Monday, July 8, 2013
John Steele at Legal Ethics Forum has posted a very interesting bar discipline decision from the Kentucky Supreme Court.
The court suspended the attorney for 120 days for, among other things, a violation of Rule 1.13(a) (organization as client).
The attorney represented a corporation of heirs to approximately 500 acres of land "rich in timber, oil, coal, and gas." He was hired to pursue recovery of proceeds from timber that was wrongfully harvested and coal that was wrongfully mined.
A division between two factions of heirs developed. A new board (consisting of all prior board members save one) was elected.
The attorney challenged the legitimacy of the new board and filed suit in the corporation's name without corporate authority. Eventually, the attorney arranged for another lawyer to handle the case, which was converted to a shareholder derivitive suit.
The court held that the attorney failed to communicate with the board (his client) and violated Rule 1.13(a) in that "the steps he took (such as filing the suit) were not reasonable and did not avoid disrupting the organization, as required by the rule."
The attorney also violated the duty of confidentiality by turning over files to successor counsel.
Bloomberg BNA had the original report of the decision. (Mike Frisch)