KBA BAR COUNSEL MAY BE VIOLATING SUPREME COURT RULES BY CLAIMING ATTORNEY FEES AS COSTS

KBA BAR COUNSEL MAY BE VIOLATING SUPREME COURT RULES BY INCLUDING A CLAIM FOR THEIR ATTORNEY FEES IN THE COST BILL
REQUIRED TO BE PAID PRIOR TO ANY APPEAL BY A DEFENDANT LAWYER TO THE SUPREME COURT IN KBA DISCIPLINE ACTIONS
.   — Board of Governors to review actions of Bar Counsel in submitting exhorbitant “cost” bill.

By LawReader  Senior Editor Stan Billingsley   –   Nov. 5, 2011

In the KBA’s ethics complaint against Kenton attorney Eric Deters, the Bar Counsel’s office has filed a cost bill with the
Disciplinary Clerk demanding “costs” from Deters in the amount of $52,962.89.

Under SCR 3.370(1) the Bar Counsel is authorized to submit a “certified bill for costs and expenses“.  We note that this rule does not mention
“attorney fees”.

The defendant attorney to a KBA discipline case may not appeal to the Supreme Court until he/she has posted a 100% surety for the
entire “cost” bill claimed unilaterally by the Bar Counsel.  The SCR provides no specific procedure for the defendant attorney to seek a review of the “cost” bill claim by
the Bar Counsel’s office.

Our reading of SCR 3.370 suggests to us that this SCR refers only to :costs and expenses” and does not authorize a claim for
“attorney fees” as apparently claimed by the Bar Counsel’s office.

We would argue that a certified bill as mentioned in SCR 3.370 imposes the duty on the Bar Counsel to only bill for “costs and expenses” and no mention is
made for the award of attorney fees.

We further suggest that when the SCR calls for the cost clam to be “certified”, that a breakdown of all individual charges must be submitted.

In the Deters case (and we presume in the Helmers case and the Bamberger case and other cases), the Bar counsel merely aggregated a general claim which included
attorney fees, and they did not spell out the actual individual costs, expenses or attorney fees.

Numerous appellate decision support the theory that attorney fees may only be claimed in cases in which a statute or rule specifically authorize an award of attorney
fees.

We do not find any authorization in the Sup. Ct. Rules for the Bar Counsel to be entitled to reimbursement for their attorney fees.
This fact strongly suggests that the Bar Counsel is improperly demanding attorney fees to be paid to the Bar Counsel’s office.
The ultimate decision of whether or not the “cost” bill is to be paid by the defendant attorney is made by the Supreme Court.  So the present practice is that the Bar
Counsel can pull a number out of thin air.

This number is not a final number, as the Supreme Court on appeal has  the exclusive power to determine any costs or fees to be awarded as
restitution.  This means that many defendant attorneys have not been able to afford an appeal due to the demand of the Bar Counsel for monies which have not been authorized by the Supreme Court.

Northern Kentucky Port Authority,  Inc. v. Cornett, 700 S.W.2d 392 (Ky., 1985)

“Kentucky generally does not allow attorney fees as a part of costs in the absence of a statute…”

See: In Com., Transp. Cabinet, Dept. of Highways v. Wireman, 714 S.W.2d
159 (Ky. App., 1986)
the court held:

” In Porter v. Citizens Fidelity Bank & Trust Co., Ky.App., 554 S.W.2d 397 (1977), this Court defined costs in a
declaratory judgment action as encompassing the actual expenses of litigation, not attorney fees”.

We note that the Wireman claim involved a civil rights claim and the KRS authorizes attorney fee awards in
such claims, but there is no statute or rule which allows attorney fees in KBA discipline
prosecutions.

In an unpublished case issued by the Ky. Court of Appeals on Nov. 4, 2011, this court
set out the procedure to be following to assess “attorney fee” awards in those cases where “attorney fees” where authorized by statute.

Click to read full text:  2010-CA-001464
FREDERICK CLARKE; JACQUELINE K.
SCHROERING; AND HARRY L. GREGORY, III APPELLANTS

v.
RIVERSIDE PAVING AND CONTRACTING, INC. APPELLEE

“”It is argued that the circuit court erred in its award of attorney’s fees in the amount of $3,360. We agree”.

“To determine a reasonable fee under KRS 344.450, the circuit court must initially calculate the “lodestar” figure. Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814 (Ky. 1992). The lodestar figure is reached by multiplying counsel’s reasonable expended hours by a reasonable hourly rate. After obtaining the lodestar figure, the circuit court may then enhance or reduce same based upon a number of factors. Hensley
v. Eckerhart, 461 U.S. 424, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983); Axton v. Vance, 207 Ky. 580, 269 S.W. 534 (1925).”

“These factors include:

(a) Amount and character of services rendered.

(b) Labor, time, and trouble involved.

(c) Nature and importance of the litigation or business in which the services were rendered.

(d) Responsibility imposed.

(e) The amount of money or the value of property affected by the controversy, or involved in the employment.

(f) Skill and experience called for in the performance of the services.

(g) The professional character and standing of the attorneys.

(h) The results secured. Axton, 269  S.W. at 536-537.”  (Note in Deters case the Bar Counsel lost l5 of 19 charges!)

The distinction between the award of “costs” and “attorney fees” is recognizing in the Porter case:

Porter v. Citizens Fidelity Bank & Trust Co., 554 S.W.2d 397 (Ky. App., 1977)

We find that it was improper for the trial court to award attorney fees in this action. The cases, Goodwin’s Ex’r v. Goodwin, 301 Ky. 526,
192 S.W.2d 493 (1946) and Croley v. Adkins, 305 Ky. 765, 205 S.W.2d 332 (1947) cited by appellee, Wyatt, Grafton and Sloss do not support the position that attorney
fees should be awarded. The above cited cases are suits to settle an estate where there is no question that the results will benefit all the parties, which
cannot be said here. In this case there is a true adversary proceeding where the interest of the parties is in conflict.

We find no authority to support the position that the trial court had the inherent authority to award attorney fees. There
has long been a distinction in Kentucky between costs and attorney fees with costs encompassing the actual expenses of litigation and not attorney fees.”

See also:

 

Cabinet For Health and Family  Services v. Dornbusch, No. 2008-CA-002385-MR (Ky. App. 4/2/2010) (Ky. App.,
2010)

“The award of attorney fees of $46,650 for the practice of an appeal from a decision of an administrative
agency strikes this Court as excessive.”

Recently  defendant attorney Eric Deters won l5 out of l9 charges filed against him by the Inquiry Commission and the Bar Counsel.

Even though Deters prevailed in 79% of the claims filed against him, the Bar Counsel seeks restitution for the Bar Counsel’s lengthy investigation of $52,962.89!!

Deters understandable objected to the imposition of a cost bill which apparently includes attorney fees and excessive expenses.  He has filed a motion before
the Board of Governors of the KBA seeking a hearing on the reasonableness of the “cost” bill of the Bar Counsel.

In a surprise ruling, the Board of Governors has apparently agreed to hear Deter’s motion on Nov. 18, 2011.   The ruling by the Board to at least review the
claims of the Bar Counsel’s cost bill is a step forward in allowing defendant attorneys their due process rights.

It is hoped that the final ruling of the Board of Governors will consider that the cost bill submitted by the Bar Counsel was apparently not certified (as
required by SCR 3.370), and there was no breakdown of the claimed costs.

Further, it is hoped that this willingness of the Board of Governors to review the cost bill in the Deters case will present an opportunity for the Board to clarify the meaning of SCR 3.370 regarding the  claimed right of the Bar Counsel to be compensated for attorney fees, particularly in cases where the  KBA lost 79% of the charges they prosecuted the defendant attorney over.

The current practice of the Bar Counsel being awarded all of their claims for attorney fees, encourages the Bar Counsel to fatten their budget by imposing exorbitant cost bills on defendant
attorneys.  The KBA currently finances the Bar Counsel’s office to the tune of $1.6 million dollars a year.

If the Bar Counsel’s office needs an increase in their budget, they should submit such a request to the Board instead of making a profit by filling multiple
claims and expending time and effort at their discretion in pursuit of claims, which are often frivolous and unsupported by probable cause.

A ruling by the Board of Governor’s to the effect that attorney fee claims are not authorized by SCR 3.370 would encourage the Bar Counsel to use the type of
professional administrative discretion that is imposed on County Attorneys and Commonwealth Attorneys in selecting the cases to prosecute.

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