Dallas Texas Divorce Attorney by jsm40037

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									  What To Do When Your
Favorite Clients Divorce, And
What To Do To Anticipate The
  Possibility Or Reality Of
           Divorce
What To Do When Your Favorite Clients
Divorce, And What To Do To Anticipate
The Possibility (Or Reality) Of Divorce


         William R. “Butch” Korb, Jr.
               Jeffrey N. Myers

              Bourland, Wall & Wenzel,
             A Professional Corporation
              Attorneys and Counselors
          301 Commerce Street, Suite 1500
              Fort Worth, Texas 76102
                   (817) 877-1088
               (817) 429-3945 (metro)
             (817) 877-1636 (facsimile)

             www.bwwlaw.com (website)
             bkorb@bwwlaw.com (Email)
            jmyers@bwwlaw.com (Email)

                Presented to
         DALLAS BAR ASSOCIATION
            PROBATE SECTION

              January 24, 2006
                2101 Ross Avenue
               Dallas, Texas 75201
I.     PRE-DIVORCE PLANNING
II.    RESOLVING DISPUTES
III.   HANDLING LITIGATION
IV.    LAWYER AS WITNESS
           Pre-Divorce Planning

                      QUESTION #1

Client seeks to engage Lawyer to provide asset protection
  planning regarding a possible divorce in order to prevent
  Spouse from receiving control of or an interest in certain
           assets. How should Lawyer respond?
              Pre-Divorce Planning

                         Rule 1.02 (c)

Lawyer may not assist in criminal or fraudulent act, but may
  discuss the legal consequences of proposed conduct.

                         Rule 1.02 (d)

When confidential information clearly establishes that Client is
 likely to commit criminal or fraudulent acts, Lawyer shall
 make reasonable efforts under the circumstances to dissuade
 Client.
          Pre-Divorce Planning

                     QUESTION #2

  Client has already engaged Lawyer to prepare transfer
documents for assets and, after execution by Client, Lawyer
 learns of Client’s fraudulent purpose. What should Lawyer
                              do?
              Pre-Divorce Planning

                         Rule 1.02 (e)

When Lawyer has confidential information clearly establishing
 that Client has committed a criminal or fraudulent act, of
 which the Lawyer’s services have been used, Lawyer shall
 make reasonable efforts under the circumstances to
 persuade Client to take corrective action.
            Pre-Divorce Planning

                      QUESTION #3

Client responds “You have been my Lawyer for 20 years and I
    have paid you hundreds of thousands of dollars. I expect
         you to help me!” How should Lawyer respond?
             Pre-Divorce Planning

                        Rule 1.02 (f)

When Lawyer knows that Client expects representation not
 permitted by the Rules, Lawyer shall consult with Client
 regarding relevant limitations on Lawyer’s conduct.
       Pre-Divorce Planning

                  QUESTION #4



Both Rule 1.02 (d) and (e) deal with Lawyer having
             “confidential information”.

What is does “confidential information” consist of?
                 Pre-Divorce Planning

                                  Rule 1.05

Confidential information =

Privileged information, and
Unprivileged Client information acquired by Lawyer in course of
   representation

General Rule:

Lawyer shall not disclose or use confidential information of Client

“May” exceptions
“Shall” exceptions
          Pre-Divorce Planning

                     QUESTION #5

 Lawyer is asked by Client to assist in the preparation of
financial disclosures in a divorce proceeding and Client asks
  that the information be knowingly misstated or withheld.
                   What should Lawyer do?
                     Pre-Divorce Planning
                                           Rule 4.01

In the course of representing Client, Lawyer shall not knowingly:

a. make a false statement of material fact or law to Third Person; or
b. fail to disclose a material fact to Third Person when disclosure is necessary to avoid making
   Lawyer a party to a criminal act or knowingly assisting in a fraudulent act by Client.

                                     Rule 4.01 Comment 6

This Rule governs Lawyer’s conduct during the “course of representing Client”. If Lawyer has
    terminated representation prior to learning of Client’s intention to commit a criminal or
    fraudulent act, subpart (b) of this Rule does not apply.

Fraud = purpose to deceive

Compare Negligent Misrepresentation: a civil cause of action but not a violation of the Rules.
   McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 SW2d 787 (Tex. 1999)
                Pre-Divorce Planning
                               Rule 1.05(c)

Lawyer may reveal confidential information:

(4) when Lawyer has reason to believe it is necessary to do so to comply
   with the Rules or other law.

(7)when Lawyer has reason to believe it is necessary to prevent Client from
   committing criminal or fraudulent act.
(8) to extent necessary to rectify the consequences of Client’s criminal or
   fraudulent act in commission of which Lawyer’s services have been used.

COMMENT 14: Disclosure adverse to Client’s interest should be no
  greater than Lawyer believes necessary for the purpose.
             Pre-Divorce Planning

                       QUESTION #6

If Lawyer discloses privileged information, can Lawyer be sued
                             by Client?
                 Pre-Divorce Planning
                           Rule 1.05, Comment 12

(1)   Lawyer may have been innocently involved in past conduct by Client
      that was criminal or fraudulent.

(2)   Since Lawyer’s services were made an instrument of Client’s crime or
      fraud, Lawyer has a legitimate interest in rectifying the consequences
      of such conduct and in avoiding charges that Lawyer’s participation
      was culpable.

(3)   Lawyer has discretion to reveal both the unprivileged and privileged
      information in order to serve those interests.

(4)   Per Rules of Evidence, rarely will such information be privileged (e.g.
      crime or fraud exception to attorney-client privilege).
             Pre-Divorce Planning

                        QUESTION #7

What if Client terminates the attorney-client relationship when
 Lawyer tries to dissuade Client from committing the conduct
         or to persuade Client to take corrective action?
              Pre-Divorce Planning

                     Rule 1.05 Comment 21

If disclosure during the relationship was permissive, disclosure
   thereafter remains permissive.
         Resolving Disputes

                   QUESTION #8

When Lawyer’s favorite Clients, Husband and Wife, are
          divorcing, what can Lawyer do?
             Resolving Disputes

                        Rule 1.06 (a)

Lawyer shall not represent opposing parties to the same
  litigation.
            Resolving Disputes

                      QUESTION #9

What if Clients say they already have an agreement as to all
                            matters?
             Resolving Disputes

                    Rule 1.06 Comment 2

“Opposing parties” contemplates a situation where a judgment
  favorable to one would directly impact unfavorably upon the
  other.
           Resolving Disputes

                     QUESTION #10

Prior to divorce litigation, can Lawyer represent Clients in
    negotiations concerning the division of their assets?
                Resolving Disputes

                            Rule 1.06(b)(1)

Lawyer shall not represent a person if representation of that
  person involves a substantially related matter in which
  that person’s interests are materially and directly
  adverse to the interest of another Client.

   UNLESS

   (c) (1) Lawyer reasonably believes the representation of each Client will
      not be materially affected, and
   (2) each Client consents under full disclosure.
Resolving Disputes

         QUESTION #11

What does “directly adverse” mean?
              Resolving Disputes

                     Rule 1.06 Comment 6

When Lawyer’s independent judgment on behalf of Client or
 Lawyer’s ability or willingness to consider, recommend or
 carry out a course of action will be or is reasonably likely to
 be adversely affected by Lawyer’s representation of, or
 responsibilities to, the other Client; OR

If Lawyer is called upon to espouse adverse positions in the
   same matter or a related matter.
          Resolving Disputes

                    QUESTION #12

If joint representation is not recommended or viable in a
    divorce situation, can Lawyer act as an intermediary?
                      Resolving Disputes
                                             Rule 1.07(d)

Intermediary = when Lawyer represents two or more parties with potentially conflicting
    interests.

     Comment 9: Where Lawyer is intermediary, Clients ordinarily must assume greater responsibility for
        decisions than when each Client is independently represented.

                                             Rule 1.07 (a)

Lawyer shall not act as intermediary between Clients unless:
(1) Lawyer consults with each Client concerning the common representation and obtains each
    Client’s written consent;
(2) Lawyer believes matter can be resolved without necessity of contested litigation on terms
    compatible with Clients’ best interests, that each will be able to make adequately informed
    decisions and that there is little risk of material prejudice if intermediation is unsuccessful;
    and
(3) Lawyer reasonably believes common representation can be undertaken impartially and
    without improper effect to any Client.
        Resolving Disputes

                  QUESTION #13

When must Lawyer cease intermediary representation?
                 Resolving Disputes

                                 Rule 1.07(c)

Lawyer shall withdraw if any of the Clients request or if any condition in
  subpart (a) is no longer satisfied.

Comment 4:

(1) Lawyer cannot undertake intermediary representation of Clients between
   whom contested litigation is reasonably expected or who contemplate
   contentious negotiations.

(2) If the relationship between the parties has already assumed definite
   antagonism, the possibility that Clients’ interests can be adjusted by
   intermediation ordinarily is not very good.
             Handling Litigation

                       QUESTION #14

One Client terminates attorney-client relationship. Can Lawyer
               represent the other in the divorce?
              Handling Litigation

                           Rule 1.09

Without prior consent, Lawyer shall not represent another
  person in a matter adverse to the former Client:

(1) in which such person questions the validity of Lawyer’s
   services or work product;
(2) if the representation in reasonable probability would involve
   inappropriate disclosure or use of confidential information of
   former Client; or
(3) if it is the same or substantially related matter.
           Handling Litigation

                     QUESTION #15

Is a divorce “the same or a substantially related matter” to
    prior estate or business planning performed for former
                             Client?
             Handling Litigation

                          Rule 1.09

Comment 4A: “same” = this divorce proceeding

Comment 4B: “substantially related” = situations where Lawyer
  could have acquired confidential information concerning a
  prior Client that could be used either to prior Client’s
  disadvantage or for the advantage of Lawyer’s current Client
  or some other persons.

Comment 8: “Substantial relationship” test used by courts for
  purposes of disqualification of counsel in litigation.
           Lawyer as Witness

                     QUESTION #16

If Lawyer expects to be a witness in a divorce, can Lawyer
           represent the Client in the proceeding?
                  Lawyer as Witness

                                    Rule 3.08

(a) Lawyer shall not accept or continue employment as an advocate before
   a tribunal in a contemplated or pending proceeding if Lawyer knows or
   believes that Lawyer is or may be a witness necessary to establish an
   essential fact on behalf of Client, unless:
    (1) uncontested issue
    (2) solely a matter of formality/no opposition
    (3) as to nature and value of legal services
    (4) Lawyer is a party and acting pro se
    (5) Lawyer promptly notified opposing counsel and disqualification would work
       substantial hardship on Client.
(b) Lawyer shall not continue as advocate if Lawyer believes that Lawyer
   will be compelled to furnish testimony substantially adverse to Client,
   unless Client consents after full disclosure.
         Lawyer as Witness

                   QUESTION #17

 Lawyer accepts engagement to represent one spouse.
Lawyer’s Firm thereafter receives discovery request. How
                  should Firm respond?
                   Lawyer as Witness
Discovery request to Firm:

      (1) All of Wife’s files (former Client)
      (2) All of Husband’s files (current Client)
      (3) All of Entity, Inc.’s files (Husband’s corporation).

                                       Issues

(1)   Privileges: identity of Clients of Lawyer
(2)   Multiple clients: open or closed relationship
(3)   Entitlement to Client’s own files (Rule 115(d))
(4)   Rule 1.09 considerations
(5)   Rule 3.08 considerations
Lawyer as Witness

          QUESTION #18

Firm receives a notice of deposition.
    How should Firm respond?
                       Lawyer as Witness
Notice of Deposition to Firm

Subjects covered:

      (1)   Characterization of all assets and/or liabilities of Husband and Wife
      (2)   All planning related to business opportunities Husband invested in through his separate estate.
      (3)   All irrevocable intervivos trust and/or charitable or non-charitable gift planning entered into by
            Husband using community property.
      (4)   All planning related to accumulation of income in trusts and/or partnerships which are Husband’s
            separate property.
      (5)   All planning related to expenditures and/or exhaustion of community estate.
      (6)   All planning related to compensation of Husband from his separate property entities.

                                                   Issues

(1)    Privileges: identity of Clients of Lawyer
(2)    Multiple clients: open or closed relationship
(3)    Entitlement to Client’s own files (Rule 115(d))
(4)    Rule 1.09 considerations
(5)    Rule 3.08 considerations

								
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