Case Title: In Re Ainsworth

Citation: 289 Or. 479, 614 P.2d 1127

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1980-07-23T00:00:00Z

Document:
614 P.2d 1127 (1980)
289 Or. 479
In re Complaint As to the Conduct of Sidney E. AINSWORTH, Accused.
OSB 1430; SC 26817.

Supreme Court of Oregon, In Banc.
Argued and Submitted June 3, 1980.
Decided July 23, 1980.
*1128 Stanley C. Jones, Klamath Falls, argued the cause for the accused. With him on the brief was Giacomini, Jones & Associates, Klamath Falls.
James R. Uerlings, Klamath Falls, argued the cause for the Oregon State Bar. On the brief was Donald R. Crane, Klamath Falls.
PER CURIAM.
This is a disciplinary proceeding by the Oregon State Bar charging the accused with (1) conduct involving a conflict of interest, (2) acquiring a proprietary interest in the subject matter of a legal controversy, (3) entering into a business transaction with a client with differing interests without full disclosure to the client, and (4) accepting employment when the exercise of his independent judgment on behalf of a client was, or was likely to be, adversely affected.[1]
The Trial Board found the accused not guilty of the first three charges, but guilty of the fourth charge, and recommended a public reprimand because of "the appearance of impropriety." The Disciplinary Review Board, based upon its own findings of fact, agreed with those conclusions and with that recommendation.
In a petition to this court to reject that recommendation the accused states that he "accepts the facts as stated by the Disciplinary Review Board and by the Trial Board," but contends that those facts do not support such conclusions and recommendation; that he should be found not guilty, and that this proceeding should be dismissed.
*1129 The Oregon State Bar, in its brief and on oral argument, contends that there was evidence to support all four charges and that "a public reprimand may not be sufficient."
The facts as stated in the opinion by the Disciplinary Review Board are as follows:
The "Supplemental Facts" as set forth in the Findings of Fact, Conclusions of Law and Recommendation of the Trial Board are as follows:
Among the findings of fact by the Trial Board which the accused "accepted," as previously stated, was a finding that:
As stated by the Trial Board,
DR 5-105 provides:
For a discussion of this disciplinary rule, see In re Hershberger, 288 Or. 559, 606 P.2d 623 (1980), and cases and authorities cited therein. We note, however, that although the brief of the Oregon State Bar relies upon and sets forth verbatim the provisions of other disciplinary rules, it does not set forth, cite or appear to rely upon DR 5-105.
Instead, the Bar, in its brief, contends that the representation of Herzman violated DR 7-104(A), which provides as follows:
We also note that both the Trial Board and the Disciplinary Review Board found that the accused was not guilty of the first charge of the complaint of the Oregon State Bar, in which facts constituting a conflict of interest, among other things, is alleged, but found him guilty only of the "appearance of impropriety" under DR 9-101, as later discussed. The apparent reason for these findings, as stated by the Disciplinary Review Board, was that "We do not believe that the evidence is clear and convincing (if any there be at all) that defendant was guilty" of the charge of a conflict of interest, as alleged in the first charge of the complaint.
It may be that the Disciplinary Review Board and the Trial Board reached this conclusion because DR 5-105 was not expressly relied upon by the Oregon State Bar. It is more likely, however, that they reached this conclusion based upon a finding that in representing Herzman in a matter not related to the underlying transaction, it was not "likely," within the meaning of DR 5-105(A), that the "independent professional judgment" in behalf of the accused on behalf of either Lamb or Herzman would be "adversely affected" by the proffered employment by Herzman. Based upon our review of the record, we agree with that conclusion.
*1132 It also appears from an examination of the first charge of the complaint that it does not very clearly charge the accused with a conflict of interest in violation of either DR 5-105 or DR 7-104(A), so as to give him a fair opportunity to defend himself against a charge of violating the terms of those disciplinary rules. Instead, the first charge of the complaint alleges all of the facts, including those realleged by reference in the second, third and fourth charges of the complaint, which more clearly allege violations of other specific disciplinary rules.
For these reasons, we agree with the findings by the Trial Board and the Disciplinary Review Board that the accused was not guilty of a conflict of interest in violation of the terms of DR 5-105 or DR 7-104(A).
Since the filing of the complaint in this case, and also since the findings and opinion by the Trial Board and the Disciplinary Review Board in this case, Section 15 of the Rules of Procedure for disciplinary cases has been amended to provide that complaints in such cases shall not only set forth "the acts or omissions of the accused," but also "the statutes, the canons, or the Disciplinary Rules violated," so as to enable the accused "to know the nature of the charge or charges against him."[3]
The second charge of the complaint alleges that "[i]n reference to the transactions described in the first cause of complaint, the accused acquired a proprietary interest in the subject matter in question." Both the Trial Board and the Disciplinary Review Board found the accused to be not guilty of this charge.
DR 5-103(A) provides:
It is clear from the facts found by the Trial Board and by the Disciplinary Review Board, as "accepted by the accused," that Mr. Lamb, the client of the accused, had at least a potential "cause of action" to enforce a lien against the property which was the subject of this controversy and that the accused purchased that property in his own name.
It also appears to be true, as found by the Disciplinary Review Board, that the accused was then having an extremely difficult problem in collecting an attorneys fee from an obstreperous client; that he had previously "discussed with Lamb the matter of the accused purchasing the property from Rosenbaum; that after purchasing the property he offered to sell it to Herzman on the same terms as purchased by him; that his client, Mr. Lamb, never complained of his purchase of the property, and that no one was harmed by what he did.
In addition, it appears from the record (although not referred to by the Trial Board or the Disciplinary Review Board) that the accused testified, without contradiction, that before purchasing the property he not only discussed the matter with Mr. Lamb, but that two or three days later Mr. Lamb called him and "said he had been thinking *1133 about it and wanted me, if I would, to go ahead and buy the property." The accused also testified, again without contradiction, that before doing so he also called Mr. Hebert, General Counsel for the Oregon State Bar, and had the following conversation with him:
This testimony was not controverted or otherwise questioned by the Oregon State Bar.
Both the Trial Board and the Disciplinary Review Board, apparently on the basis of these facts, found that the accused was not guilty of the second charge of the complaint and that the conduct of the accused constituted no more than "the appearance of impropriety."
It may be that the provisions of DR 5-103(A) (relating to the acquisition of an interest in litigation), which do not provide an exception in the event of consent by the client, as does DR 5-104 (relating to business relations with a client), prohibit the acquisition of such an interest even though consented to by the client because of the potential for conflict of interest and abuse of fiduciary responsibility. Cf. In re Boivin, 271 Or. 419, 428, 533 P.2d 171 (1975), and In re Sandblast, 210 Or. 65, 307 P.2d 532 (1957). We need not decide that question in this case. Neither need we decide whether consent by a client would be a defense to such a charge in the absence of independent legal advice.
In this case the accused not only sought and secured the express consent of his client, but also consulted with the general counsel of the Oregon State Bar and the chairman of the local ethics committee, and secured their apparent approval before proceeding to purchase the property. We do not mean to encourage consultation with the general counsel of the Oregon State Bar by suggesting that his or her advice can provide a defense to disciplinary violations. It cannot. We believe, however, if there was any violation of DR 5-103(A) or DR 5-104 by the accused in this case, it was not of any great severity or magnitude, and that under the circumstances of this case, including the fact that the accused sought the advice of the general counsel of the Oregon State Bar, he should not be disciplined by this court for any such violations.
The third charge of the complaint alleges that:
Both the Trial Board and the Disciplinary Review Board also found the accused to be not guilty of this charge.
DR 5-104(A) provides:
*1134 It is contended by the Oregon State Bar that by his purchase of the real property which was the subject matter of the controversy, the accused violated DR 5-104(A), as well as DR 5-103(A), as previously discussed. We agree with the Trial Board and the Disciplinary Review Board, however, in their finding, in effect, that by the purchase of such property by the accused, under the facts and circumstances of this case, the accused did not "enter into a business transaction with a client," within the meaning of DR 5-104(A). As also previously stated, we believe that after securing apparent approval of his purchase of the property from the general counsel of the Oregon State Bar, the accused should not be reprimanded for doing so.
The Disciplinary Review Board found that the evidence was not clear and convincing evidence that the defendant was guilty of violating DR 5-104(A), as charged in the complaint. We agree with that finding.
The fourth charge of the complaint is that:
DR 5-101(A) provides:
On their face, these allegations appear to charge substantially the same conflict of interest as charged in the first charge of the complaint, as previously discussed.
Both the Trial Board and the Disciplinary Review Board, however, apparently construed and considered this allegation to be a charge of violating Canon 9, rather than DR 5-101(A).
Canon 9 provides:
DR 9-101 provides:
In our opinion, the effect of this disciplinary rule is to define the more general terms of Canon 9 and to limit its application to the three specific situations described in DR 9-101(A), (B) and (C), none of which are applicable to the facts of this case. Indeed, the validity of Canon 9 as the basis of a complaint in a disciplinary proceeding might otherwise well be subject to question. See Megdal v. Board of Dental Examiners, 288 Or. 293, 605 P.2d 273 (1980).[4]
We note that the brief submitted on behalf of the Oregon State Bar, although citing other disciplinary rules and Canon 9, makes no reference whatever to DR 9-101. We also note that the brief of the Oregon State Bar, although setting forth in a final *1135 footnote the provisions of DR 5-101(A), together with those of DR 5-103(A), 5-104(A), 7-104(A), and Canon 9, and although contending that specific conduct by the accused violated the provisions of DR 5-103(A), 5-104(A), and 7-104(A), makes no contention that any conduct by the accused violated the provisions of either DR 5-101, DR 9-101 or of Canon 9. Under these circumstances, we find the accused to be not guilty of violating either DR 5-101 or DR 9-101.
For these reasons and under these circumstances, the complaint of the Oregon State Bar is dismissed, with costs to neither party.
[1]  The complaint also included a "cumulative" or "catch-all" charge. We find it unnecessary to consider that charge.
[2]  Herzman also instituted a suit against the accused in the Jackson County Circuit Court to force the sale to Herzman. This suit terminated with a decree for the accused which is now on appeal.
[3]  Section 15 of Rules of Procedure relating to admission, discipline, resignation and reinstatement now provides:

"If it shall appear to the board, from the report of a professional responsibility committee or otherwise, that grounds for public reprimand, suspension or disbarment exist against a member, the president or the board shall appoint counsel for the bar and a trial board, and shall cause to be prepared and filed by counsel with the executive director an original and three copies of a formal complaint against the accused in the name of the bar; and proceedings shall then be had thereon as hereafter provided. A formal complaint shall be signed by the executive director, or his designee, and shall set forth succinctly the acts or omissions of the accused, including specifically the statutes, the canons, or the Disciplinary Rules violated, so as to enable him to know the nature of the charge or charges against him. When more than one act or transaction is relied on, the allegations shall be separately stated and numbered. The complaint need not be verified." (Emphasis added)
[4]  The term "appearance of impropriety" is not only quite a general term, but it is not clear from the use of that term in Canon 9 whether that canon is intended to proscribe only conduct which has the appearance of impropriety because it may appear to constitute conduct proscribed by some other canon or disciplinary rule (such as conduct constituting an improper conflict of interest) or whether it is intended to proscribe conduct which may appear to be improper without reference to conduct proscribed by any other canon or disciplinary rule (such as being intoxicated in a public place).