Court: Iowa lawyers overbilled ill Vietnam veteran
By RYAN J. FOLEY, Associated Press
Published 10:37 am, Friday, June 14, 2013
Page 1 of 1
IOWA CITY, Iowa (AP) — Lawyers who billed a mentally ill Vietnam War veteran $125 per hour for "services," such as attending his birthday parties and taking him shopping, will have their licenses suspended for 18 months, the Iowa Supreme Court ruled Friday.
Keota law partners Donald Laing and Scott Railsback falsely claimed too many hours for providing conservator services to John KIein over three decades and charged excessive rates for services that didn't require legal training, the court ruled. The attorneys received $178,000 in excess fees while managing Klein's assets — even while he complained that they didn't give him enough money to buy cigarettes and energy drinks.
"They turned everything into a profit for themselves," said Oskaloosa attorney Garold Heslinga, who exposed the excess after suing Laing and Railsback on behalf of Klein in 2008. "They charged him to go visit him on his birthday. They charged him for going to Iowa City to buy presents to give some woman. It was just ridiculous."
He said the discipline should have come "a long time ago," and now may have little impact. The pair's former law firm has changed hands, and a secretary said Friday they've retired. Their phone numbers were disconnected.
Laing was appointed Klein's conservator in 1974 after Klein inherited valuable farmland and property. Then 24, he did not have a legal guardian at the time. Klein, who had a history of paranoid schizophrenia, depression and substance abuse, later inherited additional land and money worth hundreds of thousands of dollars.
The court said that Klein's illness and volatile behavior posed significant and time-consuming challenges for Laing and Railsback, who helped relocate Klein to residential care facilities in California, Colorado and Connecticut. When Klein lived on his own, he had trouble with crime, relationships and money management.
Klein, now 63 and living independently in Iowa, admitted that the men were very helpful over the years, even if they were tight-fisted.
The court credited Laing and Railsback for assisting Klein in the absence of relatives but found the two ultimately took advantage of the relationship through indefensible charges.
Laing and Railsback applied annually for fees from his conservatorship, and a judge approved them from 1985 to 2007 without a hearing or notifying Klein. The court said the judge had trusted the attorneys to charge reasonable fees and hours, which rose steadily over the years.
Their bills included some appropriate services such as banking transactions, but many others that did not require legal training or asset management experience. The lawyers received payment for "transporting Klein to numerous medical appointments, taking him shopping for clothes and stereo equipment, assisting him in purchasing and delivering gifts for others, attending Klein's birthday parties, and accompanying him to a play and other outings for pleasure," Justice Daryl Hecht wrote.
One report claimed 80 hours for helping Klein find a rental home in Oskaloosa, moving his possessions, taking him shopping in Des Moines for household items, measuring windows for drapes and selecting building materials for house cabinets. Such services could have been provided by a guardian for $15 per hour, rather than the $125 that Laing and Railsback charged in later years, the court ruled.
Laing also claimed excessive hours for preparing annual reports and filing Klein's tax returns for 20 years, the court said. He claimed one report took 76 hours to prepare — a task that should have required less than 8 hours. The lawyers also rented out Klein's land to members of a family who had long been their clients, a conflict of interest, the court found.
Heslinga said Klein came to him in 2008 alleging he'd been ripped off. He said he took the unusual step of suing fellow attorneys for excessive fees after determining Klein had a strong case. A judge in 2009 ordered them to pay $175,000, and an appeals court increased that amount by $3,000.
Friday's ruling criticized the lawyers for refusing to admit mistakes, citing their "profound and persistent lack of awareness of and responsibility for the excessiveness of their fees."
"We are convinced the respondents sincerely attempted to make Klein's life better when no family member stepped forward to help," Hecht wrote. "They clearly went wrong, however, in repeatedly over-reaching in their applications for fees for services to a vulnerable ward who was disabled and kept uninformed of the amounts they were charging."
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