Kelley's Case
1993 N.H. LEXIS 81, 137 N.H. 314, 627 A.2d 597 (1993)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An attorney violates professional conduct rules by jointly representing clients with substantially different interests, even with client consent, if a disinterested lawyer would deem the representation inappropriate. To prove an excessive fee, the disciplinary committee must establish a generally accepted, reasonable fee for the services in question.
Facts:
- Kendal C. Ham died in March 1988, survived by his widow, Anna Ham, and his daughter, Kendra Stanley (Anna's stepdaughter). His will created a trust for both women, divided into Parts A and B, where Kendra's only interest was in Part A, while Anna could take from both parts.
- Kendra Stanley met with attorney Edgar Kelley, expressing concern about possible overreaching and undue influence by a beneficiary/trustee. Kelley recommended a will contest and suggested it would be strengthened if Anna Ham joined.
- Anna Ham subsequently met with Kelley and his associate, Philip Cahalin, and was informed of her right to waive the will and take her statutory share of the estate. Both women then retained Kelley to represent their interests in the estate.
- In August 1988, Kelley and Cahalin filed a joint appearance in the Carroll County Probate Court. Anna Ham and later Kendra Stanley signed fee agreements providing for hourly rates for certain services and a contingent fee for additional interests gained through contesting the will, explicitly stating their interests were "coincidental but not identical."
- Anna Ham exercised her right to waive the will on September 9, 1988.
- In January 1989, the estate executors objected to the respondents’ joint representation due to the potential negative impact of Anna’s election (waiving the will) on Kendra’s share of the pourover trust, which was Kendra's only source of benefits. The executors moved to disqualify Kelley and Cahalin.
- In early February 1989, both Kendra Stanley and Anna Ham each signed memoranda acknowledging Rule 1.7(b) of the Rules of Professional Conduct and desiring Kelley and Cahalin to continue representing their interests.
- In April 1989, the Probate Court disqualified Kelley and Cahalin from representing Kendra Stanley, concluding that a disinterested lawyer would advise against the joint representation under the circumstances, despite Kendra's consent.
- After Anna Ham retained other counsel in July 1989, Kelley and Cahalin prepared invoices based on reconstructed hourly records, totaling $11,715 for Kendra, $94,756 for a 'joint endeavor' covering both women, and $3,553 for Anna (after a $7,500 retainer). Kelley later submitted a claim to Anna Ham on a contingent fee basis for $750,000, asserting his efforts increased her share from $2 million to over $7 million.
Procedural Posture:
- On September 17, 1990, the Supreme Court Committee on Professional Conduct filed a petition to publicly censure Edgar L. Kelley and Philip H. Cahalin for allegedly charging a clearly excessive fee (Rule 1.5(a)), maintaining representation that presented a conflict of interests (Rule 1.7(b)), and violating the Rules of Professional Conduct (Rule 8.4(a)).
- The petition and the respondents’ answers were referred to a Judicial Referee for a hearing.
- The Judicial Referee determined that the respondents violated each of the rules (1.5(a), 1.7(b), and 8.4(a)).
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
1. Did attorneys Edgar L. Kelley and Philip H. Cahalin violate Rule of Professional Conduct 1.7(b) by jointly representing two estate beneficiaries whose interests were substantially different, even after obtaining client consent? 2. Was a violation of Rule of Professional Conduct 1.5(a) for charging a clearly excessive fee proven when the disciplinary committee failed to present evidence establishing a generally accepted, reasonable fee for the services rendered?
Opinions:
Majority - Thayer, J.
Yes, attorneys Edgar L. Kelley and Philip H. Cahalin violated Rule of Professional Conduct 1.7(b) by jointly representing Kendra Stanley and Anna Ham, and consequently Rule 8.4(a). The representation of two women with substantially different interests in the estate presented a fundamental conflict. Although Rule 1.7(b)(2) allows clients to waive potential conflicts after consultation, there are situations where a lawyer should decline representation even with client consent. The court, citing Boyle's Case, held that if a disinterested lawyer would conclude that the client should not agree to the representation, the lawyer involved cannot properly ask for such agreement or provide representation. The Probate Court correctly found that Kendra Stanley should not have agreed to the representation given the circumstances. The court found that even if Cahalin was subordinate to Kelley, the potential conflict was so clearly fundamental that undertaking joint representation was per se unreasonable, thus negating any defense under Rule 5.2(b). No, a violation of Rule of Professional Conduct 1.5(a) for charging a clearly excessive fee was not proven by clear and convincing evidence. The court established for the first time that to prove a violation of Rule 1.5(a), the Committee on Professional Conduct must present evidence establishing a generally accepted, reasonable fee for the services in question. Without this evidence, the court could not measure the allegedly excessive fee against a reasonable one. While the respondents failed to keep accurate records and submitted a quantum meruit claim for $750,000 to Anna Ham after she terminated their services, the record lacked sufficient facts to establish what a reasonable fee would be, preventing the court from determining if the fee was clearly excessive as a matter of law. The court imposed a public censure for the violations of Rules 1.7(b) and 8.4(a).
Analysis:
This case clarifies the stringent standards for conflicts of interest in joint representation, emphasizing that client consent alone is insufficient if a disinterested lawyer would advise against it, creating a higher bar for ethical practice. It also establishes a crucial procedural and evidentiary requirement for proving excessive fee claims under Rule 1.5(a), placing the burden on the disciplinary committee to present evidence of a reasonable fee. This ruling prevents attorneys from being sanctioned solely based on an unsubstantiated fee amount and encourages disciplinary bodies to conduct thorough economic analysis. It serves as a significant precedent for both attorney ethics and disciplinary proceedings, particularly concerning the evidentiary requirements in fee disputes.
