JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 27, 1983.
In this disciplinary proceeding the Hearing Board of the Attorney Registration and Disciplinary Commission recommended that respondent, Arnold Herman Crane, be disbarred. The majority of the Review Board of the Commission concurred in the finding of the Hearing Board that respondent had obtained additional fees from the complainants which they believed constituted overreaching and a violation of respondent's fiduciary duty. However, a six-member majority of the Review Board recommended that the respondent be suspended from the practice of law for a period of one year, expressing the opinion that disbarrment would be too harsh. Two members of the Review Board recommended, as the Hearing Board did, that the respondent be disbarred. The Administrator of the Commission filed a motion for reconsideration by the Review Board of its recommendation that the respondent be suspended for one year. The respondent filed objections to the Administrator's motion for reconsideration, stating that while he still denies that he is guilty of any wrongdoing, he is willing to accept the discipline of a one-year suspension as recommended by the Review Board. The Administrator's motion was denied by the Review Board, and he was granted leave to file exceptions with this court.
Two main issues are raised on appeal before this court: (1) whether the hearing and review boards erred in finding that the respondent's acts constituted overreaching and a breach of the fiduciary duty owed to his clients, and (2) whether disbarrment, the Hearing Board's recommendation, is an appropriate sanction under the circumstances of this case or whether a one-year suspension is a sufficient sanction since the respondent did not file counter exceptions to the recommendation of the Review Board.
Since the facts in this case are extremely involved, an attempt will be made to reiterate only the most important facts. On May 25, 1979, the Administrator filed a complaint against the respondent, charging him with improperly receiving funds from Eva (Smithson) Kryfka, Patricia Smithson, William Smithson and David Smithson, the complainants, who at the time of their mother's death were 18, 15, 14 and 12 years old respectively. On October 4, 1979, the Administrator filed a second amended complaint charging that, in addition to the incidents that were already alleged in the first complaint, respondent had also received another additional fee from Eva (Smithson) Kryfka, William Smithson and David Smithson.
Early in November of 1972, decedent, Jane Bowman, the mother of Eva (Smithson) Krfyka and Patricia, William and David Smithson, was involved in an automobile accident. At the time of the accident Jane Bowman was driving and her daughter Patricia was a passenger. Patricia was "merely shaken up" by the accident, but the decedent injured both her knees. After the accident, decedent and Patricia went to respondent's office and decedent retained respondent as their attorney. Respondent alleges that decedent signed a one-third contingent-fee agreement on behalf of herself and her daughter on that day. This fee agreement was not in the record. During the meeting at the respondent's office, respondent advised decedent's immediate admission to a hospital because of the severity of the injury to her legs.
On November 20, 1972, Jane Bowman died, having never left the hospital. The hospital phoned respondent's office to inform him of her death. On that day, an associate of Mr. Crane contacted the family to inform them of their mother's death and requested that they contact the respondent the following day. On November 21, 1972, Eva (Smithson) Kryfka and Patricia, William and David Smithson went to the respondent's office. The complainants alleged that respondent told them that since their mother had retained him as her attorney, and she was now dead, he was their attorney. Crane alleges that Eva, the oldest of the children, was aware that she herself had not yet retained him and that she was free to choose whatever attorney she wished.
Eva brought several papers with her to this meeting with Crane. The insurance papers included an accidental death policy from Insurance Company of North America (INA), payable in the sum of $100,000, with all the children named as beneficiaries, and a $15,000 life insurance policy from Equitable Insurance Company in which Eva was the named beneficiary. Crane and the complainants discussed various legal matters which had to be handled. Respondent prepared, and Eva Kryfka executed, on behalf of herself and her sister and two brothers, a contingent-fee agreement. The fee agreement was for two actions Crane was to bring on the children's behalf, an action against INA on the accidental death policy, and a claim for wrongful death against Dickson and Car Carriers (Dickson), the owner of the truck involved in the accident with Mrs. Bowman. The fee agreement provided for 25% of the proceeds if the actions were settled without a lawsuit and one-third if a lawsuit had to be filed.
At that same meeting, Crane explained the need for an autopsy to establish a causal connection, if any, between Mrs. Bowman's death and the accident. Respondent sought an autopsy on the decedent, suspecting that an embolism from the leg injury may have caused her death, and that INA would then be liable on its policy of accidental death insurance and Dickson would be liable for Jane Bowman's death, not merely for personal injuries. Eva gave permission for the autopsy, which was subsequently performed. Respondent also discussed the necessity of opening an administrator's estate with the complainants at that meeting.
In February of 1973, allegedly after numerous attempts to negotiate a settlement, Crane filed an action in the circuit court of Cook County against INA entitled Eva Kryfka et al., v. Life Insurance Company of North America No. 73 L. 1548. In March, again allegedly after unsuccessful settlement negotiations, Crane filed a second lawsuit entitled Eva Kryfka et al., v. Kenneth Dickson and Car Carriers, Inc., No. 73 L 4622, seeking recovery for the wrongful death of Jane Bowman. Respondent also opened an administrator's estate on behalf of Jane Bowman, and opened a minor's estate for each of the children, appointing Eva, who had just reached her majority, as the guardian for each minor.
Both lawsuits that were filed were settled. Respondent settled the life insurance claim against INA for $100,000, the full amount of the policy. The settlement was approved by the probate division and respondent was awarded 25% of each minor's share as his fee. Four checks were issued by the insurance company, each in the amount of $25,000. Eva, as guardian, endorsed the three minors' checks. After deducting $6,427 from each minor's share for his fee and expenses, the respondent issued checks to Patricia, William and David for $18,573 each.
On September 25, 1973, Eva accompanied respondent to court in order to gain final approval from the probate division, and then Eva and respondent went to the American National Bank. At the bank, respondent opened a minor's account for each of the children, pursuant to order and subject to the supervision of the court. The appropriate check was deposited in each child's account. Eva's share was handled differently than the minor children's shares. The distribution of Eva's share will be discussed later.
In December 1974, respondent also settled the wrongful death action against Dickson for $75,000. Respondent received approval from the probate division for the settlement and his 25% fee. One check for $75,000 was issued, properly endorsed, and deposited by respondent. After respondent deducted his fee ($18,750) and the expenses he was allowed by the court, respondent issued a check to each of the four children in the amount of $13,646.77, which represented the proceeds owed to each child.
On January 24, 1975, Eva and Patricia went to respondent's office for their checks. Crane met them at his office, and then all three went to the American National Bank. Respondent deposited the full amount of William's and David's checks into their respective trust accounts. However, the distribution of Eva's and Patricia's share (Patricia having just reached majority) was handled differently and will be discussed later.
Since each child's dealings with Crane differed, the facts relating to each child will be discussed separately. However, before we get into a detailed discussion of those facts, it is important to note that another lawsuit was filed by respondent relating to Mrs. Bowman's death. In the course of taking depositions in the Dickson case, the possibility of a medical malpractice action on behalf of decedent's estate against the hospital and/or Dr. Doktorsky, Mrs. Bowman's treating physician, was allegedly suggested to Crane by defense attorneys. Respondent claims that he told the children it would be difficult to prove the cause of death in order to recover for medical malpractice and while he would be willing to handle the case, he would not do so on a contingent-fee basis. Respondent alleges that Eva insisted that the suit be brought on behalf of the minors, and that she agreed to pay for whatever legal work was done. Eva denied that she had any discussions with Crane regarding the fees in the medical malpractice action. She testified that she thought the malpractice case was going to be handled on a contingent-fee basis. The fact remains that no fee agreement was entered into concerning this medical malpractice suit, so that even if Eva understood, as Crane alleges, that this case was to be handled on a non-contingent-fee basis, she did not know what Crane was going to charge her per hour, no bills were sent, and no receipts were ever issued. Crane does not deny that no fee agreement was entered into regarding the medical malpractice lawsuit. The importance of these facts will become apparent later.
We will discuss Eva's financial dealings with Crane first. Eva's share of the INA insurance settlement, prior to deducting fees and costs, was $25,000. Since Eva was an adult, distribution was made directly to her without court approval. On September 25, 1973, respondent instructed Eva to endorse her check for $25,000 to him. He then issued a check to her in the amount of $15,000, keeping $10,000 as his fee. No receipt was issued at that time. Respondent next filled out a deposit slip for $12,500 for Eva. After depositing the $12,500, Eva received $2,500 in cash. What happened to the $2,500 in cash is in dispute. Eva alleges that respondent received the $2,500 in 25 $100 bills, which he kept, stating that the money represented "additional fees." Eva alleges that respondent neither indicated what the fees were for nor issued a statement or receipt when he allegedly received a total of $12,500 on that date. Crane denies that he received any additional money from Eva that day. The opening deposit that Eva made at the American National Bank that day was $12,500.
Eva's share of the wrongful death claim, less the fees and costs ordered by the probate court, was $13,646.77. On January 25, 1975, after the court appearance regarding the wrongful death settlement, respondent allegedly took Eva and Patricia to the American National Bank. Eva testified that, after she endorsed her check, the respondent instructed her to make out a deposit slip for $10,000. Eva alleges that respondent received the remaining $3,646.77. Eva also stated that on that same day Crane demanded and received an additional $750 in cash from her and Patricia. Eva alleged that she withdrew $1,500 and gave respondent $750 for her and $750 for Patricia.
Crane testified that his partner Shapiro handled the distribution of the wrongful death settlement in January of 1975. Crane contends that Eva and Patricia paid additional fees to Mr. Shapiro by certified check, each check in the amount of $3,646.77. But Crane denied that he was at the bank on the date in question and also denied that he requested or received $750 from either Eva or Patricia. Crane testified that the distribution was handled without his knowledge by his partner and that he first became aware of the certified-check payments following a meeting in 1978 with Eva and the Smithsons, the new family attorney, and Mr. Braun, counsel for respondent. Respondent does not dispute that the money was deposited by Shapiro into their partnership account and that he, therefore, received the benefit of the money. However, he does contend that he had no knowledge of Shapiro accepting the money and, therefore, should not be held accountable.
Eva's share of the two settlements was $38,646.77. Eva alleges that respondent received $16,146.77. The Administrator's brief claims that respondent received $22,334.72 from that total.
Patricia Smithson attained her majority in October of 1974, after the first settlement with INA, but before the second settlement with Dickson. Allegedly at respondent's request, Patricia and Eva went to respondent's office on October 9, 1974. Mr. Shapiro, Crane's associate, handled matters that day. Patricia testified that Shapiro instructed her that they were going to court and that she should not mention to the probate judge the additional fees that he, Shapiro, had requested. At the courthouse, when the judge asked if there were additional fees owing, Patricia testified that Shapiro said no. After appearing in court, Shapiro, Eva and Patricia went to the American National Bank. Patricia testified that Shapiro demanded and received $3,200 in "additional fees" on that date.
As was discussed earlier, Patricia, Eva and Crane allegedly went to the bank in January of 1975, after the settlement of the wrongful death action. At one point in this case, Patricia had alleged that she had not received her share of the wrongful death settlement, but a cashier's receipt for $10,000 was produced and she recalled depositing that money. Patricia testified that respondent instructed her, as he had instructed Eva, to endorse her check for $13,646.77. After endorsing the check Patricia informed respondent that she had recently closed her account at the American National Bank and put her money in another bank. Respondent allegedly used her settlement check to purchase a $10,000 cashier's check payable to Patricia and had the bank issue a cashier's check for the remaining $3,646.77 payable to his firm. As discussed previously, Eva testified that Crane also demanded and received $750 each from her and Patricia. Eva testified that a $1,500 cash payment was made to Crane because he stated that the amount was for fees still owed him.
Patricia's share of the two settlements was $32,219.77. The probate division approved fees owing to respondent in the amount of $11,114.50. Patricia alleges that respondent obtained $17,961.27 from her, $6,846.77 more than the fee approved by the court.
William Smithson reached the age of 18 years on November 28, 1975. Crane testified that Eva advised him earlier in the month of November that William was about to reach his majority and that he wanted his money. William testified that at the time he was unemployed. He further testified that he went to respondent's office on December 16, 1975, and signed documents which Crane held in his hand and that, when he asked to read the documents that he was signing, respondent stated that he was in a hurry and that William should just sign them. Crane testified that William called him and told him that he was employed at a garage and that he wanted his money, but wondered whether the matter could be handled without his (William's) presence. Crane testified that he advised William that William's presence was unnecessary if ...