January 24, 2008
Let The Buyers Beware
An Illinois hearing board found no ethical misconduct in a case where an attorney was alleged to have "acted dishonestly when he changed the interest rate on a promissory note without informing opposing counsel." The attorney represented the sellers of a residential property. The key findings in rejecting the charges of sharp practices:
"Prior to sending [opposing counsel] the promissory note on December 30, 2007, Respondent made 19 separate changes to it, 17 of which were essentially minor changes to a word or two. Two of the changes were more substantial, one of which changed the interest rate from annual to monthly. Respondent did not highlight any of the changes, and did not discuss the change in the interest rate with [opposing counsel] before or during the closing. The closing occurred on January 15, 2003. The promissory note had a blank space where the interest rate would be filled in. At the closing, [Opposing counsel] wrote the number "7" on the note.
Respondent did not discuss the interest rate with [opposing counsel] prior to the closing because he believed that the Edwardses agreed to that term, and [opposing counsel] knew of the agreement. After Respondent changed the note to reflect the monthly rate, he did not think there was any reason to bring it to [opposing counsel's] attention. Respondent assumed that what his clients told him about the interest rate was true and that [opposing counsel] would read the note. Respondent did not intend to deceive [opposing counsel]. (citations to record omitted)."
There was a lawsuit as a result of the dispute over the agreed interest rate. The buyers prevailed but counsel (the same attorney who had handled the settlement) ate more than $87,000 in legal fees resulting from that litigation. (Mike Frisch)
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