STATE OF SOUTH CAROLINA AFFIDAVIT COUNTY OF COUNTY OF RICHLAND NOW COMES Michael J. Virzi, and states, under oath, the following: 1. I am offering this af?davit as an expert witness on behalf of the plaintiffs, John Doe et al., to support their Complaint against the defendants, Lawrence E. Richter, Jr., Esquire, David K. Haller, Esquire, and Richter Haller, LLC, (hereinafter ?Defendants?) for professional negligence pursuant to SC. Code Ann. ?7 2. My quali?cations to give expert testimony include the following: A. I am a lawyer licensed to practice law in South Carolina; B. I am a former Assistant Disciplinary Counsel to the South Carolina Supreme Court and current Chairman of the South Carolina Bar Ethics Advisory Committee; C. I am a frequent CLE speaker and law school guest lecturer on the topic of lawyer ethics and have been selected as one of ?ve instructors for the South Carolina Supreme Court?s Ethics School; and D. Since leaving the Of?ce of Disciplinary Counsel In 2006, my practice has focused almost exclusively on matters of lawyer ethics. 3. My opinion is based on the facts provided to me by Plaintiff? counsel and review of various documents. Included in my document review are the following: A. Complaint in the Original Jurisdiction of the Supreme Court, John Doe et al. v. Lawrence E. Richter, Jr., et al.; Af?davit of Gregg Meyers, dated June 18, 2008, and ?led June 18,2008, in John Doe C, et al. The Diocese of Charleston, et al. ,Case No. 08- CP- 10- 1274, and attachments including: i. Complaint, dated May 10, 2005, and ?led May 12, 2005, in John Doe #66 v. The Bishop of Charleston et al., Case No. Page 1 of 10 ii. Complaint, dated August 10, 2005, and ?led August 12, 2005, in John Doe v. The Bishop of Charleston et al., Case No. 3293; Complaint, dated December 1, 2005, and ?led December 2, 2005, in John Doe #53 et al. v. The BishOp of Charleston et al., Case No. 05- iv. Consent Order of Dismissal Without Prejudice, dated October 19, 2006, and ?led October 23, 2006, in John Doe #66 v. The Bishop of Charleston et al., Case No. v. Consent Order of Dismissal Without Prejudice, dated October 19, 2006, and ?led October 23, 2006, in John Doe v. The BishOp of Charleston et al., Case No. vi. Consent Order of Dismissal Without Prejudice, dated October 19, 2006, and ?led October 23, 2006, in John Doe #53 et al. v. The Bishop of Charleston eta1., Case No. and vii. Transcript of Record before The Honorable Diane S. Goodstein, dated August 9, 2007, in John Doe 53 et al. v.yThe Bishop of Charleston et al., Case Nos. 2006-CP-18-131 l, and 1636; Amended Complaint, dated October 6, 2006, and ?led October 6, 2006, in, John Doe #67 et al. v. The Bishop of Charleston, Case No. 06-CP-18- 1311; ?Motion to Certify Classes and for Preliminary Approval of Class Settlement, dated October 6, 2006, and ?led October 6, 2006, in John Doe #53 et al. v. The Bishop of Charleston et al., Case No. 2006-CP-18-1310, and 2006-CP-18- (blank line in original); Motion to Certify Classes and for Preliminary Approval of Class Settlement, dated January 15, 2007, and ?led January 17, 2007, in John . Doe #53 et al. v. The Bishop of Charleston et al., Case Nos. 1310, 2006-CP-18-1311, and Settlement and Arbitration Agreement, dated January 12, 2007, and ?led January 17, 2007 in John Doe #53 et al. v. The Bishop of Charleston et al., Case Nos, 2006-CP-18-1310, 2006-CP-18-1311, and and Page 2 of 10 G. Plaintiff?s Petition for An Award of. Attorneys Fees and Litigation Costs, dated February 14, 2007, and ?led February 14, 2007, in John Doe #53 et v. The Bishop of Charleston et al., Case Nos. 2006- and 2006-CP-18-1636, and exhibits attached thereto including: i. Af?davit of Lawrence E. Richter, Jr. in Support of Plaintiffs? Petition for Attomeys Fees and Costs, with attached timesheets and expense summaries; ii. Af?davit of David K. Haller in Support of Plaintiffs? Claim for Attorneys Fees and Costs; . Af?davit of Angela Pittard, with attached timesheets; iv. Af?davit of John P. Freeman in Support of Class Action Settlement Approval and Class Counsel?s Fee Petition, with attached resume and Comparative Table of Selected Settlements; and v. Affidavit of Lionel S. Lofton in Support of Plaintiff?s Petition for Attorneys Fees and Costs, with attached timesheets. 4. These factual and legal materials are of the type reasonably relied upon by experts in the ?eld of legal malpractice in forming their opinions. 5. Based on my experience, education, training, and knowledge of the standard of care for lawyers and on my review of the above-listed documents and my discussions with Plaintiffs? counsel, it is my opinion that, Lawrence E. Richter, Jr., Esquire, David K. Haller, Esquire, and Richter Haller, LLC, (hereinafter ?Defendants?) engaged in negligent acts and omissions in their representation of Plaintiffs including the following: A. failure to provide competent representation; B. failure to act with reasonable diligence and promptness; C. failure to inform clients of decisions and circumstances with respect to which the clients? informed consent is required; Page 3 of 10 6. J. K. L. failure to reasonably consult with clients about the means by which the clients? objectives are to be accomplished; failure to keep clients reasonably informed about the status of matters; failure to explain matters to the extent reasonably necessary to permit clients to make informed decisions regarding the representation; attempting to charge and charging an unreasonable fee; representing clients when the representation involved a concurrent con?ict of interest, without obtaining the informed consent of each client, con?rmed in writing; failure to exercise independent professional judgment and render candid advice in representing clients; failure to expedite litigation consistent with the interests of clients; lack of candor toward a tribunal; and conduct prejudicial to the administration of justice. In particular, it appears from the above-referenced documents that Defendants failed to inform clients of Richter?s extensive personal relationship with an adverse party, the Diocese of Charleston, and Richter?s continuing work on behalf of the Diocese during litigation in which Defendants? clients were adverse to the Diocese. It is apparent from Richte?r?s own af?davit (identi?ed in paragraph 3.F.ii above) that he has a lifelong, extensive personal relationship with the Diocese and many of its current and formerconstituents, in addition to being a constituent himself and continuing to perform of?cial functions during the pendency of the client matter. This presents a con?ict of interests, requiring Defendants to disclose the nature Page 4 of 10 and extent of the relationship to the clients, along with the risks of the representation and the reasonably available alternatives. Defendants apparently did not do so. 7. It further appears that Defendants engaged in acts and omissions that would be potentially disadvantageous to their own clients and advantageous to the Diocese, including: A. failing to seek class certi?cation in the Charleston County class action; B. executing Consent Orders of Dismissal in the Charleston County cases; C. reducing the extent of notice to class members contained in Defendants? . A Motion to Certify Classes; D. agreeing to reduce their clients? recovery but not Defendants? fees, if the claims exceeded the pool; E. failing to object to the Diocese having sole, unsupervised, unfettered discretion to discover potential class members from its own ?les; F. failing to seek a post-claims fairness hearing or to provide any procedure in the settlement agreement for post-claim review; G. expressly sacri?cing clients? opportunity for. post-claim review by providing in the settlement agreement that the arbitrator shall have sole discretion in awards, not subject to objection, review, appeal or suit and that claimants, by participating in the claims process, expressly waive the right to appeal; H. participating in negotiations of the claims of several opted?out class members, resulting in an agreement that payment of such claims may come from the settlement pool available to class members; Page 5 oflO l. agreeing to contribute $100,000 from either Defendants? fee or the settlement pool, toward a settlement between the Diocese and several opted?out class members. It appears that Defendants engaged in these acts and omissions without first consulting or otherwise communicating with clients. Thus Defendants failed to adequately communicate with clients, failed to remain diligent and loyal to clients, and failed to obtain informed consent to a con?ict of interests. 8. It further appears that Defendants engaged in acts and omissions that would be potentially disadvantageous to their own clients and advantageous to Defendants, including simultaneously seeking a common fund recovery for class members and a ?xed fee amount for Defendants. It appears that Defendants engaged in this conduct without first consulting with clients. Thus Defendants failed to adequately communicate with clients, failed to remain diligent and loyal to clients, and failed to obtain informed consent to a con?ict of interests. 9. It further appears that Defendants engaged in acts and omissions that would be potentially advantageous to the class representative clients and disadvantageous to the non-class- representative clients, including agreeing to subject some clients to a damages matrix and claim scrutiny to which class representatives were not subjected, settling the claims of the class representatives prior to class certification and court approval of the class settlement, and expressly agreeing to settlement terms for the class representatives regardless of court approval of the class settlement. Thus Defendants failed to adequately communicate with clients, failed to remain diligent and loyal to clients, and failed to obtain informed consent to a con?ict of interests. Page 6 of 10 10. It further appears that Defendants sought an improper and unreasonable fee from the settlement pool and a payment structure that favored Defendants? own interest above those of their clients. Defendants? fee petition, af?davits and billing records overstate work performed and misrepresent the nature of the case. Defendants describe the case as hotly contested and aggressive, and the defense formidable and substantial, depicting a time-intensive case requiring the highest .skills? of the most competent counsel; yet the documents indicate contrary circumstances: little discovery (some paper requests from class counsel but no evidence of responses received nor of requests received from Opposing counsel), no depositions, few motions, and a?er mediation no client disputes, few hearings, and no animosity or contention . except on the issue of Defendants? collection of their fee. Defendants? billing records show 3385.5 total hours spent by lawyers and staff at Richter Haller; however many of the time entries are clearly false in that they are nonsensical and/or impossible, including: A. each and every entry on all 68 pages of billing records is a round, even- hour increment or an entry of hours; B. countless round?number or .5-hour time entries at ?12:00:00 including multiple tasks by the same person at the same time?while other entries indicate exact times; C. a 10-hour time entry for ?Oversight and Review? by on the 30th day of each month for 3 and? a half years, including the same 10-hour time entry for "Oversight and Review? by just?nine days after the ?rst activity in the case in July 2003; D. a 2-hour time entry for ?Bookkeeping? on the 30lh day of each month; Page 7 of10 F-a?ag H. f?Tx a 3-hour time entry for ?Photocopying Monthy? at irregular intervals but always exactly 3 hours, including one such entry when no other work had been performed in the previous month; three 5-hour time entries (one each for and ?Clerk?) for ?Legal Research? on the 30?h day of each month, including January 30, 2007, within 2 days of the end of the case (and after which no further time is recorded except 7 hours of faxing by ?Staff? and 14 hours of emailing by ?DKl-l? over the next 2 days); 7 time entries on days that do not exist: February 30, 2004, and February 30, 2005; a 16-month period, from September 2003 through December 2004, when only 5.5 hours of speci?c work is entered, yet 426 hours is entered in the same repeated, identical, rote entries of ?Oversight and Review,? ?Bookkeeping,? ?Legal Research,? and ?Photocopying described hereinabove; 3 .S?hour time entries for drafting 3 Certi?cates of Service at the same time on the same day (this set of entries occurs multiple times); 12 consecutive l-hour time entries by for work on 12 different documents, all at speci?c times beginning at ?07:38:38 on ?10/26/06? but extending consecutively over a period of approximately 1 hour and 49 minutes ending at ?09:27:30 with many l-hour entries within less than a minute of each other; Page 8 of 10 Ilnumerous sets of entries similar to the 12 described in the immediately preceding subparagraph (J), such as 3 consecutive l-hour time entries by for work on 2 documents, all at speci?c times beginning at ?03:54:19 but extending consecutively over a period of 1 minute and 13 seconds; entries of exactly 20 hours for drafting each discovery document; multiple instances of more than one 20-hour time entry for the same person on the same day; 27.5 hours (in 55 increments of .5 each, all at ?12:00:00 in one day by for emailing to ?David K. Haller?; 60 hours (10 by and 50 by for amending complaints that ultimately contained very little amendment, including one which apparently changed only the county in the caption and the date at the end; multiple instances of one person in some instances, in others) of billing more than 24 hours in a?day?; 568.5 hours of entries appended to the end of the (otherwise chronological) timesheets, for dates ranging from 2004 through 2007, 500 hours of which is, in whole multiples of 10 and expressed in date ranges rather than in dates and times, including 3 130-hour single entries by for one- and two-week time periods in June and October 2006; and i one of the above-referenced 130-hour single entries by for the eight-day time period of October 4-11, 2006, duringwhich period Page 9 of 10 had already billed 51.5 hours one day and 20 the next, totaling 201.5 hours in 8 days (including weekends) for an average of more than 25 hours per day. Defendants stated to the court that the above entries were ?by far conservative? estimates of time actually Spent on the speci?c services indicated, and the above list is not exhaustive of the nonsensical and impossible entries. Thus Defendants appear to have made false statements to a tribunal in support of a ?xed fee that was unreasonable and put Defendants in a position potentially adverse to their own clients without taking appropriate steps to deal with the con?ict of interests created thereby. 11. As a result, it is my opinion that Defendants? conduct fell below the standard of care, competence, diligence, and loyalty expected of lawyers. 12. The opinions in this affidavit are given to a reasonable degree of certainty and are speci?cally based on the documents listed above. I reserve the right to alter, amend, modify, reduce, or expand these opinions if and when additional information is presented. FURTHER AFFIANT SAYETH NOT. Mich/act J. Virzi, Esq./ State of South Carolina County of Richland Swoman subscribed before me This ay of December, 2008 (W Notaryw My Commission 32;! 9 21? My Commission Expires: ?5 2013 Page 10 of10