Risky Business

A conflict of interest has resulted in a 60-day suspension by the Iowa Supreme Court

In the transaction between Wieniewitz and Synergy, Willey represented two parties on opposing sides of a transaction. The interests of Wieniewitz as the party loaning the money, and Synergy as the party receiving the loan, were at odds from the beginning. That the two parties had competing interests is demonstrated throughout the transaction. Throughout the email correspondence, Willey was repeatedly caught between the interests of Wieniewitz and the interests of Wild. During the entire transaction, Willey continued to represent the interests of Wild and Synergy, charging and collecting tens of thousands of dollars in legal fees. At the same time, Willey was unable to adequately pursue the interests of Wieniewitz in obtaining the return of his original investment, let alone any of the future payments promised to him in the promissory note prepared by Willey on behalf of Synergy/Wild. Other than forwarding information from one client to another, Willey did nothing to advance the legal interests of Wieniewitz.

After Wieniewitz obtained new counsel, Willey expressed that he could not give certain information to Wieniewitz because of nondisclosure agreements and because dispersing the information could harm Wild. Clearly, Synergy was not in a position to return Wieniewitz’s money, and Willey was not able to adequately pursue Wieniewitz’s interest in obtaining a full refund of the money he provided under the promissory note. We agree with the finding of the commission and hold that the Board proved a violation of rule 32:1.7(a)(2) by a convincing preponderance of the evidence.

On informed consent

If there is a concurrent conflict of interest, our rules provide a mechanism for the attorney to cure the conflict and continue to represent both clients. Iowa R. Prof’l Conduct 32:1.7(b); see also Stoller, 879 N.W.2d at 210. If a concurrent conflict of interest exists, one of the steps an attorney must take to cure the conflict is to obtain “informed consent, confirmed in writing” from both clients. Iowa R. Prof’l Conduct 32:1.17(b)(4). When the conflict exists at the outset of representation, the attorney must obtain the written consent before undertaking the representation. Id. r. 32:1.7 cmt. 3. Contrary to the position taken by Willey, he never informed Wieniewitz of the concurrent conflict of interest, and certainly not the extent of his relationship with Wild or his involvement with Synergy. Willey failed to obtain any informed consent, confirmed in writing, from Wieniewitz before continuing to represent both parties in the loan transaction. We agree with the finding of the commission and hold that the Board proved a violation of rule 32:1.7(b)(4) by a convincing preponderance of the evidence.

Sanction

While failing to disclose the conflict of interest to Wieniewitz, Willey repeatedly represented to Wieniewitz that his payment was forthcoming “soon,” whether in a few days or the next week. Willey continued to tell Wieniewitz the payment would be coming “just next week” for nearly two years. It was only much later that Wieniewitz learned of the conflict of interest, and then Willey advised him to seek other legal counsel. In our de novo review of the record, and considering all of the mitigating and aggravating circumstances in this case, we find that the aggravating factors weigh in favor of a longer period of suspension. We conclude a sixty-day suspension is appropriate.

(Mike Frisch)