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Anthony R. Castelda (WSBA No. 28937, admitted 1999), of Tonasket, was suspended for 60 days, effective April 7, 2008, by order of the Washington State Supreme Court following approval of a stipulation. This discipline was based on conduct involving failure to deposit an advance fee into a trust account, treating a client’s advance fee as a flat fee without her informed consent and after representation had ended, failing to promptly provide a client with an accounting of the fees she had paid to him, and failing to promptly refund an unearned portion of a client’s advance fees.
On February 1, 2006, Mr. Castelda met with a client for a consultation to discuss the client’s legal needs as a result of the recent death of her husband. The client wanted to have a will prepared for herself, change the names on two property deeds, change the names on three vehicle titles, and record her husband’s death certificate and their community property agreement which gave her title to the property. Mr. Castelda agreed to do this work; however, upon learning that she would have to meet Mr. Castelda at the Okanogan courthouse to change the title of three vehicles, the client informed Mr. Castelda that she would take care of transferring the vehicle titles herself. At the February meeting, Mr. Castelda and the client agreed that Mr. Castelda would bill at a rate of $150 per hour. Mr. Castelda ordinarily has all new clients sign his standard “Retainer and Fee Agreement” that provides for “an initial fee” that is to be billed against but which is described as a non-refundable retainer. The client declined to sign the proposed agreement. Thus, there was no written fee agreement between Mr. Castelda and his client, and the client did not agree to pay Mr. Castelda a nonrefundable retainer. The client left a check for $1,000 with Mr. Castelda’s front desk as she left the office that day. Mr. Castelda’s staff deposited the client’s $1,000 check into the law office’s operating account. Mr. Castelda believed the fee advance to be a nonrefundable retainer, and no funds of the client were ever held in Mr. Castelda’s client trust account.
On February 2, 2006, Mr. Castelda sent the client a cover letter enclosing a draft will and asking her to bring in her original community property agreement so he could record it with the local County Auditor’s Office. Mr. Castelda also sent the client’s late husband’s death certificate to the County Auditor for filing. On February 6, 2006, the client came to Mr. Castelda’s office and executed the will. On February 7, 2006, Mr. Castelda sent the client’s original community property agreement to the county auditor for filing. This concluded Mr. Castelda’s representation of the client other than providing the client with the recorded documents when they returned from the auditor. The client expected that she would receive a statement from Mr. Castelda in early March as to the portion of her $1,000 that had been used, but received no such statement. In March 2006, the client went to Mr. Castelda’s office to inquire about her account. Mr. Castelda was not in his office and his staff provided the client a statement dated March 1, 2006, from the Timeslips program that Mr. Castelda uses for billings. The statement showed $480 in hourly charges, $54 in costs expended, and a $466 credit balance. The client asked that the credit balance of $466 be refunded. Mr. Castelda’s office staff told the client she would need to talk to Mr. Castelda about a refund.
In March 2006, Mr. Castelda spoke with the client and told her that no refund was owed, as there was a written fee agreement that provided that the $1,000 was a non-refundable retainer. The client disputed that there was a written fee agreement. Mr. Castelda agreed to review his file and call her back. He reviewed his files and verified that there was no written fee agreement. Mr. Castelda sent the client a letter admitting that he did not have a signed fee agreement for a non-refundable retainer. He explained his general practice to treat retainers as earned at the time they are paid, thus non-refundable. The letter stated: “Given the type of work performed for you, and the services rendered, we feel treating this matter as a flat fee earned in the amount of $1,000 is more than reasonable.” The letter also informed the client that Mr. Castelda had discovered “recording errors” in her billing records, which resulted in additional hourly charges of $445. Although the letter claimed $445 in additional charges, the additional entries of time that he put into the Timeslips billing program after the client raised the issue about his fees added only $377 in additional charges, leaving a credit balance of $89. Mr. Castelda believed it would have been reasonable to charge the client a $1,000 flat fee for the work he performed on her behalf. The client believed she agreed to hire Mr. Castelda on an hourly basis only. Mr. Castelda attempted to resolve his differences with the client by sending her a check for $89, the amount of the refund he thought she would be entitled to if he had agreed to work for her on a straight hourly fee basis, taking his recording errors into account. The client believed that Mr. Castelda’s recording errors, which increased his hourly fees, were unjustified. In July 2006, after the client filed a Bar complaint and disciplinary counsel urged him to refund the balance, Mr. Castelda refunded the balance of $377 to the client.
Mr. Castelda’s conduct violated former RPC 1.5(a), requiring that a lawyer’s fee be reasonable; former RPC 1.5(b), requiring a lawyer who has not regularly represented a client to communicate to the client the basis or rate of the fee or factors involved in determining the charges for legal services and the lawyer’s billing practices; RPC 1.7(b), prohibiting a lawyer from representing a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests, unless the lawyer reasonably believes the representation will not be affected and the client consents in writing after consultation and a full disclosure in writing of the material facts; RPC 1.8(a), prohibiting a lawyer who is representing a client in a matter from entering into a business transaction with a client or knowingly acquiring an ownership, possessory, security, or other pecuniary interest adverse to a client unless the transaction and its terms are fair and reasonable and fully disclosed and transmitted in writing to the client, the client is given opportunity to seek the advice of independent counsel, and the client consents; former RPC 1.14(a), requiring all funds of clients paid to a lawyer or law firm be deposited in one or more identifiable interest-bearing trust accounts and no funds belonging to the lawyer or law firm be deposited therein; former RPC 1.14(b)(3), requiring a lawyer to maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his or her client regarding them; former RPC 1.14(b)(4), requiring a lawyer to promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive; and former RPC 1.15(d), requiring a lawyer to take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled, and refunding any advance payment of fee that has not been earned.
Leslie C. Allen represented the Bar Association. Dustin D. Deissner represented Mr. Castelda. |