Professional Responsibility Briefs
Printed 03/15/97
1. Togstad v. Vesely, Otto, Miller & Keefe, (1980); pg. 677, briefed 3/15/97 2. Facts: Mr. Togstad was paralyzed by negligent doctors. Mrs. Togstad approached Miller seeking legal advice on her malpractice case. After a standard interview, Miller stated that he didn’t think that she had a case. However, Miller never ordered medical records, nor did he advise her of the two-year statute of limitations. Mrs. Togstad relied on Miller’s advice, and did not approach another attorney until the statute of limitations had run. 3. Procedural Posture: The lower court found that Miller was liable for malpractice, and he appeals. 4. Issue: Whether Miller is liable for malpractice for his failure to advise Mrs. Togstad properly. 5. Holding: Yes. 6. Reasoning: In a legal malpractice action, four elements must be shown: 1) that an attorney-client relationship existed, 2) that the defendant acted negligently or in breach of contract, 3) “but for” causation, and 4) damages. It is settled that where a person seeks the “legal advice” of an attorney, and the attorney renders a “professional opinion”, an attorney client relationship is established. Based on expert testimony, Miller failed to perform the minimal medical records research that would be required to render advice of this sort. Miller was also negligent in failing to advise Mrs. Togstad of the 2-year medical malpractice statute of limitations because a prudent lawyer would have done so. There is further sufficient evidence to show that Mrs. Togstad would have been successful had the case gone to trial. Thus, Miller is liable for malpractice. 1. Mirabito v. Liccardo, (1992); pg. 694, briefed 3/15/97 2. Facts: Liccardo is a lawyer who is a relative of Mirabito. Liccardo advised Mirabito to enter into investment transactions in which Liccardo had an interest, without disclosing this interest to Mirabito, in violation of a rule of professional conduct. The investments lost money. 3. Procedural Posture: The lower court found Mirabito liable for the losses, and allowed evidence of the rules of professional conduct. Liccardo appeals. 4. Issue: Whether the rules of professional conduct, even though their violation does not directly give rise to a cause of action for malpractice, may nevertheless be used as relevant evidence in a malpractice case for establishing the standard of care required of a lawyer. 5. Holding: Yes. Roger W. Martin 1
Professional Responsibility Briefs
Printed 03/15/97
6. Reasoning: It is well established that the rules of professional conduct governs the attorney’s duties to his client. The violation of these rules may be used to establish the attorney’s liability even in the absence of expert testimony. Although there is no independent cause of action for their violation, this case did not state such a cause of action, but rather stated a breach of fiduciary duty which duty was measured by the rules. Thus, a jury instruction based on the rules themselves is entirely appropriate. 1. Simpson v. James, (1990), pg. 264, briefed 3/15/97 2. Facts: Oliver and James were partners in the same law firm. Oliver represented both sides of the transaction in the sale of a business. Oliver then left the law firm to practice elsewhere. As the buyer became unable to make payments, James assured the seller that restructuring the deal was the best course of action, and assisted the seller in restructuring the note. When the buyer went bankrupt, James told the seller that he could no longer represent her since her interests were adverse to those of the buyer, who James was keeping as a client. 3. Procedural Posture: The lower court found that both Oliver and James were subject to liability for malpractice. James appealed, insisting that he owed no duty to Simpson. 4. Issue: Whether James was subject to liability for malpractice. 5. Holding: Yes. 6. Reasoning: There was sufficient evidence presented that an attorney client relationship existed between Simpson and James based on James assurances to Simpson that the buyer would remain solvent, and the restructuring of the deal, and Simpson’s reliance on this advice. Thus, James owed a duty of care to Simpson. Simpson breached this duty of care by representing the buyer as well. 1. Olfe v. Gordon, (1980); pg. 78, briefed 3/15/97 2. Facts: Olfe hired Gordon to sell her real estate. The buyer wanted seller financing, but Olfe instructed Gordon that she was only willing to take back a first mortgage, but not a second mortgage. Gordon proceeded to structure the seller financing as a second mortgage, and led Olfe to believe that she had got the first position that she wanted. After the buyer defaulted, the first mortgage foreclosed, and Olfe lost $25,000. 3. Procedural Posture: The lower court dismissed for lack of evidence, and a “ lack of expert testimony relating to the standard of care required of attorneys in Roger W. Martin 2
Professional Responsibility Briefs
Printed 03/15/97
similar circumstances.” 4. Issue: Whether expert testimony is required to show the standard of care in a malpractice action when the alleged breach is a direct disobedience of the client’ s wishes. 5. Holding: No. 6. Reasoning: The failure to follow the client’s wishes is an exception to the normal rule requiring expert testimony. Even if the attorney believed that the client’s instructions were not in the client’s best interests, that is not a defense to a malpractice action. In this context, the attorney-client relationship is an agency relationship. Expert testimony is not required in such circumstances. 1. Jesse v. Danforth, (1992); pg. 494, briefed 3/15/97 2. Facts: Jesse hired DeWitt law firm to sue Dr. Danforth for medical malpractice. However, DeWitt law firm had previously assisted Danforth and other doctors in forming a corporation. 3. Procedural Posture: Danforth moved to have DeWitt disqualified as plaintiff’ s attorney on conflict of interest grounds. The trial judge denied the motion, but the Appellate court reversed. Jesse appeals. 4. Issue: Whether Danforth is or was a client of DeWitt for purposes of the conflict of interest rule. 5. Holding: No. 6. Reasoning: The conflict of interest rule prevents a lawyer from representing a party whose interests are directly adverse to those of another client. Although DeWitt was the incorporator for Danforth’s corporation, the entity rule provides that where a lawyer represents a corporation, the client is the corporation, not the corporation’s constituents. The entity rule exists to prevent the automatic dual-representation that would occur with every incorporation. Thus, “where a person retains a lawyer for the purpose of organizing an entity, and the lawyer’s involvement with that person is directly related to that incorporation, and such entity is eventually incorporated, the entity rule applies retroactively such that the lawyer’s pre-incorporation involvement with the person is deemed to be representation of the entity, not the person.” The evidence here overwhelmingly supports that DeWitt’s involvement with Danforth was only to organize the corporation. Thus, DeWitt is not disqualified as Jesse’s attorney because the entity rule retroactively applies, and there is no conflict of interest.
Roger W. Martin
3
Professional Responsibility Briefs
Printed 03/15/97
1. Murphy & Demory, Ltd. V. Adm. Daniel J. Murphy, (1994); pg. 506, briefed 3/16/97 2. Facts: Murphy and Demory were incorporated by Pillsbury Madison. Later, Murphy asked one of the Pillsbury attorneys to help him either gain control of Murphy & Demory, or to set up a competing business. The Pillsbury lawyer agreed to the dual-representation without notifying the corporate client. Further, the Pillsbury lawyer ignored warnings from junior associates about the conflict. 3. Procedural Posture: The corporation brought an action for damages for malpractice against Pillsbury. 4. Issue: Whether Pillsbury is liable for malpractice based on the dual representation. 5. Holding: Yes. 6. Reasoning: The Pillsbury lawyer was clearly violating the ethical rules by representing a corporate constituent with a clearly adverse interest to the corporation, while representing the corporation itself. Furthermore, the warnings from the junior associate were routed to the lawyer handling the dual-representation, rather than an independent ethics counsel. 1. General Dynamics Corp. v. Superior Court, (1994); pg. 511, briefed 3/16/97 2. Facts: Rose was inside counsel for GD. Rose spearheaded an investigation into employee drug use at GD, protested the company’s failure to investigate the bugging of the office of the chief of security, and advised the company that certain of their wage agreements might be in violation of the Fair Labor Standards Act. Rose was fired, allegedly in retaliation for these actions. 3. Procedural Posture: Rose filed an implied in fact contract action and a retaliatory discharge action. GD demurred. 4. Issue: Whether an attorney’s status as an employee bars the pursuit of implied-in-fact contract and retaliatory discharge tort causes of action against the employer that are commonly the subject of suits by non-attorney employees who assert the same claims. 5. Holding: No. 6. Reasoning: From an economic standpoint, the dependence of in-house counsel is indistinguishable from that of other corporate managers or senior executives who also are dependent on a single employer. This is different than the case of an outside counsel being fired without cause. An employer does not Roger W. Martin 4
Professional Responsibility Briefs
Printed 03/15/97
have an “absolute” right to terminate in house counsel without cause - there may be damages. The “reasonable expectation” of Rose, after his years of service, was that he would not be fired without cause. With respect to the retaliatory discharge claim, an in-house attorney may state a claim for violation of public policy if the issue is one that is “fundamental” to state law, and if it is truly “public” in nature and not just for the benefit of the plaintiff employee. It is precisely because of the unique ethical obligations of a lawyer that he should be afforded a retaliatory discharge remedy when the employer insists on a course of action that violates the rules of professional conduct. As to the attorney-client relationship, it still must be protected. Thus, where the elements of the wrongful discharge can not be proven without violating the attorney-client privilege, the court must dismiss the case. In this way, the attorney’s remedy for retaliatory discharge is more limited than other employees. 1. Kline v. First Western Gov’t. Securities, (1994); pg. 548, briefed 3/16/97 2. Facts: Arvey was counsel for defendant company, which engaged in the buying and selling of gov’t securities. Arvey prepared an favorable opinion letter on the tax consequences to clients of the transactions that First Western engaged in. In his opinion letters, Arvey stated that the opinion was based solely on the facts given to him by First Western, and that it was only for the internal use of First Western. However, several of First Western’s clients were sent the opinion letter as an inducement to buy. When the IRS disagreed with Arvey’s conclusions, the clients sued for their losses. 3. Procedural Posture: The lower court found in favor of the plaintiffs on the misrepresentation claim, but granted summary judgment for Arvey on the material omissions claim. 4. Issue: Whether a lawyer may be held liable for an opinion letter that explicitly states that it is based on an assumed set of facts provided by the client without conducting an independent investigation into the truth of those assumed facts. 5. Holding: Yes. 6. Reasoning: An opinion must not be made with reckless disregard for its truth or falsity or with a lack of a genuine belief that the information disclosed was accurate and complete in all material respects. The responsibility can not be avoided with a disclaimer. Arvey had a long and close relationship with First Western. As such, he could not have had a genuine belief in the assumed facts without independent confirmation. The plaintiffs reasonably relied on the opinion letter to their detriment, and Arvey was aware of their reliance. There is a limited duty to investigate and disclose when, by the drafter’s omission, a public opinion could mislead third parties. Roger W. Martin 5
Professional Responsibility Briefs
Printed 03/15/97
1. Liljeberg v. Health Services Acquisition Corp., (1988); pg. 566, briefed 3/16/97 2. Facts: Liljeberg entered into a contract with another company, HAI, to purchase land from Loyola University for use as a hospital. Liljeberg and HAI had a contract dispute which was tried without a jury in front of Judge Collins, who was also a member of the Loyola board of trustees. Judge Collins found in favor of Liljeberg, which was also in his own financial best interest as board of trustee member for Loyola. 3. Procedural Posture: The defendants moved for a new trial. The court of Appeals granted the new trial. 4. Issue: Whether the defendant is entitled to a new trial even though the judge did not have actual knowledge of the conflict of interest until after he rendered his opinion. 5. Holding: Yes. 6. Reasoning: 28 U.S.C. 455 provides that a judge must disqualify himself in any proceeding in which his impartiality might reasonably be questioned. This includes cases in which he may have a financial interest in the outcome. Furthermore, a judge is required to keep informed about his personal financial interests. It is not required that the judge knowingly violate these rules. The purpose of these rules is to avoid even the appearance of impropriety so that the public confidence in the judiciary is not undermined. Here, the judge should have known of the conflict beforehand, and it is inexcusable that he did not disqualify himself after learning of the actual conflict. 7. Dissent Reasoning: The rule of constructive knowledge is unworkable because it is too speculative. 1. In Re Marriage of Iverson, (1992); pg. 592, briefed 3/16/97 2. Facts: A husband and wife entered into a premarital agreement. After splitting up, the judge in the case interpreting the validity of the premarital agreement tried the case without a jury. Making several specific findings of fact, the judge showed a tremendous stereotypical gender bias against women, and found against the wife. 3. Procedural Posture: The wife appealed, citing judge bias. 4. Issue: Whether a wife may be entitled to a new trial when the judge exhibits such a strong gender bias in his written opinion as to indicate that the wife did not get a fair trial. Roger W. Martin 6
Professional Responsibility Briefs
Printed 03/15/97
5. Holding: Yes. 6. Reasoning: The judge used so many gender stereotypes (i.e. why buy the cow when you get the milk for free, the wife didn’t have anything going for her except her loveliness and physical attractiveness) that the wife could not have received a fair trial. The trial of a case should not only be fair in fact, but it should also appear to be fair. Thus the gender bias contaminated the proceeding whether or not the judge had actual bias against the wife in particular. 1. Supreme Court of Virginia v. Friedman, (1988); pg. 616, briefed 4/26/97 2. Facts: Friedman has a law office in Virginia. Friedman lives in Maryland. Friedman applied for bar admission on motion under a Virginia statute that requires permanent residence in Virginia for application on motion, otherwise the applicant must take and pass the bar exam. The state denied her request because she was not a resident. 3. Procedural Posture: Friedman brought an action against the state for violation of the Privileges and Immunities clause on the ground that the residence requirement discriminated against non-residents. 4. Issue: Whether the residency requirement for admission on motion in Virginia (without having to pass the Virginia bar exam) violates the Privileges and Immunities clause. 5. Holding: Yes. 6. Reasoning: In Piper the court held that a state can not discriminate against a non-resident who has taken and passed the bar exam. However, Piper also stands for the proposition that a non-resident can not be prevented from doing business in a state terms of substantial equality with residents unless the state has a substantial reason for such discrimination and the discrimination is closely related to such reasons. Here, although the state may have a substantial enough interest in ensuring the high quality of the state bar, it has not met its burden in proving that the residency requirement is closely tailored to achieve that end. The state could choose the less burdensome alternative of requiring mandatory CLE or pro-bono work. 1. Cord v. Gibb, (1979); pg. 625, briefed 4/26/97 2. Facts: Cord is a female attorney admitted in D.C. in good standing, and applying to sit for the Virginia bar exam. She was denied permission after the routine moral character investigation revealed that she had purchased a home with a man, and was living with him out of wedlock. Roger W. Martin 7
Professional Responsibility Briefs
Printed 03/15/97
3. Procedural Posture: The lower court denied her permission to take the bar exam. 4. Issue: Whether Cord’s living arrangement affected her character and fitness to the extent that she should not be allowed to sit for the bar exam. 5. Holding: No. 6. Reasoning: Although her living arrangements are unorthodox, this conduct bears no rational relationship to her fitness to practice law. Furthermore, there is ample evidence from other witnesses of her high moral character. Thus, the decision below is unconstitutional. 1. In Re Mustafa, (1993); pg. 627, briefed 4/26/97 2. Facts: Mustafa, while the editor of the law review in law school, misappropriated money from a student fund. When caught, he immediately confessed, and made restitution to the University. He is now applying for admission to the bar after taking the bar exam. The University and an investigating committee both believe that Mustafa has acted properly and ethically since the incident, and recommend that he be admitted. 3. Procedural Posture: Mustafa has applied for admission to the D.C. bar. 4. Issue: Whether Mustafa has shown sufficient good moral character for admission given that such a short time has passed since the incident. 5. Holding: No. 6. Reasoning: An applicant must demonstrate moral fitness by “clear and convincing evidence.” Mustafa has not yet met that burden because too little time has passed since the incident. Normally, a lawyer who is disbarred for misappropriating client funds must wait 5 years. Although such a standard is not directly applicable to applicants, it still has been too short of a time. 1. El Gemayel v. Seaman, (1988); pg. 647, briefed 4/26/97 2. Facts: The plaintiff is a Lebanese lawyer not registered to practice in New York. He contracted with the defendant to help liberate her daughter from her ex-husband who had kidnapped her and taken her to Lebanon. In the course of his work, he was required to visit New York, and make several phone calls there, but most of his work was done in Lebanon in the courts there. When he billed the defendant, she refused to pay, citing unlawful practice of law in New York. Roger W. Martin 8
Professional Responsibility Briefs
Printed 03/15/97
3. Procedural Posture: The lower court found that the plaintiff’s actions did not constitute the unlawful practice of law. 4. Issue: Whether the services rendered by the plaintiff in connection with a Lebanese legal matter constituted the unlawful practice of law in New York such that the contract for such services was illegal and therefore unenforceable. 5. Holding: No. 6. Reasoning: The statute should not be construed to prohibit “customary and innocuous practices.” The court can not penalize every instance where an out of state lawyer comes into New York for conferences or negotiations relating to a New York client. The plaintiff’s only contact with New York was phone calls to advise his client of how things were proceeding in Lebanon. This is not enough to constitute unlawful practice of law. 1. Analytica, Inc. v. NPD Research, Inc., (1983); pg. 285, briefed 4/26/97 2. Facts: A lawyer from the Schwartz firm counseled Malec, an employee and shareholder of NPD, and counseled NPD itself, on the tax consequences of a stock compensation plan. Thereafter, Malec left NPD and founded Analytica as a competing corporation to NPD. Analytica then hired firm #1 to represent it in connection with its claim of anti-competitive behavior against NPD. NPD moved to disqualify the Schwartz firm. 3. Procedural Posture: The lower court disqualified the Schwartz firm. 4. Issue: Whether the Schwartz firm should be disqualified for a successive conflict of interest between NPD and Analytica. 5. Holding: Yes. 6. Reasoning: A lawyer may not represent an adversary of his former client if the subject matter of the two representations is “substantially related”, which means “ if the lawyer could have obtained confidential information in the first representation which would have been relevant in the second.” It is irrelevant whether he actually obtained such information. Here, there was actual receipt of confidential financial and operating information. Thus, the two representations are substantially related because this confidential information is relevant to the anti-trust action. Here, the lawyer was counsel to both the corporation and the principals of the firm. Clients will not repose trust and confidence in lawyers who switch sides as in the present case. 1. Cromley v. Board of Education, (1994); pg. 307, briefed 4/26/97 Roger W. Martin 9
Professional Responsibility Briefs
Printed 03/15/97
2. Facts: After two years of discovery, but before trial, the lawyer representing Ms. Cromley in her action against the Board of Education was hired by the firm who represents the Board of Education. 3. Procedural Posture: Cromley moved to disqualify the defendant’s firm on the grounds of a conflict of interest. The district court denied the motion. 4. Issue: Whether the defendant’s firm should be disqualified on the grounds of conflict of interest for hiring the plaintiff’s lawyer while the litigation was still pending. 5. Holding: No. 6. Reasoning: The determination of whether a new firm should be disqualified for hiring a lawyer who has an actual, present conflict of interest consists of three steps: 1) determination of whether a “substantial relationship” exists between the subject matter of the present and the prior representations, 2) if so, whether the presumption of shared confidences of the prior representation has been rebutted, and 3) if not, whether the presumption of shared confidences of the present representation has been rebutted. The rebuttal can be established either by proof that the lawyer was not exposed to confidential information in the prior representation, or that screening procedures were timely employed in the new law firm to prevent disclosure of information and secrets. Here, it is clear that the subject matter of the present and prior representations are “substantially related” because they are, in fact, the same litigation. Also, it is clear that the lawyer was actually exposed to confidential information because he was the plaintiff’s direct representative. However, the new firm has instituted adequate and timely screening procedures to rebut the presumption that the lawyer has divulged any confidential information. 1. Fiandaca v. Cunningham, (1987); pg. 248, briefed 4/26/97 2. Facts: NHLA is a legal assistance association representing the female prisoners in an overcrowded jail. The state informed NHLA that it planned to use a local state special education institution to house the overflow inmates. However, NHLA had a conflict of interest because it also represented the students at the special education institution in another unrelated matter, but who were vehemently opposed to allowing female inmates to stay there. 3. Procedural Posture: The state moved to disqualify the NHLA as class counsel for the inmates based on the conflict of interest. The trial court did not disqualify the NHLA before trial. 4. Issue: Whether the NHLA should have been disqualified based on the unresolvable conflict of interest. Roger W. Martin 10
Professional Responsibility Briefs
Printed 03/15/97
5. Holding: Yes. 6. Reasoning: NHLA owed a duty of undivided loyalty to the female inmates as their class counsel. They also owed the same duty to the students. Under Rule 1.7(b), the NHLA could not have reasonably believed that its representation would not be adversely affected by the conflict. There was no real necessity here that prevented the trial court from disqualifying the NHLA before trial. As for the remedy, the trial’s decision that the female prisoners could not be housed at the school should be set aside in light of the court’s refusal to disqualify the NHLA. 1. Public Service Mutual Insurance Co. v. Goldfarb, (1981); pg. 273, briefed 4/28/97 2. Facts: A dentist was convicted of sexual abuse against a female patient during dental services. The dentist had professional malpractice insurance which covered professional negligence and mistake in the rendering of services. The dentist filed a claim against the insurance to cover the costs of his defense in the civil action by the same patient. 3. Procedural Posture: The insurance company refused to pay for the civil defense, claiming that it was not intended to cover a claim of sexual abuse. 4. Issue: Whether the insurance company is obligated to defend the dentist in the civil suit. 5. Holding: Yes. 6. Reasoning: As a purely contractual matter, absent any consideration of public policy, a claim within the stated coverage has been made and the insurer is contractually obligated to defend the suit. Whether indemnity will ultimately be required can not be determined until the trier of fact determines whether the unlawful conduct occurred in the course of professional dental services. The mere fact that an act may have penal consequences does not necessarily mean that insurance coverage for civil liability arising from the same act is precluded by public policy. One who intentionally injures another may not be indemnified, but unintentional injury may be indemnified. However, the insurer is not compelled to indemnify the dentist for punitive damages. 1. United States v. Kojayan, (1993); pg. 453, briefed 4/28/97 2. Facts: A man and a woman were arrested for trafficking narcotics. The woman was charged and stood trial, but the defense was unable to locate the man because the government was unwilling to cooperate. The defense had no proof that the man was cooperating with the government, but they urged the jury Roger W. Martin 11
Professional Responsibility Briefs
Printed 03/15/97
to infer from the man’s absence that he was cooperating with the government. The government argued to the jury “don’t be misled that the government could have called” the man. This statement was misleading because the government did in fact have a deal with the man. 3. Procedural Posture: On appeal, at oral argument, the government admitted that it did have a deal with the man, and therefore the trial prosecutor made a blatantly false statement to the jury. 4. Issue: Whether the prosecutor has violated the rules of conduct by making a misleading statement to the jury. 5. Holding: Yes. 6. Reasoning: The statement was clearly false and misleading. Worse still, the government has never quite owned up to the serious breach of professional ethics. The defense properly asked the jury to infer that the man was cooperating with the government, but the prosecution made a plain statement that he was not. It is never proper to make a false statement to the jury. The convictions must be reversed because the prosecutorial misconduct deprived the defendants of the due process of law. 1. People v. Meredith, (1981); pg. 474, briefed 4/28/97 2. Facts: The defendant in a robbery case told his former counsel that he stole the victim’s wallet, and then put it in the trash can behind his house. The former counsel hired an investigator, who found the wallet in the location described by the defendant, and gave it to the lawyer. The lawyer then looked it over and finally gave it to the police. When threatened with contempt, the lawyer revealed how he obtained the wallet, and the defendant was convicted. 3. Procedural Posture: An appeal of the conviction. 4. Issue: Whether the attorney-client privilege extends to the location and condition of evidence that is removed by the defense based on confidential information revealed by the defendant. 5. Holding: No. 6. Reasoning: If the attorney client privilege were allowed to extend so far, then there would be a “race” to remove evidence from its location so that the police could not get the information associated with its location and condition. When defense counsel removes physical evidence, he necessarily deprives the prosecution of the opportunity to observe that evidence in its original location and condition. Thus, there is an exception to the attorney client privilege where the Roger W. Martin 12
Professional Responsibility Briefs
Printed 03/15/97
defense has removed or altered evidence. 1. Brobeck, Phleger & Harrison v. Telex Corp., (1979); pg. 123, briefed 4/28/97 2. Facts: After losing at the lower courts, Telex sought the best Supreme Court anti-trust attorneys available in its fight against IBM. Telex settled on one of the partners at the plaintiff law firm. The law firm and Telex (with the assistance of an independent law firm) entered into a fee agreement which provided a contingent fee recovery once a Writ of Certiorari was filed. The contingent fee was based on the recovery by Telex of any sum, including a settlement, from IBM. IBM and Telex then entered into a “wash” settlement, thereby releasing each other, but no money changed hands. Telex then refused to pay the law firm its minimum $1,000,000 fee. 3. Procedural Posture: The law firm brought this action to recover their fee. 4. Issue: Whether the fee was so excessive as to render the fee agreement unenforceable. 5. Holding: No. 6. Reasoning: The contract was not unconscionable. This is not a case where one party took advantage of another’s ignorance or exerted unfair bargaining power. Telex is a sophisticated multi-million dollar company with its own independent counsel. They needed the best attorney and now they have to pay. 1. Bushman v. State Bar, (1974); pg. 130, briefed 4/28/97 2. Facts: Bushman was retained by a mother in connection with a custody battle with the father. Bushman charged the mother a $5,000 minimum retainer. The custody battle was resovled with minimal effort. The lawyer was investigated by the state bar and suspended for one year. 3. Procedural Posture: An appeal from the suspension for one year. 4. Issue: Whether the lawyer should be suspended for having charged an unconscionable fee from his clients. 5. Holding: Yes. 6. Reasoning: The lawyer can produce no documentation that shows that he spent any substantial time on this case. A simple, and almost routine set of documents was filed, and that was all. The trial court found that the total Roger W. Martin 13
Professional Responsibility Briefs
Printed 03/15/97
reaonable fees to be paid by the losing side were $300 plus costs. Thus, the $5,000 fee charged were unconscionable. 1. Matter of Cooperman, (1994); pg. 134, briefed 4/28/97 2. Facts: The defendant lawyer repeatedly used “non-refundable” retainer fee agreements with his clients. He refused to refund any portion of the fee for any reason, even after being fired on several occasions and warned by the local grievance committee. 3. Procedural Posture: The lawyer was suspended for two years, and appeals. 4. Issue: Whether the non-refundable fee agreements were in violation of the professional rules of conduct. 5. Holding: Yes. 6. Reasoning: The code of professional responsibility specifically mandates that an attorney may not “enter into an agreement for, charge, or collect and illegal or excessive fee”, and that upon withdrawal or discharge, “shall refund promptly any part of a fee paid in advance that has not been earned.” Although the lawyer is entitled to payment for services already rendered in quantum meruit, the “ non-refundable” fee is contrary to public policy because it compromises the right of the client to fire the attorney. 1. Ohralik v. Ohio State Bar Assn., (1978); pg. 873, briefed 4/28/97 2. Facts: A lawyer learned of an accident involving a young woman with whom he was casually acquainted. While the girl was in the hospital, the lawyer personally visited her and had her sign a retainer contract. He then visited the passenger in the accident and entered into a contingent fee arrangement with her. Eventually, both parties discharged the lawyer. 3. Procedural Posture: After a disciplinary hearing, the Supreme Court of Ohio affirmed the finding that the appellant had violated the code by making in-person solicitations of his services with the injured victims. 4. Issue: Whether it is unconstitutional to prohibit in-person solicitation of legal services with persons known to need legal services. 5. Holding: No. 6. Reasoning: This case is distinguishable from the free speech advertisement case in Bates. These rules of professional conduct serve to reduce the likelihood Roger W. Martin 14
Professional Responsibility Briefs
Printed 03/15/97
of overreaching and the exertion of undue influence on lay persons, to protect the privacy of individuals, and to avoid situations where the lawyer’s exercise of judgment on behalf of the client will be clouded by his own pecuniary self-interest. The rules are prophylactic measures whose objective is the prevention of harm before it occurs. Thus, the state has a legitimate interest in prohibiting this type of behavior and the rule is rationally related to acheiving that end. 1. Shapero v. Kentucky Bar Assn., (1988); pg. 891, briefed 4/28/97 2. Facts: A lawyer sent out a mailer to potential clients who have had a foreclosure filed against them which advertised his services to defend them and order the creditors to give them more time to pay. Rule 7.3 of the model rules prohibited targeted mail to persons known to need legal services if a significant motive for the lawyer’s doing so was his pecuniary gain. 3. Procedural Posture: The lawyer was suspended and appeals. 4. Issue: Whether a state may categorically prohibit lawyers from soliciting legal business for pecuniary gain by sending truthful and non-deceptive letters to potential clients known to face particular legal problems. 5. Holding: No. 6. Reasoning: The first amendment does not permit a ban on certain speech merely because it is more efficient in reaching the potential audience. The relevant inquiry is not whether there exist potential clients whose “condition” makes them susceptible to undue influence, but whether the mode of communication poses a serious danger that lawyers will exploit any such susceptibility. Targeted mail does not pose the same threat of overreaching that in-person contact does. The reader of the letter can merely end the influence by throwing the letter away.
Roger W. Martin
15