July 27, 2010
Every Mother's Son
The South Carolina Supreme Court affirmed the dismissal of a suit brought against an attorney under the following circumstances:
Appellant filed the underlying lawsuit against Respondent arising out of his representation of her husband, Lewis M. Argoe, Jr. (Husband), and son, G. Lewis Argoe, III (Son). Although now divorced, Appellant and Husband were experiencing marital difficulties at the time Respondent represented Husband and Son.
Husband and Son entered into an attorney-client relationship with Respondent, informing him that they were seeking his help in protecting Appellant from her own irresponsible and erratic behavior. They told Respondent that Appellant was acting strangely and had become financially irresponsible. Specifically, Husband and Son informed Respondent that Appellant had taken out a loan against a condominium she owned in Beaufort County, South Carolina (the Beaufort Property). Appellant told no one about the loan, allowed it to go into default, and the Beaufort Property was about to enter foreclosure. Respondent learned that Son was Appellant's attorney-in-fact pursuant to a Durable Power of Attorney executed by Appellant on April, 20, 2004. In order to avoid financial disaster, Respondent assisted Son in the transfer of title to the Beaufort Property to a trust for the benefit of Appellant. Son was the residual beneficiary to the trust and would receive legal title to the Beaufort Property in the event of Appellant's death. Pursuant to Appellant's then-existing estate plan, Son was already to receive the property upon her death. Thus, the creation of the trust at issue was consistent with the status quo.
Appellant alleges that Husband orchestrated the transfer of title to the Beaufort Property and her involuntary commitment because he feared she was going to divorce him. Husband and Son maintain these actions were taken to protect Appellant from herself. Respondent understood Husband and Son's motivations to be benevolent and there is no evidence in the record to indicate that he had reason to believe otherwise.
On August 15, 2006, Appellant filed an action against Respondent in Beaufort County asserting various causes of action, including setting aside influenced transactions, professional negligence, breach of fiduciary duty, breach of trust, invasion of privacy, intentional infliction of emotional distress, violation of civil rights, conspiracy, conversion, and abuse of process. On June 6, 2007, Appellant filed another action in Lexington County arising out of the same facts and circumstances, but naming additional defendants. The two lawsuits were combined in Lexington County. Respondent filed a motion for summary judgment, which was granted by the trial court as to all causes of action.
The court concluded that summary judgment was properly granted as the attorney had no duty of care or attorney-client relationship with the mother.
Justice Pleicones disagreed:
I agree that, generally, where an individual who holds a power of attorney hires an attorney, that attorney's client is the attorney-in-fact and not the principal who executed the power. I also agree that, in general, an attorney who acts in good faith with the authority of his client is not liable to a third party for the performance of his professional services. However, an attorney may be liable to a third party where he conspires with a client against that third party, or where his professional negligence injures a party in privity with his client. (citations omitted)
In other words, I largely agree with the majority on the applicable law. Where I disagree, however, is with the consequences, at least for the purposes of summary judgment, of respondent's advice and assistance to Son to exercise his authority as Appellant's attorney-in-fact to transfer title to the Beaufort Property from Appellant's name into a trust. Unlike the majority, I am not persuaded that, because at the time the property was transferred to the trust, Son was also the devisee under Appellant's current will, it can be said that this transfer was, as a matter of law, not a self-gift. Until the transfer of title to the trust, Appellant had the right to dispose of the property during her lifetime or to change her testamentary disposition of the Beaufort Property. Once the trust was established, however, she could no longer dispose of this property during her lifetime or in her will.
In my opinion, the evidence here is sufficient to withstand respondent's motion for summary judgment on appellant's claims of legal malpractice and conflict of interest. I would reverse.
Chief Deputy Clerk Gets Pretrial Diversion
The Tennessee Court of Criminal Appeals dismissed an appeal in a case in which a county circuit court chief deputy clerk was charged with providing information to bonding companies in exchange for cash payments. The information allegedly provided was a list of people who had missed court or been arrested. The trial court had ruled that the district attorney general abused his discretion by refusing to permit the defendant to enter pretrial diversion.
The court here held that the State cannot appeal the trial court's decision. (Mike Frisch)
July 26, 2010
Censure Proposed For Gifts From Client
The Illinois Review Board has rejected the Administrator's call for a three-month suspension and recommended a censure of an attorney who accepted $90,000 in gifts from an elderly client shortly before the client's death. The pivotal finding of the Hearing Board that the attorney did not overreach in the attorney-client relationship was affirmed by the review board. The review board concluded, contrary to the hearing board, that the conduct brought the legal profession into disrepute.
With respect to sanction:
Under the circumstances presented here, we conclude that it would be punitive to suspend Respondent. She has no prior discipline and the misconduct occurred over ten years ago. The amount of the gifts Respondent received was small relative to the size of the estate, and Respondent made full restitution to the estate four years before members of the Vermillion family filed a complaint with the ARDC. It is also significant that she did not act with a dishonest motive and had positive character evidence from four witnesses, including a retired circuit court judge and two attorneys. Additionally, Respondent was fired from her job as a staff attorney for a commercial real estate company as a result of the disciplinary charges filed against her and has not been employed as an attorney since that time.
We would recommend a sanction greater than a reprimand, however, to deter similar misconduct in the future and to impress upon Respondent and other attorneys their obligation to comply with the Rules of Professional Conduct before accepting a substantial gift from a client. We conclude that a censure will make clear to Respondent the need to be vigilant about her ethical obligations without punishing her for her misconduct. We are guided by the following censure cases, all of which involved respondents who, without dishonest motives, prepared instruments giving themselves substantial gifts from clients. (citations omitted)
Based on the foregoing cases and our consideration of all of the relevant circumstances, we recommend that Respondent receive a censure and be required to complete the ARDC Professional Responsibility Institute program within one year of the date of entry of the final order of discipline.
An ethics opinion from Nebraska deals with ethics of the use of the "Of Counsel" designation. The summary:
An attorney may only be listed on firm letterhead and in firm advertisements as "Of Counsel" where there is close, ongoing, regular, and frequent contact with the firm for the purpose of providing consultation and advice.
A firm name may retain the name of a retired partner, but not if the retired partner resumes the practice of law elsewhere, even if he maintains an "Of Counsel" relationship to the former firm.
In The Name Of the ParentsA Colorado attorney was disbarred who had "knowingly signed his parents' names on loan documents, gave them to his secretary to notarize, and tendered the signed documents to the bank. He also knew or should have known that the bank would rely on the loan documents in advancing credit that he needed in order to obtain an appeal bond." (Mike Frisch)
After Failed Witchcraft, Client in Love With Attorney Sought Hit Man to Murder His Wife
The New Hampshire Supreme Court recently affirmed a conviction for criminal solicitation to commit murder. The defendant was the client of an attorney in a workers' compensation matter. After retaining the attorney in late 2004 or early 2005, she
...developed romantic feelings for him, which she expressed by calling him repeatedly and by saying inappropriate things to him, such as referring to her cleavage, describing herself as "young," "hot," and "sexy," and telling him that she would "make the best wife in the whole wide world."
Over a period of two months, the client called the attorney 458 times. She tried to break up his marriage with magic spells that she ordered from witchcraft websites. When that failed, she turned to solicitation to murder the attorney's wife. The hit man, as so often happens, was a state trooper.
The court rejected a claim of entrapment as well as arguments over the admission of evidence at trial. (Mike Frisch)
The South Carolina Judicial Ethics Advisory Committee opines on the following question:
A circuit court judge inquires into the propriety of presiding in a civil case under the following circumstances. Lawyer A has a case pending before the judge. The judge’s spouse is a lawyer who is involved in a case (that is not pending before the judge) with the partner of Lawyer A. In that case, Lawyer A’s partner and the judge’s husband are working in concert and have a fee-sharing arrangement. One of the parties in Lawyer A’s case that is pending before the judge has questioned whether it is proper for the judge to preside, suggesting that the judge will benefit financially from Lawyer A’s firm by way of the fee-sharing arrangement between Lawyer A’s partner and the judge’s spouse in the other case. The judge inquires as to whether there is an appearance of impropriety that would require disqualification from Lawyer A’s case.
The committee's opinion:
Here, it does not appear that the judge’s spouse has a interest in Lawyer A’s firm that could be affected by the proceeding before the judge. The judge’s spouse is merely co-counsel with a member of that firm on another matter. Thus, as in many situation, the judge must use his or her discretion in determining if there is any other appearance of impropriety that would require the judge to recuse himself or herself.