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FIRST MATTER
Attorney James T. Runyon (Runyon)
represented a client in a foreclosure
action. There was no fee agreement between
Runyon and the client. Runyon did not
disclose to the client in writing at or near
the start of the representation the basis or
rate of his fee for legal services.
Runyon’s bill for services provided between
October 2012 and September 2013 did not
itemize the time spent on each task
performed. Instead, it listed the total
time as 15.9 hours at $200 per hour. The
client did not become aware of the $200 per
hour rate until he received a bill for
services at the conclusion of the case.
Runyon also represented the client in a
separate matter, relating to the sale of
client’s septic business in late 2012 and
early 2013. In February 2013 when the
business sold, the settlement statement
provided that Runyon would hold $10,000 in
his trust account for at least one year to
allow the buyer time to obtain a septic
license in his name.
There was no fee agreement between Runyon
and the client for the sale of the septic
business. Runyon did not disclose to the
client in writing at or near the start of
the representation what his fee would be in
the matter of the sale of the septic
business.
After the client filed his grievance with
the Office of Lawyer Regulation (OLR),
Runyon sent the client a bill dated April
22, 2015 for his legal services regarding
the sale of the septic business from
February 2014 to April 2015. Runyon charged
$250 per hour. The total bill was
$1,055.31. The client did not become aware
of the $250 per hour rate until he received
a bill for services at the conclusion of the
case.
On about August 29, 2013, the client hired
Runyon to represent him in a criminal case.
On September 2, 2013, Runyon sent the client
a letter stating, “I will bill my time and
disbursements in representing you in the
criminal case against the $10,000 I am
holding in trust from the sale of the septic
business.” Runyon’s September 2, 2013,
letter did not state an hourly rate or any
other basis for his fee in the criminal
case.
It was reasonably foreseeable that the total
cost of the felony criminal case
representation for the client, including
attorney’s fees, would be over $1,000.00.
Runyon did not provide the client with a fee
agreement regarding his representation of
the client in the criminal case.
On September 24, 2013, less than a month
after the start of Runyon’s representation
of the client in the criminal case, Runyon
withdrew the last of the $10,000 which was
being held in the trust account for the
client. Runyon did not notify the client of
his intent to withdraw the trust account
funds prior to the withdrawal. Runyon did
not send the client a billing statement or
accounting for either the criminal case or
the business sale at the time of the
withdrawal from the trust account.
Runyon represented the client through trial
and did significant work on the case.
Though Runyon accumulated time and expenses
totaling $41,792.93 if he had been billing
at his normal hourly rate, Runyon only
charged and accepted the fee of $10,000 for
the representation. Such fee charged was
not unreasonable under the circumstances.
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By failing to provide, in writing, the scope
of the representation and the basis or rate
of the fee and expenses for which the client
would be responsible before or within a
reasonable time after commencing each of
three representations of the client, Runyon
violated SCR 20:1.5(b)(1) and (2), which
state, “(1) The scope of the representation
and the basis or rate of the fee and
expenses for which the client will be
responsible shall be communicated to the
client in writing, before or within a
reasonable time after commencing the
representation, except when the lawyer will
charge a regularly represented client on the
same basis or rate as in the past. If it is
reasonably foreseeable that the total cost
of representation to the client, including
attorney's fees, will be $1000 or less, the
communication may be oral or in writing. Any
changes in the basis or rate of the fee or
expenses shall also be communicated in
writing to the client. (2) If the total
cost of representation to the client,
including attorney's fees, is more than
$1000, the purpose and effect of any
retainer or advance fee that is paid to the
lawyer shall be communicated in writing.”
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By failing to provide notice to the client,
at least 5 business days before the date on
which a disbursement was made from his trust
account for the purpose of paying fees,
Runyon violated former SCR 20:1.15(g)(1),
effective through June 30, 2016, which
states, “Notice to client. At least 5
business days before the date on which a
disbursement is made from a trust account
for the purpose of paying fees, with the
exception of contingent fees or fees paid
pursuant to court order, the lawyer shall
transmit to the client in writing all of the
following: a. an itemized bill or other
accounting showing the services rendered; b.
notice of the amount owed and the
anticipated date of the withdrawal; and c. a
statement of the balance of the client's
funds in the lawyer trust account after the
withdrawal.”
SECOND MATTER
In a second unrelated matter, Runyon
represented a client who had been charged
with Conspiracy to commit 1st-Degree
Homicide, a Class A felony carrying a
possible 60-year prison sentence. At his
first meeting with the client Runyon
informed the client that he would need an
advanced fee of $25,000. The client
responded that she had only $15,000 to
$16,000 in savings, but that she could sell
her car, which might garner another $3,000
or $4,000. Runyon agreed to take the case
on those terms. Runyon entered his
appearance in the case on March 3, 2014.
On March 4, 2014, the client signed a
General Power of Attorney form appointing
Runyon as her Power of Attorney, so he could
pay bills from her account and be her “life-
line.” Runyon, however, did not enter into
a written fee agreement with the client
until August 19, 2014, just days before her
sentencing hearing. The fee agreement
provided that Runyon had handled the case on
a flat fee basis of $20,000, which included
Runyon’s fee, the disbursements made by
Runyon, and the client’s personal bills that
Runyon paid.
On March 4, 2014, the client sent a letter
to her bank explaining that she had hired
Runyon to represent her and directing the
bank to transfer the balances of her savings
and checking accounts to Runyon.
Thereafter, Runyon sold the client’s car and
deposited to his trust account the net
proceeds of the sale, $3,927.59. Between
the client’s bank account funds, payments
received from tenants renting the client’s
house, and the net proceeds from the car
sale, Runyon received a total of $21,635.24
from the client.
By May 5, 2014, Runyon had disbursed
$19,915.53 of the client’s funds from his
trust account to himself, some of which was
disbursed in payment of expenses on the
client’s behalf. By the end of the
representation, Runyon’s net fees and costs
totaled $18,810.53, which was not
unreasonable under the circumstances. The
fee Runyon took was significantly less than
it would have been had he billed the client
at his normal hourly rate of $250. Runyon
indicated his total bill at an hourly rate
would have been $47,375.94 for his services
between March 3, 2014 and May 20, 2014.
While a portion of the client’s funds were
intended to cover Runyon’s fees, the parties
also contemplated that Runyon would be
handling some of the client’s bills and
personal expenses. However, Runyon never
entered into an agreement or clear
understanding with the client regarding
precisely which bills and expenses he would
be paying on her behalf. This caused
confusion between the client and Runyon. In
many of her letters to Runyon, the client
raised the issue of payment of her personal
bills, but Runyon never made clear which of
the bills he would be paying from her funds.
Runyon claims that he paid every bill that
the client provided to Runyon and asked him
to pay. While the evidence showed that
Runyon paid $2,824.71 of the client’s bills
and expenses, the client claimed Runyon
failed to pay an additional $2,880.60 worth
of bills.
After the representation concluded, on
October 30, 2014 the client sent Runyon a
letter asking why her bank accounts had been
closed and what happened to the remaining
balances. Further, she requested an
itemized summary of all the transactions and
expenses. Runyon did not provide the client
a final accounting until April 20, 2016,
after the client filed a grievance with OLR.
Though he agreed to pay some portion of her
personal bills and expenses while the client
was incarcerated, by failing to enter a
written agreement or otherwise confirm with
the client precisely which of her personal
bills he would pay from the $21,635.24
belonging to the client that he had in his
possession as her Power of Attorney, Runyon
violated SCR 20:1.4(a)(2), which states, “A
lawyer shall reasonably consult with the
client about the means by which the client’s
objectives are to be accomplished.”
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By failing until August 2014 to enter into a
written fee agreement with the client for his
representation of her in the felony criminal
case, Runyon violated SCR 20:1.5(b)(1) and
(2).
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Upon conclusion of the representation, by
failing to timely comply with his client’s
request for a full accounting of her funds
that he had held in his trust account,
Runyon violated former SCR 20:1.15(d)(2),
effective through June 30, 2016, which
states, “Upon final distribution of any
trust property or upon request by the client
or a 3rd party having an ownership interest
in the property, the lawyer shall promptly
render a full written accounting regarding
the property.”
THIRD MATTER
In a third unrelated matter, in April 2014,
a woman contacted Runyon about her financial
situation and a mortgage loan. Because of
poor economic conditions and personal
reasons, the woman had to close her gas
station and had been trying to sell it for
years. The woman hired Runyon and initially
paid him $16,065.00 as an advanced fee for a
Chapter 11 bankruptcy. Runyon deposited
$16,065.00 to his trust account on April 17,
2014. Ultimately, they decided against a
Chapter 11 because the business was closed
and she had no income and no means to
reorganize.
The client asked Runyon to sue the bank for
tortious interference with her attempts to
sell the business and for releasing her
confidential financial and personal
information. Runyon informed the client
that his normal hourly rate was $250.00, but
he agreed to handle the lawsuit against the
bank for a flat fee that she had already
paid, $16,065.00. Runyon did not enter into
a written fee agreement with the client.
In July 2014, Runyon filed the summons and
complaint in circuit court. The bank filed
counterclaims relating to non-payment of the
loan balance of $210,705.45 due as of
September 18, 2014.
Discovery took place. The client and other
witnesses were deposed. Runyon believed
that the problem with the case was that
testimony from the depositions did not
support the client’s claim that the bank had
discouraged potential buyers from buying the
business so that they could purchase it
later at a lower price through a foreclosure
sale. The realtors testified that the
buyers backed out because their own home
failed to sell.
In summer 2015, the parties mediated the
case. The parties came to a settlement
agreement and voluntarily dismissed their
respective claims as of October 2015.
In response to OLR’s investigation, Runyon
produced a billing statement indicating that
he had incurred $31,146.44 in fees and
costs, if he had been billing at his normal
billing rate of $250 per hour. Runyon did
not charge the client any more than the
agreed upon fee of $16,065.00, which was not
unreasonable under the circumstances.
Runyon’s trust account records reflect that
he disbursed all of the $16,065.00 by May 8,
2014. Runyon did not notify the client that
he would be disbursing her funds from the
trust account.
By May 8, 2014, Runyon had not completed the
complaint in the lawsuit. He first sent the
client a draft of the complaint on May 21,
2014. It was not filed until July 25, 2014.
Under SCR 20:1.0(ag), a flat fee paid at the
outset of representation is one type of an
advanced fee. Runyon’s billing statement
shows that by May 8, 2014, he had worked at
most 16.9 hours on the client’s case, which
would be $4,225.00 worth of fees at Runyon’s
normal hourly rate of $250.00. While the
fee agreement in this matter called for a
flat fee, he did not earn the fee by the
time he had disbursed all of it on May 1,
2014.
Runyon failed to enter into a written
agreement with the client and also failed to
establish benchmarks by which portions of
the flat fee would be earned. In the
absence of any such agreement, Runyon should
have held the full flat fee in trust until
it was fully earned at the conclusion of the
representation, which would have been the
date the stipulation and order for dismissal
was entered in October 2015.
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By failing to enter into a written fee
agreement with the client in the
representation of her relating to the lawsuit
against her bank, Runyon violated SCR
20:1.5(b)(1) and (2).
By disbursing the client’s entire advanced fee
of $16,065.00 before such time as he had
earned it, Runyon violated former SCR
20:1.15(b)(4), effective through June 30,
2016, which states in relevant part, “Except
as provided in par. (4m), unearned fees and
advanced payments of fees shall be held in
trust until earned by the lawyer, and
withdrawn pursuant to sub. (g).”
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By disbursing the client’s advanced fee of
$16,065.00 from his trust account without
providing the client any advance notice of
such disbursement, Runyon violated former
SCR 20:1.15(g)(1), effective through June
30, 2016.
Runyon has been the subject of prior
discipline: Runyon was suspended for one
year in 1984; Runyon received a private
reprimand in 2006; and Runyon was suspended
for 60 days in 2015.
For the above misconduct, and in accordance
with SCR 21.09(2), Attorney James T. Runyon
is hereby publicly reprimanded.
Dated this 20th day of July, 2017.
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