly made on behalf of Ms. Houston, resulted in the third party carrier’s settlement offer. However, these negotiations occurred after Ms. Houston had discharged Respondent. Accordingly, Respondent had no authority to enter into such negotiations on behalf of Ms. Houston, who was no longer his client.
Further, the Board concludes that Respondent’s actions and testimony demonstrate that he did not in good faith assert that he was entitled to a one-third contingency fee pursuant to the Kaushiva case. Respondent claimed varied fees and then asserted that the amounts were only a negotiating position. For these reasons, the Board affirms the Hearing Committee’s conclusion of a violation of DR2-106(A).
C. DR9-103(B)(4): Failure to Deliver Client’s Papers
Bar Counsel alleged, and the Hearing Committee found, that Respondent improperly asserted a lien on his client’s papers, violating DR9-103(B)(4) by failing to deliver to the client her papers after requested to do so. The Board agrees.
An attorney generally has a right to assert a retaining lien on his client’s property to secure his fee for professional services. See generally In re Hines, 482 A.2d 378 (D.C.1984), citing, Grabowsky, “Attorney’s Liens,” District Lawyer, April 1978, at 6. The right, however, is not absolute. See D.C. Legal Ethics Committee Opinion No. 59 (an attorney’s right to assert a retaining lien must be balanced against the attorney’s ethical responsibilities to take reasonable efforts to not prejudice the client). While Legal Ethics Opinion No. 59 does not directly address an excessive fee restriction on asserting a retaining lien, it does state, “Thus, for purposes of considering the propriety of the actual assertion of a retaining lien, we must assume that the fee question is reasonable....” Thus, by implication, the Opinion states that the claim of an excessive fee restricts the right to assert a lien.
The Board has concluded that Respondent charged an excessive fee. The Board further concludes that Respondent’s assertion of a retaining lien to secure an excessive fee constituted a violation of DR9-103(B)(4).
III. SANCTION
The Board agrees with Bar Counsel and the Hearing Committee on the findings and violations, but we believe that appropriate sanction should be a 30-day suspension. Respondent violated DR2-110(B)(4), DR2-106(A) and DR9-103(B)(4) with respect to one client in one case. Yet we find his conduct more serious than that of the Respondent in In re Goldstein, 471 A.2d 267 (D.C.1984), where the sanction was a public censure. In the instant case, Respondent’s misconduct was motivated by his desire to obtain an optimal fee situation for himself, irrespective of the best interests of his client. While Ms. Houston did receive Worker’s Compensation benefits and a civil judgment through the efforts of her new attorney, she was delayed in collecting on the civil judgment due to Respondent’s improperly asserted lien.
We find Respondent’s self-serving behavior in continuing to represent himself as Ms. Houston’s attorney particularly egregious. He was properly discharged, yet he attempted to negotiate a settlement in her behalf and without her knowledge which might have resulted in a larger fee for himself. This goal was pursued at peril to his client’s interests. Respondent’s prior discipline also was considered in determining the appropriate sanction. On October 27, 1981 Respondent received an informal admonition for violations of DR6-101(A)(3) (neglect), DR1-102(A)(5) (conduct prejudicial to the administration of justice), and DR7-102(A)(1) and (2) (threatening legal action for the purpose of harassment and knowingly advancing an unwarranted [755]*755claim). While the conduct underlying Respondent’s prior informal admonition differs from the conduct at issue here, it does indicate a pattern of manipulation and general unprofessional behavior. Respondent does not appear to recognize his conduct as unethical. We believe the public must be protected from such behavior.
Accordingly, the Board recommends that the Court enter an order suspending Respondent for a period of thirty days.
BOARD ON PROFESSIONAL
Responsibility
By: /s/ Dr. William Alexander
Dr. William Alexander
Date: May 12, 1986
All members of the Board concur in this Report and Recommendation, except for Mr. Wilson, who has filed a separate dissenting opinion, joined by Mr. Foster and Mr. Carter.
The Hearing Committee found that Bar Counsel had failed to establish by clear and convincing evidence that Respondent had violated DR7-101(A)(1) by intentionally failing to seek the lawful objectives of his client because Bar Counsel failed to establish that Respondent agreed to represent Ms. Houston in her Worker’s Compensation claim. H.Comm.Rpt. 6-9. The Board affirms this finding.