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25002 - In the Matter of Vannie Williams, Jr.

Shearouse Adv. Sh. No.
S.E. 2d





THE STATE OF SOUTH CAROLINA

In The Supreme Court

In the Matter of Vannie

Williams, Jr., Respondent.

PUBLIC REPRIMAND

Opinion No. 25002

Submitted August 2, 1999 - Filed September 27, 1999

Clifford Scott, of Columbia, for respondent.

Attorney General Charles M.: Condon, Senior

Assistant Attorney General James G. Bogle, Jr., and

Henry B. Richardson, Jr., all of Columbia, for the

Office of Disciplinary Counsel.





PER CURIAM: 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:

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In the Matter of Vannie Williams, Jr.





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

[the] 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.



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In the Matter of Vannie Williams, Jr.





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.





Statements to the Commission on Lawyer Conduct



Due to respondent's conduct, both Liles and her sister, Laterna

Jones, filed letters of complaint with the Commission on Lawyer Conduct. In

response to these letters, the Commission contacted respondent concerning his

representation of Liles. Respondent replied in a letter that he had taken a fee

of $275,348.98. If this had been his fee, then he charged an excess of

$52,598.98. In fact, this was not his fee, because he issued an escrow account

check to himself, for the fee, in the amount of $275,000.





In his response to the Notice of Full Investigation, Respondent

repeated the above figures, and again made a false statement to the

Commission because the amount of the fee was incorrect and inconsistent with

the escrow check actually written.





The Hospital Lien and Disbursement Sheet



One of the medical facilities that treated Liles was North Carolina

Baptist Hospital (Hospital). By letter dated July 10, 1997, the Hospital notified

respondent that it was asserting a lien against the settlement, pursuant to

North Carolina General Statutes Sections 44-49 and 44-50. On August 14,

1997, the Hospital again notified respondent of their lien by letter, noting total

charges due of $53,615.36.





The settlement provided that Liles would acknowledge certain

liens from various sources, including the Hospital, and be responsible for the

payment of those liens. Despite the settlement's provisions, respondent

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In the Matter of Vannie Williams, Jr.





attempted to negotiate a settlement for the hospital bill. Respondent wrote the

liability counsel for the Hospital on November 12, 1997, requesting an

adjustment or reduction of the bill. In that letter, respondent represented that

the settlement had been an initial payment of $269,433, with monthly

payments of $1,500 for the life of Liles, with 420 payments guaranteed. He did

not disclose the existence of any other sums withheld on her behalf, and

requested that the Hospital reduce its outstanding bill. The Hospital, through

its counsel, responded with an offer to reduce the hospital bill by ten percent

and accept $48,253.82 in full settlement of its lien. Respondent never

acknowledged nor settled the Hospital's statutory lien.





Instead, respondent wrote the Hospital on December 4, 1997,

enclosing an escrow account check in the amount of $32,859.99 as payment for

services provided by the hospital to Liles. Attached to the letter was a

disbursement sheet, showing total settlement and recovery of $999,433.

Deducted from the total settlement was respondent's legal fee of $333,144.33,

together with expenses, bringing the total deduction to $336,573.01, plus the

initial cash payment of $369,433. These: deductions from the total settlement

amount of $999,433 left a balance of $32,859.99. This was the amount remitted

to the Hospital.





The disbursement sheet was a false statement, because respondent

did not take a legal fee of $333,144.33. Instead, respondent's legal fee was, as

determined by an escrow account check, $275,348.98. In the alternative, his

legal fee, as represented to the Commission on Lawyer Conduct in both his

letter of response and his response to the Notice of Full Investigation, was

$275,348.98. Finally, the disbursement sheet was also a false statement to the

Hospital because it did not disclose the disbursement of $45,000 to Liles.

Thereafter, the Hospital contacted Liles directly, seeking to collect the

remainder due on her hospital bill, in the amount of $15,695.51.





Advances



In his replies to the Commission on July 13, 1998, and following

the Notice of Full Investigation, respondent falsely stated that Liles had been

paid $57,600 from the proceeds of the initial check of $369,433. However,

during his representation of Liles, respondent actually made a series of

advances to Liles from his general account. Respondent made these advances

both prior to and after the receipt of the settlement from Empire. The checks

were made payable to a variety of concerns and totaled $10,263.36.



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In the Matter of Vannie Williams, Jr.





Additional Fees



After issuing an escrow account check to himself in the amount of

$275,000 on September 25, 1997, respondent wrote himself other escrow

account checks in the amount of $5,000 on October 22, 1997, and $11,575 on

December 3, 1997. On the same day respondent represented to the Hospital

that the only money left from the settlement was $32,859.99, respondent wrote

the escrow account check for $11,575. These sums represented reimbursement

for both fees and advances to Liles. No accounting was ever given to Liles

concerning how the reimbursements were calculated. In addition, respondent

did not disclose the reimbursement checks in his reply to the inquiry of the

Commission on Lawyer Conduct, or in his reply to the Notice of Full

Investigation.





No combination of the above checks for fees, advances, or costs

equals the amount respondent represented to be his disbursement to Liles, in

his response to the Commission's initial letter, and Notice of Full Investigation,

where he represented that Liles had been paid $57,600. Respondent therefore

made false statements to the Commission during the course of its investigation

regarding the accuracy of the funds disbursed to Liles.





Costs



In his replies to the Commission's inquiry on July 13, 1998, and

the Notice of Full Investigation, respondent represented that he had recovered

costs incurred in representing Liles in the amount of $3,624.03. In reply to a

subpoena, respondent submitted receipts and bills in the amount of

approximately $428. In his attempt to comply with a Notice to Appear,

respondent was also unable to provide an accounting which would match the

claimed amount. In addition, the costs set forth on the false Disbursement

Sheet respondent submitted to the Hospital totaled yet another amount,

$3,428.68.





Disbursement Sheet .



Respondent never gave a completed, signed Disbursement Sheet to

Liles, showing all sums received on her:!behalf, all disbursements, and

disbursements to her.







Conclusion

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In the Matter of Vannie Williams, Jr.





Respondent has engaged in conduct which violates the Rules of

Professional Conduct, Rule 407, SCACR. He failed to provide competent

representation by not using the accounting methods and procedures meeting

the standards of competent practitioners. Rule 1. 1. He failed to comply with

demand for payment and exceeded his scope of representation. Rule 1.2. He

failed to keep his client reasonably informed about the status of the case and

respond to requests by failing to make a proper accounting to his client. Rule

1.4. He failed to properly safeguard his client's property by neglecting to

promptly notify his client of the settlement and by fraudulently endorsing the

settlement check. Rule 1.15. He made false statements to the Commission on

Lawyer Conduct. Rule 3.3. He made false statements to the hospital, and

created a false Disbursement Sheet. Rule 4.1. He committed professional

misconduct by violating the Rules of Professional Conduct. Rule 8.4(a). He

engaged in conduct involving moral turpitude. Rule 8.4(c). He engaged in

conduct involving dishonesty, fraud, deceit, and misrepresentation. Rule

8.4(d). He engaged in conduct prejudicial to the administration of justice. Rule

8.4(e).







In addition, respondent has engaged in conduct constituting

violations of Rule 7 of the Rules for Lawyer Disciplinary Enforcement, Rule

413, SCACR. He violated the Rules of Professional Conduct, Rule 407, SCACR.

Rule 7(a)(1), RLDE. He brought the legal profession into disrepute and

polluted the administration of justice by his inappropriate actions. Rule

7(a)(5), RLDE.





Accordingly, we reprimand respondent.



PUBLIC REPRIMAND.





Associate Justice John H. Waller, Jr.,

not participating.

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