Kentucky Bar Ass'n v. Unnamed Attorney

414 S.W.3d 412, 2013 WL 6700253, 2013 Ky. LEXIS 641

• Court: Kentucky Supreme Court
• Decided: December 19, 2013
• Docket: No. 2012-SC-000388-KB
• Status: Published

Opinions

OPINION AND ORDER

During the course of Unnamed Attorney’s ¹ representation of a fellow attorney in a disciplinary matter, Unnamed Attorney negotiated a settlement between his client and the complaining party. The terms of the negotiated settlement have now resulted in charges of professional misconduct against Unnamed Attorney because the terms of the settlement agreement required the complaining party to refuse to cooperate voluntarily with the Kentucky Bar Association in any investigation into the matter. The Trial Commissioner adjudged Unnamed Attorney guilty of professional misconduct for entering into such an agreement with a witness, but the KBA Board of Governors overturned that determination on appeal. Neither party has appealed to this Court, but we exercise our discretion under SCR 3.370(8) and notice review. We now reverse, in part, and affirm, in part, the decision of the Board of Governors. In so doing, we find Unnamed Attorney guilty of violating SCR 3.130-3.4(g) but not guilty of violating SCR 3.130-3.4(a).

I. FACTUAL AND PROCEDURAL BACKGROUND.

The material facts of this case are undisputed. Unnamed Attorney agreed to represent a fellow attorney in a disciplinary matter filed by one of the fellow attorney’s former clients, Jane Doe.² Doe alleged the client of Unnamed Attorney overcharged for his handling of a probate matter. Eventually, Doe’s dissatisfaction with what she perceived to be little work for great expense led her to terminate employment of Unnamed Attorney’s client and hire a new attorney.

At some point after terminating the employment of Unnamed Attorney’s client, Doe filed a bar complaint against Unnamed Attorney’s client. During the initial stages of the complaint proceedings, Unnamed- Attorney arranged a meeting between Doe and the Unnamed Attorney’s client to discuss a possible settlement. Unnamed Attorney notified the Office of Bar Counsel, the prosecutorial agency in the disciplinary matter, of the meeting and potential settlement. In April of 2010, as a result of Unnamed Attorney’s negotiations, Doe agreed to settle the dispute. The terms of the settlement required Unnamed Attorney’s client to refund a $30,000 fee in return for Doe’s withdrawal of her bar complaint. Specifically, paragraph 4 of the settlement agreement stated:

Withdrawal of Bar Complaint. [Jane Doe] agrees to take all action legally necessary to immediately withdrawal [sic] of the Bar Complaint and agrees to the extent permitted by law, to refuse to voluntarily assist or to voluntarily provide information to the KBA or anyone else, regarding the Bar Complaint unless directed to do so pursuant to subpoena, court order or other binding authority.

At the request of Doe, Unnamed Attorney provided a copy of the agreement to Doe’s attorney for his review. Doe’s attorney reviewed the agreement, suggested minor changes, and recommended Doe sign the agreement.

Unnamed Attorney’s client paid the $30,000. Later, Unnamed Attorney complied with the OBC’s request for a copy of the settlement agreement. The Inquiry Commission ultimately issued a Charge against Unnamed Attorney alleging he violated: (1) SCR 3.130-3.4(a),³ “by unlawfully obstructing another party’s access to evidence, or by counseling or ordering another to do so, as evidenced by paragraph 4 of the Release Agreement”; and (2) SCR 3.130-3.4(g),⁴ “by requesting that a person, ..., who was not Respondent’s client, refrain from voluntarily giving relevant information to another party as evidenced by paragraph 4 of the Release Agreement.”

After a hearing, the Trial Commissioner found Unnamed Attorney guilty of both charges and recommended Unnamed Attorney receive a public reprimand and be suspended from the practice of law for thirty days. Unnamed Attorney appealed the decision to the Board of Governors. The Board of Governors, after conducting its own de novo review of the matter, concluded Unnamed Attorney was not guilty of either charge, by a 16-0 and 12^1 vote, respectively. We exercised our authority under SCR 3.370(8) and took review of the case. We now reverse the Board of Governors, in part.

II. ANALYSIS.

A. Unnamed Attorney did not Violate SCR 3.130-3.4(a).

As mentioned previously, SCR 3.130-3.4(a) prohibits a lawyer from unlawfully obstructing another party’s access to evidence. Although the Trial Commissioner concluded that Unnamed Attorney had obstructed the KBA’s access to evidence by committing the unlawful act of “fraud,” no statute or case law was cited in support of this assertion. We have failed to identify any Kentucky statute under which Unnamed Attorney’s actions could be considered fraudulent. As a result, we must look to our common-law definition of fraud for guidance.

In Kentucky, to make a prima facie claim of fraud, a party must, by clear and convincing evidence, satisfy six elements: “a) material representation b) which is false c) known to be false or made recklessly d) made with inducement to be acted upon e) acted in reliance thereon and f) causing injury.”⁵ These requirements are clearly lacking in this case.

During the negotiation, Unnamed Attorney asked Doe, outside of the presence of Unnamed Attorney’s client: “What would you accept?” Doe responded, “$30,000.” Unnamed Attorney took that information to his client who agreed to reimburse the $30,000 and the negotiation ended. After Unnamed Attorney’s client reimbursed the estate, Doe signed the release. There was no false representation, and Doe suffered no injury. Rather, Unnamed Attorney obtained Doe’s signature on the release agreement by successfully negotiating a settlement in which Doe received everything she asked for. Doe was represented by counsel who advised her to accept the settlement and to sign the release agreement. Accordingly, we adopt the recommendation of the Board of Governors and find Unnamed Attorney not guilty of violating SCR 3.130-3.4(a).

B. Unnamed Attorney Violated SCR 3.130-3.4(g).

1. The Trial Commissioner did not Err in Excluding Professor Fortune’s “Expert” Testimony.

Initially, we feel it worthwhile to discuss an important point raised primarily by the KBA’s brief. At the underlying hearing in this case, Unnamed Attorney offered Professor William Fortune to testify as an expert. The Trial Commissioner, finding that it needed no expert help in reading and applying the applicable disciplinary rule, did not allow Professor Fortune’s testimony. Unnamed Attorney properly preserved Professor Fortune’s testimony in the record via an offer of proof.⁶ Indeed, Professor Fortune’s testimony was paramount in attempting to convince the Trial Commissioner to construe the rule in a manner that would result in finding Unnamed Attorney not guilty. As a result, Unnamed Attorney has previously argued the Trial Commissioner acted erroneously in excluding the testimony. The KBA now argues there was no error. We agree with the KBA.

It is well settled that the Kentucky Rules of Evidence are applicable in KBA proceedings.⁷ KRE 702 specifies that “[i]f scientific, technical, or otherwise specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert ... may testify.” In reviewing a trial court’s, in this case the Trial Commissioner’s, decision to prohibit expert testimony, we look for an abuse of discretion.⁸ An abuse of discretion is only found when the “the trial judge’s decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles.”⁹ Using this standard, we cannot say that the Trial Commissioner’s decision in this case was an abuse of discretion.

The KBA and OBC, as agents of this Court, are charged with applying, and often interpreting, the Rules of Professional Conduct. This case is no different. Here, the Trial Commissioner was faced with a seemingly novel application of a rule adopted during “Ethics 2000,” the recent overhaul of our ethics rules. We fail to see how a Trial Commissioner choosing to interpret a particular rule without the aid of a proffered expert is “arbitrary, unreasonable, unfair, or unsupported by sound legal principles.” We would not require a court to allow testimony of a grammar expert in the interpretation of a statute, and we see no reason to require a Trial Commissioner to do so here. And we should not foist such a requirement on triers of fact simply because we find the excluded evidence or testimony alluring.

It is indisputable that Professor Fortune is a highly respected authority in the field of legal ethics, and he was asked by this Court to play a vital role in the process of adopting Ethics 2000. In dissent, Justice Scott relies heavily on Professor Fortune’s singular expertise on our Rules of Professional Conduct. But that alone cannot be sufficient reason for a finding of abuse of discretion in a trier of fact’s decision to exclude expert testimony. Taking the dissent’s reasoning to its logical conclusion renders the abuse of discretion standard meaningless and indicates KRE 702 requires a judge to allow expert testimony when a party proffers a prominent expert, regardless of the subject. Simply put, Professor Fortune’s testimony was enlightening, but it was not mandatory, especially given the subject matter. The Trial Commissioner, as an attorney, is adequately equipped to apply the Rules of Professional Conduct. And, furthermore, the Trial Commissioner is entrusted with adequate discretion to decide whether an expert will be helpful. We find no abuse of that discretion and, accordingly, do not make mention of Professor Fortune’s testimony in deciding the instant case.

2. The Plain Language of SCR 3.130-3.4(g) Proves Unnamed Attorney’s Guilt.

We now turn to the question of whether or not Unnamed Attorney violated SCR 3.130 — 8.4(g). SCR 3.130-3.4(g) provides,

A lawyer shall not request a person other than a client to refrain from voluntarily giving relevant information to another party unless:

(1) the person is a relative or agent who supervises, directs or regularly consults with the client concerning the matter or has authority to obligate the client with respect to the matter;

(2) the lawyer reasonably believes that the person’s interests will not be adversely affected by refraining from giving such information.

The structure of the rule immediately presents a concern — that is, notably, whether 3.4(g)(1) and 3.4(g)(2) are to be read in the conjunctive or disjunctive. Curiously, the rule is written in a manner that does not indicate how it should be read. The semicolon after -3.4(g)(1) is followed by neither “and” nor “or.” Before we can accurately or fairly determine if an attorney has violated a rule, we must first determine what the rule requires.¹⁰

We believe it is clear that -3.4(g)(1) and (2) are to be read in the conjunctive. Accordingly, an attorney can request a person other than a client to refrain from voluntarily giving relevant information to another party only if the person “is a relative or agent who supervises, directs or regularly consults with the client concerning the matter or has authority to obligate the client with respect to the matter” and “the lawyer reasonably believes that the person’s interests will not be adversely affected by refraining from giving such information.” This interpretation is supported by the manifest weight of the relevant evidence and commentary.

Our Rules of Professional Conduct are modeled after the American Bar Association’s (ABA) Model Rules of Professional Conduct (MRPC). Notably, MRPC 3.4(f), the model for our 3.4(g), reads as follows:

A lawyer shall not request a person other than a client to refrain from voluntarily giving relevant information to another party unless:

(1) the person is a relative or an employee or other agent of a client; and

(2) the lawyer reasonably believes that the person’s interests will not be adversely affected by refraining from giving such information, (emphasis added).

It is telling and highly persuasive that the ABA’s Model Rules include “and.” So by the ABA’s Model Rules, a lawyer is only permitted to request a person other than a client to refrain from volunteering relevant information to another party if both sub-parts are satisfied. Of course, our reliance on and adoption of the ABA Model Rules makes the omission of “and” in our -3.4(g) even more curious. Nonetheless, it is undeniable that the language of the ABA Model Rules is highly persuasive.

In addition, the Commentary to -3.4(g) clearly indicates that sections (1) and (2) should be read in the conjunctive. Comment 4, particularly, sheds light on this topic:

Paragraph (g) permits a lawyer to request relatives or employees or other agents of a client to refrain from giving information to another party. Such persons may identify their interests with those of the client.... The lawyer must reasonably believe that the person’s interests will not be adversely affected by compliance with the request. The Rule does not require that the lawyer know or ascertain the person’s interest, but any such knowledge, communication, or other information available to the lawyer may suggest that such a belief is reasonable ....

This Comment provides a strong implication that the rule is to be read in the conjunctive. Importantly, the Comment speaks seamlessly about persons other than clients being requested to refrain from giving information, ie. -3.4(g)(1), and those persons’ interests, ie. -3.4(g)(2). It is our opinion that “and,” while omitted, was certainly intended to be included in - 3.4(g).

Under this interpretation, Unnamed Attorney is guilty of violating SCR 3.130-3.4(g). Unnamed Attorney negotiated a deal in which Unnamed Attorney’s client agreed to refund the $30,000 fee in return for Doe’s agreement to withdraw her bar complaint and to refuse to cooperate voluntarily with the KBA. It is indisputable that Doe was not Unnamed Attorney’s client, nor was she “a relative or agent who supervises, directs or regularly consults with the client concerning the matter or has authority to obligate the client with respect to the matter.” So Unnamed Attorney cannot meet the requirement of SCR 3.130 — 3.4(g)(1). Accordingly, because -3.4(g)(1) and (2) are read in the conjunctive, Unnamed Attorney cannot satisfy the exception to the general rule prohibiting a lawyer from “requesting] a person other than a client to refrain from voluntarily giving relevant information to another party[.]” The plain language of the rule mandates this result. And when we engage in interpretation, it is a fundamental principle that when the language is unambiguous, we will apply it straightforwardly.¹¹ There is no need to engage in the imprecise debate of what was intended with our passage of the rule because the language is certain. Unnamed Attorney must be found guilty under the plain language of SCR 3.130-3.4(g).

III. CONCLUSION.

We cannot place our imprimatur on settlements that attempt to obstruct the disciplinary process in any way. And it is clear the plain language of the rule requires a finding of guilt in this case. Certainly, Unnamed Attorney’s actions were not of a highly objectionable nature as undoubtedly many attorneys may engage in similar conduct outside the disciplinary context. Weighing this accordingly, we find a private reprimand is an appropriate sanction.

For the foregoing reasons, the Court ORDERS:

1) Unnamed Attorney is guilty of violating SCR 3.180-3.4(g);

2) Unnamed Attorney is not guilty of violating SCR 3.130 — 3.4(a); and

3) Unnamed Attorney is hereby privately reprimanded.

All sitting. MINTON, C.J.; KELLER, NOBLE, and VENTERS, JJ., concur. ABRAMSON, J., concurs by separate opinion. SCOTT, J., concurs, in part, and dissents, in part, by separate opinion in which CUNNINGHAM, J., joins.

1 . Admitted to practice law in Kentucky.

2 . Jane Doe is a pseudonym to protect the identity of those involved.

3 . SCR 3.130-3.4(a) reads, "A lawyer shall not: (a) unlawfully obstruct another party's access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act.”

4 . SCR 3.130-3.4(g) reads, "A lawyer shall not: request a person other than a client to refrain from voluntarily giving relevant information to another party unless:

(1) the person is a relative or agent who supervises, directs or regularly consults with the client concerning the matter or has authority to obligate the client with respect to the matter;

(2) the lawyer reasonably believes that the person's interests will not be adversely affected by refraining from giving such information.”

5 .United Parcel Serv. v. Rickert, 996 S.W.2d 464, 468 (Ky.1999).

6 . See Kentucky Rules of Evidence (KRE) 103(a)(2).

7 . SCR 3.340 ("The rules of evidence applicable in civil proceedings shall apply, and the Trial Commissioner will rule on all evidentia-ry issues.”).

8 . Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 577-78 (Ky.2000).

9 . Id. at 581.

10 . Effective January 1, 2014, SCR 3.130-3.4(g) includes "and” following the semi-colon between paragraphs (1) and (2). However, we must interpret the rule as it read during the action against Unnamed Attorney.

11 . See, e.g., MPM Financial Group, Inc. v. Morton, 289 S.W.3d 193, 197 (Ky.2009); King Drugs, Inc. v. Commonwealth, 250 S.W.3d 643, 645 (Ky.2008) ("[I]f a plain reading of the statute yields a reasonable legislative intent, then that reading is decisive and must be given effect.”); Commonwealth v. Steve Plowman, 86 S.W.3d 47, 49 (Ky.2002) ("This Court has repeatedly held that statutes must be given their literal interpretation unless they are ambiguous and if the words are not ambiguous, no statutory construction is required.”).