Indiana Attorney Douglas L. Krasnoff His Own Worst Enemy, Receives a 6 Month Suspension

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How many times does attorney Krasnoff need to thumb his nose at the Rules before the Commission does the right thing for the protection of the public and DISBAR Krasnoff.

Indiana Attorney Douglas L. Krasnoff His Own Worst Enemy, Receives a 6 Month Suspension

A suspension of at least 180 days without automatic reinstatement has been ordered by the Indiana Supreme Court of an attorney who practiced after a suspension and engaged in substantive misconduct.

He represented the client in two matters against General Motors.

As to fees, the attorney charged $10,000 for an "appeal"

The Commission further alleged Respondent violated Professional Conduct Rule 1.5(a) by charging an unreasonable fee in several respects. The hearing officer found a violation in part, concluding that the Appeal Fee was unreasonable but the Additional Fee was not unreasonable. Both parties have sought review of these conclusions. We agree with the hearing officer’s conclusion that the Appeal Fee was unreasonable and accordingly find that Respondent violated Rule 1.5(a). The action taken by Respondent was not an “appeal” in the traditional sense but rather an objection to a magistrate’s pretrial order lodged with the district judge pursuant to Rule 72(a) of the Federal Rules of Civil Procedure, and the parties accordingly dispute whether this work was encompassed within the scope of the original fee agreement. But however this work is characterized, its ultimate purpose was to challenge a pretrial order in the Second GM Case requiring Client to provide medical records that already had been provided by Client to GM in the First GM Case. In other words, Respondent charged Client $10,000 to try to avoid giving GM materials that Respondent knew GM already had. 

And violated the "business transaction with client" rule by renegotiating the fee

Finally in Count 1, the Commission alleged, and the hearing officer found, that Respondent violated Professional Conduct Rule 1.8(a) by renegotiating his fee agreement with Client on terms more advantageous to Respondent without adhering to the safeguards required by the rule, including the need to advise the client in writing of the desirability of seeking independent counsel and to give the client a reasonable opportunity to do so. Respondent disputes the notion that the renegotiated terms disadvantaged Client, arguing that a settlement was better for Client than losing the case outright. The relevant inquiry, though, is not whether some recovery is better than no recovery, but whether the terms of a renegotiated fee agreement are more advantageous to the attorney than the terms of the original fee agreement. Moreover, the original fee agreement between Respondent and Client expressly contemplated the possibility of a settlement. Application of the terms of that agreement to the $30,000 settlement amount would have given Respondent about $10,000 and Client about $20,000 of that amount, and additionally would have credited Client with his $5,000 retainer. Instead, the renegotiated terms essentially flipped these sums, giving Client $10,000 and Respondent $20,000 of the settlement amount, and failed to credit Client with his $5,000 retainer.

Respondent also argues “time was of the essence” in settlement discussions with GM and therefore his failure to comply with the requirements of Rule 1.8(a) should be excused. Respondent cites only his own self-serving testimony in support of his contention that time was of the essence, which the hearing officer does not appear to have credited. Regardless, Rule 1.8(a) does not provide the type of exception Respondent appears to seek, and we decline to carve out such an exception here. Accordingly, we find Respondent violated Rule 1.8(a).

Sanction

Describing Respondent as “his own worst enemy,” the hearing officer cited Respondent’s prior suspensions, his pattern of combativeness toward the Commission, and his lack of insight into his misconduct as factors in aggravation. (HO’s Report at 21-24). Respondent’s representation of Client included actions taken in disregard of suspension orders issued by this Court and the District Court. Further, Respondent used his representation of Client as a vehicle to extract fees at every opportunity, and he did so to Client’s detriment. Respondent charged Client $10,000 for the First GM Case, which settled for $3,000 and left Client indebted to Respondent. In the Second GM Case, Respondent charged a $5,000 retainer which he promised to (but never did) credit against an eventual recovery; charged another $8,000 for work that was never carried out (and under the circumstances, likely could not have been carried out); charged another $10,000 to resist giving GM discovery that GM already had; negotiated a settlement agreement that effectively doubled the contingent fee previously agreed upon by Respondent and Client; and then, after collecting his own share of the settlement from GM, made only token efforts to collect Respondent’s share. When all is said and done, between the two cases Respondent collected over $50,000 for himself and nothing for Client, and Respondent claims Client still owes him money.

Source: Professional Legal Blog