Title: In re Merkel

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: July 7, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
In re Complaint as to the Conduct of
WILLARD MERKEL,
Accused.
(OSB 04-154; S52856)
En Banc
On Review of the decision of a trial panel of the
Disciplinary Board.
Argued and submitted May 8, 2006.
Wayne Mackeson of Birmingham & Mackeson, LLP, Portland,
argued the cause and filed the brief for the accused. 
Jane E. Angus, Assistant Disciplinary Counsel, Oregon State
Bar, Lake Oswego, argued the cause and filed the brief for the
Oregon State Bar.  With her on the brief was David L. Slader, Bar
Counsel.  
PER CURIAM
Complaint dismissed.
Kistler, J., concurred in part and dissented in part and
filed an opinion in which Gillette and Balmer, JJ., joined.
PER CURIAM
In this lawyer disciplinary proceeding, the Oregon
State Bar charged the accused with violating the Oregon Code of
Professional Responsibility Disciplinary Rules (DR) 7-110(B)
(prohibiting ex parte communication with court on merits of 
pending case) and DR 1-102(A)(3) (prohibiting dishonesty, fraud,
deceit, and misrepresentation). (1)  A trial panel of the
Disciplinary Board concluded that the accused had violated DR 1-102(A)(3), but not DR 7-110(B), and imposed a public reprimand as
a sanction.  The accused sought review, arguing that he had not
violated DR 1-102(A)(3).  The Bar maintains that he violated both
rules and requests that this court suspend the accused from the
practice of law for 60 days.
We review a decision of the trial panel de novo, ORS
9.536(2).  The Bar must establish misconduct by clear and
convincing evidence, which "means evidence establishing that the
truth of the facts asserted is highly probable."  In re Cohen,
316 Or 657, 659, 853 P2d 286 (1993).  On de novo review, we
conclude that the Bar has failed to establish by clear and
convincing evidence that the accused violated DR 1-102(A)(3) or
DR 7-110(B).
We find the following facts.  The accused became a
member of the Bar in 1979 and has no previous disciplinary
record.  A client retained the accused to pursue a personal
injury claim against Tri-County Metropolitan Transportation
District of Oregon (TriMet), and an arbitrator set the case for
an arbitration hearing on April 23, 2004.  Toran, Director of
Legal Services at TriMet, represented TriMet.  The accused and
Toran had a contentious professional relationship when the events
in this case unfolded.
Prior to the hearing, the accused subpoenaed two
witnesses.  Between April 21 and April 22, 2004, both witnesses
contacted the accused and informed him that they could not attend
the arbitration, but agreed to testify by telephone.  Early on
the morning of April 22, around 8:00 a.m., the accused called the 
arbitrator.  He asked the arbitrator about his policy regarding
telephone testimony and whether he had access to a speaker
telephone.  The arbitrator advised the accused that he had a
speaker telephone and that "it's okay with me if it's ok with
[opposing counsel]."  The arbitrator made no ruling regarding the
admissibility of telephone testimony during the call.  That call
lasted approximately 30 seconds.    
That same morning, the accused sent Toran a letter by
fax.  The letter stated that two witnesses had contacted the
accused and informed him that they could not attend the
arbitration.  The letter then stated:
"I have contact telephone numbers for each of these
witnesses and intend to present their testimony by
speaker phone.  I have cleared this with the arbitrator
who asked me in turn to advise you of these
developments.  Please call if there are questions."
Toran responded by addressing a letter to the
arbitrator and sending it by fax to both the arbitrator and the
accused.  In it, Toran stated that she objected to the use of
telephone testimony and asked that the arbitrator "either
disallow the testimony of these witnesses by telephone or that
the arbitration be continued until such time as they are
available to testify in person."  She requested a decision by the
end of the day.  Toran also asserted that the accused's telephone
conversation with the arbitrator was an improper ex parte
communication and violated DR 7-110(B).
The arbitrator received the letter and scheduled a
telephone conference with Toran and the accused for that same
day.  During the conference, the arbitrator states in record that
he did not make a ruling during the telephone conversation with
Merkel, but he states that he might have informed Toran of that
during the telephone conference the arbitrator ruled that he
would prohibit telephone testimony and continued the hearing
until a later date.
Subsequently, Toran filed a complaint with the Bar,
alleging that the accused had violated DR 7-110(B) by his
communication with the arbitrator and DR 1-102(A)(3) when he
misrepresented to Toran that he had "cleared" testimony by
telephone with the arbitrator.  The Bar requested a response from
the accused.  In a May 18, 2004, letter, the accused stated that
he had not engaged in ex parte contact with the arbitrator.  He
also stated that he had "called [Toran's] office the morning
before the hearing to determine whether she objected" to
telephone testimony, but "[s]he was out."  He maintained that he
had faxed the letter to Toran, "intending to provide her an
opportunity to object."  The Bar found that there was
insufficient evidence of misconduct and stated that it would not
take further action on the matter.  However, the Bar informed
Toran that, if she disagreed with the Bar's disposition, she
could request that the General Counsel of the Bar review her
complaint.  See BR 2.5(a)(1) (describing review procedure).
Subsequently, Toran requested that General Counsel
review her complaint and added to her allegations that the
accused had misrepresented to the Bar that he had called Toran on
the morning of April 22, 2004, prior to contacting the
arbitrator.  She attached telephone records that listed all
incoming calls to TriMet.  The accused's telephone numbers were
not among those listed for the morning of April 22.  A voice-systems engineer testified at a subsequent hearing that TriMet's
telephone system captures the telephone numbers of all incoming
calls as long as a person answers the call.  The system does not
record hang-ups and calls answered by a voicemail message.  
General Counsel reviewed the matter and referred the
complaint to disciplinary counsel.   The Bar later requested
further information from the accused.  In a September 21, 2004,
letter to the Bar, the accused indicated that he was responding
to the best of his ability to recall the events from memory.  He
stated that:
"My memory is that I called one of the TriMet
phone numbers from my office the morning before the
arbitration hearing intending to ask whether defense
counsel objected to two witnesses testifying by
telephone.  I do not remember which office line I used
to make the call, nor do I remember which of the TriMet
lines I dialed.  My memory is that a female voice
answered, I asked for Ms. Toran, and was told that she
was out, and that I didn't pursue the matter.  My
memory of the conversation is that it lasted about five
seconds.  After reviewing my file, I find no file notes
on the topic which leads me to believe I may be
mistaken and may be confusing the call with a call on
another file."
The Bar charged the accused with violating: (1) DR 7-110(B), for the accused's telephone communication with the
arbitrator; (2) DR 1-102(A)(3), for misrepresenting that he had
called Toran prior to calling the arbitrator; and (3) DR 1-102(A)(3), for conveying to Toran that he had "cleared" telephone
testimony with the arbitrator when he had not.  The trial panel
determined that the accused did not have ex parte communications
with the arbitrator.  However, the trial panel concluded that the
accused had committed both alleged DR 1-102(A)(3) violations and
imposed a sanction of a public reprimand.
We first address the charge regarding an ex parte
communication.  DR 7-110(B) provides, in part, that "a lawyer
shall not communicate, or cause another to communicate, as to the
merits of the cause with a judge or an official before whom the
proceeding is pending * * *."  The purpose of that rule is to
prevent a party from improperly influencing or inaccurately
informing a judge.  In re Burrows, 291 Or 135, 144, 629 P2d 820
(1981).  Here, there is no dispute that the accused was involved
in a proceeding pending before the arbitrator and that he spoke
to the arbitrator outside opposing counsel's presence.  The only
question is whether the communication concerned the merits of the
cause.  An ex parte contact is considered "on the merits" if it
"affects any legal right or duty of the parties."  In re Smith,
295 Or 755, 760, 670 P2d 1018 (1983).  A lawyer need not be
successful in improperly influencing a judge; an attempt is
sufficient.  In re Thompson, 325 Or 467, 473, 940 P2d 512 (1997).
The Bar argues that the content of the accused's ex
parte communication was on the merits because it regarded
"TriMet's right to agree or to object to the presentation of
telephone testimony."  The evidence does not support that
argument.  The conversation concerned the procedural issues of
whether the arbitrator had speaker telephone technology and the
arbitrator's policy regarding telephone testimony, not whether
TriMet had a right to agree or to object to the presentation of
testimony by telephone.  The accused did not ask for such a
ruling, nor did the arbitrator make a ruling.  As the Bar
correctly notes, a ruling by the arbitrator is not a prerequisite
for a DR 7-110(B) violation.  However, the Bar points to no
evidence that the accused attempted to persuade the arbitrator to
allow telephone testimony or otherwise attempted to improperly
influence the arbitrator.  The arbitrator testified that the
conversation was not an improper ex parte communication.  It does
not appear that the communication was "on the merits" of the
pending proceeding.  Considering the entirety of the evidence,
the Bar did not prove by clear and convincing evidence that the
accused violated DR 7-110(B).
Next, we address the Bar's charges regarding
misrepresentation.  DR 1-102(A)(3) states that it is professional
misconduct for a lawyer to "[e]ngage in conduct involving
dishonesty, fraud, deceit or misrepresentation."  Conduct
involving misrepresentation can include a material nondisclosure. 
In re Hiller, 298 Or 526, 533, 694 P2d 540 (1985).  However,
"[t]o establish misrepresentation by nondisclosure, the Bar must
meet a high standard of proof: The Bar must establish that the
accused lawyer knowingly failed to disclose a fact that the
accused lawyer had in mind and knew to be material."  In re
Huffman, 331 Or 209, 218, 13 P3d 994 (2000).  "[M]aterial
information is information that, if it had been known by the
court or other decision-maker, would or could have influenced the
decision-making process significantly."  In re Gustafson, 327 Or
636, 649, 968 P2d 367 (1998).
The Bar charges the accused with engaging in two
instances of conduct involving misrepresentation.  First, the Bar
contends that the accused's letter to Toran created the false
impression that the arbitrator had agreed to allow the accused's
witnesses to testify by telephone.  Second, The Bar asserts that
the accused failed to disclose that the arbitrator stated that he
would allow telephone testimony only if Toran agreed to it.
The accused's letter to Toran stated that he had
telephone numbers for the witnesses and "intend[ed] to present
their testimony by speaker phone."  The letter then informed
Toran that the accused had "cleared this with the arbitrator who
asked me in turn to advise you of these developments."  The trial
panel agreed with the Bar that the accused's use of the word
"cleared" created the impression that "the issue was a 'fait
accompli.'"  However, in reaching that conclusion, the trial
panel incorrectly quoted the accused's letter, stating that the
accused had written that he had "cleared his presentation of
testimony by telephone with the arbitrator."  
The accused's letter stated that the accused intended
to present testimony by telephone; it did not state expressly
that the arbitrator had ruled that he would admit testimony by
telephone or that Toran was precluded from objecting to the
admission of testimony by telephone.  The Bar, however, argues
that the accused's use of the term "cleared" created a false
inference.
The term "cleared" is, in context, ambiguous.  On the
one hand, a reader might interpret that term, as the Bar claims,
to indicate that the arbitrator had authorized the submission of
telephone testimony at the hearing.  On the other hand, a reader
also might interpret that term to indicate only that the accused
had apprised the arbitrator of his intention to present telephone
testimony at the hearing and that the arbitrator was amenable to
the proposal.  In examining the evidence, we may consider the
relative strength of those competing inferences that the
ambiguous word "cleared" could create.  See In re Phelps, 306 Or
508, 513, 760 P2d 1331 (1988) (Bar may satisfy its burden if
court draws necessary inferences from evidence).
Viewing the accused's letter in context, it is
difficult to conclude that the accused knowingly sought to convey
the first inference discussed above.  To draw that inference, the
reader would have to believe that (1) the accused was willing to
breach a well-accepted procedural norm in the presence of a
witness, the arbitrator; (2) the arbitrator himself had chosen to
commit a breach of fundamental fairness by binding Toran to a
ruling admitting telephone testimony without affording her any
right to be heard; and (3) Toran, an experienced lawyer, would
presume that she could raise no objection, before or during the
hearing, to the admission of witness testimony by telephone. 
Nothing in the record indicates that those assumptions regarding
the accused's letter are true.
To establish a charge of misrepresentation, it is not
necessary that the Bar prove that the recipient of the alleged
misrepresentation detrimentally relied on the accused's
statement.  Nevertheless, in determining which of the two
competing inferences that the accused likely intended to convey
by his statement, we may examine all the circumstances
surrounding the communication, including the reactions of the
arbitrator and Toran.  Those reactions may shed some light on the
reasonableness of the competing inferences that the parties claim
to draw from an ambiguous representation of fact by an accused. 
That information, in turn, may help explain which of the two
competing inferences that the accused meant to convey by his
statement.  
As noted, Toran asserted a written objection to
receiving the disputed testimony by telephone as soon as she
became aware of the accused's letter.  She sought a ruling on her
objection by the end of the day.  Even if Toran assumed that the
arbitrator actually had decided to admit telephone testimony --
an erroneous assumption, if she made it -- she clearly did not
assume that the arbitrator already had foreclosed her from
objecting to the receipt of that testimony by telephone. 
Before the trial panel, the accused contended that the
arbitrator had made no ruling on the receipt of telephone
testimony and that the arbitrator's brief conversation with the
accused about the speaker telephone issue had not prejudiced the
position of either party.  The arbitrator generally corroborated
the accused's version of those events.
Considering the totality of the evidence, the Bar has
not proved by clear and convincing evidence that the accused made
a knowing misrepresentation, or misrepresentation by
nondisclosure, in his letter to Toran.  In our view, the letter
fairly stated the accused's intention to offer some witness
testimony by speaker telephone and that the arbitrator had no
problem with that procedure.  In context, the absence of express
notice in the letter that Toran could object if she so desired
was immaterial; Toran knew that she could object to the procedure
if she wished, and she did so promptly.  The evidence in this
record does not demonstrate clearly and convincingly that the
accused's failure to alert Toran in his letter about her right to
object to the telephone procedure significantly could affect
Toran's decision-making process.  Although, as noted, the
accused's use of the word "cleared" in his letter created an
ambiguity, the Bar did not prove that the letter amounted to
misrepresentation under DR 1-102(A)(3).
In its second charge of misrepresentation, the Bar
alleges that the accused misrepresented to the Bar that he had
telephoned Toran prior to contacting the arbitrator on the
morning of April 22, 2004.  The accused's initial response to the
Bar stated that he had called Toran prior to calling the
arbitrator, but Toran was out.  In his second response to the
Bar, following Toran's allegation that the accused had
misrepresented that he had called her and the Bar's request for
the accused's response, the accused sought to clarify his earlier
statement by asserting that he remembered calling Toran's office
and that a female voice had answered and informed him that Toran
was out.  He also stated that he had no file notes regarding the
call and, therefore, he "may be mistaken and may be confusing the
call with a call on another file."  
The trial panel found, on the basis of TriMet's
telephone logs, that the accused did not call Toran.  We find,
however, that the telephone logs alone do not present clear and
convincing evidence that the accused violated DR 1-102(A)(3).  A
lawyer violates DR 1-102(A)(3) when he makes a knowing,
affirmative false statement to another.  In re Lawrence, 337 Or
450, 464, 98 P3d 366 (2004).  There is not clear and convincing
evidence that the accused uttered a knowing falsehood when he
stated that he had called Toran.  The Bar's evidence –- the
TriMet telephone log –- proves only that the accused did not call
TriMet and speak to a person.  It also is possible that the
accused called Toran, and the voicemail system answered his call. 
TriMet's telephone system does not record those calls.
The accused thought that he had called Toran when he
first responded to the Bar.  The record does not prove clearly
and convincingly that the accused's response, if false, was more
culpable than an innocent false statement.  An explanatory
statement to the Bar may not be true, but the individual making
the statement innocently may still believe in its truth.  The
accused later admitted that he might have been mistaken about
calling Toran.  He did not cling to or repeat a false statement
with knowledge of its falsity.  A mistake of that kind is not
inconceivable considering the high volume of cases that the
accused handled with TriMet.   On the basis of the record, the
Bar has failed to prove by clear and convincing evidence that the
accused violated DR 1-102(A)(3). 
Complaint dismissed.
KISTLER, J., concurring in part and dissenting in part.
I agree with the majority that the accused's telephone
call to the arbitrator did not constitute an ex parte
communication in violation of DR 7-110(B).  I also agree that the
Bar failed to prove by clear and convincing evidence that the
accused's statement that he had tried to speak with Toran before
he telephoned the arbitrator was a misrepresentation.  I would
hold, however, that the accused misrepresented the arbitrator's
ruling in his April 22, 2004, letter to Toran.
The day before a scheduled arbitration hearing, the
accused called the arbitrator to ask whether the arbitrator, as a
general matter, permitted witnesses to testify by telephone. 
According to the accused, the arbitrator responded, "[I]t's okay
with me if it's okay with [opposing counsel]."
The accused then faxed a letter to Toran telling her
that two witnesses whom he had subpoenaed would not be able to
attend the scheduled hearing but that they would be available to
testify by telephone.  He added:
"I have contact telephone numbers for each of these
witnesses and intend to present their testimony by
speaker phone.  I have cleared this with the arbitrator
who asked me in turn to advise you of these
developments.  Please call if there are questions."
It is worth noting that, in reporting his conversation with the
arbitrator, the accused did not say that the arbitrator would
permit the two witnesses to testify if Toran would agree to that
procedure.  Rather, he said, "I intend to present their testimony
by speaker phone" and "I have cleared this with the arbitrator
who asked me in turn to advise you of these developments."  The
accused thus omitted the condition that the arbitrator explicitly
had placed on the use of telephonic testimony, and his use of the
verb "cleared" implied an approval that the arbitrator never
gave.  Moreover, stating that the arbitrator had "asked [the
accused] to advise [Toran] of these developments" implies that
the accused was accurately reporting what the arbitrator had
ruled -- something, it turns out, that the accused did not do.
DR 1-102(A)(3) provides that "[i]t is professional
misconduct for a lawyer to * * * [e]ngage in conduct involving *
* * misrepresentation."   To establish that the accused made a
misrepresentation, the Bar must prove by clear and convincing
evidence that the misrepresentation was "knowing, false, and
material in the sense that the misrepresentatio[n] would or could
significantly influence the hearer's decision-making process." 
In re Eadie, 333 Or 42, 53, 36 P3d 468 (2001).  A lawyer makes a misrepresentation "either when the lawyer makes an affirmative
false statement or when the lawyer remains silent despite having
a duty to speak."  In re Lawrence, 337 Or 450, 464, 98 P3d 366
(2004).
The question whether the accused misrepresented the
arbitrator's ruling turns initially on the message that his
letter to Toran conveyed.  In that letter, the accused began by
saying, "I intend to present [two witnesses's] testimony by
speaker phone."  The use of the verb "intend" implies a present
intent to present the witnesses's testimony by telephone, not one
that is conditioned either on Toran's agreement or on some future
ruling by the arbitrator.  The accused then added, "I have
cleared this [i.e., his intent to use telephonic testimony] with
the arbitrator."  In context, the accused's use of the word
"cleared" implies that the arbitrator had approved the accused's
intent of having the two witnesses testify by telephone.  Equally
telling is what the accused failed to mention.  The accused did
not say that the arbitrator would permit the witnesses to testify
by telephone only if Toran would agree with that procedure.  The
letter omits any mention of the condition that the arbitrator
explicitly placed on the use of telephonic testimony.
The majority notes that it is possible to read the
letter differently.  It explains that "the letter fairly stated
the accused's intention to offer some witness testimony by
speaker telephone and that the arbitrator had no problem with
that procedure."  That reading gives too little weight to the
ordinary meaning of the word "cleared" and fails to take account
of the accused's omission of the specific condition that the
arbitrator had placed on the use of telephonic testimony:  The
arbitrator said that the procedure would be permissible only if
Toran approved.
This court has explained that "'[a] person must be able
to trust a lawyer's word as the lawyer should expect [the
lawyer's] word to be understood, without having to search for
equivocation, hidden meanings, deliberate half-truths or
camouflaged escape hatches.'"  Lawrence, 337 Or at 466 (quoting
In re Hiller, 298 Or 526, 534, 694 P2d 540 (1985) (brackets in
original; emphasis added)).  Taking the accused at his word, I
would find his message unmistakable:  His letter conveyed the
message that the arbitrator had approved permitting the two
witnesses to testify by telephone and had placed no conditions on
the use of their telephonic testimony.  Neither part of that
message turned out to be true.
The majority reasons, however, that the omission of
"express notice in the letter that Toran could object if she so
desired is immaterial" because Toran was aware that she could
object.  With respect, that reasoning misses the mark.  The point
is not that Toran knew that she could lodge an objection to the
arbitrator's ruling.  Rather, the point is that the arbitrator
said that he would not rule that the accused could use telephonic
testimony unless Toran agreed.  The difference between those two
propositions is material, as is the accused's omission of the
express condition that the arbitrator placed on the use of
telephonic testimony.  In relaying what the arbitrator had ruled,
the accused should expect to be taken at his word "'without
[opposing counsel's] having to search for equivocation, hidden
meanings, deliberate half-truths or camouflaged escape hatches.'" 
See id. (holding lawyers to that standard).
I would find that the accused acted knowingly.  He knew
that the arbitrator had conditioned use of telephonic testimony
on Toran's approval, but that is not what he said in his letter
to Toran.  Finally, I would hold that the misstatement was
material.  Materiality does not turn on whether a statement in
fact affected the hearer's decision-making practice; rather, it
turns on whether it could have done so.  Eadie, 333 Or at 53.  It
is true that the accused's letter did not dissuade Toran from
asking the arbitrator to "disallow the testimony of these
witnesses by telephone." (2)  But it could have dissuaded her,
and that is sufficient to establish materiality.
I would hold that the accused misrepresented the
arbitrator's ruling to Toran in violation of DR 1-102(A)(3). 
Accordingly, I respectfully dissent from that part from the
majority's decision.
Gillette and Balmer, JJ., join in this opinion.
1. The Oregon Rules of Professional Conduct became
effective January 1, 2005.  Because the conduct at issue here
occured before that date, the Code of Professional Responsibility
Disciplinary Rules apply.
2. Toran testified that she understood from the accused's
letter that the arbitrator had ruled that the witnesses could
testify by telephone.  Her use of the word "disallow" in her
letter to the arbitrator is consistent with that testimony.