In his third time through the disciplinary system in 9 years, attorney Timothy Shimko of Westlake was indefinitely suspended from the practice of law on July 18, 2019, for charging a clearly excessive fee and for revealing confidential attorney-client information.
Richard Berris hired Shimko to represent him on a limited basis regarding a commercial claim he filed with Nationwide Insurance after a fire destroyed Berris’s house. Berris did not reside in the house but told Shimko that he conducted business out of the basement. Shimko advised that under those facts Nationwide would not pay on the claim. Berris also filed a claim with Allstate, his homeowner’s insurance company.
Nationwide requested that Berris submit to an examination under oath (“EUO”). Berris testified at the EUO that he did not conduct business out of the house.
Shimko quoted Berris an hourly rate of $385 for the limited representation and estimated that it would require approximately 6 hours and that he would expect the fee to be about $2,300.00. After the EUO, Shimko sent Berris a bill for $4,350. Berris indicating he was satisfied with the representation but objected to the amount of the bill. He offered to pay Shimko $3,300 in $500 monthly installments with no interest. Shimko charged 1-1/2% interest on amounts not paid within 30 days. Shimko rejected Berris’s offer.
Shimko filed suit to collect the $1,050 balance of his fees plus interest on the unpaid portion. Shimko told Berris’s counsel that he would be filing a Motion for Summary Judgment, which would reveal the client’s misstatement at the EUO. If the client wanted to avoid this, he should settle the matter prior to that filing. The court found that, although the amount of time Shimko spent on the representation was reasonable, his $154 charge for an initial telephone consult and his $539 charge for an email regarding the fee agreement were unreasonable. The court did not award interest on the fee bill.
The Supreme Court found that Shimko’s $154 and $539 charges were clearly excessive in violation of Prof.Cond.R. 1.5. The former because Shimko told Berris that he would not charge for the consultation and the latter because it was merely a fee agreement with no legal analysis. Also violating that rule was Shimko’s interest charge since there was nothing in the fee agreement that alerted Berris that Shimko would charge interest on unpaid balances.
The Court also found that Shimko’s threat to reveal confidential information and then actually disclosing it in the Motion for Summary judgment in the civil case violated Prof.Cond.R. 1.9(c)(1) (using confidential information to the disadvantage of a former client); Prof.cond.R. 1.9(c)(2) (prohibiting use of information related to the former representation of a client except as required or permitted by law); and Prof.Cond.R. 8.4(h) (conduct adversely reflecting on the attorney’s fitness to practice law). The Court rejected Shimko’s argument that revealing the information came within the Prof.Cond.R. 1.6(b)(5) exception to establish a claim in a controversy between lawyer and client.
This case raises a whole host of interesting questions. Shimko was sanctioned for violating conflict of interest rules stemming from a violation of the attorney-client privilege. However, no Prof.Cond.R. 1.6 violation was charged, although the Supreme Court did find that it occurred.
Shimko claimed that Berris lied in the EUO, a fact that both the Panel and the Board flat out rejected. Berris testified at the hearing that he and Shimko spent a considerable amount of time in preparing for the EUO to discussing “how Mr. Berris might successfully navigate his way through the [EUO], without destroying coverage and without perjuring himself.” Disciplinary Counsel v. Shimko, 2019-Ohio-2881, par. 39.
Shimko’s statement that Berris lied about a factual issue at the EUO would invoke Shimko’s duty under Prof.Cond.R. 4.1 to rectify the misstatement. Comment  makes clear that an attorney may not assist a client in conduct the lawyer knows is illegal or fraudulent. An attorney is required “to disclose a material fact, including one protected by the attorney-client privilege, when the disclosure is necessary to avoid the lawyer’s assistance in the client’s illegal or fraudulent act.” The only way that Shimko could have been justified in revealing his client’s confidential information is by following Prof.Cond.R. 4.1, which he clearly did not do.
The results here seem puzzling. The confidential information that Shimko revealed was “that Berris’s testimony at the EUO was inconsistent with his confidential statements to Shimko — all the while knowing that the disclosure could damage Berris’s pending claim with Allstate.” Id. par. 21. This finding accepts Shimko’s statement as true that Berris’s testimony at the EUO was, indeed, inconsistent with his confidential statements to Shimko. Yet, the Panel and the Board rejected Shimko’s position that Berris lied under oath at the EUO. Id. par. 40. If Berris’s testimony at the EUO was truthful, how could Shimko’s statements that Berris told him inconsistent confidential information, likewise, be true? Shimko’s statement would be a misrepresentation in violation of Prof.Cond.R. 8.4(c). No such violation was pled or found. Either Berris lied at the EUO and his testimony falls outside of the attorney-client privilege per Prof.Cond.R. 1.6(d), or Shimko lied in saying Berris’s testimony was inconsistent with privileged communication. If Berris lied, there is no conflict of interest for Shimko revealing information that is not privileged. If Shimko lied, there is no conflict of interest because the information he revealed is a lie and not a privileged communication.
The cautionary tale behind this case is that a client may well use an attorney’s services to perpetrate a fraud, as appears to have been done here. Where the purpose of revealing the confidential information is to prevent the client from using the attorney’s legal services to do so, revealing the information is permitted. Id. par. 40. Where, however, the sole purpose for revealing the confidential information is to compel the client to pay the attorney’s fee bill, revealing attorney-client information is not permitted without taking steps to limit access to the confidential information only to persons needing to know it. Id. pars. 40, 43.