Attorney Mike Morse faces grievance hearing over misconduct claim

Jan. 31--Editor's note: An earlier version of this story should have made it clearer that Tom Waun, president of the Michigan Association of Justice, was speaking in general terms and not commenting specifically about the grievance complaint involving Mike Morse.

Mike Morse, one of Michigan's most visible personal injury attorneys, warns viewers in a recent TV ad that after an accident, it's illegal for a stranger to solicit for legal services or medical treatment.

"You're being conned -- that's a crime," Morse says in the ad that aired for weeks across metro Detroit. "Call the police, and if you need further help, call me at 855-MIKE-WINS."

But now Morse is fighting allegations that he was involved in a hospital room solicitation of a car crash victim at Sinai-Grace Hospital in Detroit in November 2010.

The Michigan Attorney Grievance Commission, which investigates allegations of attorney misconduct, filed a four-count complaint in June claiming that Morse, as owner of the Southfield-based Mike Morse Law Firm, was personally liable for the alleged solicitation of the woman, who became a client after signing a Mike Morse Law retainer agreement handed to her by a stranger in her room.

The complaint also claims that Morse's firm -- billed as "the largest personal injury law firm in Michigan" -- took an improperly large cut of the woman's no-fault insurance benefits during the six-month period when an auto insurance company was voluntarily paying her benefits but no lawsuit had been filed. During that time, her case was in Morse's "pre-suit department."

The State Bar of Michigan says it is generally OK for lawyers to charge pre-lawsuit fees. However, the size of Morse's 33% fee before a lawsuit was actually filed was "disproportionate to the nature and extent of the legal services provided," the grievance complaint says.

Kenneth Mogill, an attorney representing Morse in the grievance case, denied all the allegations against his client.

"Michael Morse expects the complaint to be dismissed because he did nothing wrong," Mogill said in a written statement to the Free Press. "The Grievance Administrator admits that he (Morse) had no personal involvement in the 2010 events that are at issue, and his law firm fully complied with all its ethical obligations."

The case is tentatively scheduled for a March 1 hearing before a three-person panel of the Attorney Discipline Board, which ultimately could dismiss the complaint or take disciplinary actions, such as a reprimand, suspension or disbarment.

The complaint comes amid building pressure in Lansing for a legislative revamp to the state's no-fault insurance system to bring down the high costs of car insurance, especially in Detroit. Past proposals have looked at capping no-fault's potentially unlimited medical benefits or setting maximum fees that medical providers can bill for post-crash procedures or services, similar to what exists for workers' compensation.

Such proposals would invariably make no-fault cases less lucrative for personal injury lawyers, who share in large settlements when a client generates big medical bills and other insurance benefit claims.

"There are other states that have no-fault, but the biggest difference in Michigan is there is no limit to what you can recover," said James Lynch, chief actuary at the Insurance Information Institute based in New York.

The complaint says that a non-lawyer private investigator who had a business relationship with Morse appeared in the doorway of the crash victim's hospital room and carried with him an unsigned Mike Morse Law retainer agreement.

The investigator, Kenneth Jackson, owner of K. Jacks Investigative Consulting, purportedly told the woman he was there to offer information about the no-fault law at the request of one of the woman's coworkers, the complaint says. But the injured woman, Felicia Denson, never told any coworkers she wanted such info, the complaint says. Jackson nevertheless emerged from the room with her fresh signature on paperwork to become a Mike Morse Law Firm client, according to the complaint.

Mogill, Morse's attorney, declined to be interviewed or answer questions for this story. However, Mogill's formal response to the complaint says Morse never requested or was aware of Jackson signing up the woman, and that his law firm's contingency fee was legally permissible.

"There's no claim, again, that Mr. Morse knew at any particular point in time, or at all, what Mr. Jackson was allegedly doing in the hospital room," Mogill said at a hearing last November in the grievance case, according to a transcript.

Grievance Administrator Alan Gershel declined to comment.

According to the grievance complaint, from 2010 through 2015, Morse's firm ultimately paid Jackson about $500,000 for various work.

The "contingency fee agreement" that Jackson had Denson sign gave Mike Morse Law a 33% cut of future insurance checks intended for her in-home nursing care and household chores money -- benefits available for those injured in auto accidents under Michigan's no-fault system. It also gave Morse's firm 20% cuts of the woman's wage-loss replacement benefits and medical appointment mileage reimbursements.

Among Michigan accident attorneys, it is commonly accepted practice to take 33% of a client's no-fault insurance benefits as a contingency fee from the settlement of a lawsuit that the attorney filed against an auto insurer that cut off benefits. Attorneys can even get 33% of the total outstanding medical bills that the client rang up at various doctors offices, physical therapy clinics and MRI centers.

The reasoning behind this practice is that without the attorney's services in battling the insurance company, none of the benefits or medical bills would have gotten paid.

But there is an ongoing debate within the bar about whether it's proper for lawyers to do what Morse's firm did: take a one-third cut of a client's no-fault benefits or medical provider bills while the insurance company is still voluntarily paying and no lawsuit work is yet needed. That is because a client could conceivably get 100% of their benefits without a lawyer.

Mike Morse Law held Denson's case in its "pre-suit department" during the six months that Farmers Insurance voluntarily paid her no-fault claims and benefits. During that time, the law firm took its 33% cut of the checks the insurance company sent that were payable to Denson's two nursing care providers, the grievance complaint says.

Morse's firm ultimately did represent Denson in suing Farmers Insurance after it stopped paying her no-fault benefits in April 2011.

It was near the conclusion of that lawsuit in Wayne County Circuit Court that solicitation allegations first arose. Under state law, attorney fees are voided if a client was found to be improperly solicited.

Morse at the time denounced the solicitation claims as "outright lies" and, in court filings, described how the private investigator -- Kenneth Jackson -- knocked on the door and politely informed the hospital patient of her legal options under no-fault. Jackson only visited her hospital room after having been "contacted by an acquaintance" who told him that Denson wanted this information, a distinction purportedly showing how the visit wasn't an improper show-up.

During the hospital room meeting, Jackson gave the woman the option of several other law firms to go with, Morse wrote, and she happened to pick his firm.

Morse went on to question his client's motivations for purportedly concocting a story to get out of paying attorney fees.

"Ms. Denson has been deemed mentally deficient and incompetent, and she is surely biased in her recitation as she stands to avoid paying attorney fees and gain financially," Morse and a fellow attorney wrote in court filings. "If this court finds that Michael J. Morse P.C. is not entitled to an attorney fee, then there is a windfall for Ms. Denson and her care providers."

In the end, Morse's firm voluntarily waived its potential $25,500 cut of the woman's lump-sum insurance settlement. The law firm, however, did keep an unspecified pre-lawsuit share of the attendant care benefits.

Carolyn Graham, one of Denson's former caregivers, told the Free Press on Friday that having to share this attendant-care money is what compelled her to make a complaint about Morse. Her payment rate was at first $10 an hour and later $13 an hour, court documents show.

"I had no contractual obligations for him to take a third of my money -- that's why I filed it," Graham said.

Graham recalled how she was aghast to find that Denson had signed away a portion of her no-fault insurance benefits while still in the hospital and heavily medicated for her injuries. "How could somebody on pain medications -- a litany of pain medications -- how could they possibly sign something granting someone authority to represent them?" Graham said.

In a phone interview Friday, Jackson insisted that he visited Denson only after hearing from a mutual acquaintance that she was interested in legal information. He said he never sneaks into hospitals when doing his job, "I always sign in."

"When I went to this lady's room, it was at the request of an associate of hers that knew me," Jackson said. "Because I work for a few attorneys, they called me and asked me if I could go and see her.

"I didn't go and see her with the intent to write her up," he added. "I went to see her to give her information on different attorneys. And she decided that she did want to go with Mike Morse."

Jackson also said he passed a November 2012 polygraph test that found him truthful about the circumstances of his visit to the hospital room.

Amari Hatcher, who represents Denson's legal guardian, said Denson, now 55, suffered severe head injuries in the 2010 incident when she was struck by a car in Detroit. She has improved since then, but will likely never make a full recovery, Hatcher said.

Denson does not have any stake in the grievance complaint brought against Morse, she said.

"My client is interested in someday living independently, not bringing down a firm," Hatcher said.

Contact JC Reindl: 313-222-6631 or [email protected]. Follow him on Twitter @JCReindl.

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