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In re Ledingham

Supreme Court of New Jersey

August 13, 2019

In the Matter of Richard Ledingham An Attorney at Law

          Argued: March 21, 2019

          District Docket No. IIIB-2017-0023E

          Stephanie S. Shreter appeared on behalf of the District IIIB Ethics Committee.

          Respondent appeared pro se.

          Ellen A. Brodsky Chief Counsel


         To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey.

         This matter was before us on a recommendation for an eighteen-month suspension, filed by the District IIIB Ethics Committee (DEC). The complaint charged respondent with violating RFC 1.5(a) (unreasonable fee) and RPC 8.4(c) (engaging in conduct involving dishonesty, fraud, deceit or misrepresentation). For the reasons stated below, we recommend disbarment.

          Respondent was admitted to the New Jersey bar in 1981 and the New York bar in 1988. On March 5, 2007, he received a three-month suspension for charging an excessive fee and threatening criminal prosecution in an effort to collect that fee. In re Ledingham, 189 N.J. 298 (2007). On March 30, 2015, respondent was temporarily suspended for failure to comply with a fee arbitration determination in the matter underlying this case. In re Ledingham, 220 N.J. 578 (2015). He remains suspended to date.

         In 2003, Dr. Robert Binder retained respondent to draft a second codicil to a Last Will and Testament and First Codicil. A different lawyer had provided most of the estate planning for Dr. Binder and grievant, Mary Kay Binder, his wife, in 1995 and 1999. Shortly after Dr. Binder died on August 1, 2011, Mrs. Binder - who was eighty-eight-years-old at the time - retained respondent to represent her as Executrix of his estate. The retainer agreement provided for a rate of $175 per hour. Respondent did not collect a retainer. Ultimately, he billed Mrs. Binder for 674 hours, for a total fee of $120, 275.25, of which she paid $88, 199.68.

         On May 21, 2012, when Mrs. Binder owed fees of $34, 826.25, respondent offered to lower his hourly rate to $130 per hour, if she paid the balance in full. On June 11, 2012, he wrote a letter to Mrs. Binder and the Co-Trustees of Dr. Binder's estate, proposing to finish the estate and to limit the billing to $10, 000 or less, through December 31, 2012, at the rate of $130 per hour, if the balance were paid. By letter dated June 27, 2012, respondent reduced the balance owed by Mrs. Binder to $15, 000, and offered to finish the estate, and file all tax returns, through December 31, 2012, at no cost to the estate. Soon thereafter, Mrs. Binder terminated the representation. On July 5, 2012, respondent forgave the balance of legal fees and promised to deliver all necessary paperwork to subsequent counsel, Martin Cramer.

         Cramer began the estate work anew, filed all the necessary tax returns, and billed Mrs. Binder $9, 412.50. Local counsel in Vermont was engaged to handle ancillary property issues in that state, for an additional $3, 500 fee.

         Respondent asserts that the fees he billed to Mrs. Binder resulted from the complexity of various interwoven provisions contained within the Last Will and Testament and the First and Second Codicils. He claims that other complications included extensive investments owned by the estate, voluminous monthly buying and selling of investments with losses, and unrealized losses.

         Further, because Dr. Binder owned property in Vermont, respondent was required to send correspondence to the seven beneficiaries of the estate, in accordance with the laws of Vermont, regarding property and other assets in that state. The beneficiaries lived in different parts of the United States. Respondent also billed Mrs. Binder for calling the court in Vermont on two occasions to ascertain that local counsel in Vermont was not necessary for issuing the required notices and financial information to all the beneficiaries. Respondent claims that his work saved the estate $23, 243 in New Jersey estate taxes.

         According to respondent, additional complexities arose through his attempts to reduce New Jersey estate taxes, the filing of which had a statutorily prescribed nine-month deadline. He also claims that, in May 2012, he discovered additional assets, the existence of which Mrs. Binder had previously denied.

         At the hearing below, Jonathan Mate, Esq., who was of counsel to Newman & Simpson, LLP, testified as an expert witness regarding the reasonableness of respondent's fee. Based on his forty-seven years of experience as a trust and estates attorney in New Jersey, Mate opined that the amount of time for the work respondent performed should not have exceeded thirty billable hours. Mate acknowledged that respondent's hourly rate, however, was well below the amount that the average attorney in New Jersey charges for estate work.

         Mate asserted that, if he had represented the Binder Estate, his fee would have been $400 per hour, the work would have taken him twenty-five to thirty hours, and his total bill would have been approximately $12, 000. Also, he would have referred the Vermont issues to local counsel, for an additional $3, 500 fee, resulting in a maximum total fee of $15, 500. In contrast, respondent completed the Vermont work himself, and billed Mrs. Binder almost $15, 000 for those services alone. According to Mate, the estate did not present unusual tax issues, and the amount of time that respondent spent on them far exceeded the number of hours that Mate, or any other estate attorney, would have billed.

         The presenter challenged many of respondent's bills to Mrs. Binder. In August 2011, respondent billed 86.75 hours to review the will and two codicils "for the purposes of taking notes in regard to general terms of tax language." This billing entry appeared fifteen times on fifteen separate days in August 2011. Ten of those days included additional entries, such as "preparation of Form SS4," which is required to obtain a tax identification number. Respondent acknowledged that he had prepared the second codicil, and therefore had previously reviewed the will and first codicil, and that the will and two codicils comprised forty-three total pages. In turn, Mate testified that he thoroughly reviewed the will and two codicils in two hours.

         In September 2011, respondent billed 83 hours to review "financial documents for purpose of preparing inheritance tax returns." This entry appears sixteen times on sixteen different days. Similarly, in October 2011, respondent billed Mrs. Binder 96.75 hours for review of "financial documents for preparation of notes regarding lists of assets."

          Respondent did not bill Mrs. Binder for any work in November 2011. In December 2011, however, he billed her 55 hours to research mutual fund and stock prices as of August 1, 2011, to calculate the valuation of Dr. Binder's portfolio at the time of his death. This billing description appears in every entry for the month of December 2011. Respondent admitted that this information could be obtained directly from a brokerage account website as part of standard online reporting, but he neither went online for that information nor contacted any of the financial institutions for information regarding date-of-death valuations. The hearing panel asked respondent whether he customarily performed valuations for estates or whether he relied on information provided by financial institutions. Respondent replied that, although he has reached out to financial institutions for information ...

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