Lawyer For (A) Day

A District of Columbia Hearing Committee proposes a 60-day suspension of an attorney.

In many ways, this is a straightforward case. The core question here is whether Mr. Robbins, the Respondent, had an attorney-client relationship with a man named Gary Day with respect to a particular transaction. There was no engagement agreement between the two that covered that transaction; no fee paid by Mr. Day for legal work on that transaction; no document that established an attorney-client relationship; and no testimony from any witness to a conversation where Respondent and Mr. Day agreed that they would enter into an attorney-client relationship. We nonetheless find that there was an attorney-client relationship, for the reasons set forth below.

On that threshold issue

We take very seriously Mr. Day’s testimony that he believed that Respondent was his lawyer. The Court of Appeals has held that “client’s perceptions are [an] important consideration in determining whether attorney-client relationship existed.” In re Bernstein, 707 A.2d 371, 375 (D.C. 1998) (citing Leiber, 442 A.2d at 156). As set out above, we find Mr. Day credible and believe his testimony about his understanding that Respondent represented him. In addition, Mr. Day testified that he agreed to sign the indemnification agreement based on his trust in Respondent. See FF 25. We find this, too, to be strong evidence of his understanding of Respondent’s role.

Moreover, Mr. Day’s belief was reasonable. Respondent had represented Mr. Day in the past in connection with a number of business deals. And Respondent’s work on the matter was consistent with what lawyers do in such situations; he negotiated a part of the agreement and memorialized it. As a result, we have little trouble concluding that Mr. Day’s belief was reasonable. This strongly supports a finding that there was an attorney-client relationship…

Finally, while Respondent makes much of the lack of documentation clarifying their relationship, we believe that door swings the other way. Respondent could have easily avoided this problem by simply telling Mr. Day that he was not representing him. He did not do so. This strongly supports the conclusion that Respondent represented Mr. Day. In re Schlemmer, BDN 444-99 (BPR Dec. 27, 2002) at 14 (“[W]hen a lawyer does not make the conditions of his retention clear, the client’s view of the creation of an attorney-client relationship will prevail.”), aff’d in relevant part and remanded for further consideration of sanction, 840 A.2d 657, 664 (D.C. 2004).

 Mr. Pledger’s understanding that Respondent represented Mr. Day is wholly consistent with this view. He was a third party witness with no dog in the fight. Perhaps more importantly, what he describes is, again, highly consistent with what a lawyer would do. Lawyers tell opposing counsel to talk to them and not to their client. See Rule 4.2. Mr. Pledger explained that Respondent identified a conflict of interest that would prevent him from representing Mr. Day if a suit were to be filed. This is also consistent with Respondent functioning as counsel for Mr. Day.

Ultimately, we have little trouble finding that Respondent represented Mr. Day. Mr. Day reasonably believed Respondent was his lawyer; a disinterested third-party, Mr. Pledger, reasonably believed Respondent was Mr. Day’s lawyer; and Respondent acted like Mr. Day’s lawyer. There is little in the record to question this conclusion. 

This finding led to conclusions that the attorney had failed to communicate with his client and engaged in both a concurrent client conflict of interest as well as a personal conflict (in other words, conduct in violation of two separate subsections of Rule 1.7):

Respondent simultaneously represented Persaud and Mr. Day. At the outset of the representation, Respondent knew that Persaud’s failure to perform on its contracts would cause Hudson to seek payment from Mr. Day. As a result, Mr. Day expected Respondent to protect Mr. Day’s interests by requiring the surety to seek indemnification from Persaud and Andy Persaud before Mr. Day. These protections were not written into the indemnity agreement, but Mr. Day nevertheless signed the agreement based upon assurances from Respondent. The potential conflict turned into an actual conflict when Respondent realized that Persaud was having financial and performance problems. At that point, Respondent was constrained by Rule 1.6 to protect Persaud’s confidences and secrets, but also obligated under Rule 1.4 to keep Mr. Day reasonably informed about the status of the matter. Despite this untenable position, instead of withdrawing from the representation, Respondent simply failed to inform Mr. Day of this development. (citations to record omitted)

Sanction

 Mr. Day walked into a transaction thinking he had a lawyer who was looking out for his interests. He was wrong. His lawyer stood to profit personally from the transaction and so did his lawyer’s other client. While Respondent characterizes this as bringing a good investment to Mr. Day (FF 15), it is clear that without Mr. Day, Respondent would have had to do more work to get this deal funded – assuming the deal could be funded at all. Respondent’s motives cannot reasonably be characterized merely as bringing an investment opportunity to a friend. He stood to benefit, as did his other client. He may have wanted this to work out for Mr. Day, but, to be clear, he wanted it to work out for himself and his other client too. 

Respondent also failed to inform Mr. Day about Persaud’s failure to comply with his obligations as a part of the deal. Indeed, Respondent’s actions hurt Mr. Day’s ability to learn what was happening with his investment. Because of Respondent’s actions, Hudson’s lawyer, Mr. Pledger, did not communicate Hudson’s demands to Mr. Day. Instead of serving the purposes of Rule 1.4 – to keep a client informed – Respondent did not merely fail to keep his client informed, he affirmatively kept him from getting information about what was happening with his investment. And he appears to have done this for the most base of reasons – to avoid having his misconduct come to light.

We see this as serious misconduct…

Here, the character of the conflict of interest bears closest resemblance to [prior cases] Shay and Cohen, in which the respondents represented two parties with aligned interests that later diverged, and later withheld information from one client in order to favor the other. The conduct here is more serious than that in both of these cases in the sense that Respondent was motivated by personal financial gain. Respondent here stood to personally profit from the conflict; that suggests a more substantial sanction than where the attorney did not have such a personal motive in the case. At the same time, the misconduct at issue here is less serious than that in Shay. The active conflict of interest and withholding of information did not persist for six years and was not accompanied by dishonesty. Respondent’s conduct is also less serious than that in both Evans and Elgin, in which the Court imposed six-month suspensions, due to the absence of serious companion Rule violations and significant aggravating factors, such as prior discipline.

The case is In re Seth Robbins and can be found at this link by clicking on Disciplinary Decisions.  (Mike Frisch)