In re Seth Adam Robbins

192 A.3d 558
CourtDistrict of Columbia Court of Appeals
DecidedAugust 30, 2018
Docket17-BG-767
StatusPublished
Cited by8 cases

This text of 192 A.3d 558 (In re Seth Adam Robbins) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Seth Adam Robbins, 192 A.3d 558 (D.C. 2018).

Opinion

Per Curiam:

The Board on Professional Responsibility (the Board) recommends that respondent Seth Adam Robbins be suspended for sixty days from the practice of law and, prior to reinstatement, complete four hours of ethics-related Continuing Legal Education (CLE) because of clear and convincing evidence that Mr. Robbins failed to keep a client reasonably informed about the status of a matter, represented the client despite the likelihood that such representation would be adversely affected by Mr. Robbins's representation of another client, and represented the client where Mr. Robbins's professional judgment might reasonably have been affected by his interest in a business related to the underlying matter. D.C. R. Prof. Conduct 1.4 (a), 1.7 (b)(2), 1.7 (b)(4). We hold that the record supports the Board's conclusions and accept the Board's recommendation.

I.

Mr. Robbins was admitted to the District of Columbia Bar in May 2001 and has no record of professional discipline. At the time of the alleged misconduct, he was a partner at a law firm and responsible for one of the firm's clients, Persaud Companies, Inc. (Persaud), a government contractor and construction company founded and owned by its CEO Andy Persaud. This case arose when Mr. Robbins invited his friend and client, Gary Day, to serve as an indemnitor for Persaud's surety bonds on future projects. The evidence presented to the Hearing Committee was as follows.

Hudson Insurance Company had previously served as surety on Persaud's government contracts, issuing payment and performance bonds. In 2011, Persaud asked Hudson to furnish bonds on future construction projects, but Persaud was unable to produce certified audited financial statements. Hudson thus agreed to remain as surety on future projects but on two conditions. First, Hudson wanted Persaud to engage an escrow agent to receive and disburse funds from the government agencies with which it contracted. Hudson suggested Chesapeake Escrow Services, *561 which Mr. Robbins had formed with his sister earlier that year. Chesapeake agreed and Mr. Robbins formally disclosed his conflict of interest to gain consent for his representation.

Second, Hudson wanted Persaud to add a third indemnitor. In the past, Persaud and Andy Persaud had served as indemnitors for Hudson. Mr. Robbins knew Gary Day through the work Mr. Robbins's firm had done for Mr. Day's family and the work Mr. Robbins had done for Mr. Day, and Mr. Robbins and Mr. Day had since become friends. Mr. Robbins approached Mr. Day about this opportunity and explained that the requirement of an additional indemnitor was the result of Andy Persaud's need to rearrange funds, but assured Mr. Day that Persaud and Andy Persaud had sufficient assets to protect Mr. Day in the event that Hudson paid a claim and sought indemnification. Mr. Day testified that he was not aware of Mr. Robbins's interest in Chesapeake, whereas Mr. Robbins testified that Mr. Day was aware because Mr. Day had seen the escrow agreements.

According to his testimony, Mr. Day understood that Mr. Robbins would represent Mr. Day's interests in negotiating the terms of the indemnification agreement. Specifically, Mr. Day expected Mr. Robbins to ensure that the agreement included a provision that if Persaud failed to perform on a contract and Hudson had to pay out its bonds, Hudson would look to Persaud and Andy Persaud before turning to Mr. Day. In addition, Mr. Day requested a provision that would require his explicit approval before he indemnified future contracts, as well as a provision that both he and Mr. Robbins would be notified of any future indemnifications. Mr. Robbins successfully negotiated the second two terms with Hudson, but did not obtain the provision in the agreement that would ensure that Hudson looked to Persaud and Andy Persaud before turning to Mr. Day. 1 Mr. Day explained that, based on reassurances from Mr. Robbins, he signed the indemnity agreement without reading or understanding it, and did so again with each revised copy Mr. Robbins sent him. Mr. Day did not feel the need to read the documents carefully because he trusted Mr. Robbins and "didn't know enough about this stuff." Throughout this time, Mr. Day believed Mr. Robbins was his lawyer, despite never receiving an invoice for Mr. Robbins's services.

Over time, Mr. Robbins learned that Persaud may be having financial problems. In February 2012 Chesapeake loaned Persaud close to $1 million from its escrow account but did not receive immediate repayment. Later that year, Persaud fell behind on its performance on one of the contracts on which Mr. Day was an indemnitor, became subject to a federal criminal investigation, and stopped escrowing funds with Chesapeake as required by its agreement with Hudson. Mr. Robbins did not convey any of this information to Mr. Day. In July 2012 a lawyer for Hudson named Richard Pledger sent Mr. Day a demand letter because Persaud was failing to pay its bills on certain projects, resulting in claims against the surety bonds for $1,215,242. Mr. Day emailed Mr. Robbins the letter. Mr. Robbins replied, "It's all good .... I am working out with Hudson. You do not need to be concerned," and Mr. Day wrote back, "Yeah, figured. Thanks for the update." The two also spoke over the phone.

Over the next few months, Mr. Robbins continued to communicate with Richard Pledger about the claims against the surety bonds. In September, Mr. Pledger sent *562 Mr. Robbins a draft complaint that named Mr. Day as one of the defendants, but did not send the draft to any of the indemnitors. Mr. Robbins informed Mr. Pledger that he had no objection to Mr. Pledger contacting Andy Persaud directly, but as to Mr. Day, Mr. Robbins told Mr. Pledger that he was going to communicate with Mr. Day and keep him apprised. Days later, in an email copied to Mr. Persaud but not Mr. Day, Mr. Robbins informed Mr. Pledger that "[m]oving forward, to the extent Hudson does in fact file suit against Persaud and Gary Day, please be aware that I will no longer be engaged in the discussions between Persaud and Hudson-because of a conflict of interest." Mr. Pledger understood the conflict Mr. Robbins mentioned to mean a conflict between Mr. Robbins's two clients, Mr. Day and Andy Persaud, though Mr. Robbins testified that he was referring to a conflict relating to his interest in Chesapeake. Mr. Pledger followed up with an email confirming, among other things, Mr. Robbins's permission that Mr. Pledger could communicate directly with Andy Persaud. Mr. Robbins did not provide Mr. Day with a copy of the draft complaint nor inform him of the draft's existence.

In January 2013, Mr. Pledger, on behalf of Hudson, filed suit against Persaud, Andy Persaud, and Mr. Day, and sent a letter to the parties informing them that he was delaying service in hopes of working out a resolution. The letter referred to Mr. Robbins as their "former counsel." Mr. Pledger sent the letter to Mr. Day directly because of Mr. Robbins's statement that he would not be involved after a suit was filed because of a conflict of interest. Days later, Mr. Robbins texted Mr. Day to say "[t]he Persaud crap is not good .... I think you are going to need to hire an atty to deal with the surety." Mr. Day said he understood this to mean that he needed to hire an attorney who specialized in surety bond litigation, not that Mr. Robbins had never represented Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
192 A.3d 558, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-seth-adam-robbins-dc-2018.