THE STATE OF SOUTH CAROLINA
In The Supreme Court
In the Matter of Vannie
Williams, Jr., Respondent.
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:
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
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
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.
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.
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
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.
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,
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.
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
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
Accordingly, we reprimand respondent.
Associate Justice John H. Waller, Jr.,