Conflict Draws Censure
An attorney’s conflict of interest in multiple representations drew a public censure from the New Jersey Supreme Court.
The Disciplinary Review Board report describes the situation
Here, respondent violated RPC 1.7(a)(2) by continuing to represent Cuyco in connection with the dispute between Cuyco and Takahashi when he knew, at least as early as his receipt of the April 1, 2015 e-mail from Cuyco, that the relationship between Cuyco and Takahashi irreparably had broken down. Respondent continued his representation of Cuyco, however, in ongoing negotiations with Takahashi’s counsel regarding their dispute, notwithstanding the significant risk that his representation of Cuyco would be materially limited by his obligations to Takahashi and Champion. Also, respondent violated RPC 1.7(b)(1) by failing to obtain the required informed, written consent from Takahashi, Cuyco, or Champion, after full disclosure and consultation; nor did he explain the advantages and risks of a common representation to any of the parties.
The parties
This matter stems from a dispute between two business partners – the grievant, Hiroki Takahashi, and Renato R. Cuyco, Jr. Cuyco is the stepson of respondent’s uncle and introduced respondent to Takahashi. Prior to the dispute between the parties, respondent had represented Takahashi in connection with a traffic ticket.
In March 2013, Takahashi and Cuyco formed Champion Autosports, LLC (Champion), a car dealership business involved in the sale, leasing,
and servicing of luxury automobiles. Champion’s March 11, 2013 operating agreement provided that Takahashi owned 70% of the company and Cuyco owned 30% of the company, but it did not set forth the capital contributions of either party.
Respondent provided legal services to the entity, including negations with landlord Rex 3.
He had favored Cuyco in handling entrusted funds
…respondent violated RPC 1.15(a) by endorsing the $2,320 security deposit check from Rex 3 and submitting it to Cuyco, despite his awareness that Takahashi had retained counsel and was threatening litigation. Given the circumstances, respondent was duty-bound to deposit those disputed funds in his ATA and to safeguard them until the dispute was resolved. Respondent also violated RPC 1.15(b) by failing to notify Takahashi when respondent received the check.
As to disputed allegations involving a statement being a prohibited threat
To determine whether an attorney’s advocacy crossed the line contemplated by RPC 3.4(g), we examine both the context of the conduct and the attorney’s intent. In that light, Cuyco, as the operating principal of Champion, was still responsible for the vehicle and the dealer plates possessed by Takahashi. Regardless of whether the ongoing business dispute was headed toward civil litigation, Cuyco had the right to pursue parallel, criminal charges against Takahashi, within the bounds of the RPCs, and to obtain legal representation toward that purpose.
The question before us is whether respondent’s statements in his letter were intended to gain an improper advantage in a civil matter. Based on this record, we concluded that the OAE failed to sustain its burden of proof that the advantage was improper. Indeed, if Takahashi failed to return Champion’s property, Cuyco was entitled to pursue other remedies available to him, including reaching out to criminal authorities to report Takahashi’s perceived theft. Although, as respondent recognized, his statement was potentially “problematic,” we find both respondent’s intent and the context of the statement to be factually distinguishable from the precedent discussed above. Thus, we are unable to conclude by clear and convincing evidence that the statement violated RPC 3.4(g), and determine to dismiss that charge.