source: Caselaw Access Project

author: WOODALL, Justice. MURDOCK, Justice

license: Public Domain

text:
    ALABAMA STATE BAR v. Lawrence Johnson HALLETT, Jr. Lawrence Johnson Hallett, Jr. v. Alabama State Bar.
    1071419 and 1071486.
    Supreme Court of Alabama.
    April 10, 2009.
    Rehearing Denied June 19, 2009.

      Robert E. Lusk, Jr., asst. gen. counsel, Alabama State Bar, for appellant/cross-appellee Alabama State Bar.
    Matthew C. McDonald and Kirkland E. Reid of Jones, Walker, Waechter, Poitev-ent, Carrere & Denegre, LLP, Mobile; and Thomas E. Harrison, Mobile, for appel-lee/cross-appellant Lawrence Johnson Hal-lett, Jr.
   WOODALL, Justice.

The Alabama State Bar (“the Bar”) and Lawrence Johnson Hallett, Jr., a member of the Bar, appeal and cross-appeal, respectively, from a decision of the Board of Disciplinary Appeals of the Alabama State Bar (“the Board”), which reversed in part an order of a panel of the Disciplinary Board of the Alabama State Bar (“the panel”); the panel had disciplined Hallett after finding that he had violated Rules 1.5(a), 1.5(e), 1.8(a), and 8.4(g), Ala. R. Prof. Cond. We reverse and remand.

I. Factual and Procedural Background

This disciplinary action arose out of an action commenced in December 1999 by Carol J. Earheart to dissolve her marriage to Joel Earheart. On March 23, 2000, Mrs. Earheart engaged J. Daniel Morrow to represent her in that action. The marital estate included real property valued in excess of $1 million and three ongoing businesses valued at $5-6 million. Mrs. Earheart was the chief financial officer of those companies. The divorce action also involved issues regarding the custody of the couple’s two minor children.

The divorce action was set for trial on September 27, 2000. On September 5, 2000, Morrow introduced Mrs. Earheart to Hallett. At that meeting, they discussed whether Hallett should represent Mrs. Earheart. On September 14, 2000, before Mrs. Earheart agreed to hire Hallett, Morrow and Hallett agreed in writing that Hallett would pay Morrow 25% of the fee he earned in representing Mrs. Earheart.

Four days later*, on September 18, 2000, Mrs. Earheart signed a “Retainer Agreement and Promissory Note” (“the retainer agreement”). The retainer agreement provided, in pertinent part:

“1. I, CAROLYN [sic] EARHEART, do hereby hire and retain the services of LAWRENCE J. HALLETT, JR., Attorney at Law. I do further affirm that I have read, understand and do affix my signature to this instrument evidencing the fact that I owe to the same LAWRENCE J. HALLETT, JR., One Hundred Thousand Dollars and no/100 Dollars ($100,000) attorney fees plus any and all costs advanced, court costs, paralegal fees or any other costs incurred in this matter as evidenced by invoices rendered during and a final invoice rendered upon completion of this matter. All such sums are considered a part of this agreement and Promissory Note which represents fees and costs incurred. It is further agreed and understood that any and all costs advanced or incurred, court costs, paralegal fees or any other costs incurred in this matter are in addition to the Attorney Fees and are due and payable upon rendering of Invoice for said costs, fees and advances. I further acknowledge that LAWRENCE J. HALLETT, JR., [sic]
“2. The parties hereby acknowledge that they have this day paid the sum of $ 0 as a retainer against current and future invoices and I owe and Promise to Pay the balance shown on each and every invoice submitted to me upon rendering an invoice for any and all costs advanced or incurred, court costs, paralegal fees or any other costs incurred in this matter in addition to professional legal services rendered. PAYMENTS TO BE PAID AT THE FIRST OF EACH MONTH, LATE AFTER THE 15TH OF EACH MONTH.
“3. I acknowledge that the full amount is due and owing immediately and I agree and understand that if I am unable to pay the full amount I shall be responsible for interest of 1⅜% per month on the unpaid balance plus the costs incurred for additional amounts due including the costs of collection and reasonable attorney’s fees.
“4. I further understand that if I fail to comply with this agreement and do not have the balance paid by my court date that, LAWRENCE J. HAL-LETT, JR. can withdraw from the case or seek other legal remedies. This debt will be turned over to a collection agent to collect the balance and all costs associated therewith will be my responsibility including all costs for the collection including attorney’s fees.
“5. I have read and understand this instrument in its entirety and I fully understand and agree to its terms and conditions.”

That same day, Mrs. Earheart also signed a “promissory note,” which stated, in pertinent part:

“For value received, the undersigned Carol Jean Earheart (‘the Client’) ... promises to pay to the order of Lawrence J. Hallett, Jr. (‘the Attorney’), • ■ • the sum of $100,000.00 with interest from September 15, 2000, on the unpaid principal at the rate of 12.00% per an-num.
“Unpaid principal after the Due Date [] shown below shall accrue interest at a rate of 18.00%.
“The unpaid principal and accrued interest shall be payable on demand.
“If any installment is not paid when due, the remaining unpaid balance and accrued interest shall become due immediately at the option of the Attorney.
“The Client reserves the right to prepay this Note (in whole or in part) prior to the due date with no prepayment penalty.
“If any payment obligation under this Note is not paid when due, the Client promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.
“This Note is secured by Any and All Real Estate or Personal Property in which Carol Jean Earheart has an interest in or receives an interest to as a result of any court action [in] which she is a party, dated September 15, 2000. The Attorney is not required to rely on the above security for the payment of this Note in the case of default, but may proceed directly against the Client.
“If any of the following events of default occur, this Note and any other obligations of the Client to the Attorney, shall become due immediately, without demand or notice:
“1. the failure of the Client to pay the principal and any accrued interest in full on or before the Due Date;
“2. The death of the Client(s) or Attorney®;
“3. the filing of bankruptcy proceedings involving the Client as a Debtor; “4. the application for appointment of a receiver for the Client;
“5. the making of a general assignment for the benefit of the Client’s creditors;
“6. the insolvency of the Client; or “7. the misrepresentation by the Client to the Attorney for the purpose of obtaining or extending credit.
“In addition, the Client shall be in default if there is a sale, transfer, assignment, or any other disposition or any assets pledged as security for the payment of this Note, or if there is a default in any security agreement which secures this Note.”

(Emphasis added.)

These documents (hereinafter referred to collectively as “the fee-agreement documents”) were not drafted by Hallett. Instead, they were prepared by Dwight Bowman, who was employed by Hallett as a paralegal. Mrs. Earheart’s testimony regarding the fee-agreement documents varied widely. She testified (1) that she did not sign the fee-agreement documents, (2) that she did sign the fee-agreement documents, (3) that she lied under oath when she said she signed the fee-agreement documents, and (4) that she does not remember signing the fee-agreement documents. Her own handwriting expert opined that the signatures on the fee-agreement documents were hers. For the purposes of this appeal, we assume that she signed the fee-agreement documents.

At Hallett’s instance, the trial was postponed until October 13, 2000. Bowman allegedly spent 2-3 hours a day, 3 or 4 days a week with Mrs. Earheart, in preparing for the trial.

The trial began on Friday, October 13, and concluded at midday on Tuesday, October 17. Hallett appeared for Mrs. Earh-eart at trial. Issues at trial included allegations that both parties had engaged in domestic violence; that Mr. Earheart was guilty of adultery; that Mrs. Earheart had embezzled money from the family businesses; and that Mrs. Earheart had written worthless checks to a gambling casino in Mississippi for which criminal charges were pending against her.

A judgment of divorce was subsequently entered awarding Mrs. Earheart (1) custody of the children, (2) two parcels of real property, and (3) 25% of the value of Mr. Earheart’s retirement account. Regarding that real property, the judgment stated:

“[Mr. Earheart] is to transfer to [Mrs. Earheart] all of his right, title and interest in and to said property within thirty (30) days. ... In the event [he] fails, refuses or neglects to convey said property, ... then the Circuit Clerk of this Court is authorized ... to execute said conveyance in [Mr. Earheart’s] behalf upon submission by counsel of the deed to the Circuit Clerk.”

Mr. Earheart was awarded 100% interest in the family businesses, as well as visitation rights with the children. Further, he was ordered to pay child support of $1,500 per month. The court “reserved the issue of alimony” and awarded “a judgment against [Mr. Earheart] in the amount of $5,000 as additional spousal support to be applied towards a reasonable attorney’s fee.”

On December 7, 2000, Hallett moved to alter, amend, or vacate the judgment. In that motion, he sought, among other things, an award of alimony. He also sought a “judgment against [Mr. Earh-eart] in the Amount of $50,000.00 towards a reasonable attorney fee for such a complex divorce and custody matter,” plus an “amount of $585.00 representing expense in production of documents.” (Emphasis added.) The trial court denied the motion as to those requests. Mr. Earheart paid $5,000 into court as ordered “to be applied towards a reasonable attorney’s fee.” Hal-lett received $2,100 of that fee, but did not credit it to Mrs. Earheart’s account.

After the judgment of divorce had been entered, Mrs. Earheart visited Hallett at his office to discuss the status of her case. The essence of the alleged conversation is revealed in the following colloquy before the panel:

“Q. [By counsel for the Bar:] What did he say to you about the divorce and the decision?
“A. [By Mrs. Earheart:] He told me that he had made me a millionaire and that what else did I want. And he was really harsh speaking with me. And I said: ‘Well, what are my options here?’ And he said: ‘Well, you can appeal it.’ And I was dissatisfied with the divorce.
“Q. Did you ... were you happy with the outcome of the divorce?
“A. No.
“Q. What did you tell him?
“A. Well, I told him that I was going to be destitute very shortly after the divorce was rendered. And—
“Q. What did you mean by that?
“A. Well, I was unemployed. I had got no alimony, fifteen hundred dollars a month child support for two children, a house note of four thousand two dollars a month, [and] a vehicle note for seven fifty-six a month. So I was going to be shortly in trouble. And Mr. Hallett stated that I needed to sell my assets.
“Q. And had you planned on doing that?
“A. No.”

(Emphasis added.)

Mrs. Earheart did, indeed, sell one of the parcels of real estate she was awarded in the divorce judgment. It was Hallett’s role in that transaction that triggered this action by the Bar.

The sale on the property was set to close on January 12, 2001. Surety Land Title, Inc. (“Surety”), was serving as the closing agent. As of January 11, however, Mr. Earheart had not executed a deed to the property as the trial court had ordered. On that date, Shirley Harley, an employee of Surety, contacted Hallett and requested a circuit clerk’s deed in order to prepare the necessary closing documents, because, according to Harley’s affidavit testimony, she had been told that Hallett was holding such a deed. Hallett sent Harley a copy of a circuit clerk’s deed, along with a copy of the as-yet-unrecorded promissory note, with notice that he was relying on the promissoiy note as security for $110,942.78 in attorney fees and interest for his representation of Mrs. Earheart. Harley informed Mrs. Earheart’s real-estate agent that the sale could not close without resolution of the attorney-fee claim.

That same day, January 11, 2001, Hal-lett prepared a billing statement; the total of the statement was $110,942.78. The billing statement included $4,000 in interest computed at 12% beginning September 15, 2000. It also included $6,942.78 in “research costs with Westlaw; copying costs; deposition costs; discovery costs; [and] postage costs.”

Mrs. Earheart first learned of Hallett’s claim to the proceeds on the day of closing on the sale of the property when she received a copy of the United States Department of Housing and Urban Development Settlement Statement showing that the $110,942.78 was to be deducted as “settlement charges.” She telephoned Hallett from the closing and protested the fees. When she and her real-estate agent suggested placing the proceeds in an escrow account pending resolution of the dispute, they were told that Surety had already remitted funds in the amount of $110,942.78 to Hallett. Hallett split the fee with Morrow pursuant to their agreement.

On January 17, 2001, Mrs. Earheart wrote a letter to Hallett terminating his representation. In that letter, she also demanded a “complete itemized list” (emphasis in original) of Hallett’s time attributable to his representation of her, as well as a “complete list and itemization” of attendant expenses. On January 21, 2001, Hallett sent Mrs. Earheart an invoice, which, according to Hallett, was prepared by Bowman (hereinafter “the Bowman invoice”). The Bowman invoice totaled $130,235.53, which included the principal amount of $100,000, plus $4,000 interest on the promissory note from September 15, 2000, through January 15, 2001, at a rate of 12%. After crediting Mrs. Earheart for $110,942.78, the invoice showed $19,292.75 as an outstanding debt. The total number of hours reflected on the invoice as having been spent on the matter was approximately 311.

Subsequently, Mrs. Earheart sued Hal-lett in the Mobile Circuit Court. Those claims have been dismissed and are not at issue in this case. Hallett developed colon cancer and was hospitalized for treatment. While Hallett was incapacitated from the cancer, Bowman allegedly opened a large number of credit accounts in Hallett’s name, resulting in a loss to Hallett of approximately $200,000, and Hallett filed for bankruptcy protection.

Mrs. Earheart filed an adversary complaint against Hallett in the United States Bankruptcy Court for the Southern District of Alabama. Her complaint included counts of conversion and misrepresentation, alleging that the debt resulting from Hallett’s misconduct was nondisehargeable in bankruptcy. For example, according to the bankruptcy court’s “order on complaint" entered on November 9, 2006, “Mounts one and two of [Mrs.] Earheart’s complaint allege that Hallett converted approximately $111,000 in proceeds from the sale of [her] home, and the deed and real property itself by failing to deliver the clerk’s deed to [Mrs.] Earheart.” The complaint also alleged that Hallett had misrepresented to Mrs. Earheart “the terms of his employment.” The bankruptcy court concluded that the evidence before it did “not support a finding of conversion.” It deemed evidence of misrepresentation to be “conflicting and unreliable” and, consequently, held that “[Mrs.] Earheart [had] failed to prove that Hallett misrepresented the terms of his employment and the $100,000 fee.” The bankruptcy court, therefore, entered a judgment in favor of Hallett on Mrs. Earheart’s adversary complaint.

Mrs. Earheart filed a complaint against Hallett with the Bar, and on January 27, 2005, pursuant to Ala. R. Disc. P. 12(e)(1), the Bar filed a petition for disciplinary action with the disciplinary clerk of the Bar, alleging that Hallett had violated a number of the Alabama Rules of Professional Conduct in connection with his representation of Mrs. Earheart, including (1) Rule 1.1 (“Competence”), (2) Rule 1.3 (“Diligence”), (3) Rule 1.5 (“Fees”), (4) Rule 1.7(b) (“Conflict of Interest: General Rule”), (5) Rule 1.8(a) (“Conflict of Interest: Prohibited Transactions”), and (6) Rule 8.4(g) (“Misconduct”). Hallett filed his answer on March 4, 2005, denying the substantive allegations.

On July 25, 2007, following a hearing on the charges, the panel entered its judgment. After setting forth extensive findings of fact, the panel held that Hallett had violated Rule 1.5(a) and (e), Rule 1.8(a), and Rule 8.4(g). A majority of the panel found Hallett not guilty of violating Rule 1.1 or Rule 1.3. The panel suspended Hallett from the practice of law for 90 days. It further suspended Hallett for an additional 18 months, but made the additional suspension conditional on Hallett’s failure to make restitution in the amount of $40,000. Full restitution of the $40,000 at any time during the 18-month period would void the order imposing the conditional suspension. Hallett appealed.

The Board affirmed the panel’s decision in part and reversed it in part. It affirmed the panel’s holding as to the violation of Rule 8.4(g). However, it held that the panel’s findings that Hallett had violated Rule 1.5(a) and (e) and Rule 1.8(a) were clearly erroneous. The Board also vacated the discipline imposed by the panel and ordered, instead, a public reprimand with general publication. The Bar appealed (case no. 1071419), and Hallett cross-appealed (case no. 1071486).

II. Discussion

“When proceedings before the Board of Disciplinary Appeals are conducted, the Board of Disciplinary Appeals shall affirm the decision [of the panel] unless it determines that, based on the record as a whole, the findings of fact are clearly erroneous ....” Ala. R. Disc. P. 5.1(d) (emphasis added). When the panel’s findings are based on oral testimony, the “Board of Appeals, and this Court, are to accord the [panel’s] findings the benefit of the ore tenus presumption.” Tipler v. Alabama State Bar, 866 So.2d 1126, 1137 (Ala.2003). “ ‘ “A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” ’ ” Id. (quoting Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985), quoting in turn United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948)).

A. Case No. 1071119

The Bar contends that the Board merely “reweighed the evidence and reached its own conclusions, substituting its judgment for that of the [panel]” and that the Board thus “violated the standard of review.” The Bar’s brief, at 36. “[W]hether the Board of Appeals properly applied the ‘clearly erroneous’ standard of review to the [panel’s] findings of fact is a question of law,” which we review de novo. Tipler, 866 So.2d at 1137.

The panel concluded that Hallett had violated two provisions of Rule 1.5, namely, subsections (a) and (e). Those subsections provide:

“(a) A lawyer shall not enter into an agreement for, or charge, or collect a clearly excessive fee. In determining whether a fee is excessive the factors to be considered are the following:
“(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
“(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
“(3) The fee customarily charged in the locality for similar legal services;
“(4) The amount involved and the results obtained;
“(5) The time limitations imposed by the client or by the circumstances;
“(6) The nature and length of the professional relationship with the client;
“(7) The experience, reputation, and ability of the lawyer or lawyers performing the services;
“(8) Whether the fee is fixed or contingent; and
“(9) Whether there is a written fee agreement signed by the client.
“(e) A division of fee between lawyers who are not in the same firm, including a division of fees with a referring lawyer, may be made only if:
“(1) Either (a) the division is in proportion to the services performed by each lawyer, or (b) by written agreement with the client, each lawyer assumes joint responsibility for the representation, or (c) in a contingency fee case, the division is between the referring or forwarding lawyer and the receiving lawyer;
“(2) The client is advised of and does not object to the participation of all the lawyers involved;
“(3) The client is advised that a division of fee will occur; and
“(4) The total fee is not clearly excessive.”

The panel found that the fee Hallett charged Mrs. Earheart was clearly excessive in violation of Rule 1.5(a) and that it involved the improper “division of [a] fee between lawyers who are not in the same firm,” as prohibited by Rule 1.5(e).

1. Violation of Rule 1.5.

Regarding Rule 1.5(a), the panel stated:

“The Panel, having heard the testimony of respondent as to the Bowman invoice ... and having examined it, finds that many of the entries contained in it are clearly fraudulent, and even where not clearly a fraud, are excessive and show evidence of having been manufactured after the fact, and after a dispute had arisen ... as part of which the client demanded an invoice.”

(Emphasis added.) The panel discussed several exemplary entries:

“[Tjhere is an entry for October 18, 2000, for eight hours, allegedly for Mr. Bowman’s attendance in court assisting [Hal-lett]. However, the trial had been concluded by mid-day on October 17, and this identical entry and charge appears for October 13 (10 hours), October 16 (10 hours), and October 17 (8 hours), the latter for a half-day of court; October 17 further includes 4.25 hours of ‘preparation’ for an already-concluded hearing. October 16 includes time asking for information as to whether the judge had signed the divorce, before the trial was concluded. Fifteen hours were recorded to review one set of handwritten notes prepared by [Mrs. Earheart] as an outline. Oh October 12 (the day before trial), fourteen subpoenas were recorded as being prepared, at one billable hour each. Few of those were served, and even fewer were called as witnesses. Except for Mrs. Earheart’s children, none appear to have even been interviewed. One and one-half hours are charged for recording the Promissory Note/lien against [Mrs. Earheart’s] property.”

(Emphasis added.)

The panel also noted that the Bowman invoice sought payment for “$8,198.03 for largely unspecified and undocumented expenses.” In fact, that entry states only “total reimbursable expenses,” without any explanation or specification of what these expenses included. Moreover, there are two entries for December 12, 2000, totaling $4,831.08, which are entirely blank except for the date and the amount. The panel also pointed out that Hallett’s explanation for the $6,942.78 expense on the January 11, 2001, billing statement, namely, “research costs with Westlaw; copying costs; deposition costs; discovery costs; [and] postage costs,” did not identify any deposition, discovery event, or Westlaw research.

Hallett does not attempt to refute these findings. He offers, for example, no expía-nation for the seemingly fraudulent and manufactured invoice entries noted by the panel. Indeed, in testimony before the panel, he asserted that he did not keep contemporaneous records of his time, because he regarded the $100,000 fee as a “flat fee,” the total amount of which was earned upon the execution of the retainer agreement. Hallett’s position on that issue was evidenced in the following colloquy:

“Q. [By counsel for the Bar:] You didn’t keep up with your hours or the time that you devoted to this case, did you?
“A. [By Hallett:] I have a fairly good idea, but I didn’t keep a record of it.
“Q. No contemporaneous written order [sic] at all?
“A. It was a flat fee.
“Q. But my question was: ‘Did you keep a record of your time and expenses in this case?’
“A. I wouldn’t keep a record of time on a flat fee.
“Q. Because you didn’t intend to account to Ms. Earheart for any time that you expended on her behalf, did you?
“A. It was a flat fee.
“Q. You didn’t intend to account for any time that you spent in this case to Ms. Earheart, did you?
“A. No. I didn’t intend to keep time because it was a flat fee, and I didn’t have to.
“Q. Are you not aware that you have an obligation to account to your clients for your time and expenses in any case?
“A. I have a flat fee arrangement. She is a grown, intelligent woman, relatively sophisticated. She had a lawyer. Why would I keep time on a flat fee case?
“Q. You are not aware that you should keep time records?
“A. I am not aware that I should keep records on a flat fee case .... That is correct.
“Q. So, it is your position that once you had, Ms. Earheart sign that retainer agreement and sign that promissory note that your $100,000 plus interest was earned?
“A. That’s correct.”

(Emphasis added.)

In that connection, however, the panel observed: “Even a flat or fixed fee ... must be returnable to the extent of any un-eamed portion. [Hallett] testified that he regarded the entire fee as being fully earned upon execution of the contract, and that no part of it was refundable or subject to cancellation.” (Emphasis added.) The panel’s observation is correct. The Bar argues, and we agree, that Hallett’s contention is tantamount to defending charging a nonrefundable retainer, which is forbidden in Alabama. It is well settled that nonrefundable retainers are prohibited. See Taylor v. Alabama State Bar, 587 So.2d 1205 (Ala.1991); Rule 1.16(d), Ala. R. Prof. Cond. (“Upon termination of representation, a lawyer shall ... refundf ] any advance payment of fee that has not been earned.”); J. Anthony McLain, Opinions of General Counsel, “Lawyers’ Trust Account Obligations with Regard to Retainers and Set Fees,” 70 Ala. Law. 65, 66 (January 2009) (“all retainers and fees are refundable to the extent that they have not yet been earned”).

The panel’s findings were also informed by the factors listed in Rule 1.5(a)(1) — (9), most particularly, the factors listed in subsections (4) (“[t]he amount involved and the results obtained”) and (7) (“[t]he experience, reputation, and ability of the lawyer or lawyers performing the services”). The panel stated:

“The results of the divorce proceedings were problematic for Mrs. Earh-eart, resulting in an order granting her two pieces of real estate with an aggregate net value of approximately $600,000 (of which Mrs. Earheart already had been a half-owner before the divorce), 25% of Mr. Earheart’s retirement account (the value of which was never established, but which was later liquidated by settlement for approximately $25,000), child support as set by the domestic relations guidelines, and primary custody of the children. That order reserved a determination of alimony, but none was ever awarded, and ordered the husband to pay $5,000 toward his wife’s attorney fees. ...”

(Emphasis in original; footnotes omitted.)

Moreover, there is no explanation why, if $50,000 — the figure Hallett sought in his postjudgment motion — was a reasonable attorney fee, a fee of twice that amount is not excessive. Neither is there any explanation as to why Mrs. Earheart was not given a credit for the money Hallett received from Mr. Earheart or why Hallett began computing interest on the principal on September 15, 2000, that is, three days before the retainer agreement was signed. Based on the record as a whole, the panel’s finding that the fee charged by Hallett was excessive is not clearly erroneous.

The panel also found that Hallett’s payment of $25,000 of the fee to Morrow violated Rule 1.5(e), which limits the circumstances under which fees may be divided. Rule 1.5(e)(4) provides, in part, that “[a] division of fee between lawyers who are not in the same firm, including a division of fees with a referring lawyer, may be made only if ... the total fee is not clearly excessive.” Because we conclude that the panel’s finding that the fee was excessive is not cleai'ly erroneous, it follows that a finding that Rule 1.5(e) has been violated is, likewise, not clearly erroneous. We, therefore, pretermit any discussion of any of the other requirements of Rule 1.5(e).

2. Violation of Rule 1.8(a)

The panel also held that Hallett had violated Rule 1.8(a), Ala. R. Prof. Cond., which provides:

“A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client unless:
“(1) The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client;
“(2) The client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
“(3) The client consents in writing thereto.”

(Emphasis added.)

As a preliminary matter, it must be noted that the three subdivisions are stated in the conjunctive. In other words, a lawyer may not “knowingly acquire an ownership, possessory, security, or other pecuniary interest” in the client’s property unless all the conditions set forth in all three subdivisions are satisfied.

It is undisputed that the promissory note purported to give Hallett a security interest in Mrs. Earheart’s property, and, for the purposes of this opinion, we are regarding her signature on the promissory note as genuine. The Board held, however, that the Bar “failed to establish that there was anything about the fee agree ment that was not fair and reasonable to the client.” (Emphasis added.) The Bar contends that this holding fails to “employ the proper standard of review.” The Bar’s brief, at 61. We agree.

The panel found that the conditions of Rule 1.8(a)(1) were not met. In addition to the excessiveness and, therefore, the unreasonableness of the fee, the panel regarded the language of the fee-agreement documents as “inconsistent” and “almost incomprehensible.” Indeed, a cursory review of the fee-agreement documents reveals a number of ambiguities or irregularities potentially harmful to Mrs. Earheart.

First, the full amount of the fee, plus interest, was arguably due on demand at any time at Hallett’s option. This is so, because, according to the promissory note, “[t]he unpaid principal and accrued interest [was to be] payable on demand.” Elsewhere, the promissory note provided for the acceleration of the balance, with interest, upon any default of any installment payment “at the option of [Hallett].” This construction is bolstered by Hallett’s testimony that he regarded the entire principal amount and interest to be due and payable as of September 18, 2000, when Mrs. Earh-eart signed the fee-agreement documents. Second, although the promissory note references a “Due Date [as] shown below,” no due date actually appears in either of the fee-agreement documents. Third, the amount of interest is indeterminable. The rate was 12% per year according to the promissory note, 16% per year according to the retainer agreement, and 18% per year if not paid by an undefined due date. Finally, the retainer agreement is incomplete on its face. Paragraph one concludes with the following incomplete sentence: “I further acknowledge that LAWRENCE J. HALLETT, JR..”

These aspects of the fee-agreement documents fully support the panel’s finding that the transaction was neither “fair and reasonable to the client [nor] fully disclosed and transmitted ... in a manner that [could] be reasonably understood by the client.” Thus, the panel’s finding that Hallett was guilty of violating Rule 1.8(a) was not clearly erroneous.

B. Case No. 107U86

The Board upheld the panel’s finding that Hallett was guilty of violating Rule 8.4(g), and Hallett cross-appeals as to the punishment the Board imposed for that violation. Rule 8.4(g) provides: “It is professional misconduct for a lawyer to ... [e]ngage in any ... conduct that adversely reflects on his fitness to practice law.” Hallett does not challenge the Board’s af-firmance of the panel’s determination that he violated Rule 8.4(g). In other words, for the purposes of these proceedings, Hal-lett concedes that he engaged in “conduct that adversely reflects on his fitness to practice law.” In his words: “As the sole reason for Hallett’s cross-appeal, this Court should modify the discipline imposed by the Board as its penalty for violation of 8.4(g).” Hallett’s brief, at 17. In fact, both parties challenge the Board’s modification of the panel’s discipline.

The panel suspended Hallett from the practice of law for 90 days and imposed an additional suspension of 18 months, to be voided if Hallett paid restitution of $40,000. The Board modified the discipline imposed by the panel, ordering a public reprimand with general publication.

“When proceedings before the Board of Disciplinary Appeals are conducted, the Board of Disciplinary Appeals shall affirm the decision under review unless it determines ... that the form or extent of discipline imposed, when considered under the Alabama Standards for Imposing Lawyer Discipline, (1) bears no relation to the conduct, (2) is manifestly excessive or insufficient in relation to the needs and protection of the public, the profession, or the administration of justice, or (3) is arbitrary and capricious. No error shall be predicated on any ground not presented to the Disciplinary Board or the Disciplinary Commission.”

Rule 5.1(d), Ala. R. Disc. P. (emphasis added). Thus, the question before this Court is whether the discipline imposed by the panel bore “no relation to the conduct,” was “manifestly excessive,” or was “arbitrary or capricious.”

“Arbitrary and capricious action has been defined as willful and unreasoning action, without consideration and in disregard of facts and circumstances. Where there is room for two opinions, action is not arbitrary and capricious even though one may believe an erroneous conclusion has been reached.” Heinmiller v. Department of Health, 127 Wash.2d 595, 609, 903 P.2d 433, 440 (1995). A “ ‘decision is arbitrary when it is not done according to reason and judgment, but depending on the will alone. An action is capricious if done without reason, in a whimsical manner, implying either a lack of understanding of or disregard for the surrounding facts and settled controlling principles.’” Mississippi Dep’t of Human Servs. v. McNeel, 869 So.2d 1013, 1018 (Miss.2004) (quoting Miss. State Dep’t of Health v. Natchez, 743 So.2d 973, 977 (Miss.1999)). Thus, so long as the discipline imposed bears a rational relationship to the lawyer’s conduct, is not manifestly excessive, and is authorized for such conduct by the applicable disciplinary rules, it is not arbitrary and capricious.

In vacating the $40,000 restitution ordered by the panel, the Board reasoned: “[Sjince the fee was not shown to be clearly excessive, there was no basis to order Hallett to return any portion of his fee; indeed, to do so in light of the bankruptcy order discharging him from any debt to Ms. Earheart might very well be problematic.” (Emphasis added.) According to the Bar, this reasoning is flawed for two reasons. First, it contends, and we agree, that the excessiveness of the fee was sufficiently established to withstand appellate review.

As to the relevance of the bankruptcy order, the Bar contends that Hal-lett did not assert the bankruptcy order as a defense in the proceedings before the panel and, therefore, that any error was not preserved. See Rule 5.1(d) (“No error shall be predicated on any ground not presented to the [panel].”). We agree.

Rule 3(b), Ala. R. Disc. P., provides: “Except as otherwise provided in these rules, the Alabama Rules of Civil Procedure and the Alabama Rules of Appellate Procedure shall apply.” “Rule 8(c), Ala. R. Civ. P., governing affirmative defenses, requires that a party ‘set forth affirmatively ... discharge in bankruptcy .... ’ Subject to exceptions not shown to be here applicable, the affirmative defense of a bankruptcy discharge is waived if not affirmatively pleaded in accordance with Rule 8(c).” Systrends, Inc. v. Group 8760, LLC, 959 So.2d 1052, 1064 (Ala.2006). The affirmative defense of a discharge in bankruptcy was not raised in Hallett’s answer and therefore has been waived. Thus, the potential effect of the order of the bankruptcy court formed no part of a proper rationale for vacating the panel’s disciplinary order.

In discussing the excessiveness of the fee, the panel stated:

“[T]he total fee (exclusive of undocumented expenses) charged for the thirty days of employment through trial (and the small activity thereafter) totaled over $117,000, coupled with more than $13,000 of expenses, only approximately $2,920 of which were itemized. Mr. Hal-lett testified that his customary hourly charge would have been at most $200.00 per hour, so that, even crediting the testimony as to more than three hundred hours in thirty days, a resulting fee ivould have been at most $75,000.”

(Emphasis added; footnote omitted.)

Reducing the attorney fee in the retainer ($100,000) by the amount the panel ordered in restitution ($40,000) yields $60,000, the precise amount the panel found attributable to 300 hours in 30 days of employment at $200 per hour. Thus, the restitution bears a direct relation to the conduct and is not manifestly excessive.

Regarding the suspension ordered by the panel, suspension from the practice of law is “generally appropriate when a lawyer knowingly engages in conduct that is a violation of a duty owed to the profession and causes injury or potential injury to a client, the public, or the legal system.” Standard 7.2, Alabama Standards for Imposing Lawyer Discipline. Standard 7.2 is expressly applicable in cases such as this one involving “clearly excessive or improper fees.” Standard 7.0, Alabama Standards for Imposing Lawyer Discipline (“Violations of Duties Owed to the Profession”). Suspension is also appropriate under Standard 4.3 (“Failure to Avoid Conflicts of Interest”) “when a lawyer knows of a conflict of interest and does not fully, disclose to a client the possible effect of that conflict and causes injury or potential injury to a client.” Standard 4.32.

In addition, Standard 9.0, Alabama Standards for Imposing Lawyer Discipline, sets forth specific “aggravating and mitigating circumstances [that] may be considered” in imposing discipline “[ajfter misconduct has been established.” The aggravating factors include:

“(a) prior disciplinary offenses;
“(b) dishonest or selfish motive;
“(c) a pattern of misconduct;
“(d) multiple offenses;
“(e) bad faith obstruction of the disciplinary proceedings by intentionally failing to comply with rules or orders of the disciplinary agency;
“(f) submission of false evidence, false statements, or other deceptive practices during the disciplinary process;
“(g) refusal to acknowledge wrongful nature of conduct;
“(h) vulnerability of victim;
“(i) substantial experience in the practice of law;
“(j) indifference to making restitution.”

Standard 9.22, Alabama Standards for Imposing Lawyer Discipline. The mitigating factors include:

“(a) absence of a prior disciplinary record;
“(b) absence of a dishonest or selfish motive;
“(c) personal or emotional problems;
“(d) timely good faith effort to make restitution or to rectify consequences of misconduct;
“(e) full and free disclosure to disciplinary board or cooperative attitude toward proceedings;
“(f) inexperience in the practice of law;
“(g) character or reputation;
“(h) physical or mental disability or impairment;
“(i) delay in disciplinary proceedings; “(j) interim rehabilitation;
“(k) imposition of other penalties or discipline;
“(l) remorse;
“(m) remoteness of prior offenses.”

Standard 9.32.

The panel found six aggravating factors to be applicable, namely, those set forth in Standard 9.22(d), (f), (g), (h), (i), and (j). These findings were not clearly erroneous. There was clear — or unchallenged — evidence of violation of multiple sections of the Alabama Rules of Professional Conduct, namely, Rule 1.5(a) and (e), Rule 1.8(a), and Rule 8.4(g). See Standard 9.22(d). In a number of instances, the panel disbelieved Hallett’s exculpatory testimony, see Standard 9.22(f), and those findings by the panel are subject to the presumptions attendant the ore terms rule. Tipler, supra.

To be sure, the panel also found two notable mitigating factors, namely, those set forth in Standard 9.32(a) (Hallett had no “prior disciplinary record”) and Standard 9.32(g) (Hallett enjoyed a good reputation). However, in weighing all the factors, it cannot be said that the panel disciplined Hallett in a “form or extent” that “(1) bears no relation to the conduct, (2) is manifestly excessive ..., or (3) is arbitrary and capricious.” Rule 5.1(d). Thus, the Board erred in vacating and modifying the discipline imposed by the panel.

III. Conclusion

In summary, the Board violated the standard of review insofar as both guilt and discipline are concerned. Consequently, the Board’s judgment is reversed, and the cause is remanded for the Board to affirm the panel’s judgment.

1071419 — REVERSED AND REMANDED.

1071486 — REVERSED AND REMANDED.

COBB, C.J., and LYONS, STUART, SMITH, BOLIN, PARKER, and SHAW, JJ., concur.

MURDOCK, J., concurs in the result in part and dissents in part.

MURDOCK, Justice

(concurring in the result in part and dissenting in part).

A. Reinstating the Panel’s Findings of Violations

Although I believe we should reinstate the panel’s findings as to what rules Hal-lett violated, I do not agree with all the reasoning used by the panel or by the main opinion to reach this result.

First, I am concerned that a statement in the panel’s decision could be construed as endorsing a “reasonableness” standard for the evaluation of allegedly excessive attorney fees. Second, I am concerned about the conflation of the concept of “clearly excessive fees” and the separate and different concept of “unearned fees,” a concept that relates to the prohibition of “nonrefundable retainers.” These concerns go to the risk of improper outcomes in future cases, even if not in this case. Moreover, they ultimately implicate the right of a lawyer and his or her client to contract, particularly as to fixed or “flat” fee arrangements.

1. “Reasonableness” v. “clear excessiveness” of fees

In a statement partially quoted in the main opinion, the panel stated as follows: “Even a flat or fixed fee must be reasonable, and must be returnable to the extent of any un-earned portion.” I see no rule in the Alabama Rules of Professional Conduct requiring that fees to which two private parties voluntarily agree be “reasonable.” Wisely, in my view, the drafters of our Rules of Professional Conduct did not see fit to attempt to involve the Alabama Bar Association in policing the “reasonableness” of fees charged by lawyers. What the drafters did choose to prohibit is what the rules refer to as “clearly excessive fees.”

Rule 1.5(a) is the rule the drafters wrote to prohibit a “clearly excessive fee.” It contains a plain prohibition of such a fee and a list of factors to be considered by the Bar in determining what is and what is not a “clearly excessive fee.” Insofar as the amount of Hallett’s fee is concerned, Rule 1.5(a) is the rule Hallett was charged with violating. I agree that he violated this rule.

2. Conflation of the concepts of “clearly excessive fees, “unearned fees, and “nonrefundable retainers

“Clearly excessive fees” and “nonrefundable retainers” are two separate and different concepts. They are governed by two different rules. Hallett was charged with violating only one of these rules, and not the other. Despite how he attempted to defend his actions at the hearing before the panel, when all was said and done, the fact is that Hallett violated only one of these rules.

The main opinion appears to accept the injection of the concepts of “unearned fees” and “nonrefundable retainers” into what I submit should be a discussion limited to the issue whether the amount of Hallett’s fee was “clearly excessive” under the criteria prescribed by Rule 1.5(a). The above-referenced partial quotation from the panel opinion and the ensuing analysis of the main opinion read as follows:

“[T]he Panel observed: ‘Even a flat or fixed fee ... must be returnable to the extent of any un-earned portion. [Hal-lett] testified that he regarded the entire fee as being fully earned upon execution of the contract, and that no part of it was refundable or subject to cancellation.’ The panel’s observation is correct. The Bar argues, and we agree, that Hallett’s contention is tantamount to defending charging a nonrefundable retainer, which is forbidden in Alabama. It is well settled that nonrefundable retainers are prohibited. See Taylor v. Alabama State Bar, 587 So.2d 1205 (Ala.1991); Rule 1.16(d), Ala. R. Prof. Cond. (‘Upon termination of representation, a lawyer shall ... refund[ ] any advance payment of fee that has not been earned.’); J. Anthony McLain, Opinions of General Counsel, ‘Lawyers’ Trust Account Obligations with Regard to Retainers and Set Fees,’ 70 Ala. Law. 65, 66 (January 2009) (‘all retainers and fees are refundable to the extent that they have not yet been earned’).”

26 So.3d at 1137 (emphasis omitted).

“Unearned fees” and “nonrefundable retainers” are the subject of Rule 1.16(d). Hallett was not charged with violating this rule. Ultimately, he did not violate it. Rule 1.16(d) provides: “Upon termination of representation, a lawyer shall ... re-fundí ] any advance payment of fee that has not been earned.” Thus, Hallett was incorrect in testifying that the fee in question was earned as soon as Mrs. Earheart executed the retainer agreement. As a factual matter, however, the fee in question ivas earned. It may have been (as discussed below) a “clearly excessive fee” in relation to the quantity and quality of work and the results achieved, thus running afoul of Rule 1.5(a), but it was a fee that was “earned” in the sense contemplated by Rule 1.16(d).

Specifically, the contract into which Hal-lett and Mrs. Earheart voluntarily entered provided that, in return for representing Mrs. Earheart through the trial-court proceedings to a final judgment, Hallett would receive a fixed, or “flat,” fee of $100,000. Hallett represented Mrs. Earheart through the trial-court proceedings to a final judgment. As contemplated by the authorities cited by the main opinion, at no time was Hallett discharged or replaced by another attorney; nor did he, for any other reason, fail to complete the representation of Mrs. Earheart through trial and a final judgment. He may not have done it well, but unlike attorneys in cases such as Taylor v. Alabama State Bar, 587 So.2d 1205 (Ala.1991), cited in the main opinion, Hallett completed the representation for which he was hired. See 587 So.2d at 1206 (explaining that there was no evidence indicating that an attorney had earned any of his fixed fee between the time it was given to him and the time he was asked to withdraw from the case). See also J. Anthony McLain, Opinions of General Counsel, “Lawyers’ Trust Account Obligations with Regard to Retainers and Set Fees,” 70 Ala. Law. 65 (January 2009).

Again, Hallett was charged with violating Rule 1.5(a). The conduct prohibited by Rule 1.5(a) and the criteria for determining whether a lawyer engaged in that conduct are clearly set out in that rule itself. Hallett clearly violated that rule. I see no need to go outside the criteria provided by Rule 1.5(a), and especially no need to inject into the discussion the different concepts of “nonrefundable retainers” and “unearned fees” found in Rule 1.16(d) in order to decide if the panel’s decision that Hallett violated Rule 1.5(a) is sustainable. As stated at the outset, in conflating these concepts we run the risk of achieving incorrect results in future cases and, even more problematically, of impinging on the right of private parties to enter into contracts governing the exchange of legal services for agreed-upon fees.

B. The Amount of the Penalty

I. Was the penalty imposed by the panel too much?

Part II.B of the main opinion, titled “Case No. 1071486,” is devoted to the issue whether the discipline imposed by the panel for the four rules violations found by the panel was too much. That issue, however, has not been presented by Hal-lett to this Court.

Of the four rules violations found by the panel, the Board upheld only one of them. As the opening sentence of Part II .B states, “The Board upheld the panel’s finding that Hallett was guilty of violating Rule 8.4(g), and Hallett cross-appeals as to the punishment the Board imposed for that violation.” 26 So.3d at 1139. In other words, the Bar filed an appeal, case no. 1071419, challenging the Board’s decision that Hallett had committed only one rule violation, instead of the four rules violations found by the panel. Hallett, as the appellee in that case, defends the Board’s decision that he committed only one rule violation. In addition, Hallett has filed a cross-appeal, case no. 1071486, in which he challenges as excessive the discipline imposed by the Board for that single rule violation.

Hallett has provided this Court with no argument by way of a conditional cross-appeal or otherwise to the effect that, if he loses in the appeal, and this Court reverses the Board’s decision and reinstates the panel’s decision, including its conviction and punishment of Hallett for four rules violations rather than only one, the discipline imposed in the panel’s decision for those four violations should be reduced. Again, Hallett makes an argument relating only to what he considers to be the unreasonableness of the discipline imposed by the Board for the single violation of Rule 8.4(g). He makes no argument challenging the degree of the punishment ordered by the panel in the event that he is to be punished for all four violations found by the panel. His argument presumes that the only violation for which a punishment is needed is his violation of Rule 8.4(g), a presumption that is not valid in light of this Court’s decision today in the Bar’s appeal.

Thus, Hallett has provided this Court with no basis for disturbing the discipline imposed by the panel now that we are reinstating the panel’s finding of four rules violations and now that a discipline is needed for those four violations rather than only the one upheld by the Board. Logically, there is no need for this Court to even take up this issue unless we would be willing to do so on the basis of an argument that we would craft for Hallett and authorities that we would provide on his behalf. See Dykes v. Lane Trucking, Inc., 652 So.2d 248, 251 (Ala.1994) (holding that it is not the function of this Court to do a party’s legal research or to make and address legal arguments for a party). I therefore do not find warranted the discussion in the main opinion as to whether the punishment imposed by the panel was too much, unless there is a sufficient need for us to take up that issue ex mero motu. I see no such need.

2. Was the punishment imposed by the panel not enough?

I do, however, see a need to take up ex mero motu the different issue whether the discipline imposed by the panel was not enough.

The panel found as follows:

“Mr. Hallett testified ... that he essentially devoted his entire professional time to this single matter from September 18 through October 17. However, the testimony of Brandon Lee, a former secretary in [Hallett’s] office, was to the effect that the day-to-day business of other matters continued to be handled by [Hallett] as had been customary, that Bowman worked on the Earheart files (obtained from opposing counsel) only for the week before trial, not for the month from September 18 to October 17, and that Bowman was also conducting other business (for which time was recorded and billed); she testified that Mr. Hallett maintáined his usual schedule, approximately 9-5, including court appearances in other matters.
“It is clear that no discovery depositions were initiated or taken by [Hal-lett],5 no witnesses were interviewed, and no accounting expert engaged. Except for the amendment adding the civil tort claim and the motion to disqualify, no pleadings were filed. On the day before trial, some 14 subpoenas were issued, only a few of which were served, and, except for witnesses on whom no subpoena was necessary ie.g., Mrs. Earheart’s children), none of those witnesses testified, including the alleged paramour of Mr. Earheart. Mr. Hallett sought to explain the failure to call or interview the alleged paramour first on the basis that his opposing counsel had ‘hidden’ the witness (which was hotly denied by such counsel), then on the basis that she lived behind a gated entrance, and service of process would have been impossible; the latter excuse also proved to be inaccurate.
“5 The deposition of Mr. Hallett’s client was ‘taken by opposing counsel,’ but Mr. Hallett did not attend, nor did he engage in preparing his client for her deposition.
“The panel, having heard the testimony of [Hallett] as to the Bowman invoice and having examined it, finds that many of the entries contained in it are clearly fraudulent, and even where not clearly a fraud, are excessive and show evidence of having been manufactured after the fact, and after a dispute had arisen between [Hallett] and Mrs. Earheart, as part of which the client demanded an invoice.6 The invoice sought payment of $11,094.72 for Mr. Bowman’s services, and an additional $8198.03 for largely unspecified and undocumented expenses. On January 11, 2001, [Hallett] also sent a separate invoice for a $100,000 fee, $4,000 in interest from September 15, 2000, and $6,942.78 for expenses. Those expenses were only (collectively) identified as: ‘Research costs with Westlaw; copying costs; deposition costs; discovery costs; postage costs;’ [sic]. There was no identification of the depositions (other than the single deposition taken by opposing counsel, there were none), discovery events (none were identified), or Westlaw research (none was identified). The January 11 invoice expressly did not include the ‘paralegal fees’ which were to be ‘billed seperately [sic] per retainer agreement ... ’
“6 A few examples suffice: there is an entry for October 18, 2000, for eight hours, allegedly for Mr. Bowman’s attendance in court assisting [Hallett]. However, the trial had been concluded by midday on October 17, and this identical entry and charge appears for October 13 (10 hours), October 16 (10 hours) and October 17 (8 hours), the latter for a half-day of court; October 17 further includes 4.25 hours of ‘preparation’ for an already-concluded hearing. October 16 includes time asking for information as to whether the judge had signed the divorce, before the trial was concluded. Fifteen hours were recorded to review one set of handwritten notes prepared by [Mrs. Earheart] as an outline. On October 12 (the day before trial), fourteen subpoenas were recorded as being prepared, at one billable hour each. Few of those were served, and even fewer were called as witnesses. Except for Mrs. Earh-eart’s children, none appear to have even been interviewed. One and one-half hours are charged for recording the Promissory Note/lien against Mr. Hallett’s client’s property.”

(Emphasis added; citations to the record omitted.)

Regarding the relationship of the fee charged by Hallett to the amount of work he actually put into preparing for trial, the panel states:

“As set out in the background facts, the total fee (exclusive of undocumented expenses) charged for the thirty days of employment through trial (and the small activity thereafter) totaled over $117,000, coupled with more than $13,000 of expenses, only approximately $2,920.00 of which was itemized. Mr. Hallett testified that his customary hourly charge would have been at most $200.00 per hour, so that, even crediting the testimony as to more than three hundred hours in thirty days, a resulting fee would have been at most $75,000.
... The factors under Rule 1.5(a)(l)-(9) were, for the most part not addressed by [Hallett] in support of the fee charged.
“The credible evidence does not support a finding of 300-400 hours of work devoted to this single matter in one month, nor anything approaching such a figure. The issues in the divorce, while unpleasant and contentious, were in no way unique or unprecedented; nor is the evidence of preclusion of other employment persuasive. The hilling by Mr. Hallett’s office for the paralegal time of Mr. Bowman is transparently false and overstated. The failure to even credit Mrs. Earheart with the $2100 portion of the $5000 awarded by the Court and paid by Mr. Earheart was not explained or justified; nor was the accrual of a high interest charge, from a date prior to the contract, on a fee which plainly could not possibly have been paid on demand, as its terms provide, justified.”

(Emphasis added; footnotes omitted.)

Despite the fact that Mr. Earheart had a net worth of millions of dollars and made over $500,000 per year, the panel found the results achieved for Mrs. Earheart to be “problematic”:

“The results of the divorce proceedings were problematic for Mrs. Earh-eart, resulting in an order granting her two pieces of real estate with an aggregate net value of approximately $600,000 (of which Mrs. Earheart already had been a half-owner before the divorce), 25% of Mr. Earheart’s retirement account (the value of which was never established, but which was later liquidated by settlement for approximately $25,000), child support as set by the domestic relations guidelines,7 and primary custody of the children. That order reserved a determination of alimony, but none was ever awarded, and ordered the husband to pay $5,000 toward his wife’s attorney’s fees.
“7 The evidence was without dispute that Mr. Earheart’s earnings far exceeded the guideline cap, but no application for an award exceeding the guidelines was made.”

Finally, the panel adds: “[T]he Panel is satisfied that [Hallett] has not been fully candid and truthful in his testimony or in his characterization of the events and documents before the Panel.”

The main opinion describes the fact that, some time after the trial in the divorce proceeding, Mrs. Earheart was forced for economic reasons to sell one of the parcels of land she had been awarded in the divorce and how Hallett extracted $110,942.78 from the closing proceeds. That sale came after a meeting between Hallett and Mrs. Earheart as described in the following colloquy:

“Q. [By counsel for the Bar:] What did he say to you about the divorce and the decision?
“A. [By Mrs. Earheart:] He told me titat he had made me a millionaire[] and that what else did I want. And he was really harsh speaking with me. And I said: “Well, what are my options here?’ And he said: ‘Well, you can appeal it.’ And I was dissatisfied with the divorce.
“Q. What did you tell him?
“A. Well, I told him that I was going to be destitute very shortly after the divorce was rendered. And—
“Q. What did you mean by that?
“A. Well, I was unemployed. I had got no alimony, fifteen hundred dollars a month child support for two children, a house note of four thousand two dollars a month, [and] a vehicle note for seven fifty-six a month. So I was going to be shortly in trouble. And Mr. Hallett stated that I needed to sell my assets.
“Q. And had you planned on doing that?
“A. No.”

(Emphasis added.)

Hallett’s conduct in this case is the type of conduct that diminishes the reputation of the legal profession. Further, the $60,000 fee that remains after the panel-ordered restitution of $40,000 would correlate to Hallett’s working on Mrs. Earh-eart’s case for 10 hours a day every day, including weekends, for 30 straight days at a rate of $200 per hour. It is clear that Hallett did not work anywhere near this much on Mrs. Earheart’s case. In addition, Hallett has received the additional $11,000 in at least partially fraudulent charges he caused to be added to the “HUD” closing statement as a precondition to Mrs. Earheart’s being able to close the above-described property sale.

Based on this Court’s inherent authority to oversee the administration of the judicial system and the discipline of lawyers admitted to practice before the Alabama courts, see Ex parte Case, 925 So.2d 956, 962-63 (Ala.2005) (“This Court has the inherent authority to admit lawyers to the practice of law, ... to inquire into matters of any disciplinary proceeding, and to take any action it sees fit in disciplinary matters.”), and because the restitution ordered by the panel is “manifestly ... insufficient in relation to the needs and protection of the public, the profession, or the administration of justice,” see Rule 5.1(d), Ala. R. Disc. P., I would remand this case to the panel for the entry of an order increasing the amount of restitution to be paid by Hallett to Mrs. Earheart up to, but not exceeding, an amount that would leave Hallett with sufficient funds to fairly compensate Morrow for his efforts in representing Mrs. Earheart before Hallett assumed that responsibility and compensating Hallett for reasonable out-of-pocket expenses he actually incurred.

C. Conclusion

Based on the foregoing, I concur in the result reached by the main opinion insofar as it reinstates the panel’s decision finding that Hallett committed four violations of the Alabama Rules of Professional Conduct. I dissent insofar as the main opinion reinstates the punishment imposed by that decision.

      . Although this appears to be a defined term in the promissory note, the “Due Date” is not specified.

      . The panel construed this language as “a prayer for an award of $50,000 as a reasonable fee.” Hallett does not challenge this characterization of his request.

      . Mrs. Earheart appealed the divorce judgment, but neither Morrow nor Hallett represented her on that appeal.

      .The remainder of the $5,000 was paid to Hallett's successor, who represented Mrs. Earheart in her appeal from the judgment of divorce.

      . Morrow eventually surrendered his license to practice law and is currently on disability/inactive status.

      . On September 12, 2008, this Court issued an order rescinding Rule 5.1, Ala. R. Disc. P., effective October 6, 2008. In that same order, it adopted Rule 12.1, which provides, in pertinent part, that "[t]he Board of Disciplinary Appeals shall remain in effect ... for the limited purpose of disposing of pending matters.”

      . In its appeal, the Bar also challenges the Board’s modification of the discipline imposed by the panel. The Bar requests that in reversing the Board's order, we should order that the discipline imposed by the panel be reinstated. Our discussion of that contention is consolidated with our discussion of Hal-lett’s cross-appeal.

      . See note 6, supra.

      . Restitution is a disciplinary device expressly authorized by Rule 8(i)(l), Ala. R. Disc. P.

      . This citation is to an opinion of the general counsel of the Alabama State Bar published in The Alabama Lawyer in which the general counsel explains that
      “the overriding principle of [Formal Opinion] RO 1992-17 and [Formal Opinion] RO 1993-21 is that a non-refundable fee would impinge on the right of the client to change lawyers at any time. Allowing an attorney to keep a fee, regardless of whether any service has been performed for the client, would certainly restrict the ability of a client to terminate the attorney and seek new counsel. In reaching this conclusion, the Commission also made clear that the rule applied to all arrangements where fees are paid in advance of legal services being rendered. As such, all retainers and fees are refundable to the extent that they have not yet been earned.”
      70 Ala. Law. at 65-66.

      . As noted in Part A.l above, this conflation is articulated with reference to a “reasonable fee” standard rather than simply the "clearly excessive” standard prescribed in Rule 1.5(a). To that extent, I also am concerned that it could put us on a “slope” toward the use of the non-rule-based concept of the "reasonableness” of a fee as a measure for what will be deemed "unearned” and therefore what "must be returnable.”

      . See, e.g., Parsons v. Aaron, 849 So.2d 932, 935 (Ala.2002) (explaining that the appellee had "filed a conditional cross-appeal, seeking reinstatement of the full punitive-damages award in the event the [appellant’s] appeals were not dismissed as untimely”); First Props., L.L.C. v. Bennett, 959 So.2d 653, 657 (Ala.Civ.App.2006) ("Because we have concluded that the judgment is due to be reversed as a result of the appeal, the condition specified in the [appellee’s] conditional cross-appeal has occurred, and that cross-appeal is ripe for review.”); Bess v. Waffle House, Inc., 824 So.2d 783, 787 (Ala.Civ.App.2001) ("Waffle House filed a cross-appeal, in which it did not challenge any portion of the trial court's judgment. Instead, Waffle House sought review of the trial court’s exclusion of the deposition testimony of a psychologist, Dr. Robert Barth, in the event that this court reversed the trial court’s judgment. Such a cross-appeal is known as a conditional cross-appeal and is considered to be moot in the event that the trial court’s judgment is affirmed.").

      . The panel's findings obviously conflict with Hallett's assertion that he made Mrs. Earh-eart a millionaire.

      . Even if 25% of this amount is allocated to Morrow, Hallett would still be paid at the rate of $150 per hour for a theoretical 300 hours, plus the $11,000 in at least partially fraudulent expenses extracted by Hallett from Mrs. Earheart at her real-estate closing.

      . Rule 5.1, Ala. R. Disc. P., establishing the Board of Disciplinary Appeals and governing its operation, was rescinded by an order of this Court effective October 6, 2008.


author: BOLIN, Justice. LYONS, Justice MURDOCK, Justice

text:
    HENRI-DUVAL WINERY, L.L.C. v. ALABAMA ALCOHOLIC BEVERAGE CONTROL BOARD et al.
    1070257.
    Supreme Court of Alabama.
    May 1, 2009.
    Rehearing Denied June 19, 2009.
    J. Doyle Fuller and Susan G. Copeland of Law Office of J. Doyle Fuller, P.C., Montgomery; and Robert B. Roden of Shelby & Cartee, Birmingham, for appellant.
    James H. Anderson and Ryan Wesley Shaw of Beers, Anderson, Jackson, Patty & Fawal, P.C., for appellee Alabama Alcoholic Beverage Control Board.
   BOLIN, Justice.

AFFIRMED. NO OPINION.

See Rule 53(a)(1) and (a)(2)(F), Ala. R.App. P.

STUART, SMITH, PARKER, and SHAW, JJ., concur.

LYONS, WOODALL, and MURDOCK, JJ., concur in part and dissent in part.

COBB, C.J., recuses herself.

LYONS, Justice

(concurring in part and dissenting in part).

I concur in the affirmance of the trial court’s judgment in this case in all respects except for the affirmance of the trial court’s disallowance of an attorney fee for Henri-Duval Winery, L.L.C. As to this issue, I join Justice Murdock’s special writing.

MURDOCK, Justice

(concurring in part and dissenting in part).

I concur in the affirmance of the trial court’s judgment on remand in this case, see Alabama Alcoholic Beverage Control Board v. Henri-Duval Winery, L.L.C., 890 So.2d 70 (Ala.2004), except to the extent that the trial court determined that Henri-Duval Winery, L.L.C., has not been a “prevailing party” for purposes of recovering an attorney fee pursuant to 42 U.S.C. § 1988. See, e.g., Grier v. Goetz, 421 F.Supp.2d 1061, 1068-69 (M.D.Tenn.2006) (discussing relevant United States Supreme Court precedents); James v. Alabama Coal, for Equity, Inc., 713 So.2d 937, 947 (Ala.1997) (quoting Texas State Teachers’ Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 789, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989)).

LYONS and WOODALL, JJ., concur.


author: STUART, Justice.

text:
    Governor Bob RILEY and Robert L. Childree, comptroller of the State of Alabama v. JOINT FISCAL COMMITTEE OF THE ALABAMA LEGISLATURE et al.
    1080468.
    Supreme Court of Alabama.
    June 19, 2009.

      Matthew H. Lembke and Andrew L. Brasher of Bradley Arant Boult Cummings LLP, for appellant Governor Riley; and Troy King, atty. gen., and William G. Parker, Jr., asst. atty. gen., for appellant Comptroller Robert L. Childree.
    Robert D. Segall and James David Martin of Copeland, Franco, Screws & Gill, P.A., Montgomery, for appellees.
   On Application for Rehearing

STUART, Justice.

This Court’s opinion of April 3, 2009, is withdrawn, and the following is substituted therefor.

Hank Sanders and Roger Bedford, members of the Alabama Senate; John Knight, a member of the Alabama House of Representatives; and the Joint Fiscal Committee of the Alabama Legislature, of which Sanders, Bedford, and Knight are members (the individual legislators and the Joint Fiscal Committee are hereinafter referred to collectively as “the legislators”), sued Governor Bob Riley and the state comptroller, Robert L. Childree (hereinafter referred to collectively as “the Riley administration”), in the Montgomery Circuit Court, seeking a judgment declaring that Governor Riley’s use of the line-item veto to veto § 4 of House Bill 328 (“H.B. 328”), the general-fund appropriations bill for fiscal year 2009 (October 1, 2008, through September 30, 2009), was unconstitutional and also seeking injunc-tive relief. The trial court entered a summary judgment in favor of the legislators, and the Riley administration now appeals. We affirm.

I.

We set forth the facts at the root of this dispute in our previous opinion denying the Riley administration’s petition for a writ of mandamus seeking the dismissal of the legislators’ complaint. We stated:

“The underlying action arises from Governor Riley’s veto of § 4 of House Bill 328 (‘H.B. 328’), the general-fund appropriations bill for fiscal year 2009, enacted during the 2008 Regular Session of the Alabama Legislature. That section provides, in pertinent part:
“ ‘Of the amounts appropriated in this act from the State General Fund for the fiscal year ending September 30, 2009, 17.75% of each appropriation is conditioned upon the availability of funds in the State General Fund, the recommendation of the Director of Finance, and the approval of the Governor with the exception of the following appropriations from the State General
Fund to the following agencies:
“ ‘Alabama Medicaid Agency $622,478,155
“ ‘Alabama Department of ¡Public Health $ 84,641,324
“ ‘Alabama Department of Senior Services $ 17,554,599
“ ‘Alabama Department of Human Resources $112,881,321
“ ‘Alabama Department of Mental Health and Mental Retardation $143,258,026
“ ‘Department of Child Abuse and Neglect Prevention $ 1,011,610
“ ‘The above-listed appropriations shall be funded in their entirety from the State General Fund in [fiscal year] 2009. In the event funds are not available to fully fund the conditional appropriations from the State General Fund made in this section to other agencies, the Governor shall apportion available funds in the General Fund proportionately across-the-board to those agencies for the fiscal year that ends September 30, 2009. In the event revenue is not available to fund all of these conditional appropriations, earmarked items and line-item appropriations shall be released proportionately. On October 30, 2008, the Governor shall certify to the Director of Finance and notify the Chair of the Senate Finance and Taxation-General Fund Committee, the Chair of the House Government Appropriations Committee, and the Legislative Fiscal Officer the amount of projected available revenue in the State General Fund and the source of the additional revenue available to fund all or any portion of the conditional appropriations made in this section. The conditional appropriations made in this section from the State General Fund are first priority conditional appropriations and shall be released in their entirety before any other conditional appropriations from the State General Fund may be released. The amount of revenue certified by the Governor on October 15, 2008[sic],m to be available for the conditional State General Fund appropriations made in this section shall be the amount of funds allocated proportionately to each agency for its operation plan for [fiscal year] 2009.’

“On May 19, 2008, pursuant to Ala. Const.1901, Art. V, § 126, Governor Riley sent a message to the legislature that he was disapproving § 4 of H.B. 328:

“ ‘Beginning on page 128, line 10, by striking through line 10 and each subsequent line, through line 20, on page 128, and resuming on page 129, line 1, and striking through that line 1 and each subsequent line on page 129, through line 23, and resuming on page 130, line 1, strike through said line and each succeeding line through line 7, thus striking and deleting the entire section 4 of said bill. This item, or these items, are both illegal under the laws of the State of Alabama and unconstitutional under the Constitution of the State of Alabama. In the Alabama Constitution of 1901, as amended, in Article XI, Section 213, there is a specific constitutional requirement that the state comptroller shall issue warrants for that proportion of each claim which the money available for payment of all claims bears to the whole, and such warrants for such prorated sums shall thereupon be paid by the state treasurer. This provision clearly imposes a constitutional obligation on the state comptroller to prorate, both across the board, proportionately to all departments and agencies. Similarly, under state law, Code of Alabama, § 41-4-90, requires the governor, in the event the estimated budget resources during the budget year are not sufficient to pay all appropriations in full, to restrict allotments to prevent an overdraft or deficit in any fiscal year for which appropriations are made, by prorating, without discrimination against any department, board, bureau, commission, agency, office, or institution of the state, the available revenues among the various departments, boards, bureaus, commissions, agencies, offices, and institutions of the state. The law goes further to more specifically state, “in other words, said appropriations shall be payable in such proportion as the total sum of all appropriations bears to the total revenues estimate by the Department of Finance as available in each of said fiscal years.”
“ ‘The Legislature, in its appropriation bill, House Bill 328, cannot supersede, change, alter, or amend either this constitutional amendment or this statutory provision, both of which require proportional proration among all recipients of state funds in said appropriations bill.
“ ‘Although well intended, in the unfortunate event that proration becomes necessary, the Legislature cannot provide, either constitutionally or legally, special protection for any individual agencies or departments of state government.
“ ‘For these reasons I have found it necessary to line item veto said bill. I most sincerely encourage you to agree with my disapproval of said item, or items. Done this 19th day of May, 2008.’
“Section 126, Ala. Const.1901, does provide that the legislature may ‘repass’ the vetoed item; however, Governor Riley’s message was delivered to the legislature on the last day of the 2008 Regular Session of the Alabama Legislature. In an affidavit filed with the trial court, Greg Pappas, the clerk of the Alabama House of Representatives, testified that at 11:54 p.m. on May 19, 2008, as a motion for adjournment sine die was being made, he was given Governor Riley’s message vetoing § 4 of H.B. 328. The motion to adjourn was passed at 11:55 p.m. Thus, the legislature had no opportunity to address Governor Riley’s action while it was in session.
“1 The disparity in the October 30, 2008, date in a preceding sentence and the October 15, 2008, date as the date that Governor Riley certifies the amount of funds available for conditional appropriations is not explained.
“2 Section 126 provides:
“ ‘The governor shall have power to approve or disapprove any item or items of any appropriation bill embracing distinct items, and the part or parts of the bill approved shall be the law, and the item or items disapproved shall be void, unless repassed according to the rule and limitations prescribed for the passage of bills over the executive veto; and he shall in writing state specifically the item or items he disapproves, setting the same out in full in his message, but in such case the enrolled bill shall not be returned with the governor’s objection.’ ”

Ex parte Riley, 11 So.3d 801, 803-805 (Ala. 2008).

Following our denial of the Riley administration’s petition for the writ of mandamus, proceedings in the trial court resumed, and the Riley administration filed an answer to the legislators’ complaint. On January 9, 2009, the trial court held a hearing on the legislators’ motion for a summary judgment, which had been filed and to which the Riley administration had responded before this Court stayed the proceedings in the trial court to consider the Riley administration’s petition for a writ of mandamus. On January 16, 2009, the trial court granted the legislators’ summary-judgment motion, holding that Governor Riley’s veto of § 4 of H.B. 328 was unconstitutional because, in the message transmitting news of that veto to the legislature, Governor Riley had merely referred to the “item or items” he was purporting to veto by line, section, and page number as opposed to setting the item or items “out in full” as required by Ala. Const.1901, Art. V, § 126. The trial court also rejected the Riley administration’s argument that § 4 of H.B. 328 was itself unconstitutional and therefore unenforceable regardless of any procedural defects in Governor Riley’s attempted veto. That same day, the Riley administration filed its notice of appeal to this Court, and the trial court stayed its order pending our resolution of this appeal.

II.

The Riley administration argues, first, that the message Governor Riley sent to the legislature notifying it that he was, under § 126, exercising his line-item veto authority to veto § 4 of H.B. 328 complied with the procedural requirement in § 126 that the governor “in writing state specifically the item or items he disapproves, setting the same out in full in his message .... ” The Riley administration argues that § 126 does not require Governor Riley to quote the disapproved item or items in his message to the legislature, only to clearly identify that item or those items for the legislative record, which, the Riley administration alleges, Governor Riley did by citing the relevant line, page, and section numbers. However, although we agree that Governor Riley clearly identified the disapproved items, we cannot agree that his shorthand identification of those items is tantamount to “setting the same out in full” or that his failure to do so is inconsequential.

“The authority to determine the amount of appropriations necessary for the performance of the essential functions of government is vested fully and exclusively in the legislature.” Morgan County Comm’n v. Powell, 292 Ala. 300, 306, 293 So.2d 830, 834 (1974) (citing Abramson v. Hard, 229 Ala. 2, 155 So. 590 (1934)). Section 126 of the constitution grants the governor line-item veto power, which can be used to disapprove specific items in an appropriations bill; however, when he exercises that power the governor is performing a traditionally legislative function. Therefore, in order to ensure that the governor does not exceed the limited authority given by § 126 and impermissibly encroach upon the functions of the legislative branch, § 126 must “be narrowly or strictly construed so as not to thwart the lawmaking powers of the legislative department.” Hunt v. Hubbert, 588 So.2d 848, 864 (Ala.1991) (Houston, J., concurring in the result). See also Stong v. People, 74 Colo. 283, 290, 220 P. 999, 1002 (1923) (“The power of the Governor over legislation by the exercise of the veto is a legislative power. It can only be exercised when clearly authorized by a specific provision of the Constitution not only because said article 3 [providing for separation of powers] so requires, but because, being a power in derogation of the general plan of the state government, the language conferring it must be strictly construed.”).

For this reason, it is insufficient that Governor Riley identified by line and page number the entirety of § 4 of H.B. 328 as the disapproved item in his veto message; he was required by § 126 to “set[ ] the same out in full.” The natural, plain, ordinary, and commonly understood meaning of the phrase “setting the same out in full” is that the disapproved item is to be written out in its entirety. It is undisputed that Governor Riley failed to do this in his message to the legislature purporting to veto § 4 of H.B. 328. Accordingly, that veto is of no effect. See State ex rel. Robertson v. McGough, 118 Ala. 159, 166, 24 So. 395, 397 (1898) (“Whenever a constitutional provision is plain and unambiguous, when no two meanings can be placed on the words employed, it is mandatory, and courts are bound to obey it.”).

III.

The Riley administration argues that, even if we hold that Governor Riley’s attempted veto of § 4 of H.B. 328 is void for failure to comply with § 126, § 4 of H.B. 328 is nevertheless unenforceable, because, it argues, it is unconstitutional. The Riley administration argues that § 4 of H.B. 328 violates both Ala. Const.1901, Art. XI, § 213, and Art. IV, § 71. Section 213 provides:

“In case there is, at the end of any fiscal year, insufficient money in the state treasury for the payment of all proper claims presented to the state comptroller for the issuance of warrants, the comptroller shall issue warrants for that proportion of each such claim which the money available for the payment of all said claims bears to the whole, and such warrants for such prorated sums shall thereupon be paid by the state treasurer.”

Section 71 provides:

“The general appropriation bill shall embrace nothing but appropriations for the ordinary expenses of the executive, legislative, and judicial departments of the state, for interest on the public debt, and for the public schools.... All other appropriations shall be made by separate bills, each embracing but one subject.”

We examine these arguments in turn.

Section 213 details the manner in which appropriations are to be reduced in the event there is a gap between the total appropriations made by the legislature and the amount available to the State to fund those appropriations. Specifically, it sets out a formula providing that all claims for appropriated funds will be funded proportionally. In other words, all claimants will have their appropriations reduced pro rata, or by the same percentage. See Opinion of the Justices No. 156, 265 Ala. 501, 503, 92 So.2d 429, 431 (1957) (“[T]he Constitution itself reduces an appropriation according to a constitutional formula from that amount fixed by the Legislature to a lesser amount as determined by the Constitution.”). Clearly then, under § 213, all State agencies and departments are subject to the same pro rata reductions in the event of a shortfall in funds, and neither the governor nor the legislature can spare a favored agency from those reductions without violating § 213.

In § 2 of H.B. 328, the legislature sets forth the specific appropriations it is making for fiscal year 2009 — subsection 2A details appropriations to the legislative branch, subsection 2B details appropriations to the judicial branch, and subsection 2C details appropriations to the executive branch. As an example, in item number 20 in subsection 2C, the legislature appropriated $100,000 from the general fund to Brierfield Ironworks Park. Section 2 of H.B. 328 contains nothing other than these types of appropriations.

In § 4 of H.B. 328, however, the legislature states that 17.75% of each appropriation made in § 2 is conditioned upon the availability of funds, with the exception of six specified social-service agencies (“the protected agencies”), which § 4 provides “shall be funded in their entirety.” The Riley administration argues that this added contingency — that 17.75% of the appropriations made in § 2 to other agencies (“the nonprotected agencies”) is contingent upon the availability of funds— is clearly an attempt by the legislature to dictate how appropriations should be reduced in the event of a shortfall, i.e., in the event the total amount of appropriations exceeds the amount of revenue available to fund those appropriations. Therefore, the Riley administration argues, because § 213 already speaks to precisely this subject, that is, how to reduce appropriations in the event of a shortfall, and sets forth a different formula for reducing appropriations, § 4 of H.B. 328 is unconstitutional and must therefore cede to § 218.

The legislators, however, argue that nowhere in H.B. 328 is there a formula for reducing appropriations. When §§ 2 and 4 of H.B. 328 are read together, as they must be, the legislators argue, it is clear that there has been no reduction in the appropriation for any agency; rather, they argue, every agency, with the exception of the protected agencies, is appropriated an absolute amount equal to 82.25% of the amount listed and appropriated an additional 17.75% of that amount contingent upon there being sufficient funds in the general fund. Thus, returning to our example of Brierfield Ironworks Park, the legislators would argue that, in H.B. 328, Brierfield Ironworks Park received an absolute appropriation of $82,250 and a conditional appropriation of $17,750, not a blanket appropriation of $100,000 as the Riley administration argues. The legislators further argue that the “effect” of § 4 of H.B. 328 as written is exactly the same as if the legislature had simply listed all the absolute appropriations in one section of an appropriations bill and then listed all the conditional appropriations in the following section. (Legislators’ brief, pp. 59-60.)

The relevant question before this Court then is whether we should adopt the interpretation of H.B. 328 the Riley administration urges, in which the legislature makes a series of essentially absolute appropriations in § 2 and then almost immediately reduces those appropriations in § 4, or the interpretation of H.B. 328 the legislators urge, in which 82.25% of each appropriation in § 2 is absolute and § 4 makes an additional conditional appropriation of 17.75% — with the exception that 100% of the appropriations to the protected agen-cíes are absolute. If we adopt the interpretation of H.B. 328 urged by the Riley administration, we would be required to declare § 4 of H.B. 328 unconstitutional as violating § 213. However, we have previously stated that “acts of the legislature are presumed constitutional,” State ex rel. King v. Morton, 955 So.2d 1012, 1017 (Ala.2006) (citing State v. Alabama Mun. Ins. Corp, 730 So.2d 107, 110 (Ala.1998)), and further that “we are obliged to construe statutes so as to avoid conflicts with constitutional provisions if possible.” City of Homewood v. Bharat, LLC, 931 So.2d 697, 701 (Ala.2005) (citing James v. Todd, 267 Ala. 495, 505, 103 So.2d 19, 27 (1957)). See also Alabama State Fed’n of Labor v. McAdory, 246 Ala. 1, 9, 18 So.2d 810, 815 (1944) (“[I]n passing upon the constitutionality of a legislative act, the courts uniformly approach the question with every presumption and intendment in favor of its validity, and seek to sustain rather than strike down the enactment of a coordinate branch of the government.”). When we afford H.B. 328 that presumption of constitutionality and consider it as a whole, we must interpret it in the manner urged by the legislators and conclude that H.B. 328 does not offend § 213.

We next consider the Riley administration’s argument that § 4 of H.B. 328 conflicts with § 71 of the Alabama Constitution, which, the Riley administration argues, bars the legislature from including anything other than appropriations in the general-appropriations bill. However, although we agree with the general principle that § 71 bars the legislature from addressing matters other than appropriations in a general-appropriations bill, we cannot conclude that that is what the legislature has done in H.B. 328. Rather, the legislature in H.B. 328 merely imposed a condition upon certain appropriations — that the State treasury have sufficient funds to satisfy those appropriations. This condition does not, in our view, change the intrinsic nature of those appropriations as appropriations so as to run afoul of § 71. See, e.g., South Dakota Educ. Ass’n v. Barnett, 582 N.W.2d 386, 392 (S.D.1998) (stating that even though the South Dakota legislature is forbidden from enacting, via the general appropriations bill, substantive legislation that changes, amends, or repeals existing law, it is nevertheless “free to impose conditions and restrictions on appropriated funds within the body of a general appropriations bill”).

The Riley administration nevertheless alleges that § 4 of H.B. 328 violates § 71 in the following four ways:

1. It places the responsibility upon the governor to estimate how much revenue will be available for fiscal year 2009 while § 41-4-90, Ala.Code 1975, places that responsibility upon the director of finance;
2. It creates an alternative process for reducing appropriations in the event of a budget shortfall, which process is inconsistent with § 213 and § 41-4-90;
3. It fails to ensure that there is adequate funding for constitutionally required appropriations, such as for the judicial branch of government, even though this Court has stated that the governor, when cutting appropriations, is required to consult with the chief justice to ensure that remaining appropriations are adequate for constitutionally mandated services, see Folsom v. Wynn, 631 So.2d 890 (Ala.1993); and
4. It takes away the discretion given the director of finance in § 41-19-10 to modify the funds agencies receive during the year if expenditures are greater than necessary or revenues are insufficient.

In regard to the Riley administration’s second argument, we have already noted that § 4 of H.B. 328, properly interpreted, does not actually reduce any appropriations; therefore, H.B. 328 does not conflict with existing law surrounding proration or with the constitutional formula for reducing appropriations when revenues are insufficient to fund the appropriations. Similarly, the Riley administration’s third argument, which is premised on this Court’s holding in Folsom v. Wynn, is premised on a reduction in the amount appropriated the judicial branch; however, in the absence of any true cuts to absolute appropriations there is no conflict with existing law. Finally, the Riley administration also objects to the language in § 4 of H.B. 328 requiring the governor to estimate the amount of revenue that will be available as conflicting with § 41-4-90, which provides that, in the event proration is necessary, “appropriations shall be payable in such proportion as the total sum of all appropriations bears to the total revenues estimated by the Department of Finance ....” Section 4 of H.B. 328, however, provides that the conditional appropriation of 17.75% made to the nonprotected agencies shall be allocated proportionately based on the amount of revenue the governor estimates is available. Nevertheless, although § 41-4-90 contemplates an estimate of available funds prepared by the Department of Finance and § 4 of H.B. 328 contemplates a similar estimate prepared by the governor, there is no conflict because § 41-4-90 has a field of operation when proration is declared and appropriations are being reduced and § 4 of H.B. 328 addresses how the conditional appropriations made in H.B. 328 are funded. If those conditional appropriations are being funded in a manner consistent with § 4 of H.B. 328, then § 41-4-90 has no field of operation because funding the conditional appropriations according to § 4 necessarily means that there were sufficient funds for all absolute appropriations and that proration was not necessary.

The Riley administration’s remaining argument, that § 4 of H.B. 328 conflicts with § 41-19-10 inasmuch as it purports to take away the director of finance’s discretion to modify the funds an agency receives during the year if expenditures are greater than necessary or revenues are insufficient, may or may not have merit; however, we are ultimately prevented from addressing that argument because, although the Riley administration specifically made the three preceding arguments in the trial court, it did not make the fourth argument in the trial court. In the brief the Riley administration filed with the trial court in opposition to the legislators’ motion for a summary judgment, it summarized its arguments as to how § 4 of H.B. 328 violated § 71 with a table (see Riley administration’s trial-court brief, pp. 24-25, attached to this opinion as Appendix A). That table identified three ways in which § 4 of H.B. 328 allegedly modified existing law — the same three arguments discussed immediately above. Although § 41-19-10 is cited in the context of whether § 4 of H.B. 328 modifies existing law in regard to the “[p]rocess for determining how much revenue is available for paying appropriations,” it is not quoted or otherwise referred to, nor is there any discussion of whether § 4 of H.B. 328 abrogates the discretion given the director of finance in § 41-19-10 to modify the funds an agency receives during the year if expenditures are greater than necessary or revenues are insufficient.

In its brief to this Court, the Riley administration again relies on a table to illustrate the ways in which § 4 of H.B. 328 violates § 71 by allegedly modifying existing law (see Riley administration’s brief, p. 46, attached to this opinion as Appendix B). This table is substantially identical to the table included in the Riley administration’s trial-court brief; however, it has been expanded to include a fourth way in which § 4 of H.B. 328 conflicts with existing law — by allegedly taking away the discretion afforded the executive branch in § 41 — 19—10(c)(3) “to spend funds according to shifting priorities and revenues.” This is apparently the first time this argument has been articulated by the Riley administration; it was not included in its trial-court brief, nor is it found anywhere else in the record. Notably, the trial court’s order entering a summary judgment in favor of the legislators is completely silent as to this issue. “This Court cannot consider arguments raised for the first time on appeal; rather, our review is restricted to the evidence and arguments considered by the trial court.” Andrews v. Merritt Oil Co., 612 So.2d 409, 410 (Ala.1992) (citing Rodriguez-Ramos v. J. Thomas Williams, Jr., M.D., P.C., 580 So.2d 1326 (Ala.1991)). For that reason, we do not reach the merits of this argument.

TV.

The trial court entered a summary judgment in favor of the legislators, holding that Governor Riley’s veto of § 4 of H.B. 328 was unconstitutional because it failed to comply with the procedural requirements of § 126. The trial court also rejected the Riley administration’s argument that § 4 of H.B. 328 was unconstitutional, holding that § 4 of H.B. 328 was in fact “lawful and of full effect.” For the reasons set forth above, that judgment is hereby affirmed.

APPLICATION GRANTED; OPINION OF APRIL 3, 2009, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED.

COBB, C.J., and LYONS, WOODALL, SMITH, BOLIN, PARKER, MURDOCK, and SHAW, JJ., concur.

      . The legislators have also argued that Governor Riley's attempted veto of § 4 of H.B. 328 does not comply with § 126 because, they argue, § 4 is not an “item or items” subject to the line-item veto; rather, they argue, it is a condition placed upon certain appropriations. The legislators argue that the term “item” in § 126 applies only to a specific sum of money designated for a specific purpose, while the Riley administration argues that the term “item" refers to any enumerated part of an appropriations bill. However, because we have already held that Governor Riley's veto is void because it did not comply with the procedural requirements of § 126, we need not address the merits of this argument.

      . The legislators argue that the issue of the constitutionality of § 4 was not properly raised because, they allege, the only issue raised by their complaint was the constitutionality of Governor Riley's veto. Although the legislators acknowledge that the Riley administration asserted as an affirmative defense that § 4 of H.B. 328 was unconstitutional, they argue that the Riley administration should have made that assertion as a counterclaim if it desired to raise the issue. We disagree. Assuming for the sake of argument that the legislators are correct and that the Riley administration should have labeled as a counterclaim its assertion that § 4 of H.B. 328 is unconstitutional, Rule 8(c), Ala. R. Civ. P., nevertheless provides that an affirmative defense that is mistakenly designated as a counterclaim, or a counterclaim that is erroneously labeled an affirmative defense, should be treated "as if there had been a proper designation.” Most importantly, the constitutionality of § 4 was argued by both sides at the trial-court level, and the trial court definitively ruled on the issue. Moreover, the Riley administration specifically identified the constitutionality of § 4 of H.B. 328 as an issue on appeal, and both sides have argued the merits of that issue to this Court.

      . The Riley administration has properly raised the issues whether § 4 of H.B. 328 is in conflict with both §§213 and 71 of the Alabama Constitution. At oral argument, a question arose as to whether the Riley administration had raised the issue whether § 4 of H.B. 328 also conflicts with § 126 of the Alabama Constitution; the parties subsequently filed letter briefs addressing that issue. Upon reviewing the record and the briefs, we must conclude that this argument is not properly before us. Accordingly, we express no opinion as to its merits.