In Re Hatch

Petition by Glen S. Hatch, an attorney, for review of the recommendation of the Board of Commissioners of the Utah State Bar that petitioner be punished for unprofessional conduct.

The petitioner is an attorney and counsellor at law in the state of Utah. A formal complaint was filed by the Board of Commissioners accusing the petitioner of unprofessional conduct. A hearing was held on February 11, 1944, after which the Board of Commissioners found that the petitioner was guilty of unprofessional conduct and recommended to the Supreme Court that an order be entered suspending the petitioner from the practice of law in this state for a period of one year. Pursuant to the Revised Rules of Discipline of the Utah State Bar, heretofore approved by this court, the petitioner filed a petition for review of the findings, conclusions and recommendation of the Board.

The complaint is in two counts. The first count charges and the evidence shows that the petitioner was retained by William and Arillie Stott to represent them in a proceeding before the Industrial Commission; that the petitioner appeared as attorney for the Stotts and was awarded the sum of $50 as attorney's fees for his services in that proceeding; that at no time did the petitioner apply to the Industrial Commission for an additional allowance as attorney's fees; that he accepted the $50 and thereafter procured from the Stotts an additional amount in excess of $200 for the legal services in connection with said proceeding. That the collection of this additional amount was in violation of the provisions of Sec. 42-1-81, U.C.A. 1943, which gives the Industrial Commission authority to fix and regulate the fees of attorneys in all cases before the commission. The method of collecting the excess was by use of a third party intermediary. The Board of Commissioners found that the method used to collect the additional amount was a mere subterfuge adopted to avoid and circumvent the provisions of Sec. 42-1-81. This later finding correctly reflects the evidence. The petitioner knew that the commission had the power to regulate attorney fees, but thought that the fee usually awarded by the commission to an attorney was inadequate. He therefore, as a condition to accepting employment in the case by the Stotts, worked out a method whereby he could collect fees in addition to the amount awarded by the commission and in violation of the statute.

The second count related to the collection of money from a client for the purpose of paying it to an attorney for a third party and the retention of that money for nearly four years by the petitioner. One Dermont Casper employed the petitioner in connection with the settlement by Casper of his obligation under a stipulation and judgment in a divorce proceeding. By the terms of the stipulation and judgment Casper was to pay a total of $77 to the Relief Society of the Utah Stake of the Church of Jesus Christ of Latter-Day Saints for the use and benefit of his minor child and Mildred Casper, his former wife. In addition, Casper was required to pay the sum of $50 to W.S. Dunford, attorney for Mildred Casper. The petitioner, after being retained by Casper, collected a total of at least $180 from Casper. There is evidence that he collected a larger amount, but it is admitted that he collected at least $180. He paid $30 of this amount over to W.S. Dunford, an attorney, to discharge Casper's obligation as noted above. Arrangements were made to pay the $97 balance to Dunford by installments. No further payments were made by the petitioner. He had $150 to cover the $97 balance to Dunford and his attorney fee. The petitioner testified that $50 to $75 would have been a reasonable attorney's fee for his services in connection with this matter. Some four years later the petitioner and Mr. Casper agreed that the petitioner was still holding $85 of the petitioner's money over and above the attorney's fee.

The evidence thus stands uncontradicted that petitioner retained the sum of $85 for approximately four years without either paying it in discharge of Mr. Casper's obligation or requesting instructions from his client for its disposition. As noted by the findings:

"Mr. Hatch [petitioner] seeks to justify his failure to comply with the provisions of his agreement with Mr. Dunford on the grounds, first, that he was going to attempt to get attorney Dunford to settle for less than the One Hundred and Twenty-seven ($127.00) Dollars agreed upon and, second, that he did not wish to make partial payments but expected to obtain and keep in his possession the money collected from Casper until he had sufficient funds to discharge the entire obligation and obtain a dismissal of the case and release in full of the obligation. There is no evidence in the record that Hatch at any time attempted to settle the case for a lesser amount than that agreed upon. * * * In September, 1936, action was started in the Provo City Court against Dermont Casper, charging him with willful neglect and failure to provide for his wife and child. The warrant was in the hands of the sheriff for the arrest of Casper. Mr. Dunford, as County Attorney, upon the receipt of the Thirty ($30.00) Dollars paid on April 29, 1937, by the said Glen S. Hatch ceased in his efforts to have Dermont Casper arrested. Mr. Hatch knew that his client, Dermont Casper, upon failure to comply with his stipulation by his attorney and Mr. Dunford was subject to citation for contempt in the divorce action or perhaps subject to arrest under the criminal action in the Provo City Court. He exposed his client, Dermont Casper, to this risk rather than to pay the second installment to Mr. Dunford on July 1, 1937, when he had the funds in his hands to do so."

Both of the above matters show unprofessional conduct on the part of the petitioner. We decided in Ellis v. Ind. Comm.,91 Utah 432, 64 P.2d 363, that the Industrial Commission could, under Sec. 42-1-81, fix the attorney's fee to be allowed for a proceeding before the Industrial Commission and that in doing so it was not bound by any contract made between the parties. The petitioner knew that the Commission had the power to fix the fees and that he could not directly by contract fix a different fee. The procedure adopted by petitioner to collect higher fee than the Industrial Commission allowed was illegal and the petitioner knew it. As to the collection of the money from Casper, petitioner had a duty to his client to either pay the money collected over to W.S. Dunford as agreed or to return it to his client. The holding of this money for nearly four years was not motivated by any intention to protect the client's interest. He violated common rules of honesty and good faith. The recommendation of the Board of Commissioners is fully justified.

It is therefore ordered that Mr. Glen S. Hatch be suspended from the practice of law in the State of Utah for a period of one year from the date of the issuance of the remittitur herein and until he is reinstated upon recommendation of the Board of Commissioners of the Utah State Bar, and that he return to William and Arillie Stott the fees in excess of the amount allowed by the Industrial Commission and that he pay to the Utah State Bar all costs expended by it in the prosecution of the charges against him.

McDONOUGH and WADE, JJ, concur.