345 Or 670 | Omnilex

Gesamter Gesetzestext

670
Argued and submitted December 10, 2008, accused suspended from practice oflaw
for a period of60 days, commencing 60 days from date of filing of decision
February 5, 2009
In re Complaint as to the Conduct of
G. JEFFERSON CAMPBELL, JR.,
Accused.
(OSB 06-14, 06-127; SC 8055577)
202 P3d 871

Cite as 345 Or 670 (2009) 	671

671-a 	In re Campbell
CJS, Attorney and Client§ 78.
En Banc
On 	review 	of the 	decision 	of a 	trial 	panel 	of the
Disciplinary Board.
G. Jefferson Campbell, Jr., inpropria persona, argued the
cause. Douglas J. Richmond, Kellington, Krack, Richmond,
Blackhurst & Glatte, LLP, Medford, filed the briefs for the
accused.
Stacy J. Hankin, Assistant Disciplinary Counsel, Tigard,
filed the brief for the Oregon State Bar.

Cite as 345 Or 670 (2009) 	671-b
PERCURIAM
The accused is suspended from the practice of law for a
period of 60 days, commencing 60 days from the date of filing
of this decision.

672 	In re
PERCURIAM
In this lawyer disciplinary matter, the Bar charged
the accused with ethical violations in two separate matters.
In the first matter, the Bar charged that the accused violated
conflict of interest rules in a bankruptcy case. The trial panel
concluded (1) that the accused did not violate DR 5-101(A)(1) 1
when, although he had represented the debtor in a Chapter
13 bankruptcy proceeding, and was therefore an administra-
tive creditor of the estate, he agreed to serve as special coun-
sel to the estate when the bankruptcy was converted to a
Chapter 7 proceeding; but (2) that the accused did violate DR
5-105(C) when, after the trustee in the Chapter 7 case
reached a settlement that was contrary to the accused's inter-
est in collecting his fees, he resigned as special counsel and
represented new clients in an appeal that challenged the set-
tlement. In the second matter, the trial panel concluded that
the accused violated DR 2-106(A) when he charged his client,
Burch, for late fees in excess of the legal rate of interest,
although no written agreement required payment of such
fees, and when he charged Burch hourly fees for a trespass
case, although a written agreement provided for a contin-
gency fee. In part because the accused had been disciplined
previously, the trial panel recommended that he be sus-
pended from the practice oflaw for 90 days.
Pursuant 	to 	ORS 	9.536(1) 	and 	Bar 	Rules 	of
Procedure (BR) 10.1 and 10.3, both the Bar and the accused
seek review of the trial panel's conclusions. 2 This court
reviews the trial panel decision de novo. ORS 9.536(2); BR
10.6. The Bar must establish misconduct by clear and con-
vincing evidence, i.e., "evidence establishing that the truth of
the facts asserted is highly probable." In re Cohen, 316 Or
657, 659, 853 P2d 286 (1993). As to the bankruptcy matter,
we conclude, as did the trial panel, that the accused did not
1 The Oregon Rules of Professional Conduct (RPC) became effective January 1,
2005. Because the conduct at issue here occurred before that date, the Disciplinary
Rules (DRs) of the Oregon Code of Professional Responsibility apply. In re
Fitzhenry, 343 Or 86, 88 n 1, 162 P3d 260 (2007). All citations are to the 2004 ver-
sion of the Disciplinary Rules unless otherwise noted.
The trial panel also concluded that the accused did not violate DR 7-101(A)(3)
(prohibiting lawyer from intentionally damaging or prejudicing client), and the Bar
does not seek review of that decision.

Cite as 345 Or 670 (2009) 	673
violate DR 5-lOl(A)(l), but did violate DR 5-105(C). As to the
Burch matter, we conclude that the accused violated DR
2-106(A) in charging Burch late fees not provided for by prior
written agreement, but that the Bar failed to prove that the
accused had charged Burch excessive fees in violation of DR
2-106(A), when he billed Burch for his services on an hourly
fee basis. We impose a suspension of 60 days.
I. 	FACTS AND PROCEDURAL HISTORY
A. 	Facts in the Bankruptcy Matter 3
The accused represented Kara, the debtor, in a
Chapter 13 bankruptcy proceeding. The most important
asset of the bankruptcy estate was a piece of real property
known as the Phoenix Club. Three secured creditors had
liens on the property. The Dorsey Trust (Dorsey) 4 held the
lien that was in first 	position, the Ziegenhagen family
(Ziegenhagens) 	was 	in 	second 	position, 	and 	First 	Call
Mortgage (First Call) held the third secured interest in the
property.
The bankruptcy court ordered that the bankruptcy
be converted from a Chapter 13 to a Chapter 7 proceeding
and appointed Tracy Trunnell, an attorney, to serve as trus-
tee for the bankruptcy estate. At that time, the debtor owed
the accused attorney fees of approximately $20,000 for work
in the Chapter 7 case, and the accused was an administrative
expense creditor of the estate. See 11 USC§ 503 (describing
administrative expense claims).
Shortly after the conversion, Dorsey, the senior lien
creditor, began to take steps to obtain judicial authority to
foreclose its lien. The accused discussed with Trunnell the
possibility that she retain him to challenge the validity of
Dorsey's lien, and Trunnell agreed to employ him to bring an
adversary proceeding against Dorsey. 5 In his application for
:i The facts in both the bankruptcy and the Burch matters are undisputed
except as otherwise noted.
4 Dorsey was the party that filed a complaint with the Bar. Dorsey was not a
client of the accused.
5 An adversary proceeding in bankruptcy is a specified form of civil action
within the context of the bankruptcy proceeding. See FRBP 7001 (defining adver-
sary proceedings). For example, a proceeding to determine the validity, priority, or
extent of a lien or other interest in property is an adversary proceeding. FRBP
7001(2).

674 	In re Campbell
appointment as special counsel, the accused disclosed his
earlier representation of the debtor in the Chapter 13 case
and stated that the interests of the debtor and the trustee in
employing him to file 	an adversary proceeding against
Dorsey were the same. The accused reasoned that, if the chal-
lenge to Dorsey's lien were successful, the benefits of that
challenge would redound to the junior secured creditors, the
Ziegenhagens and First Call, and possibly also to unsecured
creditors. Furthermore, defeat of Dorsey's security interest
would make payment of the administrative expenses of the
estate, including the fees of the accused in the Chapter 13
case, more likely.
The accused sought a preliminary injunction to pre-
vent Dorsey from foreclosing. Before the injunction hearing,
the parties engaged in settlement discussions. Trunnell, who
had begun to have concerns about both the merits and poten-
tial expense of the adversary proceeding, changed her posi-
tion and negotiated a settlement that permitted Dorsey to
proceed with foreclosure on the condition that it pay the trus-
tee $18,000 out of the sale proceeds. The accused thought,
however, that those terms wrongly granted Dorsey a wind-
fall, precluded payment of the claims of the other creditors,
and possibly also precluded payment of his fees. The accused
decided that he could not advocate for the settlement and
informed Trunnell that he needed to resign as special counsel
in the adversary proceeding.
After the court permitted the accused to withdraw
as special counsel, 6 the accused filed an objection to the
settlement on behalf of his law firm and encouraged the
Ziegenhagens and First Call to do the same. Despite those
objections, the bankruptcy court entered an order permitting
the settlement. The accused then, on his own behalf but also
as the attorney for the Ziegenhagens and First Call, filed an
appeal to the Bankruptcy Appellate Panel of the Ninth
6 Although 11 USC section 327(e) requires court approval for the trustee to
employ special counsel, the court never gave that approval. Trunnell never submit-
ted one application, dated September 20, 2004. According to Trunnell, she had sub-
mitted a second application, dated September 22, 2004, but it did not appear in the
court's records. In May 2005, after the accused withdrew, Trunnell filed a notice of
employment application with the court, attaching the prior applications. The Bar
does not argue that the accused was not authorized to act as special counsel.

Cite as 345 Or 670 (2009) 	675
Circuit and then to the Ninth Circuit itself. In re Kara, 258
Fed Appx 154 (9th Cir 2007). The appeals were unsuccessful,
and the appellate courts upheld the settlement that Trunnell
had negotiated. Trunnell incurred $18,000 in attorney fees to
contest those appeals.
B. 	Facts in the Burch Matter
The accused represented Burch in 10 or more mat-
ters over a number of years and billed Burch for those serv-
ices. On the lower margin of many of the bills that were
received in evidence, the accused included the following
statement: "Statements not paid within 30 days of billing will
be charged a late fee of 1 Yz% per month of the unpaid balance
on the statement." The late fees exceeded the legal rate of
interest, and the fee agreements that were received in evi-
dence and signed by Burch did not include a provision requir-
ing that Burch pay those fees. See ORS 82.010(1) (2003)
(legal rate of interest for certain transactions, unless parties
otherwise agreed, was nine percent per year).
On October 18, 2000, the accused and Burch entered
into a contingent fee agreement providing that the accused
would represent Burch in a case that involved assault,
battery, and trespass claims against one Thompson. On
February 27, 2001, the accused wrote a letter to Burch advis-
ing him to file two separate actions in the Thompson case-
one for the assault and battery claims, and one for trespass.
In the accused's view, the potential award on the assault and
battery claims, which had resulted in personal injuries, was
sufficient to justify a contingent fee. By contrast, the poten-
tial award on the trespass claim likely would not be suffi-
ciently sizeable to justify the accused handling the case on a
contingent fee basis. However, the accused reasoned, the
trespass claim would entitle Burch to seek an award of attor-
ney fees reasonably incurred, should he prevail. See ORS
20.080 (providing for attorney fees in certain tort actions
pleading minimal damages). That suggested to the accused
that it would be better to bill the trespass claim on an hourly
fee basis. During several telephone conversations and one
in-person meeting, the accused and Burch discussed the fee
arrangement. The accused testified that Burch had agreed to

676 	In re Campbell
the change that the accused had proposed and that, there-
after, the accused had billed Burch on an hourly fee basis for
the work that he performed on the trespass matter in accor-
dance with their modified oral agreement. Burch testified
that he did not remember agreeing to the change in billing.
However, the accused established that he had billed Burch on
an hourly fee basis for his work on the trespass claim and
that Burch had paid most, but not all, of those bills.
Burch did not prevail in the trespass case against
Thompson and was therefore not entitled to seek recovery in
that action. The accused notified Burch that he owed fees for
the Thompson trespass case and other unrelated matters and
billed Burch a total of more than $15,000. That total included
approximately $300 in late fees and slightly more than
$1,000 for the Thompson trespass matter. When Burch
refused to pay any portion of that bill, the accused trans-
ferred the debt to a collection agency. At the arbitration that
followed, Burch was required to pay approximately half of
the amount that the accused had billed him. It is unclear
whether the arbitration award included the late fees or any
sum for the trespass matter.
C. 	Procedural History
The Bar filed its initial formal complaint against the
accused on April 11, 2006, and an amended complaint on
December 8, 2006. The accused denied the majority of the
Bar's allegations, but conceded as to the Burch matter that
he had violated DR 2-106(A) (charging an illegal or excessive
fee) when he billed Burch for late fees at 18 percent per year
without having included a provision for an enhanced rate of
interest in the fee agreements that Burch signed. As noted,
the trial panel determined that the Bar had proved by clear
and convincing evidence the charged violations of DR 5-
105(C) (representing new client when interests conflict with
those of former client) in the bankruptcy matter and DR 2-
106(A) (charging an illegal or excessive fee) in the Burch mat-
ter. The trial panel also determined that the Bar had not sat-
isfied its burden of showing that the accused had violated DR
5-lOl(A)(l) (representing client when client's interests may
be affected by lawyer's own interests) or DR 7-101(A)(3)

Cite as 345 Or 670 (2009) 	677
(intentionally damaging client), both in the bankruptcy mat-
ter. The trial panel determined that a 90-day suspension was
appropriate, in part because the accused had been sanctioned
previously for other disciplinary violations.
In this court, the Bar seeks review of the trial panel
finding that the accused did not violate DR 5-lOl(A)(l) in the
bankruptcy matter, and the accused seeks review of the trial
panel finding that he did violate DR 5-105(C) in that matter.
In the Burch matter, the accused concedes that his imposi-
tion oflate fees violated DR 2-106(A), but he seeks review of
the trial panel finding that he violated that rule in charging
an hourly fee for the trespass claim.
II. 	DISCUSSION
A 	Violation of DR 5-101(A)(1) in the Bankruptcy Matter
The Bar seeks review of the trial panel's decision
that the accused did not violate DR 5-lOl(A)(l) in the bank-
ruptcy matter. Pursuant to that rule, a lawyer is prohibited
from accepting or continuing employment "if the exercise of
the lawyer's professional judgment on behalf of the lawyer's
client will be or reasonably may be affected by the lawyer's
own financial, business, property, or personal interests,"
unless 	the 	client 	consents 	after 	full 	disclosure. 	DR 	5-
10 l(A)(l). The Bar argues that the accused violated that rule
because he accepted employment as special counsel in the
Chapter 7 bankruptcy when his personal interest either
affected or may have affected his judgment. The Bar con-
tends that the accused's interests were affected because his
primary motivation in seeking to challenge the Dorsey lien
was to protect his outstanding Chapter 13 fees.
To analyze the accused's duties in the Chapter 7 pro-
ceeding, it is important to describe the duties of a trustee and
the various roles that attorneys employed by trustees may
have. When a debtor files a petition in bankruptcy, an estate
is created. See 11 USC§ 541(a) (describing creation of bank-
ruptcy estate). In a Chapter 7 liquidation proceeding, a trus-
tee manages the estate for the benefit of the creditors of the
estate. The trustee's duties include marshaling assets and
liquidating the property of the estate as expeditiously as is
compatible with the best interests of the parties in interest.

678 	In re Campbell
11 USC§ 704(1). The trustee's primary duty is to manage the
assets for the benefit of the unsecured creditors. In re Merrill
Lynch & Co., Inc. Research Reports Securities Litigation, 375
BR 719, 727 (Bankr SDNY 2007); In re Thu Viet Dihn, 80 BR
819, 822 (Bankr SD Miss 1987). Secured creditors, by con-
trast, do not need the trustee's protection nearly as much as
the unsecured creditors, because the secured creditors have
(or ought to have) adequate protection based on their security
interests. Dihn, 80 BR at 822.
The bankruptcy trustee may hire an attorney for
general advice and assistance or to perform a particular task,
and different conflict of interest rules apply in each instance.
The trustee may hire an attorney "to represent or assist the
trustee in carrying out the trustee's duties." 11 USC § 327(a).
Such an attorney must "not hold or represent an interest
adverse to the estate" and must be a "disinterested person."
Id.; 11 USC § 101(14) (defining "disinterested person" as,
inter alia, not a creditor). By contrast, with court approval
and "for a specified special purpose, other than to represent
the trustee in conducting the case," the trustee may employ a
special counsel. Although an attorney who previously has
represented the debtor is likely to have unsatisfied legal fees,
see In re Heatron, Inc., 5 BR 703, 705 (Bankr WD Mo 1980)
(so stating), special counsel may be "an attorney that has rep-
resented the debtor, if[it is] in the best interest of the estate."
11 USC § 327(e). Rather than having to satisfy the stricter
criteria applicable to a "disinterested person," special counsel
may hold an interest adverse to the estate, but must "not rep-
resent or hold any interest adverse to the debtor or to the
estate with respect to the matter on which such attorney is to
be employed." Id. (emphasis added). As the trustee, Trunnell,
indicated in her testimony, efficiency is a prime consideration
in 	employing 	the 	debtor's 	attorney 	as 	special 	counsel,
because the debtor's attorney is familiar with the case, the
parties, and the claims.
In this case, Trunnell employed the accused as spe-
cial counsel, and the Bar understandably does not contend
that the accused's interest in collecting his fees alone created
a conflict of interest sufficient to subject him to the require-
ments of DR 5-lOl(A)(l). At the time that the accused sought
and accepted that employment, he did not represent or hold

Cite as 345 Or 670 	679
an interest adverse to the debtor or to the estate with respect
to the adversary proceeding for which he was employed.
Trunnell's duty in the adversary proceeding was to manage
the estate for the benefit of the unsecured creditors, and the
accused's interest and the interest of the trustee were the
same: to increase the size of the estate for the benefit of the
creditors, including the accused.
The Bar argues that, in this case, however, the
accused's interests were different from those of other lawyers
who have represented debtors and who thereafter represent
the bankruptcy estate. Here, the Bar contends, the accused's
self-interest was primary and overrode his interest in pro-
tecting the estate and the other creditors. For that conten-
tion, the Bar relies on a letter that the accused wrote to the
United States Trustee after the conflict with Trunnell over
the settlement arose. In that letter, the accused wrote that
"protection of this Chapter 13 administrative expense claim
was one of the prime motivating reasons" for his undertaking
to represent the estate. Trunnell testified in the disciplinary
proceeding that, when she first employed the accused, she
did not know that he was primarily motivated to protect his
fees and that, in the absence of that knowledge, she had
relied on the accused's advice and may not have considered
the extra costs or chances of prevailing in the adversary pro-
ceeding. The Bar asserts that the judgment of a lawyer who is
primarily motivated to protect his fees is, or certainly may be,
affected by that interest.
The accused responds that the Bar misconstrues his
memo to the United States Trustee. Although he stated in
that memo that one of the primary motivations for his repre-
sentation of the estate was to protect his fees, he did not state
that collecting those fees was his only motivation. The
accused also argues that the Bar misconstrues Trunnell's tes-
timony. Specifically, the accused points to Trunnell's testi-
mony that, before the injunction hearing, Trunnell had
"always seen it as [the accused] putting forth legal efforts to
do what was best for the estate, and that's what we both were
trying [to] do."
We do not find the Bar's evidence that the accused's
only motivation in serving as special counsel was to protect

680 	In re Campbell
his own interests to be clear and convincing. The interests of
the 	accused 	and Trunnell 	were 	aligned 	until 	Trunnell
decided to enter into a settlement that had the potential to
foreclose payment of the accused's fees. In a bankruptcy case,
it is not unusual for interests to shift. The multiplicity of par-
ties and interests in bankruptcy proceedings make for a con-
text that "is rich in the potential for conflict, but it is also rich
in the potential for cooperation." John D. Ayer, How to Think
About Bankruptcy Ethics, 60 Arn Bankr L J 355, 386 (1986).
In bankruptcy, the multiple creditors, each with either a
secured or an unsecured interest, each of whom occupies a
particular place in the pecking order of priorities, have inher-
ently varying interests, and the trustee may not be able to
satisfy all of those interests out of the limited resources of a
liquidated estate. See 	11 USC § 507 (listing priority of
expenses and claims). When the accused undertook to repre-
sent the estate in the adversary proceeding against Dorsey,
he and Trunnell thought that that proceeding would defeat
the interests of one creditor, Dorsey, but would benefit the
others. Alliances shifted when Trunnell determined that
Dorsey, rather than the other creditors, should recover its
claim. Although that shift created a conflict for the accused, it
does not establish that that conflict existed when he initially
undertook to file the adversary proceeding. We agree with
the trial panel that the accused did not violate DR 5-
lOl(A)(l).
B. 	Violation of DR 5-105(C) in the Bankruptcy Matter
The accused seek;s review of the trial panel's decision
that he violated DR 5-105(C) in the bankruptcy matter. Pur-
suant to DR 5-105(C), after representing a former client, an
attorney cannot represent another client in the same or a sig-
nificantly related matter when the current client's interests
conflict with the former client's interests, unless all the cli-
ents consent after full disclosure under DR 5-105(D). DR 5-
105(C) specifically provides, in part: "Except as permitted by
DR 5-105(D), a lawyer who has represented a client in
a matter shall not subsequently represent another client in
the same or a significantly related matter when the interests
of the current and former clients are in actual or likely
conflict."

Cite as 345 Or 670 (2009) 	681
In this case, the Bar charged that DR 5-105(C) pre-
cluded the accused from representing the Ziegenhagens and
First Call on appeal of the Bankruptcy Court's approval of
the Dorsey settlement. The Bar contends that the interests of
those clients in opposing the settlement conflicted with the
interests of the accused's former client, Trunnell, whose
interest 	was 	in 	affirming 	the 	settlement. 	The 	accused
responds that Trunnell was not his client, that the appeal
was not the same matter as, or significantly related to, the
adversary proceeding, and that the interests of his new and
former clients did not conflict. We turn to those arguments.
1. 	Who was the former client?
The accused argues that, in the adversary proceed-
ing, he was special counsel for the bankruptcy estate, not
Trunnell. He further argues that, even though Trunnell had
decided, as trustee of the estate, to settle with Dorsey, the
interests of the estate were independent of those of the
trustee.
The Bar argues that the accused's distinction is too
fine, and we agree. When a lawyer represents a corporation,
the lawyer represents, for the purpose of conflict of interest
analysis, the entity, not the person who manages the entity.
See In re Banks, 283 Or 459, 469, 584 P2d 284 (1978) ("[t]he
corporation usually is considered an entity[,] and the attor-
ney's duty of loyalty is to the corporation and not to its offi-
cers, directors or any particular group of stockholders"). How-
ever, 	the 	entity 	may 	act 	only 	through 	its 	authorized
representatives, and, in representing the entity, the lawyer
generally must follow their directives. See RPC 1.13(a) ("law-
yer 	employed 	or 	retained 	by 	an 	organization 	repre-
sents the organization acting through its duly authorized
constituents").
A personal representative of a decedent's estate sim-
ilarly has authority to direct a lawyer who the personal rep-
resentative hires for advice and counsel in the administra-
tion of a decedent's estate. See ORS 114.305(18) ("a personal
representative, acting reasonably for the benefit of interested
persons, is authorized to [e]mploy qualified persons, includ-
ing 	attorneys, 	accountants 	and investment 	advisers, 	to

682 	In re Campbell
advise and assist the personal representative and to perform
acts of administration, whether or not discretionary, on
behalf of the personal representative"). This court has con-
cluded that, for purposes of conflict of interest analysis, when
the personal representative hires a lawyer, the lawyer must
treat the personal representative as the laywer's client. See
ORS 113.135 ("[i]f the personal representative has employed
an attorney to represent the personal representative in the
administration of the estate, the personal representative
shall file in the estate proceeding the name and post-office
address of the attorney unless that information appears in
the petition or the order appointing the personal representa-
tive" (emphasis added)); In re Phelps, 306 Or 508, 517, 760
P2d 1331 (1988) ("[t]he accused was the lawyer for the per-
sonal representative"); In re Howard, 304 Or 193, 204, 743
P2d 	719 (1987) {"the accused's client was the personal
representative").
In 	this 	case, 	the 	accused 	understood 	that 	it
was Trunnell who defined the interests of the estate. In his
Application to Employ Attorney, the accused stated, in rele-
vant 	part, 	that "[t]he 	trustee 	seeks 	to 	employ 	Special
Counsel, G. 	Jefferson Campbell, Jr. 	of the law firm 	of
G. Jefferson Campbell, Jr., P.C., to assist the trustee in the
following discrete matters having the following potential
benefits to the estate." {Emphasis added.) The accused also
verified in that document that he "[would] be the trustee's
attorney of record." (Emphasis added.) In addition, when the
accused 	objected 	to 	the 	settlement 	that 	Trunnell 	had
arranged, the accused referred to himself as "former special
counsel to the Chapter 7 Trustee." (Emphasis added.)
We conclude that, whether the accused represented
Trunnell or the estate, Trunnell's decisions represented the
interests of the estate and the accused therefore could not
represent new clients who opposed the estate's interests, as
she determined them to be, without her consent. It is undis-
puted that the accused did not obtain that consent.
2. 	Was the adversary proceeding the same matter as the
appeal of the settlement?
The accused next argues that the appeal in which he
represented the Ziegenhagens and First Call was a different

Cite as 345 Or 670 (2009) 	683
matter from the adversary proceeding against Dorsey. The
accused argues that the appeal was a "contested matter." A
"contested matter" is a matter that addresses factual and
legal issues arising out of particular statutes, procedures,
and practices in bankruptcy. By definition, a "contested
matter" does not include an adversary proceeding. See Advi-
sory Committee Note to FRBP 9014 ("Whenever there is an
actual dispute, other than an adversary proceeding, before
the bankruptcy court, the litigation to resolve that dispute is
a contested matter."). According to the accused, the appeal
and the adversary proceeding were, 	therefore, 	different
matters.
The 	accused's 	argument is 	not well-taken. 	The
appeal was from the outcome of the adversary proceeding.
Whether or not the appeal falls within the definition of a
"contested matter," the dispute in that appeal centered on
the settlement reached in the adversary proceeding, and the
adversary proceeding and the appeal were both parts of a sin-
gle bankruptcy proceeding. Thus, both the adversary pro-
ceeding and the appeal were the same matter for purposes of
DR 5-105(C).
3. 	Did the representation of the Ziegenhagens and First
Call confiict, or was it likely to confiict, with the
accused's former role as special counsel?
The accused argues finally that the interests of
the bankruptcy estate and those of his new clients, the
Ziegenhagens and First Call, did not conflict and were not
likely to conflict. A disagreement between two representa-
tives of a bankruptcy estate, the accused contends, does not
constitute a violation of DR 5-105(C).
We disagree. Trunnell's interest, and therefore the
interest of the bankruptcy estate, in enforcing the settlement
directly conflicted with the Ziegenhagens' and First Call's
interests in setting that settlement aside. Therefore, the
accused could not represent the latter without obtaining the
consent of the former, after full disclosure. DR 5-105(D). The
accused did not obtain that consent. We conclude that he vio-
lated DR 5-105(C).

684 	In re Campbell
C. 	Violation of DR 2-106(A) in the Burch Matter
The accused seeks review of the trial panel's decision
that he violated DR 2-106(A) by charging his client, Burch,
a 	clearly 	excessive 	fee 	in 	the 	trespass 	action 	against
Thompson. DR 2-106(A) provides that "[a] lawyer shall not
enter into an agreement for, charge or collect an illegal or
clearly excessive fee."
The parties agree that, if the accused had an agree-
ment with Burch to charge him fees in the trespass case on
an hourly basis, then the fees that he charged were not exces-
sive, but that, if the accused's agreement with Burch was
that he would charge his fees in that matter on a contingency
basis, then the fees were clearly excessive. See In re Sassor,
299 Or 720, 725, 705 P2d 736 (1985) (lawyer violates DR 2-
105(A) by charging more than the agreed-upon fee).
The Bar argues that the written contingency fee
agreement is clear and convincing evidence that the parties
agreed to those terms. Relying on In re Balocca, 342 Or 279,
151 P3d 154 (2007), the Bar argues that the accused bears
the burden of proving that that contract was modified. The
Bar contends that the accused failed to meet that burden and
points to the fact that Burch could not recall entering into a
new agreement, that the accused could not produce any
written documentation of the new agreement, and that no
subsequent correspondence between Burch and the accused
referred to the new agreement.
The accused takes the position that the Bar bears
the burden to prove the terms of his fee agreement with
Burch and that the fees that the accused charged varied from
those terms. The accused asserts that the evidence estab-
lishes that he had ample reason to separate the trespass
action from the assault and battery action, that he explained
the modification of the fee agreement to Burch both over the
phone and in his office, and that Burch agreed to it, although
Burch's memory is now unclear. The accused also relies on
the fact that the billing statements reflect a change in the fee
agreement, that Burch paid many of the hourly bills for the
trespass matter, and that Burch objected to the hourly billing
only after a collection action was filed.

Cite as 345 Or 670 (2009) 	685
We conclude that the Bar bears the burden of proof
and that it has failed to produce clear and convincing evi-
dence to meet it. To establish that the accused charged Burch
excessive fees, the Bar must show that it is highly likely that
Burch did not agree to pay hourly fees and that the accused
nevertheless charged his time on that basis. Although the
Bar argues that Balocca holds that the burden shifts to the
accused to prove the existence of a fee agreement, that case is
inapposite. That case involved a laywer's assertion that
money that he had received from a client did not have to be
deposited into a trust account. This court noted there "that
client funds must be deposited into a lawyer trust account
unless a written agreement provides that the funds are non-
refundable and are deemed earned upon receipt." 342 Or at
288 (emphasis in original omitted; emphasis added).7 The
case before us presents a different problem: evidence of the
terms of an hourly fee agreement when there is no require-
ment that an hourly fee agreement be in writing. Where the
law does not require that the agreement between the lawyer
and client be in writing, it is the Bar, and not the accused,
that bears the burden to prove that the lawyer charged the
client fees that were not authorized by the terms of the agree-
ment. Although the Bar's proof that the parties originally
entered into a written contingency fee agreement is signifi-
cant, 	the 	accused 	also 	provided 	evidence 	that 	he 	and
Burch had agreed orally to substitute an hourly fee agree-
ment and that Burch had made payments in accordance with
that modified agreement. We conclude that the Bar failed to
prove by clear and convincing evidence that the accused
charged Burch excessive fees for the Thompson trespass
action.
The Bar also alleged that the accused charged an
excessive fee when he billed Burch for late fees in excess of
the legal rate of interest without obtaining Burch's written
agreement to 	pay those 	charges. 8 	Because the 	accused
7 In re Knappenberger, 344 Or 559, 561-65, 186 P3d 272 (2008) (Knappenberger
II), also does not support the Bar's position. There, the lawyer charged a fee in con-
nection with a social security disability claim for which he had no authorization,
which was required by federal law. Although the evidence demonstrated that the
lawyer nevertheless billed the client for the work, this court did not find credible
his explanation that he did not expect payment for the bills for that work.
8 See ORS 82.010(1) (2003) (legal rate of interest for certain transactions was
9% per year, unless parties otherwise agreed).

concedes that violation, we conclude that the accused vio-
lated DR 2-106(A) in that regard.
D. 	Sanction
In determining an appropriate sanction, we apply the
ABA Standards for Imposing Lawyer Sanctions (ABA Stan-
dards). See In re Biggs, 318 Or 281, 295, 864 P2d 1310 (1994);
In re Spies, 316 Or 530, 541, 852 P2d 831 (1993) (so stating).
We preliminarily determine the appropriate sanction based
on (1) the duty violated; (2) the accused's mental state; and
(3) the actual or potential injury that the misconduct caused.
ABA Standard 3.0. We then examine any aggravating or mit-
igating circumstances 	to 	determine 	whether we 	should
adjust the preliminary sanction. Id. Finally, we review our
prior case law for guidance in imposing the appropriate sanc-
tion. In re Huffman, 331Or209, 223, 13 P3d 994 (2000).
1. 	Preliminary analysis
The accused violated duties that he owes to the legal
profession by failing to avoid conflicts of interest in the bank-
ruptcy matter, ABA Standard 4.3, and by charging an exces-
sive fee in the Burch matter, ABA Standard 7.0.
We find the accused's mental state to be knowing as
to the conflict and intentional as to the clearly excessive fee.
" 'Intent' is the conscious objective or purpose to accomplish a
particular result." ABA Standards at 7. " 'Knowledge' is the
conscious awareness of the nature or attendant circum-
stances of the conduct but without the conscious objective or
purpose to accomplish a particular result." Id. When the
accused appealed the settlement in the bankruptcy matter,
his "conscious purpose or objective" was to overturn the
bankruptcy settlement. He knew all of the facts that indi-
cated that a conflict existed. It is irrelevant that he did not
know that his conduct violated the disciplinary rules or
intend to engage in a violation of those rules. In re Schenck,
345 Or 350, 369, 194 P3d 804 (2008), modified on recons, 345
Or 652, 202 P3d 165 (2009). The accused's mental state was
therefore either knowing or intentional. Resolution of that
issue depends on whether the accused intended to accom-
plish a particular result.

Cite as 345 Or 670 (2009) 	687
When a lawyer knowingly takes action, the lawyer
obviously intends to accomplish some result; the action taken
is a result. So, for instance, in this case, the accused intended
to represent the Ziegenhagens and First Call on appeal and
to take a position opposite to that of the trustee. However, the
accused did not intend to harm the entity that he viewed as
his prior client, the bankruptcy estate. He intended to accom-
plish the result of benefitting the estate. In prior cases in
which the court has found that a lawyer acted intentionally it
has required a showing that the result that the accused
intended was not the act taken, but the harmful (to others)
or beneficial (to the accused) effect of that act. See In re
Paulson, 341 Or 13, 31, 136 P3d 1087 (2006) (in filing
improper objection 	in bankruptcy matter, 	lawyer 	acted
knowingly rather than intentionally because evidence did
not show that he sought to "make a 'mess' " of the proceed-
ings); In re Knappenberger, 338 Or 341, 357, 108 P3d 1161
(2005) (Knappenberger I) (although representation resulting
in conflict was knowing because accused persisted after he
knew facts giving rise to conflict, violation was not inten-
tional because lawyer did not use that conflict to his advan-
tage). In this case, the accused did not intend to harm the
estate or to use the conflict to his advantage and, we there-
fore find his conduct in the bankruptcy matter to be knowing
rather than intentional. However, in billing Burch for past-
due payments at a rate in excess of the legal rate of interest,
the accused's goal was not only to encourage timely payment
of his bills, but, if timely payment did not occur, to collect a
clearly excessive fee. See In re Knappenberger, 344 Or 559,
573, 186 P3d 272 (2008) (Knappenberger II) (lawyer acted
intentionally by charging client clearly excessive fee). In that
regard, the accused's violation of his ethical duties was
intentional.
We next consider whether the accused's violations
resulted in actual or potential injury. "'Potential injury' is
harm to the client, the public, the legal system or the profes-
sion that is reasonably foreseeable at the time of the lawyer's
misconduct and that, but for some intervening factor or
event, would probably have resulted from the lawyer's mis-
conduct." ABA Standards at 7. The accused's clients and the
legal system clearly suffered a kind of noneconomic harm by

688 	In re Campbell
the accused's misconduct. He represented new clients whose
interests were opposed to those of a former client, and he
charged another client excessive fees.
Whether the affected clients also suffered actual eco-
nomic harm as a result is more difficult to discern. In the
Burch matter, the accused charged Burch more than $300 in
late fees, but the Bar did not convincingly prove that Burch
had paid them. The collection agency sought to collect more
than $15,000 from Burch, but was awarded less than $8,000.
The arbitration award may not have included the excessive
late fees, and Burch may not have paid them. In the bank-
ruptcy matter, the Bar argues that Trunnell had to pay for a
laywer to defend the settlement from which the accused
appealed. 	However, 	the 	accused 	also 	objected 	to 	and
appealed the settlement on his own behalf, and Trunnell
would have been required to employ a lawyer even if the
accused had not also represented the junior lienholders.
There was little economic injury, if any, when the accused
also opposed the settlement on behalf of the Ziegenhagens
and First Call, because he was already representing his own
interests in the appeal.
Given that the accused violated his duties to the
legal profession, acted knowingly, and caused harm, includ-
ing potential economic harm, to his clients, the accused's con-
duct was such that a suspension may be warranted depend-
ing on the aggravating and mitigating considerations.
2. 	Aggravating and mitigating circumstances
The 	most 	significant 	aggravating 	circumstances
present in this case are the accused's prior disciplinary vio-
lations and the pattern of misconduct that they represent.
ABA Standard 9.22(a), (c). The accused was publicly repri-
manded on three prior occasions. In 1996, the reprimand was
issued for violations of the ethical rules relating to trust
accounting; in 2002, the accused was found guilty of failing to
have a written agreement for a nonrefundable retainer; and
in 2003, the accused was disciplined for charging a clearly
excessive fee, namely, a penalty of one-and-a-half times the
normal hourly rate if the client did not follow the accused's
recommendations. These violations demonstrate a pattern of
violating the ethical rules regarding the charging and pay-
ment of attorney fees.

Cite as 345 Or
Another aggravating factor 	that the accused
exhibited a selfish motive in charging late penalties and in
representing the Ziegenhagens and First Call as clients. ABA
Standard 9.22(b). The accused's motive was to generate fees,
and, although that motive is not dishonest, we conclude that
the accused acted out of self-interest. The accused also com-
mitted multiple offenses, ABA Standard 9.22(d), and had
substantial experience in practicing law, ABA Standard
9.22(i), two additional aggravating factors.
In mitigation, the accused provided full and free dis-
closure to the Bar and trial panel and maintained a coopera-
tive attitude. ABA Standard 9.32(e). On balance, the aggra-
vating circumstances outweigh the mitigating ones, and we
deem a suspension to be in order.
3. 	Prior Oregon case law
As this court has explained on several occasions, a
finding that a lawyer has engaged in a conflict of interest in
violation of DR 5-105, standing alone, typically justifies a
30-day suspension. Knappenberger I, 338 Or at 361; In re
Hockett, 303 Or 150, 164, 734 P2d 877 (1987). However,
where discipline is imposed for a sole conflict of interest vio-
lation, there have been circumstances in which this court has
imposed the lesser sanction of a reprimand, see, e.g., In re
Kinsey, 	294 Or 544, 660 P2d 660 (1983) (attorney who
engaged in conflict of interest given reprimand), or suspen-
sions lengthier than 30 days. See In re Wittemyer, 328 Or 448,
980 P2d 148 (1999) (attorney who engaged in conflict of inter-
est causing actual injury, even in absence of prior discipli-
nary history, suspended for four months). Here, the accused
not only engaged in a conflict of interest, he also charged his
client an excessive fee. The dual violations and the aggravat-
ing factors that we have described militate for more than a
30-day suspension. The accused's cooperative attitude and
our difficulty in discerning that the accused caused actual
economic injury militate against a 90-day suspension. We
conclude that a 60-day suspension is appropriate.
The accused is suspended from the practice oflaw for
a period of 60 days, commencing 60 days from the date of fil-
ing of this decision.

1 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.

OCR transcription for search; preserved printed pages are authoritative

Argued and submitted December 10, 2008, accused suspended from practice of law
for a period of 60 days, commencing 60 days from date of filing of decision
February 5, 2009

In re Complaint as to the Conduct of
G. JEFFERSON CAMPBELL, JR.,
Accused.
(OSB 06-14, 06-127; SC S055577)
202 P3d 871

671

CJS, Attorney and Client § 78.

# En Banc

On review of the decision of a trial panel of the
Disciplinary Board.

G. Jefferson Campbell, Jr., in propria persona, argued the
cause. Douglas J. Richmond, Kellington, Krack, Richmond,
Blackhurst & Glatte, LLP, Medford, filed the briefs for the
accused.

Stacy J. Hankin, Assistant Disciplinary Counsel, Tigard,
filed the brief for the Oregon State Bar.

## PER CURIAM

The accused is suspended from the practice of law for a
period of 60 days, commencing 60 days from the date of filing
of this decision.

### PER CURIAM

In this lawyer disciplinary matter, the Bar charged
the accused with ethical violations in two separate matters.
In the first matter, the Bar charged that the accused violated
conflict of interest rules in a bankruptcy case. The trial panel
concluded (1) that the accused did not violate DR 5-101(A)(1)1
when, although he had represented the debtor in a Chapter
13 bankruptcy proceeding, and was therefore an administra-
tive creditor of the estate, he agreed to serve as special coun-
sel to the estate when the bankruptcy was converted to a
Chapter 7 proceeding; but (2) that the accused did violate DR
5-105(C) when, after the trustee in the Chapter 7 case
reached a settlement that was contrary to the accused's inter-
est in collecting his fees, he resigned as special counsel and
represented new clients in an appeal that challenged the set-
tlement. In the second matter, the trial panel concluded that
the accused violated DR 2-106(A) when he charged his client,
Burch, for late fees in excess of the legal rate of interest,
although no written agreement required payment of such
fees, and when he charged Burch hourly fees for a trespass
case, although a written agreement provided for a contin-
gency fee. In part because the accused had been disciplined
previously, the trial panel recommended that he be sus-
pended from the practice of law for 90 days.

Pursuant to ORS 9.536(1) and Bar Rules of
Procedure (BR) 10.1 and 10.3, both the Bar and the accused
seek review of the trial panel's conclusions.2 This court
reviews the trial panel decision de novo. ORS 9.536(2); BR
10.6. The Bar must establish misconduct by clear and con-
vincing evidence, i.e., "evidence establishing that the truth of
the facts asserted is highly probable." In re Cohen, 316 Or
657, 659, 853 P2d 286 (1993). As to the bankruptcy matter,
we conclude, as did the trial panel, that the accused did not

1 The Oregon Rules of Professional Conduct (RPC) became effective January 1,
2005. Because the conduct at issue here occurred before that date, the Disciplinary
Rules (DRs) of the Oregon Code of Professional Responsibility apply. In re
Fitzhenry, 343 Or 86, 88 n 1, 162 P3d 260 (2007). All citations are to the 2004 ver-
sion of the Disciplinary Rules unless otherwise noted.

2 The trial panel also concluded that the accused did not violate DR 7-101(A)(3)
(prohibiting lawyer from intentionally damaging or prejudicing client), and the Bar
does not seek review of that decision.

violate DR 5-101(A)(1), but did violate DR 5-105(C). As to the
Burch matter, we conclude that the accused violated DR
2-106(A) in charging Burch late fees not provided for by prior
written agreement, but that the Bar failed to prove that the
accused had charged Burch excessive fees in violation of DR
2-106(A), when he billed Burch for his services on an hourly
fee basis. We impose a suspension of 60 days.

### I. FACTS AND PROCEDURAL HISTORY

#### A. Facts in the Bankruptcy Matter3

The accused represented Kara, the debtor, in a
Chapter 13 bankruptcy proceeding. The most important
asset of the bankruptcy estate was a piece of real property
known as the Phoenix Club. Three secured creditors had
liens on the property. The Dorsey Trust (Dorsey)4 held the
lien that was in first position, the Ziegenhagen family
(Ziegenhagens) was in second position, and First Call
Mortgage (First Call) held the third secured interest in the
property.

The bankruptcy court ordered that the bankruptcy
be converted from a Chapter 13 to a Chapter 7 proceeding
and appointed Tracy Trunnell, an attorney, to serve as trus-
tee for the bankruptcy estate. At that time, the debtor owed
the accused attorney fees of approximately $20,000 for work
in the Chapter 7 case, and the accused was an administrative
expense creditor of the estate. See 11 USC § 503 (describing
administrative expense claims).

Shortly after the conversion, Dorsey, the senior lien
creditor, began to take steps to obtain judicial authority to
foreclose its lien. The accused discussed with Trunnell the
possibility that she retain him to challenge the validity of
Dorsey's lien, and Trunnell agreed to employ him to bring an
adversary proceeding against Dorsey.5 In his application for

3 The facts in both the bankruptcy and the Burch matters are undisputed
except as otherwise noted.

4 Dorsey was the party that filed a complaint with the Bar. Dorsey was not a
client of the accused.

5 An adversary proceeding in bankruptcy is a specified form of civil action
within the context of the bankruptcy proceeding. See FRBP 7001 (defining adver-
sary proceedings). For example, a proceeding to determine the validity, priority, or
extent of a lien or other interest in property is an adversary proceeding. FRBP
7001(2).

appointment as special counsel, the accused disclosed his
earlier representation of the debtor in the Chapter 13 case
and stated that the interests of the debtor and the trustee in
employing him to file an adversary proceeding against
Dorsey were the same. The accused reasoned that, if the chal-
lenge to Dorsey's lien were successful, the benefits of that
challenge would redound to the junior secured creditors, the
Ziegenhagens and First Call, and possibly also to unsecured
creditors. Furthermore, defeat of Dorsey's security interest
would make payment of the administrative expenses of the
estate, including the fees of the accused in the Chapter 13
case, more likely.

The accused sought a preliminary injunction to pre-
vent Dorsey from foreclosing. Before the injunction hearing,
the parties engaged in settlement discussions. Trunnell, who
had begun to have concerns about both the merits and poten-
tial expense of the adversary proceeding, changed her posi-
tion and negotiated a settlement that permitted Dorsey to
proceed with foreclosure on the condition that it pay the trus-
tee $18,000 out of the sale proceeds. The accused thought,
however, that those terms wrongly granted Dorsey a wind-
fall, precluded payment of the claims of the other creditors,
and possibly also precluded payment of his fees. The accused
decided that he could not advocate for the settlement and
informed Trunnell that he needed to resign as special counsel
in the adversary proceeding.

After the court permitted the accused to withdraw
as special counsel,6 the accused filed an objection to the
settlement on behalf of his law firm and encouraged the
Ziegenhagens and First Call to do the same. Despite those
objections, the bankruptcy court entered an order permitting
the settlement. The accused then, on his own behalf but also
as the attorney for the Ziegenhagens and First Call, filed an
appeal to the Bankruptcy Appellate Panel of the Ninth

6 Although 11 USC section 327(e) requires court approval for the trustee to
employ special counsel, the court never gave that approval. Trunnell never submit-
ted one application, dated September 20, 2004. According to Trunnell, she had sub-
mitted a second application, dated September 22, 2004, but it did not appear in the
court's records. In May 2005, after the accused withdrew, Trunnell filed a notice of
employment application with the court, attaching the prior applications. The Bar
does not argue that the accused was not authorized to act as special counsel.

Circuit and then to the Ninth Circuit itself. In re Kara, 258
Fed Appx 154 (9th Cir 2007). The appeals were unsuccessful,
and the appellate courts upheld the settlement that Trunnell
had negotiated. Trunnell incurred $18,000 in attorney fees to
contest those appeals.

#### B. Facts in the Burch Matter

The accused represented Burch in 10 or more mat-
ters over a number of years and billed Burch for those serv-
ices. On the lower margin of many of the bills that were
received in evidence, the accused included the following
statement: "Statements not paid within 30 days of billing will
be charged a late fee of 11/2% per month of the unpaid balance
on the statement." The late fees exceeded the legal rate of
interest, and the fee agreements that were received in evi-
dence and signed by Burch did not include a provision requir-
ing that Burch pay those fees. See ORS 82.010(1) (2003)
(legal rate of interest for certain transactions, unless parties
otherwise agreed, was nine percent per year).

On October 18, 2000, the accused and Burch entered
into a contingent fee agreement providing that the accused
would represent Burch in a case that involved assault,
battery, and trespass claims against one Thompson. On
February 27, 2001, the accused wrote a letter to Burch advis-
ing him to file two separate actions in the Thompson case-
one for the assault and battery claims, and one for trespass.
In the accused's view, the potential award on the assault and
battery claims, which had resulted in personal injuries, was
sufficient to justify a contingent fee. By contrast, the poten-
tial award on the trespass claim likely would not be suffi-
ciently sizeable to justify the accused handling the case on a
contingent fee basis. However, the accused reasoned, the
trespass claim would entitle Burch to seek an award of attor-
ney fees reasonably incurred, should he prevail. See ORS
20.080 (providing for attorney fees in certain tort actions
pleading minimal damages). That suggested to the accused
that it would be better to bill the trespass claim on an hourly
fee basis. During several telephone conversations and one
in-person meeting, the accused and Burch discussed the fee
arrangement. The accused testified that Burch had agreed to

the change that the accused had proposed and that, there-
after, the accused had billed Burch on an hourly fee basis for
the work that he performed on the trespass matter in accor-
dance with their modified oral agreement. Burch testified
that he did not remember agreeing to the change in billing.
However, the accused established that he had billed Burch on
an hourly fee basis for his work on the trespass claim and
that Burch had paid most, but not all, of those bills.

Burch did not prevail in the trespass case against
Thompson and was therefore not entitled to seek recovery in
that action. The accused notified Burch that he owed fees for
the Thompson trespass case and other unrelated matters and
billed Burch a total of more than $15,000. That total included
approximately $300 in late fees and slightly more than
$1,000 for the Thompson trespass matter. When Burch
refused to pay any portion of that bill, the accused trans-
ferred the debt to a collection agency. At the arbitration that
followed, Burch was required to pay approximately half of
the amount that the accused had billed him. It is unclear
whether the arbitration award included the late fees or any
sum for the trespass matter.

#### C. Procedural History

The Bar filed its initial formal complaint against the
accused on April 11, 2006, and an amended complaint on
December 8, 2006. The accused denied the majority of the
Bar's allegations, but conceded as to the Burch matter that
he had violated DR 2-106(A) (charging an illegal or excessive
fee) when he billed Burch for late fees at 18 percent per year
without having included a provision for an enhanced rate of
interest in the fee agreements that Burch signed. As noted,
the trial panel determined that the Bar had proved by clear
and convincing evidence the charged violations of DR 5-
105(C) (representing new client when interests conflict with
those of former client) in the bankruptcy matter and DR 2-
106(A) (charging an illegal or excessive fee) in the Burch mat-
ter. The trial panel also determined that the Bar had not sat-
isfied its burden of showing that the accused had violated DR
5-101(A)(1) (representing client when client's interests may
be affected by lawyer's own interests) or DR 7-101(A)(3)

(intentionally damaging client), both in the bankruptcy mat-
ter. The trial panel determined that a 90-day suspension was
appropriate, in part because the accused had been sanctioned
previously for other disciplinary violations.

In this court, the Bar seeks review of the trial panel
finding that the accused did not violate DR 5-101(A)(1) in the
bankruptcy matter, and the accused seeks review of the trial
panel finding that he did violate DR 5-105(C) in that matter.
In the Burch matter, the accused concedes that his imposi-
tion of late fees violated DR 2-106(A), but he seeks review of
the trial panel finding that he violated that rule in charging
an hourly fee for the trespass claim.

### II. DISCUSSION

#### A. Violation of DR 5-101(A)(1) in the Bankruptcy Matter

The Bar seeks review of the trial panel's decision
that the accused did not violate DR 5-101(A)(1) in the bank-
ruptcy matter. Pursuant to that rule, a lawyer is prohibited
from accepting or continuing employment "if the exercise of
the lawyer's professional judgment on behalf of the lawyer's
client will be or reasonably may be affected by the lawyer's
own financial, business, property, or personal interests,"
unless the client consents after full disclosure. DR 5-
101(A)(1). The Bar argues that the accused violated that rule
because he accepted employment as special counsel in the
Chapter 7 bankruptcy when his personal interest either
affected or may have affected his judgment. The Bar con-
tends that the accused's interests were affected because his
primary motivation in seeking to challenge the Dorsey lien
was to protect his outstanding Chapter 13 fees.

To analyze the accused's duties in the Chapter 7 pro-
ceeding, it is important to describe the duties of a trustee and
the various roles that attorneys employed by trustees may
have. When a debtor files a petition in bankruptcy, an estate
is created. See 11 USC § 541(a) (describing creation of bank-
ruptcy estate). In a Chapter 7 liquidation proceeding, a trus-
tee manages the estate for the benefit of the creditors of the
estate. The trustee's duties include marshaling assets and
liquidating the property of the estate as expeditiously as is
compatible with the best interests of the parties in interest.

11 USC § 704(1). The trustee's primary duty is to manage the
assets for the benefit of the unsecured creditors. In re Merrill
Lynch & Co., Inc. Research Reports Securities Litigation, 375
BR 719, 727 (Bankr SDNY 2007); In re Thu Viet Dihn, 80 BR
819, 822 (Bankr SD Miss 1987). Secured creditors, by con-
trast, do not need the trustee's protection nearly as much as
the unsecured creditors, because the secured creditors have
(or ought to have) adequate protection based on their security
interests. Dihn, 80 BR at 822.

The bankruptcy trustee may hire an attorney for
general advice and assistance or to perform a particular task,
and different conflict of interest rules apply in each instance.
The trustee may hire an attorney "to represent or assist the
trustee in carrying out the trustee's duties." 11 USC § 327(a).
Such an attorney must "not hold or represent an interest
adverse to the estate" and must be a "disinterested person."
Id .; 11 USC § 101(14) (defining "disinterested person" as,
inter alia, not a creditor). By contrast, with court approval
and "for a specified special purpose, other than to represent
the trustee in conducting the case," the trustee may employ a
special counsel. Although an attorney who previously has
represented the debtor is likely to have unsatisfied legal fees,
see In re Heatron, Inc., 5 BR 703, 705 (Bankr WD Mo 1980)
(so stating), special counsel may be "an attorney that has rep-
resented the debtor, if [it is] in the best interest of the estate."
11 USC § 327(e). Rather than having to satisfy the stricter
criteria applicable to a "disinterested person," special counsel
may hold an interest adverse to the estate, but must "not rep-
resent or hold any interest adverse to the debtor or to the
estate with respect to the matter on which such attorney is to
be employed." Id. (emphasis added). As the trustee, Trunnell,
indicated in her testimony, efficiency is a prime consideration
in employing the debtor's attorney as special counsel,
because the debtor's attorney is familiar with the case, the
parties, and the claims.

In this case, Trunnell employed the accused as spe-
cial counsel, and the Bar understandably does not contend
that the accused's interest in collecting his fees alone created
a conflict of interest sufficient to subject him to the require-
ments of DR 5-101(A)(1). At the time that the accused sought
and accepted that employment, he did not represent or hold

an interest adverse to the debtor or to the estate with respect
to the adversary proceeding for which he was employed.
Trunnell's duty in the adversary proceeding was to manage
the estate for the benefit of the unsecured creditors, and the
accused's interest and the interest of the trustee were the
same: to increase the size of the estate for the benefit of the
creditors, including the accused.

The Bar argues that, in this case, however, the
accused's interests were different from those of other lawyers
who have represented debtors and who thereafter represent
the bankruptcy estate. Here, the Bar contends, the accused's
self-interest was primary and overrode his interest in pro-
tecting the estate and the other creditors. For that conten-
tion, the Bar relies on a letter that the accused wrote to the
United States Trustee after the conflict with Trunnell over
the settlement arose. In that letter, the accused wrote that
"protection of this Chapter 13 administrative expense claim
was one of the prime motivating reasons" for his undertaking
to represent the estate. Trunnell testified in the disciplinary
proceeding that, when she first employed the accused, she
did not know that he was primarily motivated to protect his
fees and that, in the absence of that knowledge, she had
relied on the accused's advice and may not have considered
the extra costs or chances of prevailing in the adversary pro-
ceeding. The Bar asserts that the judgment of a lawyer who is
primarily motivated to protect his fees is, or certainly may be,
affected by that interest.

The accused responds that the Bar misconstrues his
memo to the United States Trustee. Although he stated in
that memo that one of the primary motivations for his repre-
sentation of the estate was to protect his fees, he did not state
that collecting those fees was his only motivation. The
accused also argues that the Bar misconstrues Trunnell's tes-
timony. Specifically, the accused points to Trunnell's testi-
mony that, before the injunction hearing, Trunnell had
"always seen it as [the accused] putting forth legal efforts to
do what was best for the estate, and that's what we both were
trying [to] do."

We do not find the Bar's evidence that the accused's
only motivation in serving as special counsel was to protect

his own interests to be clear and convincing. The interests of
the accused and Trunnell were aligned until Trunnell
decided to enter into a settlement that had the potential to
foreclose payment of the accused's fees. In a bankruptcy case,
it is not unusual for interests to shift. The multiplicity of par-
ties and interests in bankruptcy proceedings make for a con-
text that "is rich in the potential for conflict, but it is also rich
in the potential for cooperation." John D. Ayer, How to Think
About Bankruptcy Ethics, 60 Am Bankr L J 355, 386 (1986).
In bankruptcy, the multiple creditors, each with either a
secured or an unsecured interest, each of whom occupies a
particular place in the pecking order of priorities, have inher-
ently varying interests, and the trustee may not be able to
satisfy all of those interests out of the limited resources of a
liquidated estate. See 11 USC § 507 (listing priority of
expenses and claims). When the accused undertook to repre-
sent the estate in the adversary proceeding against Dorsey,
he and Trunnell thought that that proceeding would defeat
the interests of one creditor, Dorsey, but would benefit the
others. Alliances shifted when Trunnell determined that
Dorsey, rather than the other creditors, should recover its
claim. Although that shift created a conflict for the accused, it
does not establish that that conflict existed when he initially
undertook to file the adversary proceeding. We agree with
the trial panel that the accused did not violate DR 5-
101(A)(1).

#### B. Violation of DR 5-105(C) in the Bankruptcy Matter

The accused seeks review of the trial panel's decision
that he violated DR 5-105(C) in the bankruptcy matter. Pur-
suant to DR 5-105(C), after representing a former client, an
attorney cannot represent another client in the same or a sig-
nificantly related matter when the current client's interests
conflict with the former client's interests, unless all the cli-
ents consent after full disclosure under DR 5-105(D). DR 5-
105(C) specifically provides, in part: "Except as permitted by
DR 5-105(D), a lawyer who has represented a client in
a matter shall not subsequently represent another client in
the same or a significantly related matter when the interests
of the current and former clients are in actual or likely
conflict."

In this case, the Bar charged that DR 5-105(C) pre-
cluded the accused from representing the Ziegenhagens and
First Call on appeal of the Bankruptcy Court's approval of
the Dorsey settlement. The Bar contends that the interests of
those clients in opposing the settlement conflicted with the
interests of the accused's former client, Trunnell, whose
interest was in affirming the settlement. The accused
responds that Trunnell was not his client, that the appeal
was not the same matter as, or significantly related to, the
adversary proceeding, and that the interests of his new and
former clients did not conflict. We turn to those arguments.

##### 1. Who was the former client?

The accused argues that, in the adversary proceed-
ing, he was special counsel for the bankruptcy estate, not
Trunnell. He further argues that, even though Trunnell had
decided, as trustee of the estate, to settle with Dorsey, the
interests of the estate were independent of those of the
trustee.

The Bar argues that the accused's distinction is too
fine, and we agree. When a lawyer represents a corporation,
the lawyer represents, for the purpose of conflict of interest
analysis, the entity, not the person who manages the entity.
See In re Banks, 283 Or 459, 469, 584 P2d 284 (1978) ("[t]he
corporation usually is considered an entity[,] and the attor-
ney's duty of loyalty is to the corporation and not to its offi-
cers, directors or any particular group of stockholders"). How-
ever, the entity may act only through its authorized
representatives, and, in representing the entity, the lawyer
generally must follow their directives. See RPC 1.13(a) ("law-
yer employed or retained by an organization repre-
sents the organization acting through its duly authorized
constituents").

A personal representative of a decedent's estate sim-
ilarly has authority to direct a lawyer who the personal rep-
resentative hires for advice and counsel in the administra-
tion of a decedent's estate. See ORS 114.305(18) ("a personal
representative, acting reasonably for the benefit of interested
persons, is authorized to [e]mploy qualified persons, includ-
ing attorneys, accountants and investment advisers, to

advise and assist the personal representative and to perform
acts of administration, whether or not discretionary, on
behalf of the personal representative"). This court has con-
cluded that, for purposes of conflict of interest analysis, when
the personal representative hires a lawyer, the lawyer must
treat the personal representative as the laywer's client. See
ORS 113.135 ("[i]f the personal representative has employed
an attorney to represent the personal representative in the
administration of the estate, the personal representative
shall file in the estate proceeding the name and post-office
address of the attorney unless that information appears in
the petition or the order appointing the personal representa-
tive" (emphasis added)); In re Phelps, 306 Or 508, 517, 760
P2d 1331 (1988) ("[t]he accused was the lawyer for the per-
sonal representative"); In re Howard, 304 Or 193, 204, 743
P2d 719 (1987) ("the accused's client was the personal
representative").

In this case, the accused understood that it
was Trunnell who defined the interests of the estate. In his
Application to Employ Attorney, the accused stated, in rele-
vant part, that "[t]he trustee seeks to employ Special
Counsel, G. Jefferson Campbell, Jr. of the law firm of
G. Jefferson Campbell, Jr., P.C., to assist the trustee in the
following discrete matters having the following potential
benefits to the estate." (Emphasis added.) The accused also
verified in that document that he "[would] be the trustee's
attorney of record." (Emphasis added.) In addition, when the
accused objected to the settlement that Trunnell had
arranged, the accused referred to himself as "former special
counsel to the Chapter 7 Trustee." (Emphasis added.)

We conclude that, whether the accused represented
Trunnell or the estate, Trunnell's decisions represented the
interests of the estate and the accused therefore could not
represent new clients who opposed the estate's interests, as
she determined them to be, without her consent. It is undis-
puted that the accused did not obtain that consent.

2\. Was the adversary proceeding the same matter as the
appeal of the settlement?

The accused next argues that the appeal in which he
represented the Ziegenhagens and First Call was a different

matter from the adversary proceeding against Dorsey. The
accused argues that the appeal was a "contested matter." A
"contested matter" is a matter that addresses factual and
legal issues arising out of particular statutes, procedures,
and practices in bankruptcy. By definition, a "contested
matter" does not include an adversary proceeding. See Advi-
sory Committee Note to FRBP 9014 ("Whenever there is an
actual dispute, other than an adversary proceeding, before
the bankruptcy court, the litigation to resolve that dispute is
a contested matter."). According to the accused, the appeal
and the adversary proceeding were, therefore, different
matters.

The accused's argument is not well-taken. The
appeal was from the outcome of the adversary proceeding.
Whether or not the appeal falls within the definition of a
"contested matter," the dispute in that appeal centered on
the settlement reached in the adversary proceeding, and the
adversary proceeding and the appeal were both parts of a sin-
gle bankruptcy proceeding. Thus, both the adversary pro-
ceeding and the appeal were the same matter for purposes of
DR 5-105(C).

##### 3. Did the representation of the Ziegenhagens and First Call conflict, or was it likely to conflict, with the accused's former role as special counsel?

The accused argues finally that the interests of
the bankruptcy estate and those of his new clients, the
Ziegenhagens and First Call, did not conflict and were not
likely to conflict. A disagreement between two representa-
tives of a bankruptcy estate, the accused contends, does not
constitute a violation of DR 5-105(C).

We disagree. Trunnell's interest, and therefore the
interest of the bankruptcy estate, in enforcing the settlement
directly conflicted with the Ziegenhagens' and First Call's
interests in setting that settlement aside. Therefore, the
accused could not represent the latter without obtaining the
consent of the former, after full disclosure. DR 5-105(D). The
accused did not obtain that consent. We conclude that he vio-
lated DR 5-105(C).

#### C. Violation of DR 2-106(A) in the Burch Matter

The accused seeks review of the trial panel's decision
that he violated DR 2-106(A) by charging his client, Burch,
a clearly excessive fee in the trespass action against
Thompson. DR 2-106(A) provides that "[a] lawyer shall not
enter into an agreement for, charge or collect an illegal or
clearly excessive fee."

The parties agree that, if the accused had an agree-
ment with Burch to charge him fees in the trespass case on
an hourly basis, then the fees that he charged were not exces-
sive, but that, if the accused's agreement with Burch was
that he would charge his fees in that matter on a contingency
basis, then the fees were clearly excessive. See In re Sassor,
299 Or 720, 725, 705 P2d 736 (1985) (lawyer violates DR 2-
105(A) by charging more than the agreed-upon fee).

The Bar argues that the written contingency fee
agreement is clear and convincing evidence that the parties
agreed to those terms. Relying on In re Balocca, 342 Or 279,
151 P3d 154 (2007), the Bar argues that the accused bears
the burden of proving that that contract was modified. The
Bar contends that the accused failed to meet that burden and
points to the fact that Burch could not recall entering into a
new agreement, that the accused could not produce any
written documentation of the new agreement, and that no
subsequent correspondence between Burch and the accused
referred to the new agreement.

The accused takes the position that the Bar bears
the burden to prove the terms of his fee agreement with
Burch and that the fees that the accused charged varied from
those terms. The accused asserts that the evidence estab-
lishes that he had ample reason to separate the trespass
action from the assault and battery action, that he explained
the modification of the fee agreement to Burch both over the
phone and in his office, and that Burch agreed to it, although
Burch's memory is now unclear. The accused also relies on
the fact that the billing statements reflect a change in the fee
agreement, that Burch paid many of the hourly bills for the
trespass matter, and that Burch objected to the hourly billing
only after a collection action was filed.

We conclude that the Bar bears the burden of proof
and that it has failed to produce clear and convincing evi-
dence to meet it. To establish that the accused charged Burch
excessive fees, the Bar must show that it is highly likely that
Burch did not agree to pay hourly fees and that the accused
nevertheless charged his time on that basis. Although the
Bar argues that Balocca holds that the burden shifts to the
accused to prove the existence of a fee agreement, that case is
inapposite. That case involved a laywer's assertion that
money that he had received from a client did not have to be
deposited into a trust account. This court noted there "that
client funds must be deposited into a lawyer trust account
unless a written agreement provides that the funds are non-
refundable and are deemed earned upon receipt." 342 Or at
288 (emphasis in original omitted; emphasis added).7 The
case before us presents a different problem: evidence of the
terms of an hourly fee agreement when there is no require-
ment that an hourly fee agreement be in writing. Where the
law does not require that the agreement between the lawyer
and client be in writing, it is the Bar, and not the accused,
that bears the burden to prove that the lawyer charged the
client fees that were not authorized by the terms of the agree-
ment. Although the Bar's proof that the parties originally
entered into a written contingency fee agreement is signifi-
cant, the accused also provided evidence that he and
Burch had agreed orally to substitute an hourly fee agree-
ment and that Burch had made payments in accordance with
that modified agreement. We conclude that the Bar failed to
prove by clear and convincing evidence that the accused
charged Burch excessive fees for the Thompson trespass
action.

The Bar also alleged that the accused charged an
excessive fee when he billed Burch for late fees in excess of
the legal rate of interest without obtaining Burch's written
agreement to pay those charges.8 Because the accused

7 In re Knappenberger, 344 Or 559, 561-65, 186 P3d 272 (2008) (Knappenberger
II), also does not support the Bar's position. There, the lawyer charged a fee in con-
nection with a social security disability claim for which he had no authorization,
which was required by federal law. Although the evidence demonstrated that the
lawyer nevertheless billed the client for the work, this court did not find credible
his explanation that he did not expect payment for the bills for that work.

8 See ORS 82.010(1) (2003) (legal rate of interest for certain transactions was
9% per year, unless parties otherwise agreed).

concedes that violation, we conclude that the accused vio-
lated DR 2-106(A) in that regard.

#### D. Sanction

In determining an appropriate sanction, we apply the
ABA Standards for Imposing Lawyer Sanctions (ABA Stan-
dards). See In re Biggs, 318 Or 281, 295, 864 P2d 1310 (1994);
In re Spies, 316 Or 530, 541, 852 P2d 831 (1993) (so stating).
We preliminarily determine the appropriate sanction based
on (1) the duty violated; (2) the accused's mental state; and
(3) the actual or potential injury that the misconduct caused.
ABA Standard 3.0. We then examine any aggravating or mit-
igating circumstances to determine whether we should
adjust the preliminary sanction. Id. Finally, we review our
prior case law for guidance in imposing the appropriate sanc-
tion. In re Huffman, 331 Or 209, 223, 13 P3d 994 (2000).

##### 1. Preliminary analysis

The accused violated duties that he owes to the legal
profession by failing to avoid conflicts of interest in the bank-
ruptcy matter, ABA Standard 4.3, and by charging an exces-
sive fee in the Burch matter, ABA Standard 7.0.

We find the accused's mental state to be knowing as
to the conflict and intentional as to the clearly excessive fee.
" 'Intent' is the conscious objective or purpose to accomplish a
particular result." ABA Standards at 7. " 'Knowledge' is the
conscious awareness of the nature or attendant circum-
stances of the conduct but without the conscious objective or
purpose to accomplish a particular result." Id. When the
accused appealed the settlement in the bankruptcy matter,
his "conscious purpose or objective" was to overturn the
bankruptcy settlement. He knew all of the facts that indi-
cated that a conflict existed. It is irrelevant that he did not
know that his conduct violated the disciplinary rules or
intend to engage in a violation of those rules. In re Schenck,
345 Or 350, 369, 194 P3d 804 (2008), modified on recons, 345
Or 652, 202 P3d 165 (2009). The accused's mental state was
therefore either knowing or intentional. Resolution of that
issue depends on whether the accused intended to accom-
plish a particular result.

When a lawyer knowingly takes action, the lawyer
obviously intends to accomplish some result; the action taken
is a result. So, for instance, in this case, the accused intended
to represent the Ziegenhagens and First Call on appeal and
to take a position opposite to that of the trustee. However, the
accused did not intend to harm the entity that he viewed as
his prior client, the bankruptcy estate. He intended to accom-
plish the result of benefitting the estate. In prior cases in
which the court has found that a lawyer acted intentionally it
has required a showing that the result that the accused
intended was not the act taken, but the harmful (to others)
or beneficial (to the accused) effect of that act. See In re
Paulson, 341 Or 13, 31, 136 P3d 1087 (2006) (in filing
improper objection in bankruptcy matter, lawyer acted
knowingly rather than intentionally because evidence did
not show that he sought to "make a 'mess'" of the proceed-
ings); In re Knappenberger, 338 Or 341, 357, 108 P3d 1161
(2005) (Knappenberger I) (although representation resulting
in conflict was knowing because accused persisted after he
knew facts giving rise to conflict, violation was not inten-
tional because lawyer did not use that conflict to his advan-
tage). In this case, the accused did not intend to harm the
estate or to use the conflict to his advantage and, we there-
fore find his conduct in the bankruptcy matter to be knowing
rather than intentional. However, in billing Burch for past-
due payments at a rate in excess of the legal rate of interest,
the accused's goal was not only to encourage timely payment
of his bills, but, if timely payment did not occur, to collect a
clearly excessive fee. See In re Knappenberger, 344 Or 559,
573, 186 P3d 272 (2008) (Knappenberger II) (lawyer acted
intentionally by charging client clearly excessive fee). In that
regard, the accused's violation of his ethical duties was
intentional.

We next consider whether the accused's violations
resulted in actual or potential injury. " 'Potential injury' is
harm to the client, the public, the legal system or the profes-
sion that is reasonably foreseeable at the time of the lawyer's
misconduct and that, but for some intervening factor or
event, would probably have resulted from the lawyer's mis-
conduct." ABA Standards at 7. The accused's clients and the
legal system clearly suffered a kind of noneconomic harm by

the accused's misconduct. He represented new clients whose
interests were opposed to those of a former client, and he
charged another client excessive fees.

Whether the affected clients also suffered actual eco-
nomic harm as a result is more difficult to discern. In the
Burch matter, the accused charged Burch more than $300 in
late fees, but the Bar did not convincingly prove that Burch
had paid them. The collection agency sought to collect more
than $15,000 from Burch, but was awarded less than $8,000.
The arbitration award may not have included the excessive
late fees, and Burch may not have paid them. In the bank-
ruptcy matter, the Bar argues that Trunnell had to pay for a
laywer to defend the settlement from which the accused
appealed. However, the accused also objected to and
appealed the settlement on his own behalf, and Trunnell
would have been required to employ a lawyer even if the
accused had not also represented the junior lienholders.
There was little economic injury, if any, when the accused
also opposed the settlement on behalf of the Ziegenhagens
and First Call, because he was already representing his own
interests in the appeal.

Given that the accused violated his duties to the
legal profession, acted knowingly, and caused harm, includ-
ing potential economic harm, to his clients, the accused's con-
duct was such that a suspension may be warranted depend-
ing on the aggravating and mitigating considerations.

##### 2. Aggravating and mitigating circumstances

The most significant aggravating circumstances
present in this case are the accused's prior disciplinary vio-
lations and the pattern of misconduct that they represent.
ABA Standard 9.22(a), (c). The accused was publicly repri-
manded on three prior occasions. In 1996, the reprimand was
issued for violations of the ethical rules relating to trust
accounting; in 2002, the accused was found guilty of failing to
have a written agreement for a nonrefundable retainer; and
in 2003, the accused was disciplined for charging a clearly
excessive fee, namely, a penalty of one-and-a-half times the
normal hourly rate if the client did not follow the accused's
recommendations. These violations demonstrate a pattern of
violating the ethical rules regarding the charging and pay-
ment of attorney fees.

Another aggravating factor is that the accused
exhibited a selfish motive in charging late penalties and in
representing the Ziegenhagens and First Call as clients. ABA
Standard 9.22(b). The accused's motive was to generate fees,
and, although that motive is not dishonest, we conclude that
the accused acted out of self-interest. The accused also com-
mitted multiple offenses, ABA Standard 9.22(d), and had
substantial experience in practicing law, ABA Standard
9.22(i), two additional aggravating factors.

In mitigation, the accused provided full and free dis-
closure to the Bar and trial panel and maintained a coopera-
tive attitude. ABA Standard 9.32(e). On balance, the aggra-
vating circumstances outweigh the mitigating ones, and we
deem a suspension to be in order.

##### 3. Prior Oregon case law

As this court has explained on several occasions, a
finding that a lawyer has engaged in a conflict of interest in
violation of DR 5-105, standing alone, typically justifies a
30-day suspension. Knappenberger I, 338 Or at 361; In re
Hockett, 303 Or 150, 164, 734 P2d 877 (1987). However,
where discipline is imposed for a sole conflict of interest vio-
lation, there have been circumstances in which this court has
imposed the lesser sanction of a reprimand, see, e.g., In re
Kinsey, 294 Or 544, 660 P2d 660 (1983) (attorney who
engaged in conflict of interest given reprimand), or suspen-
sions lengthier than 30 days. See In re Wittemyer, 328 Or 448,
980 P2d 148 (1999) (attorney who engaged in conflict of inter-
est causing actual injury, even in absence of prior discipli-
nary history, suspended for four months). Here, the accused
not only engaged in a conflict of interest, he also charged his
client an excessive fee. The dual violations and the aggravat-
ing factors that we have described militate for more than a
30-day suspension. The accused's cooperative attitude and
our difficulty in discerning that the accused caused actual
economic injury militate against a 90-day suspension. We
conclude that a 60-day suspension is appropriate.

The accused is suspended from the practice of law for
a period of 60 days, commencing 60 days from the date of fil-
ing of this decision.

S055577, Opinion — In re Campbell

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