Reasonable Belief Insufficient

A lawyer admitted in Ohio was granted pro hac vice status to represent the interests of two  entities and individual partners in Arizona. He sued a limited partner for legal fees and received a substantial award in federal district court based on a finding that he reasonably believed that his former client was a general partner. On appeal, the United States Court of Appeals for the Ninth Circuit held that the lawyer could not rely on such a belief: “such a holding would be perverse because [the lawyer] acted as legal counsel to both the [entity clients] and the [individual limited partners] and owed a fiduciary duty of care to both.” The lawyer was bound by the ethical rules applicable to members of the Arizona Bar. As a matter of basic competency, it was incumbent upon the lawyer to review the organic corporate documents. The lawyer may not benefit from the failure to examine the corporate documents, which would have clearly established the limited partner status of the defendants in the suit for fees. The case was remanded for further proceedings. (Mike Frisch)