Monday, June 22, 2009

Classic Conflict Leads To Reprimand

The web page of the Massachusetts Bar Counsel reports the following public reprimand for a classic conflict of interest in representing a driver and two injured passengers in a collision case:

In the fall of 2005, the respondent was retained on a one-third contingent fee basis to represent a driver who had been injured in a two-car collision. The other vehicle had crossed the center line, striking the driver client’s car head-on.

The driver client had two passengers, one of whom was rendered a paraplegic as a result the collision. The second passenger also suffered severe injuries. The driver client’s injuries were less serious than either of his passengers’. The driver referred the passengers to the respondent, who agreed to represent each of them as well for a contingent fee.

The other vehicle, which was insured in another state, carried single limit liability coverage of $400,000 per occurrence. The driver client had coverage of $50,000 per person and $100,000 per occurrence. The available insurance was grossly insufficient to cover the total damages sustained by the respondent’s three clients. Neither driver had personal assets available to satisfy claims arising from the accident.

In the circumstances, the interests of the respondent’s three clients were directly adverse to each other. The respondent’s representation of each client was or might have been materially limited by his responsibilities to the other clients. The respondent did not provide reasonably sufficient information to the clients to permit them to appreciate the full significance of the common representation. The respondent could not reasonably believe that the representation of any one of these clients would not be adversely affected by his representation of the other clients and therefore could not obtain their informed consent to the conflicts.

A few weeks after retaining the respondent, the paraplegic client discharged the respondent and engaged other counsel. Thereafter the respondent represented the driver client and the remaining passenger client. The respondent’s continued representation of those clients placed him in a position of ongoing conflict. The respondent did not provide reasonably sufficient information to permit either client to appreciate the full significance of the dual representation. The respondent could not reasonably believe that his representation of one of the clients would not be adversely affected by his representation of the other.

The respondent also represented his remaining clients in the same matter in which he had previously represented his former client, the paraplegic passenger. The remaining clients’ interests were materially adverse to those of the former client in that matter. The respondent did not obtain the former client’s consent after consultation to his continued representation of the remaining clients.

In early 2006, the other insurer offered an aggregate settlement of the $400,000 policy limits to the former client and the respondent’s remaining clients collectively, subject to their apportionment of the proceeds among themselves. Thereafter the respondent negotiated with the former client’s new counsel over apportionment of the proceeds on a percentage basis between the former client on the one hand and the respondent’s clients on the other. In the spring of 2006, the respondent agreed to allocate two-thirds of the proceeds from the other driver’s insurance, or $266,667, to the former client and one-third, or $133,333, to be divided between the respondent’s remaining clients. On that basis, the respondent accepted the insurer’s settlement offer on behalf of his clients.

The remaining passenger client’s damages alone exceeded the one-third share of $133,333 allocated to the respondent’s two clients. The respondent apportioned $76,667, or 57.5%, to the passenger client and $56,665, or 42.5%, to the driver client. The respondent did not disclose to the clients adequately the nature of all the claims involved and any implications of the allocation and division of the proceeds. Therefore, the respondent did not obtain the clients’ fully informed consent to the settlement.

While awaiting payment of the other driver’s insurance proceeds, the respondent made a claim for his passenger client against his driver client and presented the claim to the driver client’s insurer. The respondent could not have obtained the clients’ consent after consultation to the conflicts arising from his representation of the passenger client in that claim. The respondent subsequently settled that claim on behalf of the passenger for the driver’s policy limits.

By undertaking to represent the adverse interests of the driver and the passengers when the respondent could not reasonably believe that his representation of all three clients would not adversely affect his relationship with any of the clients and without, in any event, obtaining each client’s consent after consultation, the respondent violated Mass. R. Prof. C. 1.4(b) and 1.7(a). By representing the three clients when his representation of each client might be materially limited by his responsibilities to another and when he could not reasonably believe that his representation would not be adversely affected, the respondent violated Mass. R. Prof. C. 1.4(b) and 1.7(b).

By representing the driver and the remaining passenger when their interests were adverse to the interests of a former client in the same transaction, without the former client’s consent after consultation, the respondent violated Mass. R. Prof. C. 1.9(a). By failing to inform the remaining clients adequately of the full nature of the conflicts, the respondent violated Mass. R. Prof. C. 1.4(b) and 1.8(g). By failing to decline the common representation of the three clients and failing subsequently to withdraw from representing the remaining clients despite their conflicting interests, the respondent violated 1.16(a)(1).

The respondent had no history of discipline. In aggravation, the respondent’s representation of the driver client and the remaining passenger prejudiced the interests of that passenger.

Update: In response to the posted question, I do not have a link to the decision. The case is Matter of Jeffrey Glassman, Reprimand No. 2009-11, decided May 11, 2009. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2009/06/classic-conflict-leads-to-reprimand.html

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Comments

Could you provide the name of the case, or a link to the decision?

Posted by: Noah | Jun 22, 2009 9:51:37 AM

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