Brief Fact Summary. A disciplinary proceeding was commenced against an attorney for failing to disclose that another attorney was embezzling a client's funds.
Synopsis of Rule of Law. The failure of an attorney to disclose another attorney's conversion of a client's assets, and instead initiating an action and entering into a settlement agreement on behalf of that client to recover such assets, violates the rules of professional responsibility.
However, matters a client intends to disclose to third parties, who are not agents of either the attorney or the client, are not privileged.View Full Point of Law
Issue. "[W]hether the Review Board erred in concluding that respondent's client had informed the Commission of misconduct by her former attorney?"
• "[W]hether the Review Board erred in concluding that respondent had not violated Rule 1-103(a)?"
• "[W]hether the proven misconduct warrants at least a censure"?
Held. The client's conduct is irrelevant. The court first addressed "whether a client's complaint of attorney misconduct to the Commission can be a defense to an attorney's failure to report the same misconduct." The court concluded that "[c]ommon sense would dictate that if a lawyer has a duty under the Code, the actions of a client would not relieve the attorney of his own duty."
• Yes, the court first lays out the text of Rule 1-103(a). It then observes that "[t]he record does not suggest that this information was communicated by Forsberg to the respondent in confidence." Additionally, the court observed "information voluntarily disclosed by a client to an attorney, in the presence of third parties who are not agents of the client or attorney, is not privileged information." The court found that Ms. Forsberg had spoken to the Respondent in the presence of other individuals including her mother, fiancé and an insurance company's representatives and lawyer. The court determined it was irrelevant that the Respondent did not receive a fee and was not motivated by financial gain in this matter.
• Yes. The court first observed that it "is [its] responsibility to determine appropriate sanctions in attorney disciplinary cases." The court then recognized the "underlying purposes of our disciplinary process … are to maintain the integrity of the legal profession, to protect the administration of justice from reproach, and to safeguard the public." The failure of the Respondent "to report resulted in interference with the Commission's investigation of Casey, and thus with the administration of justice." The court was extremely dismayed that the Respondent drafted a settlement agreement instead of reporting Mr. Casey's crimes to the Commission. This behavior "ran afoul of the Criminal Code's prohibition against compounding a crime, which states in section 32-l: '(a) A person compounds a crime when he receives or offers to another any consideration for a promise not to prosecute or aid in the prosecution of an offender. (b) Sentence. Compounding a crime is a petty offense.' " The court also pointed out the Respondent's failure to disclose the conversion hindered the Commissions investigation.
Discussion. This case offers an interesting illustration about how important the rules of professional responsibility are, and how certain contracts (i.e. settlement agreements) can violate these rules.