The Landman’s Betrayal

The North Dakota Supreme Court has imposed a 90-day suspension of an attorney who had betrayed the confidences of a prospective client.

Carpenter was admitted to practice law in North Dakota on October 5, 1981. From 1981 until 1987, Carpenter worked as an oil and gas landman in North Dakota. During this period, Carpenter became a business acquaintance with another landman, Martin Thompson. After 1987, Carpenter began practicing law and also eventually became a real estate broker in Bismarck. In the late 1990s, the Christian Science Church listed property it owned in Bismarck with Carpenter and Carpenter assisted the Church in having the property re-zoned to facilitate its sale. Through the years, Thompson and his mother also listed their Bismarck homes for sale with Carpenter. In 2008, Thompson approached Carpenter about a potential opportunity to obtain mineral interests in McLean County. Although they agreed to a “50/50” partnership arrangement in the matter, the deal never came to fruition.

The court affirmed findings that Thompson sought Carpenter’s counsel and divulged substantial information that he had obtained through extensive research concerning the purchase.

Carpenter did not represent Thompson; rather, he used the information in representing the Church.

The court found Rule 1.18 and 1.7 violations

The record reflects that the information provided to Carpenter had already been divulged to the Church through Thompson’s efforts with the Williston attorney. We recognize that most of the information was contained in public records, and generally “records that are already public . . . are not confidential and thus would not pose any significant harm.” …But it is quite another matter when a person devotes more than 300 hours searching public records for pieces of a puzzle in an attempt to locate a deceased’s heirs. The information collected by Thompson was valuable to Thompson, and was sensitive information Carpenter would not have received in the ordinary course of due diligence. Thompson divulged this information of a potential claim to Carpenter, who had previous dealings with the Church, and Carpenter took advantage of this information. Carpenter took over Thompson’s efforts to negotiate with the Church, and as a result, Thompson suffered harm from Carpenter’s actions. But for Thompson giving the information to Carpenter, Carpenter would not have had the opportunity to represent the Church in obtaining the Mountrail County mineral interests and receiving a portion of those interests. 

 The court concluded that a period of suspension was appropriate

Carpenter violated duties owed to a potential client by knowingly using the information provided to him for his personal benefit, resulting in actual harm to the potential client through loss of any compensation for Thompson’s many hours spent searching for heirs of the deceased. The mineral rights were valued at up to $3 million. 

(Mike Frisch)