The Eyes Of Catonsville Are Upon You

The Maryland Supreme Court imposed a stayed 60-day suspension for conflict-related ethics violations

These violations stemmed from Respondent’s conflict of interest in the representation of two clients; putting the parties in direct conflict during representation; failing to recognize and advise clients of the conflict of interest; failing to attempt to obtain the clients’ informed consent, confirmed in writing, to continue with the representation; entering into a business transaction with a client without advising the client, in writing, of the desirability of seeking advice of independent counsel and without giving the client a reasonable opportunity to do so; representing a client against a former client without obtaining written, informed consent from the former client; and engaging in conduct that is prejudicial to the administration of justice.

Considering the nature of the misconduct and the various aggravating and mitigating factors present, the Supreme Court of Maryland concluded that a sixty-day suspension, stayed in favor of a six-month probationary period with the conditions that Respondent adhere to the Maryland Attorneys’ Rules of Professional Conduct and complete a continuing legal education course on conflicts of interest or general ethics, is the appropriate sanction.

Complainant

Peepers Family Eye Care (“Peepers”) is an optometry practice owned and operated by Dr. Norman Fine and Dr. Erick Gray. Dr. Gray “focuses on the administrative aspects of the business[]” while Dr. Fine “focuses on patient care.” Dr. Gray expanded Peepers’ practice by opening roughly eight stores, including Catonsville Eye Associates, LLC (“Catonsville Eye”). In this capacity, Dr. Gray has experience with commercial leases but always used his own attorney to review each lease.

The conflict involved advice concerning a lease

The hearing judge determined that Respondent violated MARPC 19-301.7 by concurrently representing Catonsville Eye in the termination of their Rolling Road lease and in the negotiation of the Baltimore National Pike Property lease with MAH Mountain. According to the hearing judge, this representation “created a significant risk that the representation of one client would be materially limited by his responsibilities to another client.” In fact, the hearing judge found that Respondent’s concurrent representation put the parties “in direct conflict with each other[.]” Respondent, as a partial owner in MAH Mountain, had a “personal interest” in the outcome of the lease negotiations. Therefore, Respondent’s “‘loyalties were divided’” between MAH Mountain and Catonsville Eye in violation of MARPC 19-301.7(a)(2). As evidenced by Respondent’s emails, the hearing judge noted that he was clearly “aware of the potential for a conflict of interest,” yet Respondent “failed to obtain Catonsville Eye’s informed consent in writing as required by [MARPC 19-301.7](b).

The court majority found that Catonsville Eye was a client entitled to protection under conflict of interest rules.

Sanction

Petitioner alleged the existence of two aggravating factors: (1) dishonest or selfish motive and (2) substantial experience in the practice of law. The hearing judge found clear and convincing evidence to establish each of the alleged aggravating factors. Respondent, as a partial owner of MAH Mountain, exhibited a selfish motive by pursuing MAH Mountain’s interest, “and therefore his own . . . to the detriment of his client, Catonsville Eye.” The hearing judge also noted Respondent’s substantial experience in the practice of law since he was admitted to the Maryland Bar in 2007. These determinations are supported by clear and convincing evidence.

The court also found several mitigating factors.

Justice Gould concurred and dissented as to the continued existence of the attorney-client relationship

This disciplinary action springs from a commercial landlord-tenant dispute among sophisticated businessmen in which the fundamental personal and business loyalties of all players were known to all. That includes the personal and business loyalties of Respondent. On one side of the business transaction we have an entity called MAH Mountain, LLC (“MAH”), which owned a commercial retail property in Catonsville, Maryland on Baltimore National Pike (the “MAH Property”). MAH was owned by Respondent, Respondent’s father Mehdi Kalarestaghi (“Mehdi”), and Respondent’s brother. Respondent was also MAH’s attorney.

On the other side of the business transaction was Catonsville Eye Associates, LLC (“Catonsville Eye”). Catonsville Eye was owned by Dr. Erick Gray and Dr. Norman Fine. Catonsville Eye was in the optometry business with multiple locations, one of which was in a commercial retail space in Catonsville on Rolling Road. Dr. Gray was primarily in charge of the administrative aspects of the business, with substantial experience signing leases and opening stores.

Area of disagreement

I write separately to explain where I agree and where I part ways with the Majority’s analysis. The fault-line between our respective views is in how we define the contours and scope of the attorney-client relationship between Respondent and Catonsville Eye. The Majority has deferred to the hearing judge’s conclusion that the relationship included both the review of the Rolling Road lease and an undertaking to secure an early termination of that lease. In my view, however, the attorney-client relationship existed only for the former: to review the Rolling Road lease and opine on its termination date. That representation was limited in time and scope and was completed no later than January 2017.

…But I disagree with the Majority that Respondent violated Rule 1.8(a). The hearing judge found a violation of this rule based on the lease executed on April 4, 2017. However, by that time, Catonsville Eye was a former client, not a current one. Therefore, Respondent did not enter into a business transaction with a current client as proscribed by this Rule. I would sustain Respondent’s exception to this conclusion.

Chief Justice Fader and Justice Booth joined the concurrence/dissent.

Oral argument is linked here. (Mike Frisch)