Lawyer who Disclosed Confidential Information to Collect an Excessive Fee Suspended Indefinitely
Like a priest or doctor a lawyer must, under all circumstances, maintain the confidences learned from the client. When a lawyer threatens to disclose confidential information that might cause the client to lose an insurance claim or be arrested for insurance fraud, to collect a fee, has breached the duty to keep the information sacrosanct.
In the Disciplinary Counsel v. Shimko, No. 2018-1438, Supreme Court of Ohio (July 18, 2019) Timothy Andrew Shimko, of Westlake, Ohio, Attorney Registration No. 0006736, was admitted to the practice of law in Ohio in 1976 and was before the Ohio Supreme Court because he was charged with acting unethically.
In a complaint certified to the Board of Professional Conduct on October 5, 2017, relator, disciplinary counsel, alleged that Shimko violated four professional-conduct rules by charging a clearly excessive fee, threatening to disclose confidential information to compel payment of that fee, and then disclosing that information to the potential detriment of his former client.
Finding that Shimko had threatened to disclose and actually disclosed confidential client information in an effort to collect an excessive legal fee, failed to acknowledge the wrongful nature of his misconduct, and failed to show any remorse in this — his third disciplinary case in just nine years — the board recommended that the Supreme Court suspend Shimko.
Because the board’s findings of fact and misconduct are supported by clear and convincing evidence, the Supreme Court accepted them.
Shimko appeared and represented Berris at an insurance Examination Under Oath (EUO). The next day, he sent Berris an e-mail with a $4,350 bill for the services he had provided. At the conclusion of his message, he stated, “If you require any further services in the future, it would be my privilege to represent you.”
Displeased by the amount of the bill, which was nearly double the original estimate, Berris wrote a letter to Shimko on December 11, 2015, stating that he was satisfied with Shimko’s legal services, but not his billing practices. Shimko rejected Berris’s proposed terms and threatened to place a lien on Berris’s property and to foreclose on the lien if necessary. The court presiding over the fee-dispute litigation found that Shimko spent a reasonable amount of time on Berris’s representation. The panel found, however, that Shimko violated Prof.Cond.R. 1.5(a) (prohibiting a lawyer from making an agreement for, charging, or collecting a clearly excessive fee) in three ways.
Threatening to Disclose and Disclosing Confidential Client Information
The panel also found that in his efforts to collect his fees, Shimko violated multiple professional-conduct rules by threatening to disclose and then intentionally revealing confidential information when he stated that Berris’s testimony at the EUO was inconsistent with his confidential statements to Shimko—all the while knowing that that disclosure could damage Berris’s pending insurance claim with Allstate.
The panel determined that by threatening to disclose Berris’s confidential information and then actually disclosing it in a public filing without making any effort to limit who could access that information, Shimko violated Prof.Cond.R. 1.9(c)(1) (2) and 8.4 (h).
Shimko Disclosed Berris’s Confidential Information
Berris’s confidential grievance was filed in direct response to Shimko’s July 18, 2016 letter disclosing Berris’s confidential information to Berris’s counsel in the fee-dispute litigation and his July 25, 2016 motion for summary judgment.
Shimko voluntarily disclosed confidential information obtained in the scope of representing Berris without Berris’s informed consent. The protection afforded by the rule is broader than the attorney-client privilege and “applies not only to matters communicated in confidence by the client but also to all information relating to the representation, whatever its source.”
The panel noted that Shimko expressed considerable outrage that Berris had put him in a “terrible position” by allegedly lying at his EUO and allegedly using his advice to commit insurance fraud. Shimko claimed that Berris’s EUO testimony to the effect that he did not work out of the fire-damaged premises was “wholly inconsistent with what he told me the Friday before” the EUO. Shimko claimed that he confronted Berris about his “perjury” as they left the EUO and agreed that they parted on “bad terms.” Yet just one day after Berris allegedly lied at the EUO, Shimko sent him a letter stating that it would be “[his] privilege to represent” Berris if he “require[d] any further services in the future”—a statement the panel found to be “totally inconsistent” with Shimko’s expression of “extreme displeasure” with his client.
Even if Shimko’s Belief that Disclosure of Confidential Information Was Necessary to Establish His Claim for Fees and Defend Against Berris’s Allegations Was Reasonable, Shimko Failed to Limit the Extent of His Disclosure
The Supreme Court concluded that Shimko could not reasonably believe that all of his disclosures of confidential information were necessary to establish his fee claim, to defend himself against a criminal charge or civil claim, or to respond to allegations in a proceeding concerning his representation of Berris.
Indeed, the first time that Shimko mentioned any perceived problem with Berris’s testimony, he disclosed that confidential information to Berris’s new counsel in a July 18, 2016 e-mail—without first obtaining Berris’s informed consent. Approximately one month later, Shimko publicly disclosed the substance of Berris’s confidential communications when he filed his motion for summary judgment and accompanying declaration, and again in his opposition to Berris’s motion for summary judgment, without making any effort to limit access to the information to the tribunal or other persons having a need to know it.
When imposing sanctions for attorney misconduct, the Supreme Court considers all relevant factors, including the ethical duties that the lawyer violated, the aggravating and mitigating factors and the sanctions imposed in similar cases.
Here four aggravating factors are present. The Supreme Court determined that Shimko not only charged a clearly excessive fee but also threatened to disclose his client’s confidential information to compel payment of that fee and then actually disclosed that information to the potential detriment of his former client.
Moreover, it determined that Shimko made those disclosures without his client’s consent and that he had no reasonable belief that the disclosures were necessary to establish his claims or defenses in the underlying fee-dispute litigation. Given the unreasonable and vindictive nature of Shimko’s conduct in this, his third disciplinary matter, the Supreme Court found that an indefinite suspension, with the attendant requirement that Shimko petition this court for reinstatement and establish by clear and convincing evidence that he possesses the requisite mental, educational, and moral qualifications and is a proper person to be readmitted to the practice of law in Ohio, is necessary and appropriate to protect the public and to deter Shimko from engaging in further unethical behavior.
A lawyer who threatens to disclose confidential information that could cost his client the right to recover on an insurance claim or cause him to potentially be arrested and convicted for insurance fraud and perjury, just to collect a fee, deserved to be disbarred and should be happy the Supreme Court allowed him to petition for reinstatement. His continually bad conduct got worse because the courts initial punishment was kind and minimal and did not deter him from acting badly. He did not commit insurance fraud – as he claimed his client did – but was willing to help the client as long as his excessive fees were paid. Not nice. Not ethical. Criminal. Shimko and Berris deserved each other.
© 2019 – Barry Zalma
This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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