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Lawyer Entitled to Hearing Before Being Ordered to Disgorge Fees

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When a court decides that a lawyer should return fees improperly collected, the usual term comes with powerful imagery. The lawyer is usually ordered to “disgorge” those fees.

Courts are very protective about the fees charged in probate, guardianship and trust administration matters. Lawyers often find themselves having to justify their fees. An order to disgorge fees may be uncommon, but not unheard of.

A guardianship, conservatorship and trust administration matter

Victor Johnson (not his real name) lives in Maine. He is an adult, but severely disabled by his mental illness. His father Kevin filed a petition for appointment as Victor’s guardian (of the person) and conservator (of the estate). Kevin was appointed by the Maine probate court in 2008.

A few years later, Kevin asked the court to approve creation of a “supplemental needs trust” for Victor’s benefit. The reason for the trust: Victor could qualify for health care and housing benefits with the trust in place. The court even agreed that the trust should be backdated to the beginning of the case.

When Kevin filed his court accounting the next year, it included payments of over $30,000 to the care facility where Victor lived. That raised the judge’s interest, since she had approved the trust in order to save having to use Victor’s money for those payments. She appointed an investigator to review the billing and status.

After the investigator’s report indicated that there were still questions about the payments to the facility, the court scheduled a hearing. During that hearing, the judge suggested that Kevin’s attorney must have misunderstood the billing system for long-term care, and might have caused Victor’s money to be spent on care that could have been provided by the state.

Victor’s attorney moved to have the judge disqualify herself over her statements in this and another, unrelated case, but the probate judge ruled that she had “acted even-handedly to date” and denied the request. At that point Kevin’s attorney moved to withdraw as counsel, writing that the judge’s personal antipathy toward her made it impossible for Kevin to get a just ruling.

Withdrawal of counsel

The general rule governing lawyers prohibits withdrawal as counsel when the change will compromise anyone’s interests. If a hearing is set, it is even harder to get withdrawal approved. Sometimes (and more than occasionally) lawyers end up staying in cases even though they think they might have conflicts or other problems that really should justify withdrawal.

In this case, though, the probate judge allowed Kevin’s lawyer to withdraw as counsel. That meant that Kevin’s accounting as conservator and trustee would be dealt with by the judge without any lawyer representing Kevin. Over the next six months, the probate judge scheduled five different hearings on the matter, and sent out ten notices of hearings to Kevin, Victor’s court-appointed attorney and the investigator.

At one of those hearings, the judge told the participants that she thought Kevin’s attorney had prepared the trust improperly, and had confused Medicare and Medicaid, the two government programs providing health care benefits to Victor. The judge also dissolved the trust she had approved two years before. In order to save Victor’s estate both additional fees and time, the judge decided to rewrite his trust herself; she prepared and approved the new trust.

In her flurry of filings, the probate judge ordered Kevin’s attorney to disgorge the $3,638.35 in legal fees she had collected from her earlier representation. To make her point even more sharply, the judge ordered that, for every day the attorney delayed, the disgorgement order would double — until it reached the $25,000 that the judge had decided would not have been paid if the trust had been drafted differently in the beginning.

The Maine Supreme Court partially reverses

Victor’s supplemental needs trust then made its way to the highest appellate court in the state — the Maine Supreme Court. Kevin argued that the probate judge was not permitted to prepare her own trust documents. His former lawyer argued that the probate judge did not have the power to order her to disgorge her fees.

The appellate judges split the difference. It decided that there was nothing in Maine law that prohibited a probate judge from preparing her own legal documents (including Victor’s new trust). But it set aside the order that Kevin’s attorney disgorge her fees.

As the Supreme Court notes, Kevin’s attorney was not involved in the proceedings by the time hearings were held on the accounting. The lawyer had not received notice of the hearings, or any indication that she might be ordered to return the fees she had collected. And ultimately she was not only ordered to disgorge her fees — she was penalized up to $25,000 if she did not acquiesce immediately.

Generally speaking, an individual has the right to know a court is considering taking action against him or her. The subject of such a proceeding has the right to review the evidence that will be used against them, and to cross examine witnesses and participate in the hearing. When the probate judge tore into Kevin’s lawyer without any notice or opportunity to be heard, she was acting beyond her judicial discretion. Guardianship of Jones, June 20, 2017.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.