The opinion of the court was delivered by: Justice Kilbride
Docket No. 92832-Agenda 11-March 2002.
Central to our disposition of this case is the question of whether respondent violated Rule 1.5(g)(2) of the Illinois Rules of Professional Conduct (Code) (134 Ill. 2d R. 1.5(g)(2)) by sharing a fee with another lawyer when respondent was unable to assume the same legal responsibility for the conduct of the case as the lawyer receiving the referral. The Administrator of the Attorney Registration and Disciplinary Commission (ARDC) filed a complaint charging Paul M. Storment, Jr., respondent, with various violations of the Code. The Hearing Board (Hearing Board or Board) found that respondent had not violated Rule 1.5(g)(2) (134 Ill. 2d R.1.5(g)(2)), but that he violated Rule 1.5(f) (134 Ill. 2d R.1.5(f)) by failing to obtain his client's written consent to a division of fees with another lawyer. The Hearing Board recommended censure. The Review Board affirmed the Hearing Board's findings on misconduct and censure. This court granted leave to file exceptions and accepted the matter for further consideration. 134 Ill. 2d R.753(e)(5). We affirm the Boards' findings on misconduct, but conclude that the circumstances warrant a harsher penalty than censure.
In 1992, this court suspended respondent's law license for two years for advising a client to testify falsely during a child custody hearing. In re Storment, MR 8487 (1992). Based on the same incident, respondent was also disbarred by the Missouri Supreme Court and by the United States District Court for the Eastern District of Missouri. Respondent's 1992 suspension ended in September 1994. He was never reinstated, however, to practice either in the State of Missouri or before the United States District Court for the Eastern District of Missouri.
In 1995, Kevin Pleas was charged in the United States District Court for the Eastern District of Missouri in connection with a narcotics conspiracy. Pleas was referred by a former client to respondent. Respondent arranged for a meeting with Pleas and then contacted Scott Rosenblum, an attorney licensed in both Illinois and Missouri, and offered to refer Pleas to him. Respondent and Rosenblum met with Pleas at the Jefferson County jail, and both attorneys agreed to represent Pleas. The disciplinary charges at issue here arose from that arrangement.
The Administrator's complaint charged that respondent never disclosed, either to Pleas or Rosenblum, that he had been disbarred from the United States District Court for the Eastern District of Missouri, where the Pleas case was pending, and that he was not authorized to practice law in Missouri. The complaint also alleged that Pleas did not sign any writing disclosing a division of fees between respondent and Rosenblum. The complaint further alleged that, although respondent kept $18,500 of the total fee paid by Pleas, he did not enter an appearance, prepare any pleadings, motions or other documents, or perform any substantial services on Pleas' behalf in the criminal case.
Based on the foregoing, the ARDC claimed that respondent violated Rules 8.4(a)(4) (134 Ill. 2d R. 8.4(a)(4) (conduct involving dishonesty, fraud, deceit or misrepresentation)) and 8.4(a)(5) (134 Ill. 2d R. 8.4(a)(5) (conduct that is prejudicial to the administration of justice)); and Supreme Court Rule 771 (134 Ill. 2d R. 771) (conduct that tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute). The specific basis for those general charges was that respondent: (1) divided a fee for legal services with another lawyer without the written consent of the client (see 134 Ill. 2d R. 1.5(f)); (2) participated in a division of fees that was not in proportion to the services performed and the responsibility assumed by each lawyer (see 134 Ill. 2d R. 1.5(g)); and (3) obtained a fee for the referral of a client to another lawyer while unable to assume the same legal responsibility for the performance of the services in question (see 134 Ill. 2d R. 1.5(g)(2)). In his answer, respondent denied any misconduct.
At the hearing, the following testimony was elicited. Respondent testified that he made no reference to money or to the case in the initial telephone conversation with Pleas because the call was monitored. According to respondent, he told Pleas that he was not licensed in Missouri, but that he knew a good lawyer, Rosenblum, who could help him. Respondent further testified that, when he and Rosenblum went together to meet Pleas, he again told Pleas that he was not licensed in Missouri while Rosenblum was talking with another client. After Rosenblum joined them, they discussed general defense strategy. Respondent stated that he told Pleas he would "take care of the family" and the inquiries of the family; that he would deal with the seizure by the government of a summer home in Illinois; and that he would "lend his expertise" to Rosenblum when the case went to trial and, potentially, to the court of appeals.
Respondent stated that Pleas first inquired about fees during the initial meeting with Rosenblum. Respondent claimed that Rosenblum requested $100,000 "up front" and that Rosenblum told Pleas that both he and respondent would be working on the case for that fee. Respondent testified that the amount of cash actually delivered was $58,500. He did not give his girlfriend, Robin Johnson, a receipt for the money. To protect his client, respondent put the cash into his business account in a series of five deposits. Pleas did not want anyone to know that he had received the money. A deposit of more than $10,000 would have required the completion of an Internal Revenue Service (IRS) Form 8300. Respondent did not complete and file that IRS cash transaction report. Respondent testified that he telephoned Rosenblum and told him the money was short. Rosenblum said that he would take $40,000 and that respondent could keep the remainder. He delivered the money to Rosenblum a few days later.
Pleas testified that he met with respondent on two occasions, once alone and once with Rosenblum. Pleas denied knowing that respondent was not licensed in Missouri. Pleas further testified that when he telephoned respondent at the suggestion of Johnson, respondent offered to represent him for a fee of $100,000. Pleas stated that he arranged for this sum to be delivered to respondent in cash. According to Pleas, he discussed his case with both attorneys and understood that Rosenblum would assist in his defense. Pleas denied that respondent had advised him or anyone else in his family regarding property in Illinois. According to Pleas, he was unaware of any pleadings or briefs on his behalf by respondent. Pleas pled guilty on February 20, 1996, and was sentenced to 15 years in prison on July 27, 1996.
Rosenblum testified that he recalled only one meeting at the jail with Pleas. He stated that it was made clear to Pleas that he would be the trial lawyer. According to Rosenblum, there was no discussion about respondent's disbarrment while he was present.
Rosenblum testified that he asked for a $50,000 retainer at the first meeting and told Pleas that he would also charge $25,000 for each week of trial. There was no discussion of any fee division. Rosenblum testified that respondent delivered $40,000 to him in cash, but said that he was not told that respondent had received $18,500. Rosenblum assumed that respondent would be compensated for whatever work he did on the Pleas matter, but he had no knowledge of the arrangements for respondent's compensation. Pursuant to his usual practice, he filed an IRS Form 8300, reflecting a receipt of the $40,000.
Rosenblum recalled that he talked to respondent periodically during the representation and was informed of respondent's contacts with Pleas' family, who "needed a lot of hand-holding." Respondent gave Rosenblum some ideas about possible legal issues, including suppression of evidence, and may have sent him some case law. He also thought respondent may have been involved in a forfeiture matter involving Pleas' property in Illinois.
Pleas' girlfriend, Johnson, testified that she obtained $100,000 in cash from Pleas' sister and delivered it to respondent at his office. Johnson denied talking with respondent about a forfeiture matter involving Pleas' property. She related that she telephoned respondent on several occasions to get a status report on Pleas' case. Johnson met with respondent on one additional occasion to pick up a power of attorney that respondent had prepared for Pleas in connection with a water damage claim to a home owned by Pleas in Illinois.
Following the close of testimony, the Hearing Board concluded that the Administrator did not prove a violation of Rule 8.4(a)(4). The Board found that the evidence did not demonstrate any false statements by respondent concerning his disbarrment in Missouri. In arriving at this conclusion, the Board assessed the relative credibility of respondent and Pleas and determined that it was more probable that respondent, an attorney with considerable experience in drug conspiracy cases, would have disclosed to Pleas his reason for bringing in another attorney with similar experience. The Board further noted that the Administrator did not establish any motive for keeping his ineligibility a secret. The Hearing Board also found that respondent's conduct in retaining $18,500 of the money paid by Pleas was not dishonest, as the evidence established that Rosenblum did not claim that he was deceived by respondent in any way, and that he assumed respondent would be compensated for his services by Pleas.
Regarding Rule 1.5(f), the Hearing Board found that respondent violated that rule because he divided a fee for legal services with another attorney without his client's written consent. The Board noted, however, that Pleas was aware that respondent would work on his behalf and that he knew respondent would be paid for his services.
The Hearing Board found that the Administrator failed to prove that the division of legal fees was not in proportion to the services performed in violation of Rule 1.5(g). While the amounts received by each attorney seemed high for the services rendered, the Administrator did not allege excessive fees. In the absence of records establishing the time spent by each attorney, there was no basis in the record to assess the proportionate contributions of each.
The Hearing Board next found that the evidence did not establish a violation of Rule 1.5(g)(2). The Rule states:
"(g) A division of fees shall be made in proportion to the services performed and responsibility assumed by each lawyer, except where the primary service performed by one lawyer is the referral of the client to another lawyer and
(2) the referring lawyer agrees to assume the same legal responsibility for the performance of the services in question as would a partner of the receiving lawyer." 134 Ill. 2d R. 1.5(g)(2).
The Board found that the exception clause did not apply because it had already determined that respondent and Rosenblum had engaged in a division of fees for the services performed by each. Thus, the primary service performed by respondent was not a "referral" within the meaning of the rule.
Even if the referral exception applied, the Board reasoned, the term "legal responsibility" in paragraph (2) has been construed to mean financial responsibility in the event of malpractice by the attorney handling the case. Citing Elane v. St. Bernard Hospital, 284 Ill. App. 3d 865, 872 (1996), the Board rejected the Administrator's argument that legal responsibility required an agreement by respondent that he could assume the representation of Pleas in the criminal case.
Finally, the Hearing Board concluded that respondent's technical violation of Rule 1.5(f) did not operate to prejudice or defeat the administration of justice in violation of either Rule 8.4(a)(5) or Rule 771. Since his omission was not part of a court proceeding, it would probably not be recognized outside the legal profession as obvious misconduct by a lawyer. Therefore, ...