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The Respondent, Attorney Edward J. Ritger,
practices in Random Lake, Wisconsin.
On November 23, 2002, a woman (the deceased)
died in an automobile accident when another
woman ran a stop sign and hit the deceased’s
car. The other woman also died in the
accident.
The deceased had two young adult children, a
son and a daughter. Their father was
recently divorced from the deceased and he
and the son were named as co-personal
representatives for the deceased’s estate.
They hired the Respondent, who had
represented the father in the divorce, to
probate the estate. The family, (son,
daughter and father) agreed to pay
Respondent $145 an hour for his services.
There was no written fee agreement.
Respondent filed a petition for the
administration of the deceased’s estate on
December 4, 2002.
Section 895.04(4) Wis. Stats. provides that
damages for loss of society and
companionship in a wrongful death action may
be awarded in an amount not to exceed
$350,000. In addition, pecuniary damages
and damages for medical and funeral expenses
may also be recovered.
The other woman’s automobile insurance
policy (first insurer) had a $150,000 policy
limit. The deceased had underinsured
motorist (UIM) benefits up to $300,000 with
a different insurance company and an
additional $5000 in coverage for medical
payments. It was believed that additional
amounts, up to the statutory limit, could be
collected from the other woman’s estate.
The family initially consulted other
attorneys about the wrongful death matter,
but decided they did not want to enter into
a contingent fee arrangement. The family
attempted to negotiate with the insurance
companies themselves and thought they could
handle the wrongful death matter on their
own. Although not retained to handle the
wrongful death matter at that time,
Respondent agreed to file claims for the son
and daughter in the other woman’s estate.
Those claims, in the amount of $350,000 plus
costs, were filed on January 14, 2003.
On January 16, 2003, the UIM carrier also
filed a claim with the other woman’s estate
for an amount “undetermined – likely to
exceed $350,000.”
Between January and August 1, 2003, the
family, primarily the son and the father,
had several contacts with the claims
adjuster for the UIM carrier. The family
understood from their contacts with the
claims adjuster that the UIM carrier would
pay their claim for underinsured motorist
benefits only after the first insurer had
paid its policy limits.
On August 1, 2003, a pre-trial conference
was held in the other woman’s estate. The
family appeared in person and attorneys
appeared for the other woman’s estate and
the two insurance companies. Respondent
appeared by telephone, but notified the
court that he had not been retained to
represent the son and daughter in the matter.
Subsequent to August 1, 2003, Respondent
agreed to represent the family with respect
to their claims against the other woman’s
estate and with respect to the disposition
of the insurance proceeds. In an August 13,
2003 cover letter to the court in the other
woman’s estate, Respondent stated:
Please find enclosed a Notice of Retainer
indicating that I have now been formally
retained by [son and daughter] with respect
to their claims against the estate of [other
woman]. As part of that retainer, I am also
authorized to represent them in connection
with the disposition of the wrongful death
proceeds arising from [first insurer] and
[UIM carrier].
Although there was no written agreement,
both Respondent and the family believed the
agreement for an hourly fee of $145
continued. In his August 13, 2003 letter to
the court, Respondent indicated that he was
aware the deceased had two estranged adult
children and that the insurance companies
would require the estranged brothers’
participation in settling the claims and
providing releases. A copy of Respondent’s
retainer notice was sent to the attorney for
the other woman’s estate and the attorneys
for the two insurance companies.
The family’s understanding was that, as of
August 13, 2003, they had hired Respondent
to represent them with respect to probating
the deceased’s estate and with respect to
the wrongful death claims. Additionally,
the son stated in an affidavit that, “when
the attorneys became involved,” the UIM
claims adjuster would no longer speak with
him and told him he had to go through the
attorneys.
Respondent believed the scope of his
representation was limited and that he was
only hired to negotiate settlements with the
estranged brothers and obtain payment from
the first insurer.
On August 18, 2003, the first insurer’s
attorney sent Respondent a letter
acknowledging Respondent’s August 13, 2003
letter and stating that his client was
willing to pay its policy limit of $150,000,
but would first require a release from the
deceased’s estate and all four of her
natural children. The first insurer’s
attorney’s August 18, 2003 letter further
stated:
Since there is a UIM carrier in the
picture,
it would be appropriate to send them a
letter advising them that [first insurer]
has offered its policy limit in this case
and they may have the right to substitute
funds in this matter if they wish to
preserve any subrogation claim they have for
any future UIM payments that may be made.
Please copy me on that letter.
Respondent did not heed the first insurer’s
attorney’s advice and sent the UIM carrier a
letter notifying it that the first insurer
had offered its policy limits. Based on the
family’s prior contacts with the UIM
carrier’s claims adjuster, Respondent
believed the UIM carrier “…was ready to pay
the underinsured motorist benefits from [the
deceased’s] policy as soon as [first
insurer] paid its policy limits.”
Respondent negotiated with the estranged
brothers and each agreed to a $10,000
settlement. The first insurer’s attorney
sent Respondent a general release for all
the parties to sign. The document released
the first insurer, the other woman’s estate
and “…all other persons and organizations
who are or might be liable, from all claims
and for all injuries arising out of the
death of [the deceased] as a result of an
accident…” The release further stated, “By
executing this release, we intend and agree
that this release applies to all claims
arising from said accident, present and
future…”
In an October 11, 2004 affidavit, Respondent
stated:
I did not attempt to distinguish the kind
of
release provided by [first insurer], as I
believed that both [first insurer] and [UIM
carrier] knew the [family’s] intention of
pursuing the full statutory amount of
$350,000 for their wrongful death claim plus
funeral expenses.
On August 30, 2003, Respondent
witnessed the son’s and the father’s
signatures on the release. Respondent then
sent the release to the estranged brothers
for their signatures on September 10, 2003
and he also obtained the daughter’s
signature.
On or about September 25, 2003,
Respondent returned the signed release to
the first insurer’s attorney. Respondent
received the first insurer’s check for
$150,000 on October 1, 2003. Based on the
family’s prior contacts with the UIM
carrier, Respondent thought the family could
then proceed to collect additional amounts
from the UIM carrier and the other woman’s
estate.
On October 13, 2003, Respondent wrote to the
claims adjuster for the UIM carrier,
enclosed a copy of the first insurer’s
check, and told the claims adjuster the
proceeds were being held in his trust
account. The letter concluded, “I
understand that I am providing you with the
copy of this check for possible substitution
by your company.”
The claims adjuster sent Respondent
an October 23, 2003 letter informing him
that the UIM carrier had lost its
subrogation rights because the deceased’s
estate and her children had executed a
general release in full and final settlement
of their claims. The claims adjuster’s
letter informed Respondent that he had
failed to provide the UIM carrier with
notice of the first insurer’s offer prior to
accepting it, in violation of the UIM
carrier’s policy requirements and
established case law.
Respondent admitted that, at the time, he
was unfamiliar with the procedure for giving
notice of settlement as prescribed in the
case law.
Respondent met with the father, the son and
the son’s uncle on November 3, 2003 to
discuss the insurance issues. According to
those family members, Respondent told them
he made a mistake by sending the executed
release to the first insurer without prior
notification to the UIM carrier, told them
he had malpractice insurance, and said he
would correct the mistake at his own
expense.
Respondent wrote to the first insurer’s
attorney on November 7, 2003 and enclosed a
trust account check for $150,000.
Respondent asked for return of the release,
explaining that his clients had signed it
under the mistaken belief that it was a
prerequisite to obtaining UIM coverage. The
first insurer did not accept the check or
return the release.
On November 7, 2003, Respondent also filed a
wrongful death lawsuit against the two
insurance companies and the other woman’s
estate asking, in part, for reformation of
the release, and for damages for negligence
and wrongful death. The plaintiffs in the
lawsuit were the son and daughter,
individually, and the son and the father as
personal representatives of the deceased’s
estate. Although the family thought
Respondent had agreed to absorb the costs of
the lawsuit, Respondent stated his
attorney’s fees were to continue to be
charged on an hourly basis and that it was
understood that the fees and costs would be
paid out of the proceeds of the lawsuit.
Respondent notified his malpractice
insurance carrier of the lawsuit in March
2004.
On May 3, 2004, Respondent had a phone
conference with a colleague about the
possibility of retaining him as co-counsel
in the wrongful death case. The colleague
subsequently agreed to enter the case as
Respondent’s co-counsel, and he filed a
notice of retainer on May 27, 2004.
Respondent’s malpractice carrier hired an
attorney to represent its and Respondent’s
interests in the wrongful death matter. In
a May 14, 2004 letter to co-counsel
transmitting the file, Respondent stated:
…as you can see from the recent
correspondence from [malpractice carrier],
some consideration was given to having
[attorney hired by malpractice carrier] be
the attorney of record instead of your
firm. In the end, the conclusion was
reached that [malpractice carrier’s
attorney] really would have a conflict of
interest representing me as an insured of
[malpractice carrier] as well as [the
family].
On May 26, 2004, the malpractice
carrier’s attorney wrote to the new co-
counsel, stating that he had been retained
by the malpractice carrier “…to assist them
in reviewing this claim and helping to get
it resolved.”
On June 30, 2004, co-counsel filed
an amended complaint in the wrongful death
lawsuit which, among other things, added the
deceased’s estate, in addition to the
personal representatives, as a plaintiff.
The family said Respondent told them he
would be responsible for co-counsel’s fees.
Respondent said he told the family he would
be responsible for co-counsel’s fees only if
there was no recovery from the UIM carrier.
Respondent believes this conversation
occurred around April 2004. The family
denies that Respondent conditioned his
commitment to pay co-counsel’s fees on a
failure to recover from the UIM carrier.
Despite the apparent recognition in his
May
14, 2004 letter to co-counsel of a conflict
of interest, Respondent remained co-counsel
in the wrongful death lawsuit until he was
granted permission by the court to withdraw
on November 19, 2004. The family did not
sign a written consent to Respondent’s
continued representation. The court signed
the order substituting co-counsel as counsel
of record (hereafter “successor counsel”) on
December 21, 2004.
Successor counsel said that, in a general
sense, a potential malpractice claim against
Respondent was apparent at the time he
(successor counsel) was hired in May 2004.
Successor counsel emphasized, however, that
he was not hired to pursue a malpractice
claim against Respondent. Nevertheless,
successor counsel said that by late October
2004, he believed there were indications
that the court might not reform the release,
and he said it was at that time that he
began to consider proposing a mediated
settlement that would include participation
by Respondent and his malpractice carrier.
Successor counsel said it was at that point
that he advised Respondent to withdraw from
the wrongful death representation.
Although Respondent remained as co-counsel
in the lawsuit until November 2004,
successor counsel stated that after he was
hired in May 2004 his firm assumed exclusive
responsibility for the case and Respondent
was only nominally involved. Nevertheless,
both successor counsel’s and Respondent’s
billing records indicate that successor
counsel’s office had numerous contacts with
Respondent and continued to keep Respondent
up-to-date on the wrongful death lawsuit,
both before and after Respondent’s
withdrawal in November 2004. Respondent
also had several direct contacts with the
family pertaining to the lawsuit.
Even though the deceased’s estate and its
personal representatives, the son and his
father, were plaintiffs in the wrongful
death lawsuit, Respondent continued to
represent the deceased’s estate until
another attorney was substituted for
Respondent on June 23, 2005.
Respondent said when the family was in his
office on estate business, if questions came
up about the wrongful death lawsuit
Respondent, as an accommodation, would call
successor counsel’s office, via speaker
phone, from his office. Respondent recalls
that at some point, it was suggested that
Respondent not participate in such
discussions because, after he had withdrawn,
they would not be within the scope of
attorney-client privilege.
Successor counsel said he recommended to the
family that Respondent, represented by his
malpractice carrier’s attorney, be involved
in mediation, even though Respondent was not
a party to the lawsuit. Successor counsel
said he explained to the family that
Respondent would be present at the mediation
as an adverse party. Additionally,
successor counsel said he explained to the
family that he represented the estate only
for purposes of the insurance litigation and
at mediation, and that Respondent
represented the estate in all other
matters.
On March 28, 2005, successor counsel’s
associate sent a Confidential Mediation
Statement letter to the mediator, which
outlined the facts and the family’s
position. The letter asked for the wrongful
death statutory amount of $350,000 plus over
$9000 in funeral expenses, $5200 for
pecuniary damages and approximately $22,000
in interest. Due to the delays in settling
the claim, the letter also asked for
attorneys fees in an amount over $46,000.
The letter further stated, “Additionally, if
the upcoming mediation is unsuccessful in
resolving this case, the [family] will have
to sue [Respondent].”
The case went to mediation on April 1,
2005. Respondent, represented by his
malpractice carrier’s attorney, attended, as
did successor counsel, the father, the son,
and the daughter. The case settled at
mediation for $320,000, with the first
insurer responsible for $150,000, the UIM
carrier for $90,000, Respondent and his
malpractice carrier for $35,000, and the
other woman’s estate for $45,000. The
settlement released Respondent from any
potential malpractice claims and further
stated that, while Respondent waived his
fees for the wrongful death matter, he was
entitled to his fees for the deceased’s
estate.
The family states that successor counsel
advised them to agree to the settlement
because it was the best they could get and
told them if they did not agree they would
have to find another attorney. The family
states they were told that successor
counsel's fees, after a reduction by
successor counsel of $10,000, would be
deducted from the settlement proceeds.
Successor counsel’s final bill was
approximately $40,000.
Respondent's time records for his work on
the estate and for his work on the wrongful
death matter were originally kept as one
combined billing record. Respondent said he
had his staff “segment” his work on the
wrongful death matter from his work on the
probate matter. The family was ultimately
ordered by the probate court to pay
Respondent $11,432.70 for fees and costs
incurred by Respondent in probating the
deceased’s estate. The order was based on a
bill submitted by Respondent for that
amount. That bill included several entries
prior the date the wrongful death action was
commenced in November 2003, which related to
the first insurer’s release and dealings
with the UIM carrier.
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