Warner v. Stewart

930 P.2d 1030, 129 Idaho 588, 1997 Ida. LEXIS 4
CourtIdaho Supreme Court
DecidedJanuary 23, 1997
Docket22697
StatusPublished
Cited by8 cases

This text of 930 P.2d 1030 (Warner v. Stewart) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Warner v. Stewart, 930 P.2d 1030, 129 Idaho 588, 1997 Ida. LEXIS 4 (Idaho 1997).

Opinion

SCHROEDER, Justice.

This is a petition for review pursuant to Idaho Bar Commission Rule (I.B.C.R.) 509(c)(9) by Nelson Warner (‘Warner”) from two Hearing Committee Decisions to affirm dismissal of his Complaints with the Idaho State Bar. Warner seeks discipline of two attorneys: Michael Stewart for his handling of a real estate transaction in Sandpoint, Idaho, and Michael Oths, Idaho State Bar Counsel, for his handling of the Stewart Complaint. Stewart requests attorney fees pursuant to section 12-121 of the Idaho Code.

I.

BACKGROUND AND PRIOR PROCEEDINGS

Warner and his wife sold an apartment property in Sandpoint, Idaho, to Vito and Marita Simplicio (“Simplicios”) in 1984. Vito Simplicio asked Warner if the Simplicios’ Mend, Michael Stewart (“Stewart”), could act as the closing attorney. Warner agreed. The Simplicios paid Stewart’s fees.

The Simplicios made monthly payments to Warner through an escrow account at Inter-mountain Escrow. In 1985 the Simplicios obtained an ownership interest in the Bonner Escrow Company (“Bonner Escrow”), and the escrow account was moved to Bonner Escrow with Warner’s permission. Stewart *591 was not involved with this transfer. Subsequently, the Simplicios divorced, and Stewart married Marita Simplicio in 1988. She remained an owner of Bonner Escrow.

In 1988 the apartment property was sold to Mr. and Mrs. Faletto (“Falettos”) who assumed payment obligations under the purchase and escrow agreements with Warner. Stewart handled the closing at the request of the Falettos.

In May of 1991 the Falettos sold the property to Mr. and Mrs. Bare (“Bares”) who assumed payment obligations under the purchase agreement. Stewart again acted as the closing attorney, apparently representing the Falettos. The Bares were not given a copy of the escrow agreement notifying them of their obligation to pay annual escrow fees.

The Bares made timely deposits with Bonner Escrow, but they failed to include an annual escrow fee of $66.60. Warner wrote to Bonner Escrow stating that the Bares had defaulted on the note because they had failed to remit the escrow fee. He directed Bonner not to accept future payments. The Bares wrote to Warner explaining that they were unaware of their obligation to pay the escrow fee and that they had not received a copy of the escrow agreement. The Bares eventually did pay the annual escrow fee, plus a $50.00 default fee, but they refused to pay liquidated damages or late charges.

In August of 1992 Warner wrote a bitter letter to Stewart expressing his dissatisfaction over Stewart’s failure to provide the Bares with the escrow agreement and questioning Stewart’s competence as an attorney. Warner also intimated that Stewart and his wife, the former Mrs. Simplicio and part owner of the Bonner Escrow, engaged in corrupt business practices involving various conflicts of interest. Warner apparently made these allegations based on his erroneous belief that Stewart had failed to have the parties to the 1984 sale sign an escrow agreement. Warner has since discovered that the escrow documents in the 1984 sale were in fact signed and not blank as he had supposed. Warner threatened to file a complaint with the Idaho State Bar (“ISB”) seeking disciplinary investigation.

Stewart responded with a letter to Warner. He admitted that he had failed to provide the Bares with escrow instructions but claimed that this was a mere oversight on his part and did not involve any corrupt motivations. Stewart took exception to Warner’s remarks about his wife’s business ethics, invited Warner to file a complaint with the ISB, and concluded with a personal observation that he believed Warner to be “a jerk.” Stewart sent a copy of this letter to the Bares.

On September 19, 1992, Warner wrote to Stewart expressing his belief that Stewart’s alleged negligence had caused Warner to declare the Bares in default when he had no legal justification for doing so, apparently based on the fact that Stewart had not intervened during the Warner/Bare escrow fee misunderstanding. Warner noted that he expected more from “our attorney” and signed the letter “your alleged client.”

Stewart wrote to Warner saying that he was not his attorney and that after consulting his client index cards had found that he had not represented Warner as a “principal” since January of 1985. Stewart also told Warner to direct any further comments to the ISB.

Warner sent a Letter of Complaint to the ISB in October of 1992, alleging Stewart violated his duties of competence, diligence, and communication and that Mrs. Stewart’s interest in Bonner Escrow constituted an impermissible conflict of interest. Warner also alleged that Stewart breached his duty of loyalty to Warner in one or both of two ways: (1) Stewart breached his duty to a current client (Warner) by representing Warner as a seller while simultaneously representing the Simplicios as buyers, and/or that, (2) Stewart breached his duty to a former client (Warner) by representing subsequent purchasers of the apartment property. The Complaint alluded to Warner’s erroneous belief that Stewart had not given the Bares a copy of the escrow agreement in order to “cover up” the fact that he had been negligent in obtaining the Simplicios’ signatures on the 1984 escrow documentation. Warner alleged Stewart had committed various acts of fraud and that he had impermissi *592 bly contacted a person represented by counsel. The last allegation is not an issue on review. Finally, Warner hinted that Stewart had committed a defamatory act by sending the Bares a copy of a letter in which he called Warner a “jerk.”

Warner’s Complaint with the ISB was delegated to an intake coordinator who is not an attorney. The intake coordinator discussed the Complaint with Warner on November 12, 1992; December 3, 1992; and June 8, 1993. She concluded that Warner had not suffered any financial injury, that Stewart had been hired by the Simplicios, and that Stewart did not have an attorney-client relationship with Warner. She also concluded that Warner had no standing to assert any claimed conflicts of interest that might only involve subsequent purchasers. On June 8, 1993, she advised Warner by phone that- there was no apparent violation of the Idaho Rules, of Professional Conduct.

On June 9,1993, Warner wrote to the ISB reiterating his position but received no written reply. In December of 1993 he complained to the Supreme Court about Idaho State Bar Counsel, Michael Oths, for his office’s handling of the Stewart Complaint and alleged various ethical violations by Oths. The Complaint against Oths was assigned to a hearing committee pursuant to I.B.C.R. 508(b).

The Oths Hearing Committee concluded that: (1) no attorney-client relationship exists between the Office of Bar Counsel and a grievant and, therefore, allegations made by Warner against Oths having to do with the attorney-client relationship were without merit; (2) Oths had not violated any Rule of Professional Conduct apart from the attorney-client relationship; and (3) it lacked jurisdiction to examine Oths’ conduct as the administrator of the Office of Bar Counsel. The Oths Hearing Committee criticized the ISB’s failure to issue a final decision in writing and its failure to respond to Warner’s letters, but found no disciplinary violation.

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Bluebook (online)
930 P.2d 1030, 129 Idaho 588, 1997 Ida. LEXIS 4, Counsel Stack Legal Research, https://law.counselstack.com/opinion/warner-v-stewart-idaho-1997.