Title: Matter of Bentley

State: arizona

Issuer: Arizona Supreme Court

Document:

141 Ariz. 593 (1984) 688 P.2d 601 In the Matter of a Member of the State Bar of Arizona, Burton Melvin BENTLEY, Respondent. No. SB-284. State Bar No. 81-3-5W. Supreme Court of Arizona, In Banc. May 29, 1984. Richard Himelrick, State Bar Counsel, Scottsdale, for State Bar. Langerman, Begam, Lewis & Marks by Frank Lewis, Phoenix, for respondent. CAMERON, Justice. Respondent, Burton M. Bentley, filed objections to the findings and recommendations of the State Disciplinary Board that he violated the Code of Professional Responsibility and that he be suspended from the practice of the law for thirty days. We have jurisdiction pursuant to Rule 36(d), Rules of the Supreme Court, 17A A.R.S. The issue we must answer in this appeal is: The facts in this matter follow. In 1968 respondent represented Mrs. Shirley Walker on a contingency fee basis in an action for debt against Mr. Jack O. Nutter. A judgment was obtained against Nutter. The parties entered into an agreement whereby Nutter was to pay Walker in periodic payments. The respondent withdrew from the practice of law from 1970 until 1978 to go into business. Upon his return to the practice of the law, he learned Walker still had not been paid by Nutter. Respondent again brought an action against Nutter and again obtained a new judgment against Nutter. Respondent recorded this judgment in every county in the state. As a real estate promoter, Nutter found it very difficult to do business because of those recordings. Nutter, with the knowledge and approval of his attorney, began directly negotiating a settlement agreement with respondent. They drafted an *594 agreement, which Walker and Nutter's attorney approved. The agreement provided that the Nutters, "JUDGMENT DEBTORS", would make periodic payments to Walker. The agreement also provided for a promissory note to Walker from Nutter and that respondent would hold some stock belonging to Nutter as security, and further: Nutter reviewed the agreement with his attorney before signing. Nutter claims that because respondent had harassed him and obstructed his ability to do business through vigorous collection efforts, Nutter's attorney advised Nutter he had no choice but to sign the agreement. Nutter's attorney stated that in his opinion Nutter had not been harassed and that Nutter did have a choice in signing the agreement. Nutter's attorney wrote respondent suggesting the existence of a possible conflict of interest in respondent's acting as Nutter's attorney "with reference to litigation involving all future business transactions." Respondent interpreted this to mean he should not represent Nutter in any litigation, and responded by letter that "so long as that remains your opinion this office shall refrain from further representation." Respondent did not represent Nutter in any matter involving litigation or in any matters in which Walker was involved, or in regard to any matter connected with the settlement agreement. Respondent did, however, accept a $3,000 retainer from Nutter and advised him in several business ventures and investments. Before accepting this retainer respondent wrote Walker requesting permission to represent Nutter and mentioned that "as his attorney, I will become privy to certain information relative to his assets [and] would attach such assets ... to satisfy the outstanding judgment." Walker responded by letter and granted permission "providing, of course, that my interests come before those of Mr. Nutter." Some fourteen months after respondent last advised Nutter, Nutter again defaulted on the payments to Walker. Respondent filed suit against Nutter, and Nutter brought this matter to the attention of the Arizona State Bar. Respondent subsequently *595 withdrew from representing Walker in the matter. The Local Administrative Committee made the following findings of fact: The committee recommended respondent be censured. The State Disciplinary Board adopted the committee's findings of fact but voted six to one to recommend the suspension of respondent from the practice of law for thirty days. Respondent objected to this recommendation. The rule respondent is charged with violating, DR 5-105, states in pertinent part: Rule 29(a), Ariz. Rules of the Supreme Court, 17A A.R.S. Respondent points out that he never represented Nutter in litigation or in any matter related to Walker or the settlement agreement, and fourteen months elapsed between the last time respondent advised Nutter and the time the last action was filed after Nutter defaulted on the payments. Therefore, respondent claims that there was no impermissible conflict of interest. Even if there was a conflict, respondent contends the parties consented to the dual representation after a full disclosure of the relevant facts pursuant to DR 5-105(C) and therefore the respondent did not act unethically. Respondent insists any settlement agreement would have included a provision requiring Nutter to disclose his assets, and therefore anything respondent might have learned would have only been information Nutter would have had to disclose anyway under the agreement. Therefore, respondent claims there was no improper action on his part. The Arizona State Bar, however, claims when Nutter's past payment record is considered, the chance of future conflict was obvious at the time respondent agreed to represent Nutter. The fact that respondent *596 only represented Nutter on unrelated matters is not a helpful distinction; "it is the fact that you have to sue him * * * that makes the representation inadequate down the road." We agree. Admittedly, while it is usually improper to simultaneously represent opposing parties, see In re Maltby, 68 Ariz. 153, 155, 202 P.2d 902, 903 (1949), it is not always so. See Matter of Hansen, 586 P.2d 413, 415 (Utah 1978) (attorney represented civil suit opponent in criminal proceeding). An ethics opinion of the state bar sets forth the law succinctly: Arizona Ethics Opinions, 72-16 (29 September 1972). In Matter of Evans, 113 Ariz. 458, 556 P.2d 792 (1976), we stated that while there was authority "that an attorney may represent two clients in the preparation of an agreement and then sue one of the parties to the agreement * * * [w]e are not, however, convinced that this is the better rule." Id. at 461, 462, 556 P.2d at 795, 796. The problems faced by respondent illustrate why an attorney should be cautious in accepting simultaneous employment from two parties who have an adverse interest. No matter how well-meaning the attorney may be, the representation is pregnant with ethical problems. In the instant case, we do not believe that Walker's interest was neglected. Indeed, she appears to have been adequately represented. As to Nutter, however, there is at the outset a conflict of interest. Viewing the facts at the time respondent agreed to represent both Walker and Nutter, we do not think it obvious, as DR 5-105(A) requires, that respondent could adequately represent both parties. In fact, as the Bar points out concerning Nutter's attitude, the fact that Nutter had failed after more than ten years to pay his debts indicated it was highly probable respondent would have to take further action against Nutter. As for respondent's suing Nutter, we question whether he might have taken this action earlier if he had not also represented Nutter. That he may have not so delayed is less important than the fact that the question is raised. Even if respondent was wrong in agreeing to represent both parties initially, by the time Nutter had defaulted on his debt it was obvious that respondent was faced with a conflict of interest that he could only cure by withdrawing from representation of both parties, which he eventually did. Even with full disclosure, not all conflicts may be waived by consent of the parties. Under the recently adopted ABA Model Rules, "[W]hen a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances, the lawyer involved cannot properly ask for such agreement or provide representation *597 on the basis of the client's consent." Comment, Rule 1.7, American Bar Association Model Rules of Professional Conduct. We hold that respondent's actions gave not only an appearance of impropriety, but created a conflict of interest. We agree with the Local Administrative Committee as to the sanctions to be imposed. Respondent entered into this agreement in apparent good faith. He has not had ethical difficulty previously, and it does not appear that he will have further difficulty. The respondent is therefore censured and assessed costs in the amount of $1,857.60. HOLOHAN, C.J., GORDON, V.C.J., and HAYS and FELDMAN, JJ., concur.