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In re Williams9/27/1999
In the Matter of Vannie Williams, Jr.
Shearouse Adv. Sh. No. S.E. 2d
PUBLIC REPRIMAND
Submitted August 2, 1999
In this attorney disciplinary matter, respondent and disciplinary counsel have entered into an agreement under Rule 21 of the Rules for Lawyer Disciplinary Enforcement (RLDE), Rule 413, SCACR. In the agreement, respondent admits misconduct and consents to be publicly reprimanded. As a special condition of this agreement, respondent also agrees to make restitution to his client. We accept the agreement.
Respondent stipulated to the following facts:
Representation of Gwendolyn Liles
On June 27, 1997, Gwendolyn Liles (Liles) retained respondent to represent her in a personal injury action. The retainer agreement with respondent called for a fee of 33% of the "gross recovery of any and all settlements in connection with this representation."
The insurance company involved in compensating Liles for her injury was Empire Fire & Marine Insurance Company (Empire). Respondent contacted Empire on Liles' behalf on or about July 17, 1997, and entered into negotiations regarding settlement of Liles' claim. Respondent suggested that Empire pay an amount of compensation at the policy limit. Empire's adjuster countered with a proposed structured settlement. The proposed agreement, dated July 25, 1997, was sent to respondent.
On August 18, 1997, respondent and Liles entered into a new retainer agreement. The original version of this agreement contained the phrase, "That if no lawsuit is filed, the attorney shall receive as fee thirty-three and one third percent (33 1/3%) of actual costs of the Structured Settlement if fees paid in one lump sum, OR the fees may be based on the gross recovery of any and all settlement, provided that the fees shall be paid on a structured basis consistent with the payments to the client . . ." Prior to Liles signing the new agreement, respondent modified the above passage to read, "That if no lawsuit is filed, the attorney shall receive as, fee thirty-three and one-third (33 1/3%) of actual cash guaranteed amount of the structured settlement if the fees paid in one lump sum OR the fees may be based on the gross recovery of any and all settlement." (modification emphasized).
The eventual settlement agreed upon called for (1) an initial payment of $369,433 that was received by respondent on September 22, 1997, and (2) the purchase of an annuity to pay his client a monthly fee for a number of years. Respondent signed his client's name to the reverse side of the check, without written permission, and without Power of Attorney, and deposited the check into his escrow account. Respondent did not show Liles the check.
The cost of the annuity to Empire was $305,567, making the total cost of the settlement $675,000. The cost of the annuity was disclosed to respondent on or about September 5, 1997 in the negotiations surrounding the settlement.
The modification of the retainer agreement was in violation of state law governing fee calculations as discussed in this Court's recent decision in Matter of Fox, 327 S.C. 293, 490 S.E.2d 265 (1997). In Fox, this Court reaffirmed existing law that to calculate a fee an attorney must discount an annuity to its present value. Fox had added together the guaranteed payments, and then calculated his fee of one-third, exactly as respondent did in the second retainer agreement in the instant case.
Accordingly, respondent should have been entitled to a fee of no more than thirty-three and one third percent of $675,000, or approximately $222,750, under the second retainer agreement.
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