A reminder (for you) about the importance of coverage issues and (for me) that there is a second side to most stories.

This is an update on the California lawyer who successfully compelled arbitration of a client’s salacious claims that he treated her as essentially a “sex slave” that I wrote about here.

While I talked about that case as an example of the growing power of arbitration provisions in the arena of attorney-client contracts, I did not mention two things that could have, should have, been mentioned.  One was shortsighted in a way I strive not to be — which is that I failed at the time to acknowledge explicitly that nothing had been proven and that there may well be a second side to the story that the accused lawyer had not yet told.  The second thing I failed to mention was just an ancillary point at the time — the opportunity to note that if the lawyer had lost on the arbitration argument it might have meant he would be looking at his carrier claiming not to have to provide coverage.

A lawsuit filed in federal court by the lawyer’s carrier seeking a declaratory judgment and rescission of an insurance policy gives me an opportunity to address both things.  Law360 had an initial story about this that prompted me to find and read the federal declaratory judgment suit brought by the carrier.  Unlike your run-of-the-mill declaratory judgment suit, it makes for an interesting read.

In addition to arguing — relatively undaunted by the fact that court hearing the underlying suit decided the allegations arose from the attorney-client relationship — that there should be no coverage for the claim because it does not involve the delivery of any legal services, the declaratory judgment action seeks rescission of the insurance policy on the basis that the lawyer failed to disclose known circumstances that amounted to a claim, or could have amounted to a claim, at the time the firm applied for the insurance policy.

It is the carrier’s pleading setting out those circumstances that the potential second side to this lawyer’s story comes to the fore.

The lawyer and his law firm put in their application with their insurance carrier for coverage on January 12, 2015, resulting in a claims-made policy period commencing on February 28, 2015.  The insurance company fills us in on the fact that they have now learned that a woman – who may or may not be Jane Doe, the insurance company will not say definitively — had filed a bar complaint against the lawyer and that, in connection with that, back on March 25, 2014 the lawyer pursued a court ordered domestic violence restraining order against the woman.  The declaratory judgment action suit details 8 aspects of what was in the lawyer’s request for the restraining order that appear to indicate knowledge of a potential claim by someone that should have been disclosed in the insurance application, but was not.

  • The lawyer had a “dating relationship” with a woman described as an “ex-girlfriend” but the lawyer had “broken it off three times.”
  • The lawyer alleged the woman “had previously attempted to extort me.”
  • The woman had filed a bar complaint on March 20, 2014 that indicated she had quit being lawyer’s client because she “no longer felt [lawyer] was negotiating the best deals for me.”
  • The woman had demanded $40,000 and an apology from the lawyer and, in an email to her before the bar complaint, the lawyer agreed to pay $30,000 and make a written apology.  But then the woman said lawyer must go on a trip with her for 10 days or she would “go to the bar on me.”
  • The lawyer says the woman then made demands for sex.  And the lawyer had his lawyer send a “cease and desist letter.”
  • The woman then sent mass e-mails to other lawyers at lawyer’s firm with “false and malicious statements intended to hurt me professionally and personally, and damage my relationship with my colleagues, and in the entertainment community generally.”
  • According to the lawyer, the woman also said “we would be at war.”

In light of those accusations, made by the lawyer himself in court filing seeking a restraining order, and the fact that he was seeking to have a court bar the woman from coming within 100 yards of him, his home, and his workplace, the insurance carrier makes the point that, regardless of whether this woman happens to be “Jane Doe” or a different woman that the lawyer failed to disclose the existence of these circumstances, and the carrier seeks rescission of the insurance contract on the basis of the failure to disclose.  Of course, if the two women are really just one woman, then the insurance company’s argument seems significantly stronger.  The “Jane Doe” lawsuit filed against the lawyer started on April 10, 2015,

Yet, if the two women are really just one woman, then the flavor of the underlying lawsuit changes a good bit.  If the woman who filed the bar complaint is the same woman who has made the “sex slave” claims, then there is now a plausible basis for significant questions about the suit.  This second side of the story would merit watching — for while there would still be underlying ethical concerns for the lawyer in terms of having admitted had a sexual relationship with a client, this alternate version of events makes him seem a lot more sympathetic than the picture painted in the lawsuit — but the second side of the story may not play out publicly any time soon because … wait for it … lawyers for the firm (as explained in the Law360 article) indicate a belief that there is an arbitration provision in the underlying insurance contract and that the coverage dispute should be arbitrated.

“Damn near never…”

I mentioned back near the end of July 2015 that I would be participating on a panel at the Association of Professional Responsibility Lawyers’ Annual Meeting in Chicago.  It is always an honor to get to speak at an APRL meeting, and it was particularly an honor to share the stage with Eliza Rodrigues of Sedgwick, Gabe Miller of Advocates United, and Charles Mokriski of Proskauer Rose.

Fortunately, if you are interested in reading a pretty extensive write-up of some of the ground we covered during our session exploring the role of internal ethics counsel in law firms, the ABA/BNA Lawyers’ Manual on Professional Conduct has it and it is available without subscription here.

With such turns of phrase by me as a “messed up” rule and “Damn near never…” I managed to sound a lot more Southern then I tend to think I am . . . so lesson learned.

We never did manage to get into much of a discussion of the varying, and seemingly contradictory, approaches courts across the nation are taking to disqualification motions involving advance waiver language and other waiver issues.

C’est la vie.  Y’all.

Traps for the Unwary – RPC 2.2: Lawyer as Intermediary

Press releases on public discipline issued by the BPR can be something of an art form and sometimes, but not always, don’t tell the whole story.  So setting aside any tea-leaf reading that might otherwise go into this one involving what sounds like a situation in which a lawyer was perhaps unknowingly used by clients to assist with some hinky efforts to shield assets, the reference to RPC 2.2 as being among the rules violated raises a fine opportunity to remind Tennessee lawyers about another trap for the unwary.

Tennessee is one of only two U.S. jurisdictions (Mississippi is the other) that still has such a rule on their books.  RPC 2.2 is pattered upon an ABA Model Rule that was quickly scuttled after adoption by the ABA.  As such, the existence of RPC 2.2 in Tennessee presents both a blessing and a curse.

If you are aware of it, and understand when it applies, it is a blessing because it makes excruciatingly clear what needs to be in your engagement letter with your various clients, what you need to say about your role, what your duties and obligations are, and when you have to terminate representing any of the clients because the situation has blown up.  If you are not aware of its existence, then it’s a curse because, given its very detailed requirements, a lawyer could find themselves incorrectly looking to RPC 1.7 and complying with those provisions to try to obtain informed consent to a joint representation only to learn later that s/he followed the wrong rule altogether.

For the lawyer involved, and the fact that this whole set-up apparently turned out to involve a gratuitous transfer, this might have become a second-level trap as Comment [4] to RPC 2.2 indicates that where what is going on is a gratuitous transfer, RPC 1. 7 and not RPC 2.2 is the relevant rule with which to comply.

But, for everyone other than the lawyer involved, this still presents a decent teachable moment to remind Tennessee lawyers that if you are undertaking to represent multiple parties in an undertaking that involves “provid[ing] impartial legal advice and assistance” to multiple parties who “are engaged in a candid and non-adversarial effort to accomplish a common objective with respect to the formation, conduct, modification, or termination of a consensual legal relations between them,” then your engagement would be as an intermediary and RPC 2.2 is the rule on point.  RPC 2.2 thoroughly details how to determine whether you have a conflict that would prevent undertaking the representation at all, what you need to do to go about getting informed consent of the multiple clients involved, and what the rules of the road are for the engagement going forward.

TN Supreme Court rejects proposed resolution of disciplinary case as too lenient

This week sees a rare instance of media publicity regarding something perceived to itself be a rare event (but for which it is difficult to prove that the perception is also reality) – the rejection of a negotiated conditional guilty plea in a lawyer discipline case that had been approved by a hearing panel, and the BPR.  The Knoxville daily newspaper has the story about the Court’s rejection of a deal for a Knoxville lawyer who would, under the terms of the conditional guilty plea, have been suspended for 1 year, with 30 days of active suspension and 11 months of probation thereafter.  Again, thanks to the Knoxville News Sentinel, you can also take a look at the Court’s order indicating the punishment should be increased here.

Although all aspects of the record of disciplinary proceedings are technically public after the BPR files a formal petition for discipline, they are not all that easily accessible compared to many other kinds of court records.  So, traditionally, unless you are one of the lawyers involved in the process (as the target or as someone representing the target), you’re not all that likely to learn about the outcomes of the proceedings until they have wrapped up and the BPR puts out a press release about the discipline imposed.  As a result, all that many of us who practice in this area have to go on is our own experience in representing clients, mine has led me to believe that instances where the Court ends up rejecting agreed discipline that passed muster with a hearing panel and the BPR is a rare event.

This particular instance likely came to light given (1) the overlap with some federal court proceedings flowing from a simultaneous, but secret, investigation of this lawyer by the U.S. DOJ, and (2) the fact that this lawyer is currently involved as a lawyer for clients in some high-profile litigation going on in Tennessee.

The underlying allegations involve a sexual relationship between the lawyer and an indigent, allegedly addicted client the lawyer had been representing as court-appointed counsel and a claim by the lawyer to suffer himself from sexual addiction.  As good a time as any to remind lawyers in Tennessee, that instead of having a rule on this issue patterned after the ABA Model Rule 1.8(j) that is limited to clients (and would not for example have reached this kind of conduct if the relationship had been with the client’s spouse), we treat a lawyer’s sexual relationships under RPC 1.7 as a subset of “personal interest” conflicts that can create a material limitation on the ability to represent a client and elaborate at length on the problems created in Comments [12], [12a], and [12b].

A recent experience speaking about legal ethics to regular people

I had the opportunity recently to make a legal ethics presentation to a group of regular people, i.e., people who were not lawyers.  (It takes effort not to call them “nonlawyers.”  I admitted that to them at the outset while acknowledging how egocentric the term sounds when lawyers use it to mean anyone else.  Even physicians manage to give people a better sounding title than that — “lay people.”)

The topic requested was legal ethics for people who were not lawyers.  I went with “15 Things You Might Not Know About Ethics Rules for TN Lawyers.”  I tried to cover some of the more relevant aspects of how our rules can impact people who hire attorneys but, what I was most looking forward to was which ones garnered the most interest.  Based on reading the room, the two aspects people seemed the most surprised/genuinely interested to hear were: (1) there are some conflicts lawyers confront that simply cannot be waived and about which the lawyer isn’t even supposed to ask the client for consent; and (2) if you are represented by an attorney in a matter, you don’t have the power to give the attorney on the other side of the matter permission to communicate with you, only your lawyer can approve that happening.

I suspect the surprise as to the latter stems from how RPC 4.2’s requirement for the consent of the other lawyer can come across as, at least, counter-intuitive if not downright dismissive of someone who is the principal in a principal/agent relationship.  It helps though to explain the genesis of the concern as the risk of overreaching or shenanigans on the part of other lawyer and to explain that the client still ultimately has the power because she can instruct her own lawyer to grant the consent necessary.

I suspect the surprise with the first aspect though is a bit more telling about how many lawyers approach conflicts in modern practice.  My guess is that there might be a handful of lawyers out there that also forget that RPC 1.7(b)(1) means that unless you can reasonably believe that you can still provide competent and diligent representation to affected clients despite the conflict you can’t even ask for consent.