Friday, April 3, 2009

Malpractice Not A Compulsory Counterclaim In Lien Action

In a decision released today, the Kansas Supreme Court addressed issues relating to the collateral consequences of an action to enforce an attorneys' lien in Missouri :

Jerome S. Tilzer, individually and as plaintiff ad litem for Rita Tilzer, Todd A. Tilzer, and Jill Jokelson, (hereafter collectively referred to as Tilzers) appeal the granting of summary judgment in favor of the defendants, Grant L. Davis and Davis, Bethune & Jones, LLC, (hereafter collectively referred to as Davis), in this legal malpractice action. Tilzers raise four issues on appeal: (1) whether Tilzers' legal malpractice claims are compulsory counterclaims to Davis' motion to enforce an attorney lien in a prior Missouri state court action and therefore barred by res judicata in the present action; (2) whether Tilzers' claims are barred by collateral estoppel based upon the litigation in the Missouri action; (3) whether the district court erred in ruling that the "Global Settlement" in the Missouri action was not an "aggregate settlement" within the meaning of Rule 4-1.8(g) of the Missouri Rules of Professional Conduct (Rule 4-1.8[g]); and (4) whether the district court erred in ordering certain documents to be sealed. We find that the district court did not abuse its discretion in ordering that the confidential settlement documents be filed under seal. However, the court did err in holding that Tilzers' claims were compulsory counterclaims in the Missouri action and that collateral estoppel applied to the aggregate settlement issue. Therefore, we reverse and remand.

The Court noted the legal significance of purported ethical violations by the law firm:

The Missouri court announced that its order enforcing the attorney's fee lien would not affect Tilzers' malpractice claims against Davis. Apparently, the court viewed the task presented by the attorney's fee lien motion to be a calculation of the amount of fees that Tilzers contracted to pay Davis and a determination of the reasonableness of those fees. In that event, the aggregate settlement issue was only relevant, if at all, to the question of whether Tilzers were entitled to an offset against Davis' attorney's fee lien based on malpractice. If the Missouri court was declining to rule on the malpractice claim, it had no reason to reach the subissue within that claim regarding any violations of the disclosure requirements of Rule 4-1.8(g). In other words, the ruling on the aggregate settlement issue was gratuitous and unnecessary to the decision rendered on the attorney's fee lien.

Perhaps more fundamentally, Rule 4-1.8(g) is a rule of professional conduct defining an unethical conflict of interest for an attorney representing two or more clients in a particular action. It is not a statutory provision governing the validity of settlement agreements, i.e., rendering aggregate settlements unlawful as a matter of law. Indeed, if all of the plaintiffs in the Missouri lawsuit had been represented by separate counsel, Rule 4-1.8(g) would not have applied, regardless of the terms of the settlement.

Likewise, compliance with the ethical rule is not necessarily a condition precedent to the enforcement of an attorney's fee lien. The preamble to the Kansas Rules of Professional Conduct (KRPC) Rule 226 (2008 Kan. Ct. R. Annot. 391) explains the scope and function of the rules, clarifying that an ethical violation does not establish a per se claim for malpractice:

"Violation of a Rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached. In addition, violation of a Rule does not necessarily warrant any other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation. The Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the rules can be subverted when they are involved by opposing parties as procedural weapons. The fact that a Rule is a just basis for a lawyer's self-assessment, or for sanctioning a lawyer under the administration of a disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the rule." KRPC (Preamble-Scope) 2008 Kan. Ct. R. Annot. at 395.

Likewise, this court has opined:

"An attorney's violation of the ethics rules cannot create a cause of action to adverse litigants or even to clients. This is because the ethics rules do not impose a legal duty on the attorney owing to either a client or a third party. Occasionally, attorney conduct which violates an ethics rule may also violate an independent legal duty and a cause of action may ensue. It is the violation of the independent legal duty, not the ethics rule, that gives rise to a cause of action." OMI Holdings, Inc. v. Howell, 260 Kan. 305, Syl. ¶ 1, 918 P.2d 1274 (1996).

Thus, even in the Kansas malpractice action, a finding that Davis violated Rule 4-1.8(g) is unnecessary. Obviously, the Missouri action was not an attorney disciplinary proceeding, and an interpretation of the applicability of the ethical rules was not required. Accordingly, the Kansas district court erred in applying the doctrine of collateral estoppel.

Finally, the court found that an order sealing the settlement terms was proper:

The overarching theme of Tilzers' impassioned argument on this issue appears to be that the public has a right to know that the pharmaceutical companies orchestrated an illegal settlement of a highly publicized and emotional case. Tilzers are in the wrong venue to make that argument. This is a legal malpractice action, where the most that will be established is that Tilzers' own former attorneys breached a legal duty by laboring under a conflict of interest among several clients involved in a single settlement agreement. The legality of the pharmaceutical companies' actions in proposing the settlement will not be implicated in any manner. Judge Wells' ruling that the settlement agreement was legal and valid will not be overturned. In short, Tilzers should have attempted to shine the light of public scrutiny upon the Missouri proceedings, rather than attempt to circumvent the Missouri court's protective orders in this Kansas proceeding.

(Mike Frisch)

April 3, 2009 in Clients, Law & Business | Permalink | Comments (0) | TrackBack (0)

Cause For Depression

The Pennsylvania Supreme Court  imposed disbarment in a matter involving misappropriation of entrusted funds. The Disciplinary Board had found that the evidence failed to establish that the misconduct was caused by depression brought on by the strained relationship between his third wife and a daughter from a second marriage. He wanted to funnel money to the daughter without knowledge of the wife. The bar's medical expert had confirmed that the lawyer suffered from major depression  but "opined that in his experience depression does not trigger acts of dishonesty."

The board found that the lawyer had not established that depression was a causal factor producing the misconduct: "We do not find [his] assertions regarding his daughter being responsible for his misappropriations to be credible or compelling, as he had misappropriated $62,500.00 of funds belonging to his daughter, and [he] had also taken other funds from the estate that had nothing to do with his daughter." He had been suspended for three years in 1979 and later reinstated after his guilty plea to 114 counts of theft by deception. (Mike Frisch)

April 3, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Not Lawyer Or Broker

An attorney admitted in Nebraska and South Carolina was contacted by the attorney of a person who wished to sell real estate in Costa Rica. The seller agreed to pay a 4% finder's fee to the attorney if he was able to find a purchaser. The attorney (named Wiseman) introduced the seller to one of his clients, who eventually made the purchase. The attorney did nothing to facilitate the transaction other than a single phone call. When the seller died, the attorney sought payment of the 4% from his estate.

The Nebraska Supreme Court held that the attorney was not entitled to any fee for legal services to the seller as his claim that he had represented the seller "is not supported by the record." Further, the attorney did not have a real estate license and was precluded by statute from payment for services performed as a real estate broker. (Mike Frisch)

April 3, 2009 in Economics | Permalink | Comments (1) | TrackBack (0)

No Obstacle To Reinstatement

The Pennsylvania Supreme Court reinstated an attorney who had been suspended for two years in 2005. The attorney had mishandled an estate matter, charged excessive fees to the estate and had demanded loans from the estate without security or set terms for repayment.

One issue that arose during the reinstatement proceeding involved evidence that he had acted as the executor of two estates while he was suspended. He had provided notice that he was a suspended attorney, been advised by counsel (who also represented him in the reinstatement) that he could serve as an executor, and in both matters the beneficiaries agreed that he had not charged excessive fees and expressed satisfaction with his services. According to the appended report of the Disciplinary Board: "[his] actions [as executor] do not mirror those that resulted in his suspension, nor do they pose an obstacle to reinstatement. " (Mike Frisch) 

April 3, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Fee Award Upheld

The New York Appellate Division for the First Judicial Department upheld a judgment for legal fees and dismissed malpractice counterclaims. As to fee entitlement:

The record shows that in December 2003, each defendant signed an agreement with [law firm]plaintiff, acknowledging that it owed plaintiff a certain sum of money for their legal representation and agreeing to pay it within a certain amount of time. Although defendants contend that there is a triable issue of fact as to whether these agreements were signed under duress, "[r]epudiation of an agreement on the ground that it was procured by duress requires a showing of both (1) a wrongful threat, and (2) the preclusion of the exercise of free will" Here, defendants have admitted that the December 2003 agreements resulted from significant negotiations with plaintiff during which they were represented by separate counsel, and even if plaintiff threatened to cease representing defendants unless it were paid, that is not a wrongful threat (id.). There is no need for discovery as to whether the December 2003 agreements are enforceable, as the existence of a wrongful threat and the overbearing of defendants' free will are both matters within defendants' knowledge.

The affidavit of defendants' principal, which claimed that he orally protested plaintiff's services, does not serve to defeat plaintiff's motion. A client's "self-serving, bald allegations of oral protests [a]re insufficient to raise a triable issue of fact as to the existence of an account stated" and defendants do not need discovery as to whether they ever protested plaintiff's bills, since that is also a matter within their own knowledge.

Defendants' contention that the December 2003 agreements cannot form the basis of an account stated because they are not itemized billing statements, is raised for the first time in their reply brief and is not entitled to consideration. In any event, plaintiff's account stated claims are not based solely on the December 2003 agreements, but also on the detailed billing statements dated from January 2004 through August 2004. (citations omitted)

(Mike Frisch)

April 3, 2009 in Economics | Permalink | Comments (0) | TrackBack (0)

Thursday, April 2, 2009

Suspension En Masse

The New York Appellate Division for the First Judicial Department entered an order today suspended a batch of lawyers for non-compliance with registration requirements:

Section 468-a of the Judiciary Law requires every resident and nonresident attorney admitted to practice in the State of New York to file a biennial registration statement with the administrative office of the courts. A biennial registration fee must be paid at the time the statement is filed. This registration statement, which is mailed every two years by the Office of Court Administration to every attorney so admitted, must be timely filed and the fee paid regardless of whether the attorney is actually engaged in the practice of law in New York or elsewhere. Attorneys who certify to the Chief Administrator of the Courts that they have retired from the practice of law are exempt from paying the registration fee at the time the statement is filed. Subdivision (5) of the statute provides further that “[n]oncompliance by an attorney with the provisions of this section and the rules promulgated hereunder shall constitute conduct prejudicial to the administration of justice and shall be referred to the appropriate appellate division of the supreme court for disciplinary action.”

Pursuant to this provision, petitioner Departmental Disciplinary Committee seeks an order suspending from the practice of law certain attorneys (whose last name begins with the letters A through K) who are in violation of the statute, in that they have failed to file the registration statement and pay the registration fee for one or more registration periods after due purported notification. This is another in a series of motions to suspend attorneys who have failed to file biennial registration statements with the Office of Court Administration. This Court has previously held that failure to register or re-register, and pay the biennial registration fee constitutes professional misconduct warranting discipline (see Matter of Pierini, 21 AD3d 42 [2005]). Since 1997 this Court granted similar motions and suspended attorneys en masse for such failure to register or re-register, and pay the registration fee pursuant to Judiciary Law § 468-a (see Matter of Attorneys in Violation of Judiciary Law § 468-a, 230 AD2d 366 [1997]; 240 AD2d 106 [1998]; 247 AD2d 158 [1998]; 257 AD2d 127 [1999]; 36 AD3d 34 [2006]; 51 AD3d 1 [2008]).

The attorneys in question have been duly notified of their noncompliance and given an opportunity to cure their default. The Office of Court Administration mailed each of the defaulting attorneys a biennial registration form to their last known home address, a second notice to their last known business address, and a final notice to their home address. Attorneys who remained in default following these three notices were referred to the Disciplinary Committee. On October 31, 2008, this Court published notice in the New York Law Journal that the Disciplinary Committee would institute an omnibus disciplinary proceeding seeking immediate suspension from the practice of law against those attorneys who did not cure their default by November 24, 2008. A list of approximately 952 attorneys who failed to submit satisfactory proof of registration and payment of fees was forwarded to the Committee. The Committee then filed its motion for service by publication of the notice of petition to suspend.

(Mike Frisch)


April 2, 2009 in Bar Discipline & Process | Permalink | Comments (3) | TrackBack (0)

52 Pick Up

The Arkansas Supreme Court ordered the disbarment of an attorney who had been the subject of a wide array of charges alleging ethics violations. The court found that the attorney had racked up 75 ethical violations and that 52 were of a serious nature. The court rejected a proposed three year suspension, ageeing with disciplinary counsel that disbarment was the appropriate sanction. The court noted that the attorney had previously been the subject of 14 public sanctions-- one caution, nine reprimands and four suspensions of varying length. (Mike Frisch)

April 2, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Back To Square One

There are relatively few cases that closely examine the procedural aspects of bar discipline. An interesting case decided today by the Oregon Supreme Court held that procedural irregularities merited a remand of findings of misconduct but not dismissal of the charges.

The Bar had filed charges against the attorney and the matter was assigned to a hearing panel. The Bar submitted its documentary evidence in advance of the hearing. The documents revealed a possible conflict between the accused and a panel member. The accused did not raise any issues relating to the document prior to the hearing. On the day of the scheduled hearing, the matter proceeded until the issue of the possible conflict was raised. A determination was made to send the matter to a new panel for disposition.

The attorney claimed that the prehearing submission of documents was an improper ex parte contact with the trier of fact. The court rejected that contention but addressed another procedural issue relating to the findings of the second panel:

On review, the accused does not raise directly any issue concerning the substance of the trial panel's decision.  Instead, the accused argues that two alleged procedural errors by the trial panel so deprived him of important procedural rights that this court should dismiss the entire disciplinary action against him.  The accused contends, first, that the Bar violated his due process rights by engaging in ex parte contacts with the first trial panel and, therefore, the first trial panel should have dismissed the charges against him.  Second, the accused argues that he was improperly denied the right to exercise a peremptory challenge to a member of the second trial panel and, therefore, this court should dismiss the charges against him.  As we shall explain, we find no merit in the accused's first claim, but some merit in the second.

The court majority found that the failure to permit the accused a peremptory challenge at the second hearing was procedural error that warranted a new hearing.

A dissent found that the underlying charges were proven and would affirm the findings of misconduct:

It is true that some procedural errors may affect the development of a record in a way that cannot be cured on appeal, even on de novo review.  In those instances, the case has to be remanded for a new hearing.  But this court has never held that every procedural error requires a remand.  Some errors are, after all, harmless, and the inquiry is or should be whether a procedural error affected the trial panel's decision in a way that requires a new hearing.  In this case, the accused has not even attempted to identify any way in which the erroneous denial of a peremptory challenge affected either his ability to create a record or our ability to correct any perceived error in the trial panel's resolution of the charges against him.  Perhaps the accused has not done so because the only real dispute below appears to have been whether his undisputed acts on behalf of his clients constituted the practice of law.  Had the accused chosen to raise that legal issue on review, we could have addressed it and resolved it one way or the other.  However, without any challenge to that issue and without some basis for thinking that the Bar's procedural error affected our ability to review these proceedings, I would affirm the trial panel's decision.

Most courts, I think, would agree with the dissent that a procedural mistake would not invalidate a proper determination of misconduct based on record evidence. (Mike Frisch)

April 2, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

"The exception proves the rule."

That is an expression that is not so nonsensical after all, as Ray Ward notes and links here, to this excellent Snopes reference. It is just a tad incomplete but really makes a valid legal point.

[Alan Childress]

April 2, 2009 in Blogging | Permalink | Comments (0) | TrackBack (0)

Presumptive Sanction Not Imposed

The Minnesota Supreme Court extended the ongoing suspension of a lawyer for three years based on a felony conviction for filing a false tax return. While the court noted that the presumptive sanction for a felony conviction is disbarment, the misconduct here was unrelated to the practice of law and did not involve client funds. (Mike Frisch)

April 2, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Are Those Sleek and Tidy Lawyer Offices In the Movies and on TV a Fair Depiction of Reality?

Posted by Alan Childress (and Kelly Anders, below)

Or are the occasional messy and paper-filled depictions more real?  Just how much of a lacuna exists between the representation and the reality of office godliness within the ontology of pop culture portrayals of offices used by lawyer-characters?  And isn't it worth noting, unrelated and yet apt, that the Franz Kafka Int'l Airport in Prague was ranked by Business Week as the world's most alienating airport?  Including "extremely long corridors that lead to dead ends."  (Not really.)

Anyway, the office question is not mine.  Sent to me by our occasional and interesting guest-poster Kelly Lynn Anders of Washburn Law School in Topeka is this request for more examples.  I will think about it and hope our readers do too (this is also a job for Jeff, Mike, and Nancy -- all avid lawyer-movie watchers).  Kelly writes:

On this rainy Kansas morning, I am in the midst of research for a CLE that meshes my book, The Organized Lawyer (Carolina Academic Press, 2009), with the topic of Professionalism in the Law. I just returned from the University of Iowa where I gave a similar presentation, which included a brief discussion of how lawyers’ offices appear (or don’t appear) in films and television shows, and how these depictions reflect on clients’ interpretations of what our spaces “should” look like, and how the realities may impact clients’ opinions of us as professionals. As I think about it, the only spaces one sees on screen are either slick and practically paperless (as in “LA Law” or “Boston Legal”) or old, worn, and disheveled (implying a sense of being overwhelmed and needing help, such as in “Erin Brockovich”).  I then started seeking out cases that actually mention elements of disorganization that led to sanctions or disbarment. Do you know of any such cases, or of examples on screen that show realistic depictions? Please advise.

Alan adds: I recall that there was some contrast in 1991's Class Action between the shopworn and paper-packed offices of the championing plaintiffs' lawyers (Gene Hackman and Laurence Fishburne) and the megafirm evil defenders of the auto company (including a highly conflicted -- in every sense, since she is Gene's daughter too --  Mary Elizabeth Mastrantonio).  The defense firm's offices were so pristine and sparse as to pass the OCD white glove test of Patrick Bergin in Sleeping With The Enemy, also a 1991 classic.  But I am not sure, Kelly, that the earnest messiness of Gene's firm was meant to convey a sense of overwhelmed or lesser confidence (indeed, Gene is one cocky lawyer, even before becoming a cocky jury-fixer in Runaway Jury, filmed here in New Orleans).  That is, up till late in the movie when Mastrantonio's firm delivers truckloads of documents in last-minute discovery and does in fact overwhelm Gene and, mainly, Laurence (because Gene does not do document review or client hand-holding, you see).

One nearly-related example (of personal kemptness rather than offices) is the funny opening of 1989's True Believer, in which the tidy and well-dressed person at the defense table turns out to be the criminal defense client, represented by an untidy James Woods whom the camera panned in such a way as to imply he was the defendant.  Job applicant Robert Downey Jr., back in the courtroom, gets them mixed up of course and hands his resume to the wrong one, I think.  One of the film's perhaps unintended ironies throughout is how the squeaky clean Robert Downey Jr. keeps haranguing James Woods for his lifestyle choices and representing...drug users.

As to bar sanctions, my sense is that haphazard organization is mainly a direct issue when it deals with financial records and trust accounts.  I am sure it underlies some other faults, like poor communication with clients and acts of malpractice, but I do not recall a lot of reports where it itself is the main culprit cited.  But the most realistic depictions of office space?  (Mmmm, yeaaahhh. I'm going to need you to come in on Saturday.)  Hope our readers will chime in....

April 2, 2009 in Lawyers & Popular Culture | Permalink | Comments (1) | TrackBack (0)

Yachting Litigation

In an appeal to determine eligiblity criteria for the Challenger of Record in the America's Cup, the New York Court of Appeals reversed the Appellate Division and reinstated the orders of the Supreme Court. The litigation had its genesis  in the aftermath of the 32nd competition held on July 3, 2007. Societe Nautique De Geneve (SNG), a Swiss yacht club, had won the 31st competition and sucessfully defended its rights to continue as Cup trustee in 2007. Club Nautico Espanol De Vela (CNEV), a Spanish yacht club, submitted a Notice of Challenge that was accepted by SNG.

The Deed of Gift that the race operates under "provides that once a Defender accepts a challenge, the two yacht clubs may negotiate and set the conditions for the next America's Cup competition through mutual consent." A California yacht club Golden Gate (GGYC) disputed the validity of CNEV's challenge alleging that CNEV was not a bona fide yacht club. SNG rejected that contention on the theory that the challenge had already been accepted. The matter proceeded to arbitration that GGYC rejected in favor of this litigation.

Here, the court interprets the deed of gift to accept the GGYC position that it was the proper Challenger of Record. CNEV failed to show that it met the eligility requirements in the deed of gift:

It has been posited that the right to act as trustee of the America's Cup should be decided on the water and not in the courtroom. We wholeheartedly agree. It falls now to SNG and GGYC to work together to maintain this noble tradition as 'a perpetual Challenge Cup for friendly competition between foriegn countries.' 

 (Mike Frisch)

April 2, 2009 in Law & Society | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 1, 2009

Order To Produce Escrow Records Overturned

The Texas Board of Disciplinary Appeals conditionally granted mandamus relief to an attorney (not named in the order) who had been the subject of a 2006 bar grievance that alleged failure to account for monies given by a client in a custody dispute. The accused attorney responded to the complaint but the State Bar filed an evidentiary petition alleging a number of ethics violations including failure to safekeep client property. The complainant was deposed and denied personal knowledge that the lawyer had engaged in dishonest conduct. An amended petition was then filed against the lawyer that included four checks not listed in the original complaint. The attorney's motion to strike the new charges in the amended petition was denied.

The State Bar then sought six years of escrow records from the lawyer, who objected to the requests as overbroad, burdensome, beyond permissible discovery, vague, available from other sources and privileged. The attorney sought mandanus relief when a panel ordered partial production of the records sought.

The commision found it had the authority to grant mandamus relief. It held that the order of production was overbroad as "the commission has not shown how trust account records of any of Attorney's other clients were relevant to the issues in this particular case." The order to compel production of the records was thus vacated. (Mike Frisch)

April 1, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Still A Judge

The New York Commission on Judicial Conduct censured a city court judge who while engaged in a part-time law practice had (1) arranged to have charges against a client sent to a court that had no jurisdiction to handle the case and avoid a prohibition against practicing in his own court, (2) failed to disqualify himself or disclose a conflict in a case where he had previously represented the complaining witness, (3) violated a statute that prohibited his handling three matters that had originated in his court, and (4) drafted papers for a client for a matter in his own court without identifying himself as the client's attorney. The censure was deemed appropriate because he had been candid and cooperative and, as a now full-time judge, no longer practices law.

A dissent favored removal from office. Noting that the judge's exit from private practice did not mitigate and that his prior service as a district attorney aggravated the misconduct, the dissent does not mince words: "It is contrary to logic and precedent to leave a judge on the bench who has so egregiously violated the trust of judicial office by manipulating the very system in which he is a judge for his personal benefit and the benefit of a private client."

The commission's press release is linked here. (Mike Frisch)

April 1, 2009 | Permalink | Comments (1) | TrackBack (0)

Ontology for Lawyers 101: Computer Programs, Contracts, and Reality

Posted by Jeff Lipshaw

Bear with me here for a few minutes, because I'm thinking this through in real-time.  (Also, for those of you who've complained in the past about my use of big words, you can free free to skip over this post.  I may use a couple because they just happen to be the best ones I know to describe what I mean.) 

I wrote an article, to which I've referred ad nauseum in this blog, about the family resemblances (linguistically speaking) between models and games, and how these resemblances can pose challenges to lawyers and ethicists.  The last line of the abstract said something like "lawyers need to be pragmatic ontologists."  Since ontology is the branch of philosophy that explores what is real or what exists, that was a fancy way of saying (now that I'm an academic) that lawyers often need to be thinking about whether what they are or their clients are doing is real or is merely a representation of reality.  The best example of which I'm aware is the preparation of financial statements, which are real, in the sense that they exist, but their purpose is to model or represent the reality of the business.  My contention was that elevating the accounting system to a game - giving it more ontological respect, as it were - and not treating like a model was problematic. 

I confess therefore to a heightened sensitivity to situations in which the model/game/reality issues appear.  For some reason not clear to me, we get New York magazine.  I will spare you the details why I happened to be reading it, but, if you get past the listing of movies and plays and the neighborhood news, there's a pretty neat little essay in the March 29, 2009 issue by Michael Osinski, the computer geek who wrote the programs used to create collateralized mortgage obligations, and to slice and dice them into tranches, and so on.  (This is something of a guilty cri de coeur, as he's now harvesting oysters off of Long Island, and wondering how his benign creation turned into Frankenstein's monster.)  Here's a key paragraph:

The aim of software is, in a sense, to create an alternative reality. After all, when you use your cell phone, you simply want to push the fewest buttons possible and call, text, purchase, listen, download, e-mail, or browse.... Over time, the users of any software are inured to the intricate nature of what they are doing. Also, as the software does more of the "thinking," the user does less.

"My software was a delicate, intricate web of logic," he says.  "Perhaps it was too complicated.  But we live in a world largely of our own device.  How to adjust and control these complexities, without stifling innovation is the problem."  The thing that is so interesting about his observations is the co-optation by which we come to believe that the devices we create to control the future are the future. Osinski's way of describing the co-optation is this:  "[i]t's the complexity masked by thousands of unseen whirring widgets that beguiles people into a sense of power, a feeling of dominion over the future."

That's where I was going to make the point that lawyers are to contracts as computer programmers are to software.  It's hard to think of a first-year contracts example of a simple contract to buy 100 bushels of wheat in thirty days as an alternative reality, but the more complex the agreement gets, the more it beguiles both the lawyer and her client into a sense of power, a feeling of dominion over the future.  I decided it would be nice if I linked above to something like the Stanford Encyclopedia of Philosophy on ontology.  So just after typing my name, I did a Google search and discovered, courtesy of Tom Gruber, something I never knew.  Among programmers creating artificial intelligence, the word "ontology" has its own meaning, not wholly unrelated to the philosophical meaning, and it has to do, as I understand it, with the consistent concepts and relationships that the code writers commonly understand when they are modeling a domain.  Pardon me if I fixate a bit (or go Freudian) on the use of words.  There's something profound going on when the creators of a programmer use the word "ontology" - i.e., the inquiry into existence or reality - to describe something that is a model!  At this point, I need only say "Second Life."

When I was in practice, doing or supervising M&A work, I'd be thinking about this ontological question (not in these terms, of course) when a lawyer on the other side (or my own lawyer, for that matter) seemed to be intent on winning the "reps and warranties" game (e.g., if I'm the seller's lawyer, I get points for how many times I can insert the word "material" in the reps, and then get bonus awards if I can double dip it in the indemnity section).  What's the model and what's the reality?  In the academy, I think about this when I read some of the rational actor expositions on why things happen in the real world (see Gilson's Value Creation essay or Schwartz and Scott on contract formalism).  What's the model and what's the reality?

In most circumstances, the contract is a linguistic model of the deal.  It's not the deal.

April 1, 2009 in Current Affairs | Permalink | Comments (1) | TrackBack (0)

Resume Misconduct Leads To Sanction

Another report of discipline from the California Bar Journal notes the sanction of an attorney for a false employment resume:

[The attorney] was suspended for two years, stayed, placed on three years of probation with a six-month actual suspension and he was ordered to prove his rehabilitation, take the MPRE within one year and comply with rule 9.20. The order took effect Oct. 31, 2008.

[He] stipulated to five counts of misconduct, all involving moral turpitude, stemming from misrepresentations on his resume. He claimed to have worked at two law firms where he never was employed and listed lengthy experience he never had and clients he never represented. When contacted by the general counsel for Sheppard Mullen, one of the firms where [he] said he had worked, he claimed the information was the result of typos and was meant to reflect that he had applied for a job there, not that he had worked there.

[He] stipulated that his statements demonstrated he “is untrustworthy even when confronted with an obvious lie that he made in writing.”

When questioned by a State Bar investigator, [he] said he contacted the ethics hotline and then contacted the general counsel of the law firm, implying that he initiated the contact in an effort to correct his resume. He also made false statements to a legal search firm.

I'd hazard a guess that we will see more of this type of misconduct given the downturn in the economy. (Mike Frisch)

April 1, 2009 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Drugs For Fees

More from the April 2009 California Bar Journal:

[an attorney] was suspended for three years, stayed, placed on five years of probation with a two-year actual suspension and until he proves his rehabilitation, and he was ordered to take the MPRE and comply with rule 9.20. Credit will be given for an interim suspension that began Dec. 2, 2007. The order took effect Oct. 10, 2008.

[He] stipulated to misconduct in two matters.

He was convicted in 2006 of felony possession of methamphetamine. [He] was a criminal defense attorney and told authorities he obtained the drug from clients in lieu of payment of his fees.

He was placed on interim suspension as a result of the conviction but did not file on time an affidavit stating that he notified his clients and other pertinent parties of his suspension. When he did file an affidavit, it was rejected as deficient. H] eventually filed a proper affidavit.

He stipulated that he violated the terms of his probation and that his drug possession conviction involved moral turpitude.

(Mike Frisch)

April 1, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Anger Management

The California Bar Journal reports:

[an attorney] was suspended for one year, stayed, placed on two years of probation and was ordered to take the MPRE within one year. The order took effect Oct. 10, 2008.

[He] pleaded no contest to misdemeanor battery in 2007 and stipulated that he failed to support the laws of California.

He got into an altercation with the office manager of So Cal Legal Services, where he worked. After the office manager bumped him, [the attorney] hit him. The office manager reported the incident to the police.

According to the stipulation, there was tension between the office manager and [the attorney] , who had reported the man to police after he left threatening messages on [the attorney's] answering machine. The stipulation called the altercation “an aberrant incident” and noted that [the attorney] is enrolled in anger management therapy and no longer works for the same employer.

(Mike Frisch)

April 1, 2009 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Permanently Revoked

From the web page of the Ohio Supreme Court:

 The Supreme Court of Ohio today permanently revoked the license of attorney George N. Kafantaris of Warren based on findings that he misappropriated funds entrusted to him by two different clients, failed to disclose to a probate court that he had received a $25,000 insurance settlement on behalf of a deceased client, and filed an affidavit with the Supreme Court falsely affirming that he had complied with a prior suspension order requiring him to return all client funds and files in his possession to those clients.

In a 7-0 per curiam opinion, the Court agreed with findings by the Board of Commissioners on Grievances & Discipline that Kafantaris committed 14 violations of state attorney discipline rules, including the rules that prohibit conduct prejudicial to the administration of justice; conduct involving fraud, deceit, dishonesty or misrepresentation; failure to maintain complete records of all funds held on behalf of clients; and failure to promptly pay or deliver to a client funds to which the client is entitled.

In imposing its ultimate sanction of disbarment, the Court noted the aggravating factors that Kafantaris had previously been suspended for disciplinary infractions in 2003, and that he engaged in a pattern of misconduct, acted with a selfish or dishonest motive and made false statements in official documents filed in the Trumbull County Probate Court and in the Supreme Court itself.

The court's opinion is linkedhere. (Mike Frisch)

April 1, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 31, 2009

Twice Disbarred

An attorney convicted of a series of criminal offenses who was imprisoned and disbarred in New Jersey was also disbarred by the New York Appellate Division for the First Judicial Department. The underlying conduct:

Respondent's conviction of official misconduct arose out of her misuse of state employees from 2002 to 2004 by having them perform work for her private law practice while she was employed as Chief of Staff and Senior Vice President of Operations for the New Jersey Commerce and Economic Growth Commission. As to her conviction of theft by deception (welfare fraud), respondent admitted that in 2000 and 2001, prior to her employment at the Commerce Commission, she obtained more than $500 in food stamps by filing a false application that failed to report her true income and her employment as an attorney.

Fuether information about the charges may be found in this December 2004 press release from the New Jersey Attorney General's office. (Mike Frisch)

March 31, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)