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In re Krasnoff

Supreme Court of Indiana

July 20, 2017

In the Matter of: Douglas L. Krasnoff,

         Attorney Discipline Action Hearing Officer Timothy W. Oakes.

          RESPONDENT PRO SE Douglas L. Krasnoff Indianapolis, Indiana.

          ATTORNEYS FOR THE INDIANA SUPREME COURT DISCIPLINARY COMMISSION G. Michael Witte, Executive Director Angie Ordway, Staff Attorney Indianapolis, Indiana.

          PER CURIAM.

         We find that Respondent, Douglas Krasnoff, committed attorney misconduct by practicing law while suspended, charging an unreasonable fee, improperly modifying a fee agreement, and failing to respond to the Commission's demand for information. For this misconduct, we conclude that Respondent should be suspended for at least 180 days without automatic reinstatement.

         This matter is before the Court on the report of the hearing officer appointed by this Court to hear evidence on the Indiana Supreme Court Disciplinary Commission's "Verified Complaint for Disciplinary Action, " and on the post-hearing briefing by the parties. Respondent's 1997 admission to this state's bar subjects him to this Court's disciplinary jurisdiction. See Ind. Const, art. 7, § 4.

         Procedural Background and Facts

         The Commission filed a two-count "Verified Complaint for Disciplinary Action" against Respondent on August 8, 2013, and we appointed a hearing officer. Respondent's answer was untimely, prompting the Commission to seek and the hearing officer to grant judgment on the complaint. In an order issued September 2, 2014, we reversed the judgment on the complaint and referred the case back to the hearing officer for further proceedings. A hearing was held over several dates in March 2016, and the hearing officer issued his report on January 24, 2017.

         Count 1. Respondent was suspended in Indiana for CLE noncompliance, effective May 12, 2002, and thereafter the United States District Court for the Southern District of Indiana ("District Court") reciprocally suspended Respondent. Respondent was reinstated in both jurisdictions effective December 31, 2002.

         In November 2001, "Client" retained Respondent to represent him in pursuing a claim against his employer, General Motors Corporation ("First GM Case"). The fee agreement provided that Client pay Respondent $10, 000 as a retainer fee/fixed fee. The agreement also called for Client to pay Respondent 40% of any recovery as a "contingent fee bonus, " to which the retainer fee/fixed fee would be credited. Client paid Respondent $6, 000. When the case settled in March 2006 for $3, 000, Respondent kept the entire amount (for a total of $9, 000), leaving Client owing $1, 000 to Respondent.

         In April 2002, Client retained Respondent to represent him in a second claim against GM under the Family and Medical Leave Act ("Second GM Case"). The fee agreement provided that Client pay Respondent $5, 000 as a "retainer fee/fixed fee, " which Client paid in full. The agreement also called for Client to pay Respondent 33% or 40% of any recovery (depending on whether the case went to trial) as a "contingent fee bonus, " to which the retainer fee/fixed fee would be credited. Respondent filed suit in state court on behalf of Client on October 2, 2002, in violation of his state CLE suspension. The case was removed to the District Court in November 2002. On December 12, 2002, Respondent filed two motions in the District Court, in violation of his federal reciprocal suspension.

         In addition to the amounts described above, Respondent charged Client $10, 000 to take an "appeal from a Magistrate Order to the District Judge" ("Appeal Fee"). Respondent also charged Client $8, 000 "to add claims to his lawsuit" ("Additional Fee"), but Respondent only belatedly attempted to add these claims to the lawsuit, was denied leave to add them, and eventually released these claims against Client's wishes.

         After the Second GM Case settled for $30, 000 in 2007, Respondent had Client sign a "Settlement Agreement" that provided Respondent would receive $20, 000 in attorney fees and Client would receive $10, 000. The $5, 000 retainer Client had paid was not credited to him. Respondent did not advise Client in writing of the desirability of seeking the advice of independent counsel regarding the modification or give Client a reasonable opportunity to do so before Client signed the Settlement Agreement.

         Respondent received $20, 000 from GM[1] according to the Settlement Agreement, bringing the total fees he collected for the representation in the Second GM Case to at least $43, 000. Client, however, has never ...


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