Disciplinary Bd. of the Supreme Court of the State of N.D. V. Bolinske (In re Bolinske)

932 N.W.2d 368

In the MATTER OF the Application for DISCIPLINARY ACTION AGAINST Robert V. BOLINSKE, a Person Admitted to the Bar of the State of North Dakota

Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner

v.Robert V. Bolinske, Sr., Respondent

Nos. 20190109 & 20190110

Supreme Court of North Dakota.

Filed August 19, 2019

Kara J. Erickson, Bismarck, ND, for petitioner.

Robert V. Bolinske, Sr., self-represented, Bismarck, ND.

Per Curiam.

[¶1] Robert Bolinske, Sr., objects to Disciplinary Board Hearing Panel’s findings of fact, conclusions of law, and recommendation that he be suspended from the practice of law for 30 days and pay $5,000 restitution to both Mark Carter and Gary and Teresa Watson. Bolinske argues the hearing panel erred by finding he violated N.D.R. Prof. Conduct 1.5(a), 1.15(e), and 1.16(e) and recommending he be suspended. We conclude clear and convincing evidence does not support finding Bolinske violated N.D.R. Prof. Conduct 1.5(a) and 1.15(e). We conclude clear and convincing evidence established Bolinske violated N.D.R. Prof. Conduct 1.16(e) by failing to return case files to Carter and the Watsons after representation was terminated. We order Bolinske be reprimanded and pay partial costs and expenses of the disciplinary proceeding in the amount of $3,300. We remand File no. 20190110 to the hearing panel for determination whether Bolinske violated Rule 1.16(e) by failing to refund to the Watsons any unearned portion of the $10,000 fee they paid Bolinske.

I

[¶2] Bolinske was admitted to practice law in North Dakota in 1975, but he is not currently licensed in this state.

[¶3] In June 2018, disciplinary counsel petitioned to discipline Bolinske, alleging he violated N.D.R. Prof. Conduct 1.5(a) (reasonable fees), 1.15(e) (safekeeping of property), and 1.16(e) (terminating representation) in connection with his representation of Carter and the Watsons. Disciplinary counsel alleged Bolinske agreed to and collected unreasonable fees from Carter and the Watsons, he failed to properly maintain possession of property in which two or more persons claimed an interest until the dispute was resolved, he failed to return Carter’s and the Watsons' files after they terminated his representation, and he failed to refund unearned fees. Bolinske denied the alleged misconduct and requested the charges be dismissed.

[¶4] After receiving testimony from Bolinske and admitting exhibits from both parties, the hearing panel found clear and convincing evidence Bolinske violated all three rules. The hearing panel recommended Bolinske be suspended from the practice of law for 30 days, refund unearned fees to Carter and the Watsons in the amount of $5,000 each, and pay the costs and expenses of the disciplinary proceedings.

II

[¶5] Bolinske argues the hearing panel erred by finding there was clear and convincing evidence he violated N.D.R. Prof. Conduct 1.5(a), 1.15(e), and 1.16(e).

[¶6] We have summarized our standard in disciplinary proceedings:

"This Court reviews disciplinary proceedings de novo on the record. Disciplinary counsel must prove each alleged violation by clear and convincing evidence, which means the trier of fact must be reasonably satisfied with the facts the evidence tends to prove and thus be led to a firm belief or conviction. The evidence need not be undisputed to be clear and convincing. We give due weight to the findings, conclusions, and recommendations of the Disciplinary Board, but we do not act as a mere rubber stamp for the Board. To decide which sanction, if any, is appropriate, each disciplinary matter must be considered on its own facts.

"Because the hearing panel has the opportunity to hear witnesses and observe their demeanor, we accord special deference to the panel’s findings on matters of conflicting evidence. Similarly, we defer to the hearing panel’s findings on the credibility of a witness, because the hearing panel has the opportunity to observe the witness’s demeanor and hear the witness testify."

In re Disciplinary Action Against Ward , 2016 ND 113, ¶ 7, 881 N.W.2d 206 (quoting Disciplinary Bd. v. Carpenter , 2015 ND 111, ¶ 9, 863 N.W.2d 223 ) (internal citations and quotation marks omitted).

A

[¶7] Disciplinary counsel alleged Bolinske violated " Rule 1.5(a), N.D.R. Prof. Conduct, by making an agreement for, charging, or collecting an unreasonable fee due to failure to follow Rule 1.5(c), regarding contingent fees, by including a provision for fixed $10,000 fee within the fee agreement." Rule 1.5(a), N.D.R. Prof. Conduct, prohibits unreasonable fees, and states:

"A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(8) whether the fee is fixed or contingent."

[¶8] Although executed at different times, Bolinske’s fee agreements with Carter and the Watsons are identical. The agreements state:

"Contingent Fees for Services. I agree to pay my attorney for his services 33 ?% of whatever amount is actually recovered as a result of trial or settlement. If no recovery is made, I will owe my attorney nothing for his labor and time spent. In addition, there shall be paid a non-refundable $10,000.00 retainer payment which amount shall thereafter be deducted from any contingent fee actually recovered.

....

"Payment for Expenses and Court Costs. Whether or not a recovery is made, all court costs and money paid out by my attorney for investigation or litigation expenses are to be paid by me. With the signing of this Agreement, I have paid to my attorney an initial sum of $ -0- to apply on costs and expenses. If my attorney advances additional money on my behalf for costs or expenses, I will repay him."

[¶9] The hearing panel found clear and convincing evidence established Bolinske’s violation of N.D.R. Prof. Conduct 1.5(a). The hearing panel found Carter and the Watsons signed their fee agreements, the clients each paid Bolinske $10,000, and Bolinske deposited the funds into his personal bank account which he also used as an operating account for his law practice. Based on Bolinske’s testimony and discovery responses, the hearing panel found Bolinske appeared to be unaware of what type of retainer he was charging, but he claimed the payments were to ensure Carter and the Watsons "had some skin in the game," and the fees were paid for Bolinske to investigate, prepare, and bring claims against Tesoro. The hearing panel found:

"[T]he internal inconsistency of Bolinske’s fee agreements rendered the agreements unreasonable. The fee agreements stated Bolinske would be owed nothing if no recovery was made or if Bolinske withdrew from representation; however, the $10,000.00 retainer was nonrefundable. But the agreement also stated the $10,000.00 retainer would be refunded, despite being labeled nonrefundable, to the client in the event of a recovery. The fee agreement did not contain language regarding what would occur if there was an early termination by the client.

"Clear and convincing evidence exists that the agreements entered by Bolinske with Carter and the Watsons are unreasonable. The internal inconsistencies in the fee agreements, failure to set forth payment of expenses and failure to establish what would occur if there was an early termination of the agreement by the client violate Rule 1.5(a), N.D.R.Prof. Conduct. N.D.R.Prof. Conduct 1.5(a).

"The factors specified in subsections 1 through 8 of Rule 1.5(a), N.D.R.Prof. Conduct are not exclusive in determining unreasonableness. See Comments, Rule 1.5, N.D.R.Prof. Conduct."

[¶10] Disciplinary counsel argues this Court should adopt the hearing panel’s recommendation and find Bolinske violated N.D.R. Prof. Conduct 1.5(a). Disciplinary counsel contends the agreements were unreasonable due to the inconsistent language used in the agreements, including that the agreements created a contingent fee and stated the client will owe nothing if there is no recovery but also required the client to pay a non-refundable $10,000 retainer payment.

[¶11] "Our Rules of Professional Conduct require an attorney’s fee to be reasonable and require the basis, rate, or fee amount to be adequately communicated to the client within a reasonable time after commencing representation." In re Disciplinary Action Against Hoffman , 2013 ND 137, ¶ 11, 834 N.W.2d 636. A contingent fee is not per se unreasonable. See In re Disciplinary Action Against Lee , 2013 ND 151, ¶ 12, 835 N.W.2d 836 ; In re Disciplinary Action Against Dooley , 1999 ND 184, ¶¶ 19-20, 599 N.W.2d 619. Non-refundable fee agreements are not per se unreasonable under N.D.R. Prof. Conduct 1.5. Hoffman , at ¶¶ 15, 27. Disciplinary counsel has not cited and we do not find any case in which this Court has held a fee agreement was unreasonable because it included both a contingent fee and a retainer.

[¶12] Comment 4 to N.D.R. Prof. Conduct 1.5 states, "A lawyer may require advance payment of a fee, but is obliged to return any unearned portion. See Rule 1.16(e)." An attorney is required to refund any unearned portions of a retainer, even if the fee agreement states the retainer is non-refundable and the fee was not held in trust for the client. See Hoffman , 2013 ND 137, ¶¶ 24-25, 834 N.W.2d 636....