Louisiana State Bar Ass'n v. Longenecker

538 So. 2d 156, 1989 La. LEXIS 715, 1988 WL 149241
CourtSupreme Court of Louisiana
DecidedFebruary 23, 1989
Docket87-B-0585, 87-B-2061
StatusPublished
Cited by15 cases

This text of 538 So. 2d 156 (Louisiana State Bar Ass'n v. Longenecker) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Louisiana State Bar Ass'n v. Longenecker, 538 So. 2d 156, 1989 La. LEXIS 715, 1988 WL 149241 (La. 1989).

Opinion

538 So.2d 156 (1988)

LOUISIANA STATE BAR ASSOCIATION
v.
Geoffrey LONGENECKER.[*]

Nos. 87-B-0585, 87-B-2061.

Supreme Court of Louisiana.

October 31, 1988.
On Application for Rehearing February 23, 1989.

*157 Thomas O. Collins, Jr., G. Fred Ours, New Orleans, Gerard F. Thomas, Natchitoches, Roland J. Achee, Shreveport, Robert J. Boudreau, Lake Charles, Robert M. Contois, New Orleans, Frank J. Gremillion, Baton Rouge, Carrick R. Inabnett, Monroe, Harvey Lewis, New Orleans, Alfred S. Landry, New Iberia, Philippi P. St. Pe, Metairie, for applicant.

Geoffrey Longenecker, Covington, Cecil M. Burglass, Jr., New Orleans, for respondent.

LEMMON, Justice.

This is a disciplinary proceeding by the Louisiana State Bar Association, through its Committee on Professional Responsibility, against one of its members based on alleged violations of the Code of Professional Responsibility.[1] The proceeding involved respondent's dealings with two separate clients.

The Hummer Matter

William Hummer hired respondent's firm to represent him in a claim against his insurer for fire damage to his residence. Before consulting legal counsel, the client had allegedly rejected an offer by his fire insurer to pay $51,000 under its policy, which provided limits of $90,000 for property damage.[2]

Respondent's partner in the two-partner firm had previously represented the client in other matters, but respondent was given responsibility for this case because of his expertise in fire insurance cases. The fee arranged between respondent's partner and the client for the insurance case was one of the disputed factual issues in the present proceeding.

During the pendency of the insurance matter, respondent's partner represented the client and others in a criminal matter. The client agreed to pay a total fee of $13,000 for the criminal matter, to be subtracted from any amount collected in the insurance case.

Respondent filed the civil action against the fire insurer. Upon respondent's demand and at the suggestion of the judge at a pretrial conference in January, 1985, the insurer issued a draft in the amount of $66,335.24 in payment of the portion of the claim that the insurer admitted was due. The draft was payable jointly to respondent, the client and the company holding a mortgage on the damaged property. Respondent placed the endorsements of all payees on the draft and deposited it into the firm's trust account. However, neither respondent nor his firm ever furnished the client with a written accounting for the funds.

Respondent at his partner's direction issued a check in the amount of $25,000 to the client from the firm's trust account on February 21, 1985 and another check in the amount of $2,000 to the client from the firm's operating account on March 11, 1985.[3] Between the January, 1985 receipt of the insurer's draft and February 27, 1985, three checks in the total amount of $30,000, representing fees attributable to the client's case, were issued by respondent from the trust account and made payable to the firm's operating account.[4] Respondent also issued two checks totaling $4,500 to an appraiser as advance payments for expert services to be performed in the client's case. Neither respondent nor his *158 partner paid the mortgagee the $16,400 balance as requested by the client.

Respondent's firm was dissolved on March 1, 1985, and respondent's partner took over the handling of the client's insurance case. The case was settled shortly thereafter, with the insurance company issuing a draft in the amount of $19,400 payable to the client and respondent's partner. Respondent's partner endorsed the draft and turned over the entire proceeds to the client, without determining whether the mortgagee had been paid the balance due on the mortgage.

As a result of subsequent litigation by the mortgagee against respondent's firm and the bank which had honored the $66,335.24 check on the basis of respondent's unauthorized endorsement, the bank paid the mortgagee in full and charged the payment to respondent's account.[5]

The Bar Association charged respondent (1) with endorsing the name of the mortgagee on the settlement draft without authority, failing to render an accounting to the client of these funds, and engaging in conduct that adversely reflects upon respondent's fitness to practice law, in violation of Disciplinary Rules 1-102(A)(6) and 9-102(B)(3); (2) with failing to pay the client the funds due to him and failing to pay the mortgagee as directed by the client, in violation of DR 9-102(B)(4) and 6-101(A)(3); (3) with paying $4,500 of the client's funds to an expert who never performed any services in the client's case, in violation of DR 1-102(A)(4) and (6); and (4) with commingling and converting the client's funds to his own use, engaging in conduct involving fraud and deceit, and engaging in conduct that is prejudicial to the administration of justice, in violation of DR 1-102(A)(4), (5), (6) and 9-102(A) and (B).

As to the first specification, the commissioner found that respondent had placed the endorsement of the mortgagee on the settlement draft without the authority of the mortgagee and consequently violated DR 1-102(A)(6). The commissioner also concluded that since respondent was not aware of the true nature of the fee arrangement with the client, he was not in a position to make an accounting and did not violate DR 9-102(B)(3).

The Association proved by clear and convincing evidence that respondent was not authorized to endorse the draft for the mortgagee. The evidence further established that respondent was generally handling the firm's bank accounts at the time, that he was responsible for handling this particular case (although Hummer was his partner's client), and that respondent received and handled the draft at issue. Although respondent claimed that he did not know the fee arrangements between his partner and the client and simply issued the checks as directed by his partner, respondent nevertheless at least shared the responsibility for delivering the client his share of the funds and rendering an accounting to the client regarding the funds from the partial payment. To this extent respondent was partially responsible for the firm's failure to render an accounting of the funds.[6]

As to the second specification, the commissioner concluded that the true fee arrangement between the parties was a forty per cent contingency fee on the total recovery, as evidenced by the written contract signed by the client. Therefore, since the $27,000 actually received by the client from the $66,335.24 payment by the insurer was an overpayment, there was no violation of DR 9-102(B)(4). The commissioner did find, however, that respondent's failure to pay the mortgage, as directed by the client, violated DR 6-101(A)(3).

The fee arrangements, as previously noted, were greatly disputed.[7] The Bar Association, *159 which bore the burden of proof, called the insurer's attorney, but failed to question him about any settlement offer prior to suit. The only evidence as to this offer was the self-serving testimony of the client and the somewhat discredited testimony of respondent's partner. On the other hand, this is the type of case in which an insurer is statutorily required to pay unconditionally to its insured the minimum amount undisputedly due, under threat of penalties and attorney's fee. Indeed, the insurer promptly paid more than $66,000 as soon as the judge suggested a tender of the amount admittedly due.

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Cite This Page — Counsel Stack

Bluebook (online)
538 So. 2d 156, 1989 La. LEXIS 715, 1988 WL 149241, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisiana-state-bar-assn-v-longenecker-la-1989.