A disciplinary board of the Alaska Bar Association is recommending attorney Ward Merdes lose his license for one year in connection with a dispute over legal fees.
Merdes is accused of professional misconduct by engaging in fraud and deceit after ignoring a judge’s order to repay $643,760 worth of attorney fees to a former client, who had disputed the fees and won them back in a court judgment on appeal.
The original case involved Merdes’ father, Ed, of Merdes & Merdes, and dates back to the 1970s.
Ward Merdes dispersed the $643,760, dissolved Merdes & Merdes and reportedly claimed to the ex-client that the firm was broke, according to bar association documents.
While Ward Merdes eventually repaid the ex-client, a grievance was filed with the bar association, and last week the association’s disciplinary board issued its findings. Now the matter now goes to the Alaska Supreme Court to decide if the one-year license suspension is warranted. Merdes is also asked to pay the association a fee of $3,000 under the findings signed by Ben Hofmeister, president of the bar association’s disciplinary board.
The fee dispute stemmed from a case involving Leisnoi Inc., an Alaska Native village corporation that had its land allotment under the Alaska Native Claims Settlement Act challenged. Leisnoi was represented by Merdes & Merdes and won the case. Ed Merdes died in 1991. Leisnoi filed a complaint about the fee with the bar association in 1992.
At the time, the bar association held that Merdes & Merdes was entitled to “payment equal to a percentage of the adjusted value of Leisnoi’s property, plus interest.”
Leisnoi made payments based on a schedule set by the bar association Fee Arbitration Board but the payments stopped in September 2002. Ward Merdes took the matter to court in 2009 and Leisnoi was ordered to pay $643,760 to Merdes & Merdes under protest. Eventually, Ward Merdes dispersed the money and opened a new law firm.
On Feb. 1, 2013, the Alaska Supreme Court ordered Merdes & Merdes to refund Leisnoi the $643,760 payment, with interest. Three days later, client matters from Merdes & Merdes began to be transferred to a new law office, Merdes Law Office, which had the same address, phone number, employees, insurance and equipment vendors.
In 2014, following a bench trial, a Superior Court judge found that a preponderance of evidence showed that Merdes had opened the new law office with the “intent to defraud Leisnoi and prevent the payment of the debt owed to Leisnoi,” according to bar association documents.
That decision was challenged and affirmed by the Alaska Supreme Court.
A bar association financial forensic examiner also “found clearly apparent badges of fraud in conveyances from Merdes & Merdes to both Merdes Law Office and Ward Merdes,” according to bar association documents.
Attempts to reach Merdes were unsuccessful.
Contact staff writer Amanda Bohman at 459-7545. Follow her on Twitter: @FDNMborough.