Matter of Disciplinary Proceedings Against Guenther

369 N.W.2d 700, 124 Wis. 2d 476, 1985 Wisc. LEXIS 2400
CourtWisconsin Supreme Court
DecidedJune 24, 1985
Docket84-732-D
StatusPublished
Cited by6 cases

This text of 369 N.W.2d 700 (Matter of Disciplinary Proceedings Against Guenther) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Disciplinary Proceedings Against Guenther, 369 N.W.2d 700, 124 Wis. 2d 476, 1985 Wisc. LEXIS 2400 (Wis. 1985).

Opinions

PER CURIAM.

Attorney disciplinary proceeding; attorney’s license suspended.

Attorney Arthur W. Guenther, Jr., appealed from the referee’s findings and conclusions that he engaged in conduct involving dishonesty, fraud, deceit or misrepresentation by charging a client for his services on a basis other than that to which they had agreed and by charging another client fees computed on an hourly basis exceeding the number of hours actually spent on the [477]*477client’s matter, that he failed to return client funds upon request, that he charged a client a clearly excessive fee, and that he took a second mortgage from a client in a divorce matter to secure a note for his fees, notwithstanding a court order prohibiting his client from encumbering the property involved. Attorney Guenther also appealed from the referee’s recommendation that his license to practice law be suspended for one year for his misconduct and that he be required to pay the costs of the disciplinary proceeding.

The referee’s findings of fact are not clearly erroneous, and we accept them; with one exception, discussed below, we accept his conclusions concerning Attorney Guenther’s misconduct. We determine that a one-year suspension of Attorney Guenther’s license to practice law in Wisconsin is appropriate discipline under the circumstances of this case. It is also appropriate, as recommended by the referee, that Attorney Guenther be required to return to his client that portion of the fees he collected which exceeded the amount to which he was entitled.

Attorney Guenther was admitted to practice law in Wisconsin in 1951, and he practices in Campbellsport. He has not previously been the subject of an attorney disciplinary proceeding.

In 1980, a woman named Hatch, who had been a client of Attorney Guenther for 20 years, consulted him concerning the sale of her farm. Prior to that time, Attorney Guenther routinely charged Mrs. Hatch a fee of one percent of the sale price for his services in representing her in the sale of her property. In this instance, however, Attorney Guenther charged her $3,847.50, an amount purportedly based on an hourly rate of $65 for Attorney Guenther’s time on the matter and a rate of $25 per hour for the work of his paralegal assistant. In the sales transaction, Mrs. Hatch herself negotiated the terms of the sale; Attorney Guenther conducted the [478]*478closing. Attorney Guenther collected his fee from es-crowed funds held for his client in his trust account.

Attorney Guenther’s time records produced in the disciplinary proceeding would have justified a bill of $2,778 on the basis of the stated hourly rates, some $600 less than the fee he charged and collected. Attorney Guen-ther maintained that the discrepancy was the result of some of his time records having been lost. The time records he produced included five conferences with the buyer’s attorney, for a total of 11.8 hours; however, the buyer’s attorney produced his records and testified that no such conferences took place. Also, Attorney Guenther’s records showed a charge of 2.3 hours for the closing, whereas the buyer’s attorney testified that the closing took approximately three-quarters of an hour.

Attorney Guenther maintained that at some time during the 20 years that he had been representing Mrs. Hatch, he changed from a percentage-of-sale-price billing to an hourly rate of $65 or percentage-of-sale-price, whichever was greater, but he testified that he did not recall ever having told Mrs. Hatch of that change. His paralegel assistant, however, testified that she mentioned the change to Mrs. Hatch as Mrs. Hatch was leaving Attorney Guenther’s office after the closing of some transaction, but there was no testimony that Mrs. Hatch agreed to that new method of billing.

The referee, Attorney Robert P. Harland, found that the fee agreement existing between Mrs. Hatch and Attorney Guenther as to the farm sale was on the basis of one percent of the sale price. He also found that Attorney Guenther’s time records were totally inadequate and unreliable to support a fee based on time spent on the matter.

This same problem occurred in Attorney Guenther’s representation of Mrs. Hatch in the sale of cattle and farm equipment, which sold for $23,000. Attorney Guen-ther charged her $935, which he collected from her funds [479]*479in his trust account, even though his time records in the matter totaled only $578.50. Here, again, the referee found that the fee agreement was the customary one percent of the sale price, that is, $230. The referee concluded that Attorney Guenther engaged in misrepresentation, in violation of SCR 20.04(4),1 by billing Mrs. Hatch for his services in both sales at an hourly rate based on inadequate time records.

A third matter involving Mrs. Hatch concerned Attorney Guenther’s failure to return to her those funds he retained in his trust account, specifically, the $5,000 held in escrow in connection with the farm sale. It was from these funds that Attorney Guenther collected his fees. The only fact in dispute was whether Mrs. Hatch asked Attorney Guenther to return the money. Mrs. Hatch testified that she asked him for it shortly after the closing and that Attorney Guenther told her he had not yet calculated his bill for services. She made another attempt to obtain the money shortly thereafter, but again Attorney Guenther told her he had not completed the billing.

Attorney Guenther, on the other hand, testified that Mrs. Hatch never requested the return of her money held in trust and that he held the trust funds to “protect” his fees. His paralegal assistant testified that she mailed a copy of Attorney Guenther’s bill for the sale of the farm and for the cattle and equipment, as well as a letter notifying her that Attorney Guenther was holding $5,000 of hers in his trust account, asking whether she would like to have his fees deducted from the trust monies or a check for the full amount. Mrs. Hatch denied ever having received either the bill or the statement concerning the money held in trust.

[480]*480In finding that Mrs. Hatch requested the return of her money, the referee noted that Attorney Guenther delayed eight months from the date of closing before sending his bill to his client, offsetting his fees against the $5,000 held in trust for her. The referee concluded that Attorney Guenther’s delay in returning his client’s funds violated SCR 20.50(2) (d) ,2

In another matter, a man named Houdek retained Attorney Guenther in August of 1980 to represent him concerning a listing contract he had entered into for the sale of his property. The client had changed his mind about selling, and he wanted to avoid the obligation to sell his property under the terms of the contract. The realtor had accepted contingent offers on the property, but the contingencies were never resolved, and the listing contract expired on October 10, 1980.

At the time of retainer, the client had agreed to Attorney Guenther’s charging $65 per hour for time spent on the matter. When he received a bill for $2,120, the client complained to Attorney Guenther, and an installment payment arrangement was agreed upon. Mr. Hou-dek paid $1,300 but then refused to make further payment.

The referee found Attorney Guenther’s time records deficient to the extent that it was virtually impossible for him to defend or explain the nature of his services performed in the matter.

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Committee on Legal Ethics of the West Virginia State Bar v. Gallaher
376 S.E.2d 346 (West Virginia Supreme Court, 1988)
In re Disciplinary Proceedings Against Guenther
430 N.W.2d 913 (Wisconsin Supreme Court, 1988)
Matter of Disciplinary Proceedings Against Camacho
375 N.W.2d 204 (Wisconsin Supreme Court, 1985)
In re Disciplinary Proceedings Against Cyrak
369 N.W.2d 708 (Wisconsin Supreme Court, 1985)
Matter of Disciplinary Proceedings Against Guenther
369 N.W.2d 700 (Wisconsin Supreme Court, 1985)

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369 N.W.2d 700, 124 Wis. 2d 476, 1985 Wisc. LEXIS 2400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-disciplinary-proceedings-against-guenther-wis-1985.