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   Dear Fellow Members:

    Below you will find a link to an online copy of the Maryland Rules of Professional Conduct. We have provided this link in hopes of making your search for answers to your legal ethics questions easier. As always, if you need additional guidance, please do not hesitate to call the Legal Ethics Committee hotline at the number listed in the current issue of your bar newsletter.


         MD Rules of Professional Conduct

 

Legal Ethics Hotline Volunteers ... July
Eshigo Okasili ... (301) 452-4929 ... eshigo@okasililawfirm.com
Brian Barkley ... (301) 251-6600 ... bbarkley@barkenlaw.com

 

Compliance WIth Basic Rules of Legal Representation

In Attorney Grievance v. Powers, 454 Md. 79, 164 A.3d 138 (2017), the attorney represented an individual in a New York state court lawsuit in a dispute with a business partner.  The attorney violated several Rules of Professional conduct which are basic to the attorney/client relationship.  The Powers opinion is worthy of report to the Bar because it deals with several of those rules, including a decision of first impression pertaining to one of those rules.

Factual Summary

            The factual background is extensive, including the lawyer’s failure to cooperate with the Attorney Grievance Commission, and the following is a summary of the facts.

            The client was the defendant in the New York lawsuit which was filed with a trial court 180 miles, or 3 hours, from the client’s New Jersey residence.  454 Md. at 88.  He retained the Maryland lawyer on February 22, 2012 (id., at 87) who explained that the lawsuit “can be substantially won over the next 20 days”, and that “he would have the suit removed to federal court or move for a change of venue to the New York City area (where virtually all of the parties reside).” Id.  The client also instructed the lawyer to not consent to a TRO.  Id.  Contrary to his client’s instructions, the lawyer consented to the TRO, did not seek removal to federal court, did not move for a change of venue to the New York City area, and also failed to respond to discovery requests.  Id.  The lawyer did not inform the client that he had consented to the TRO nor inform the client of the discovery violation.  Id.

            The client authorized a New Jersey tax attorney who was a friend to contact the lawyer to get a better understanding of what was going on in the litigation and because the lawyer failed to communicate in laymen’s terms.  454 Md. at 88.

            In September 2012 the lawyer withdrew his representation of the client in the New York lawsuit.  454 Md. at 89.  On September 24, 2012, the client requested the return of his file, but the lawyer did not return the file until November 15, 2012, even though the New York litigation was ongoing.  Id.

            After termination of representation the lawyer sent a final bill for $9,470.00 that the client disputed because he had already paid $48,000.00 and the invoices were vague.  454 Md. at 89.  In response, the lawyer sent threatening emails to the client and also threatened to report the client’s tax attorney friend to New York attorney disciplinary authorities and sue both.  Id.  The client asked to arbitrate the fee, but the lawyer rejected the offer.  Id.  The lawyer then sued his client in federal district court in Maryland for breach of contract to collect his fee and sued the tax attorney for tortious interference and unfair competition.  The lawyer claimed $1,015,000.00 in damages, including attorney fees and interest, approximating $15,000.00.  Id.  The lawyer’s allegations in his lawsuit touched upon matters in the New York lawsuit that were privileged under the attorney/client relationship and accountant/client relationship.  Id.  A lawyer representing the client in the federal suit argued that there was no personal jurisdiction, no subject matter jurisdiction, and that the complaint contained privileged information.  Id.  In response the Maryland lawyer filed affidavits from a former lawyer for the client, a former accountant, and himself, all of which revealed privileged information, strategic information related to the New York lawsuit, and disparaging information about the client.  Id., at 89-90.  When the client’s attorney filed a reply, the Maryland lawyer withdrew his complaint.  Id., at 90.

            The judge in the lawyer’s federal lawsuit issued a memorandum opinion and order that lawsuit which, inter alia, ordered that the majority of attorney/client information that the client sought to have redacted was confidential under the privilege, and that much of the information related to the accountant/client privilege also was confidential.  454 Md. at 90.  The plaintiff in the New York lawsuit, however, had obtained privileged information that had been disclosed in the federal court complaint and used it against the client in the New York lawsuit.  Id.

            Not to be done with the matter, the lawyer filed in the New York lawsuit an expedited motion to show cause in which he asked that his now former client show cause why he should not pay the lawyer’s fees and also requested that the court investigate the alleged conduct of the tax lawyer friend.  454 Md. at 90-91.  The New York court did not rule on the lawyer’s requests, and the lawsuit was transferred to the New York City area.  Id., at 91.  After the transfer the lawyer wrote to the new presiding judge requesting that the judge advise him how he could best present a motion to compel the payment of his fee.  Id.  The judge declined the request.  Id.

Court Determination

            The Court of Appeals determined that the lawyer’s conduct raised several rules of the then Maryland Lawyer’s Rules of Professional Conduct (“MLRPC”).1

Rule 1.2(a), Scope of Representation and Allocation of Authority

            Rule 1.2(a) (currently MARPC Rule 19-301.2(a)) provides that a lawyer “shall abide by a client’s decisions concerning the objectives of the representation and, when appropriate, shall consult with the client as to the means by which they are to be pursued” and “may take such action on behalf of the client as is impliedly authorized to carry out the representation.” 454 Md. at 101.  As to Rule 1.2(a), the Court found that the lawyer “failed to abide by his client’s instructions regarding the course of action of the litigation, specifically as it related to the TRO and the change of venue of the court” and also “failed to inform his client that [he] had agreed to produce the client’s tax returns to opposing counsel.”  Id.  The client was held in contempt for failure to produce the tax records.  Id.

Rule 1.4, Communication.

            Rule 1.4 (currently MARPC Rule 19-301.4.) is lengthy but essentially it requires attorneys “to keep their clients informed of the status of the case.”  454 Md. at 101.  As to Rule 1.4 the Court found that the lawyer “failed to inform his client that [he] had consented to the TRO”, “failed to tell [the client] that he needed to produce tax returns” and “failed to communicate with his client in a way that his client could understand.”  Id., at 102.  The Court noted that the failure to communicate caused the client to seek help from his friend, the tax attorney.  Id.

Rule 1.6, Confidentiality of Information

            The Court of Appeals stated that the lawyer’s “most egregious actions occurred after his representation” (454 Md. at 102 (emphasis not added)) of the client and involved Rules 1.6 and 1.9.

            Rule 1.6 (currently MARPC Rule 19-301.6) provides that a “lawyer shall not reveal information relating to representation of a client unless the client gives informed consent [and] the disclosure is impliedly authorized in order to carry out the representation”.  454 Md. at 102.  Apparently this decision is the first Maryland case involving a violation of Rule 1.6 for disclosing, without the client’s consent, information within the attorney-client privilege.  Id.  The Court of Appeals referenced a West Virginia decision and determined that the lawyer violated the rule when he disclosed in his federal court lawsuit against his client and the tax attorney friend information that was within the attorney-client privilege and which was used by the opposing party in the original New York lawsuit (see, 454 Md. at 89-90) against the client.  Id., at 103.

            The Court of Appeals also found that the lawyer threatened his client (and the tax attorney friend) when he was unsuccessful in resolving the dispute about his fee.   454 Md., at 103-04.  It did not, however, expressly state that the threat was a violation of Rule 1.6, but a lawyer’s threat to his client was involved in the West Virginia case cited by the Court.

Rule 1.9(c), Duties to Former Client.

            Rule 1.9 (currently MARPC Rule 19-301.9(c)) deals with the obligations that an attorney has to a former client and at subsection (c) states that the attorney “shall not”:

    (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or

    (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.

 

454 Md. at 104.

            In Powers the Court of Appeals determined that the attorney’s disclosure of confidential information in his federal lawsuit against his former client constituted a violation of Rule 1.9, as well as Rule 1.6.  454 Md. at 104-05.

Rule 1.16(d), Termination of Representation.

            Rule 1.16(d) (currently MARPC Rule 19-301.16(d)) is another rule which concerns an attorney’s obligations to a former client:

Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred.  The lawyer may retain papers relating to the client to the extent permitted by other law.

 

454 Md. at 105.

            The Court noted that an attorney’s delay in returning a case file to a client can be a violation of the rule, citing, Attorney Grievance v. Landeo, 446 Md. 294, 335-37, 132 A.3d 196, 220-21 (2016).  454 Md. at 105.  It then held that the attorney violated the rule because he took two months (see, 454 Md. at 96) to return his client’s file in its entirety and send a final invoice.  Id.

Rule 3.1, Meritorious Claims and Contentions.

            Rule 3.1 (currently MARPC Rule 19-303.1) provides that a “lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous....”.  454 Md. at 105.

            This rule was violated because the lawyer sued his then former client and the tax attorney friend in federal district court in Maryland which lacked both personal and subject matter jurisdiction “merely in an effort to extract legal fees by any means.”  454 Md. at 105.  The Court of Appeals noted that the lawyer knew or should have known that the Maryland federal court lacked both personal and subject matter jurisdiction, and manifested such knowledge because he withdrew his pleadings from that court and then used the New York court.  Id., at 105-06.  It also noted that he sued the tax attorney friend for contractual interference.  Id., at 106.

Rule 4.4(a), Respect for Rights of Third Persons.

            Rule 4.4(a) (currently MARPC Rule 19-304.4(a)) provides that:

(a)       In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that the lawyer knows violate the legal rights of such a person.

 

454 Md. at 106.

            The Court of Appeals determined that this rule was violated because the attorney filed his lawsuit against his former client and the tax attorney friend “as a means of compelling his former client to pay [his] outstanding legal bill” and that both had to incur legal fees to defend against that lawsuit.  Id., at 106.  The Court characterized that conduct as “tactics” that had “no substantial purpose other than to embarrass, delay, or burden” the former client and his tax attorney friend.  Id.

Rule 8.4(a), (d), Misconduct.

            Rule 8.4 (currently MARPC Rule 19-308.4) specifies in subsection (a) that it is misconduct for an attorney to “violate or attempt to violate” the Rules of Professional Conduct, and in subsection (d) that it is misconduct for an attorney to “engage in conduct that is prejudicial to the administration of justice”.

            In Powers the Court found a violation of the rule, determining that the lawyer’s Maryland federal court lawsuit was “conduct that brings the legal profession into disrepute” and the disclosure of confidential information was conduct that “denigrates the legal profession.”  454 Md. at 107.

Sanction

            The Court of Appeals spent a substantial amount of time and effort in deciding upon an appropriate sanction.  454 Md. at 107-12.  It rejected the lawyer’s excuses which centered on his personal marriage/family related situation.  Id., at 108.  He was a member of the Maryland Bar for twenty-three years.  Id., at 111.  The Court recognized that the lawyer’s “violations neither represent a pattern of misconduct, nor involve intentional deceit to the court.”  The lawyer “acted to the detriment of his former client in his dogged attempts to recoup an alleged financial loss.”  Id.

            The Court concluded that “this case was a close call between our imposing the sanction of disbarment or indefinite suspension.”  454 Md. at 112.  It stated that the violations of the rules of professional conduct “particularly of Rules 1.6 and 1.9, seriously undermine his integrity as a member of this Bar. [And,] demonstrated not only indifference towards the attorney discipline process, but an inexplicable absence of serious regard for his ethical duties to his former client [ ].”  Id.  It indefinitely suspended the attorney.  Id..

Bill Chen, Esquire
Samuel M. Shapiro, Esquire
P. David Gavin, Esquire
Allen J. Katz, Esquire

Co-Chairs

P. David Gavin
Allen J. Katz

Samuel M. Shapiro

 

   Committee
   Meetings

Sept. 20, 2018
Oct. 25, 2018
Nov. 15, 2018
Dec. 20, 2018
Jan. 17, 2019
Feb. 21, 2019
Mar. 21, 2019
Apr. 18, 2019
May 16, 2018

Meetings will be held on the 3rd Thursday of the month at 4:30PM in the upstairs conference room of the Bar Association building, unless otherwise noted.