Case Name: In re Anonymous Nos. 8 and 9 D.B. 88
Court: Disciplinary Board of the Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1990-11-22
Citations: 21 Pa. D. & C.4th 13
Docket Number: Disciplinary Board docket nos. 8 and 9 D.B. 88
Parties: In re Anonymous Nos. 8 and 9 D.B. 88
Judges: 
Reporter: Pennsylvania District and County Reports
Volume: 21
Pages: 13–52

Head Matter:
In re Anonymous Nos. 8 and 9 D.B. 88
Disciplinary Board docket nos. 8 and 9 D.B. 88.
November 22, 1990—

Opinion:
Hearing Committee,
I. INTRODUCTION
On January 20,1988, the Office of Disciplinary Counsel filed two petitions for discipline, one against [respondent 1] and the other against [respondent 2].
The allegations against these lawyers grew out of their representation of [Mr. A] and his wife [Mrs. A].
On February 21, 1982, [Mrs. A] was a passenger in a [B] jeep driven by her husband which was involved in an accident near [ ], Pennsylvania. The jeep apparently flipped over and [Mrs. A] was seriously injured. In fact, she remained in a coma for several months. [Mrs. A's] father, [C], sought out [respondent 1], an old family friend.
[Mr. A] also wished to have [respondent 1] represent them because he knew that [respondent 1] cared deeply for [Mrs. A] and would do everything necessary to protect their interests. [Respondent 1] later brought [respondent 2] into the case to assist him in connection with his representation of [Mrs. A] and [Mr. A].
Along the way [respondents] found themselves caught in the middle of a family dispute that was occasioned by the deep-seated animosity that [Mrs. A's] parents, the [C], had for [Mr. A],
The ultimate course of their representation substantially deviated from merely acting as counsel for the [A's] in a tragic automobile accident case. Respondents, especially [respondent 1 ] became immersed in a plethora of legal and social problems that stemmed from these family problems.
The starting point, of course, is our set of factual findings that embrace our ultimate legal conclusions.
II. FINDINGS OF FACT
(1) [Respondent 1] was admitted to practice law in the Commonwealth of Pennsylvania on November 1, 1976, and has, at all times relevant hereto, maintained law offices in [ ], Pennsylvania.
(2) [Respondent 2] was admitted to practice law in the Commonwealth of Pennsylvania on June 2, 1958 and, at all times relevant hereto, has maintained law offices in the City of [ ].
(3) These disciplinary proceedings arise from issues that are an outgrowth of respondents' representation of [Mrs. A] and her husband, [Mr. A].
(4) It was on February 21, 1982 that [Mrs. A] was seriously injured in an automobile accident which occurred when a [B] jeep driven by her husband, [Mr. A], "flipped over" and was struck by a truck.
(5) As a result of this accident, [Mrs. A] was in a coma until approximately May 1982 and thereafter began a slow but steady course of rehabilitation; her injuries are permanent, although she is able to walk, talk, and care for her personal needs. She is blind in one eye, cannot see well with the other eye, has mobility limitations, emotional problems, and a severe short term memory deficit.
(6) Shortly after the automobile accident, [respondent 1] was consulted by [Mrs. A's] father, [C], who was a long time friend of [respondent 1]. [Mr. C], was joined by [Mr. A] at this meeting with [respondent 1] wherein they discussed the possibility of [respondent 1] representing [Mrs. & Mr. A] and their two year old son, [J] with respect to claims arising from the automobile accident.
(7) [Respondent 1] agreed to represent the interests of the [As] in claims against [B] and others arising out of the automobile accident and, on March 18,1982, a contingent fee agreement was executed by [Mr. A].
(8) The contingent fee agreement entered into between [respondent 1] and [Mr. A] as concerns the [B] suit provides that all expenses incurred by [respondent 1] with regard to the claim would be deducted from the gross sum received by verdict or settlement of the claim. (Ex. P-1.)
(9) On August 23, 1983, [respondent 1] entered into a contingent fee agreement with [Mrs. A] to represent [Mrs: A's] interests in the [B] suit. The agreement provides that [respondent 1] is to "advance the expenses of the investigation, institution, prosecution and trial of the case unless other arrangements are made" and to be reimbursed for such expenses "from the proceeds of any settlement or verdict or other form of recovery." (Ex. P-7.)
(10) Although petitioner maintains that respondent's dual representation of [Mr; & Mrs. A] constituted a conflict of interest ab initio because [Mrs. A] had "a potential claim against [Mr. A] arising out of the . accident," we find as a fact that no evidence was presented with respect to the cause of the accident which would enable anyone to reasonably conclude that an actual conflict between the parties existed. The facts presented, as well as the disclosure of the progress of the present lawsuit against [B], suggest that the injuries were caused by a defective product, and not the negligence of [Mr. A]. In any event, petitioner did not present any evidence from which we can conclude that any legitimate claim against [Mr. A] could have been brought by [Mrs. A].
(11) [Respondent 1] knew from his prior contact with [Mrs. A], as well as his discussions with [Mr. A], that no conflicts in the marriage existed prior ,.to the automobile accident.
(12) After [Mrs. A] awoke from a coma in May 1982, she was transferred to [D] Rehabilitation Unit at [E], and was subsequently discharged from [D] on October 8, 1982. Since that date, [Mrs. A] has resided with her parents, the [Cs], at their home in [ ], New Jersey.
(13) Sometime in the fall of 1982, [respondent 1] engaged the services of [respondent 2], with whom [respondent 1] shared offices, to assist him in his representation of the [As].
(14) After becoming involved in the representation of the [As], both respondents continued to act to maintain representation of the [As] in the [B] claim despite the fact that the intervention of [Mrs. A's] parents led directly to. an erosion of the relationship between [Mr. & Mrs. A]. However, at no time, did respondents believe that there was any conflict between the interests of the parties with respect to their claims against defendants in the underlying lawsuit. Moreover, respondents reasonably concluded that the claim itself would be enhanced if the [As] maintained a cohesive family unit, and maintained a united purpose.
(15) [Mr. A] became concerned that the [Cs] were attempting to dislodge his marriage and complained to [respondent 1] that the [Cs] were fostering conflicts in the marital relationship- that were inconsistent' with [Mr. A's] wishes, and deleterious to the welfare of the [As'] small child, [J].
(16) Both the [Cs] and [Mr. A] constantly sought the assistance of respondents with respect to Conflicts that were arising between [Mr. A] and the [Cs]. It was [Mr. A's] desire to resolve the marital conflicts that were spawned by the [Cs] interference which ultimately resulted in the problems which [respondent 1] (and derivatively [respondent 2]) now confronts. Rather than just maintaining the lawsuits, [respondent 1] was asked to play the role of conciliator; a job that he embraced as both friend of the family, and as lawyer responsible for doing that which was necessary to enhance the value of his claim against defendants in the underlying lawsuit.
(17) We find that respondents expended an extraordinary amount of time attempting to deal with family problems that arose from the rupture in the relationship between [Mr. A] and his wife's parents.
(18) Medical experts advised respondents that it would be a full year before the extent of [Mrs. A's] injuries would be known.
(19) When [respondent 1] advised [Mrs. A's] parents that he thought a guardian should be appointed, they strenuously objected. He did, however, advise the [Cs] that if [Mrs. A.'s] short term memory deficit did not improve, a guardian ad litem for the [B] litigation would have to be appointed even if they maintained their opr position. He also advised them that if a settlement offer was made, or a monetary recovery otherwise achieved, a guardian would have to be appointed.
(20) In June 1983, [respondent 1] obtained counsel in [F] County to file a petition in the Orphan's Court, [F] County, on behalf of [Mr. A], to adjudicate [Mrs. A] incompetent and have [respondent 1] appointed as her guardian.
(21) [Respondent 1] was never appointed guardian ad litem for [Mrs. A] as the petition was never pursued in [ ] County. Later, in November 1984, at [respondent 1 's] request [Mrs. A] was ruled incompetent by Judge [G], in [H] Common Pleas Court, and a guardian, other than [respondent 1] was appointed for [Mrs. A].
(22) At the time of the accident, the following insurance coverage was held by the [As]: .
"(a) The jeep carried bodily injury and Personal Injury Protection insurance under a policy issued by the [I] Insurance Company in which [Mr. A] was named insured and [Mrs. A] was insured as a family member.
"(b) [Mrs. A] owned a [ ] which carried bodily injury and PIP insurance under a separate policy issued by [I] in which [Mrs. A] was named insured.
"(c). Both [Mrs. A] and [Mr. A] had [K] medical insurance derived from their respective employment and covering both of them."
(23) [Respondent 1] assisted [Mr. A] in obtaining benefits due under the insurance policies. In early 1983, [respondent 1] was informed by [Mr. A] that he was receiving $1,200 per month in benefits from [Mrs. A's] employers and from social security. [Respondent 1] was advised by [Mr. A] that PIP wage loss benefits had ended and [Mr. A] was sending $200 per week to the [Cs] for [Mrs. A's] necessities and utilizing the balance of the benefits toward the payment of the mortgage on the family home, the upkeep of [J] and [Mr. A's] parents' home and upkeep of the marital residence and bills incurred by [Mrs. & Mr. A] prior to the accident.
(24) When the [Cs] advised [respondent 1] that they were not receiving money from [Mr. A], [respondent 1] encouraged [Mr. A] to send funds to the [Cs] as long as [Mrs. A] was staying with them. As a result, in the fall of 1983, all funds went directly to [Mrs. A] with the exception of funds [J] was receiving because at that time [J] was still with [Mr. A].
(25) At all times relevant hereto, respondents bélieved that the differences and problems that existed were not between [Mrs. A] and [Mr. A]; rather, they reasonably concluded that the problems were being created by the [Cs].
(26) The collateral conflicts which [respondent 1] was called upon to .reconcile included such things as striking a balance between the conflicting opinions of experts regarding how much and how often [Mrs. A] should see her son, [J]. .
(27) Although [respondent 1] consistently attempted to cater to the needs and wishes of the [Cs], he always made it clear to them that he represented only [Mrs. A], [Mr. A], and [J].
(28) In December 1982, [I] determined that PIP benefits in the amount of $195,859.01 were payable on account of the [E] bill. Because [Mr. A's] [K] policies covered and satisfied the bill from [E] as well as other medical services for [Mrs. A] the [I] monies were now available as a "double dip" payment. Based on [I's] .representation to [respondent 1] that the double dip payments were to be paid directly to [Mr. A] as the owner of the policy, as well as [respondent 2's] representation to [respondent 1] that [respondent 2's] research of the law at that time did not disclose who, if anyone, was actually entitled to these monies, [respondent 1] reasonably concluded that [Mr. A] was legally entitled to the double dip payments.
(29) Because [respondent 1] was concerned that [Mr. A] who had been living under the pressure and the disruptions occasioned by the aftermath of the accident, would just "take off," he set about to attempt to fulfill his responsibilities as "family counselor" by persuading [Mr. A] to create a trust for [Mrs. A's] benefit. [Mr. A] agreed to establish a trust, for the benefit of [Mrs. A] "so long as [respondent 1] agreed not to reveal the existence of the money to the [Cs]." Both [respondents 1 & 2] agreed to this condition.
(30) With [Mr. A's] approval, [respondent 1] advised [I] that a trust was going to be created for the benefit of [Mrs. A], of which he would be co-trustee.
(31) By letter dated February 22, 1983, [respondent 1] asked [I] to pay the monies to the trust.
(32) [I] issued a check in the amount of $195,859.01 dated February 28, 1983 payable to [respondent 1] and [Mr. A] as "trustees of the [Mrs. A's] trust, [L] Bank, [ ], Pennsylvania, for the benefit of [Mrs. A]." Based on prior conversations with [I], we find that it is likely that [I] would have issued the check directly to [Mr. A] alone, without any conditions, absent the intervention of [respondent 1].
(33) Under cover of letter dated March 1, 1983, [I] transmitted the check to [respondent 1] which was deposited into the trust account.
(34) [Respondents 1 & 2] drafted a trust agreement which was executed by [Mr. A] and [respondent 1] on March 2, 1983. (Ex. P-50, S.F.-45, S.K.-39.) The agreement provides that the trust monies may be used for (1) the care and maintenance of [Mrs. A] and (2) the care and maintenance of [J] and (3) expenses incurred by [Mr. A] arising out of the accident.
(35) Between March 1983 and January 1984, [respondent 1] caused or permitted to be drawn against the trust account checks to or on behalf of [Mr. A] totalling approximately $62,030 covering such items as expenses incurred for the care of [J] and [Mrs. A], as well as payment for a safe replacement vehicle due to the loss of the family vehicle as a result of the automobile accident. [Respondent 1] also gave [Mr. A] at least $6,500 from the trust fund as unsecured personal loans.
(36) Other monies were paid to the [Cs] from the trust fund in order to maintain [Mrs. A], with [Mr. A's] approval.
(37) From October 1983 through February 1984, despite the terms of the contingent fee agreements, [respondent 1] disbursed funds from the trust account totalling approximately $30,000 to himself and $5,000 to [respondent 2] in connection with expenses incurred with respect to the preparation of the [B] case. These expenses include legal research on "issues relating to incompetency of plaintiff and appointment of guardian," all of which arose from the [B] litigation. These payments were made with the approval of [Mr. A].
(38) With the approval of [Mr. A], [respondent 1] disbursed $ 12,180 to himself and $35,650 to [respondent 2] from the trust account for professional services rendered by him for the period July 1, 1983 to January 23, 1984 covering his services to [Mrs. A], [Mr. A], and the [Cs] with respect to domestic relations issues, whose resolution [respondent 1] believed was in [Mrs. A's] best interests. These services were rendered at the insistence and request of [Mr. A] in an effort to preserve the marital relationship, and to keep the family intact, and all payments were made with [Mr. A's] knowledge, permission and approval.
(39) The interests of [Mrs. A] and [Mr. A] in their domestic relations matter did not, as far as [respondent 1 ] was concerned, differ in any way. [Mrs. A] repeatedly, over a long period of time, stated that [Mr. A] was a kind and gentle man. She evidenced loving feelings for [Mr. A] at a meeting in [respondent l's] office in September 1983, once she was not under the control and prodding of her parents. [Mr. A] approved of the issuance of funds from the trust account as compensation for respondents, and concluded that the payments were fair and reasonable in view of the extraordinary time expended by both.
(40) On September 21, 1983 [respondent 2] entered his appearance in the [B] suit on behalf of [Mr. A] as an additional defendant as to liability in excess of the $100,000 policy limit only.
(41) On November 4, 1983 [respondent 1] entered his appearance in the [B] suit for [Mrs. A], [Mr. A] and. [J] as plaintiffs.
(42) On November 4, 1983 [respondent 2] withdrew his appearance for [Mr. A] as an additional defendant, who was then represented by other counsel.
(43) The foregoing actions by [respondent 2] were taken without [respondent l's] knowledge.
(44) In or about October 1983, [Mrs. A] and the [Cs] consulted with [M], Esquire, a New Jersey attorney, concerning the domestic relations issues, and [Mr. C] so advised respondents.
(45) On October 4,1983, a meeting was held among [Mrs. A], the [Cs], respondents, and [Mr. M], in which a divorce was discussed.
(46) On November 9,1983 respondents were advised by [N] Esquire, that he now represented [Mr. A] in the custody dispute, a dispute which respondents reasonably conclude was spawned by the [Cs] and not [Mrs. A].
(47) On December 30,1983 [Mr. A] filed a complaint for custody of [J] against [Mrs. A] in the Court of Common Pleas, [F] County, at no. [ ], on the.grounds of [Mrs. A's] alleged mental incompetency.
(48) Each of the parties was represented by independent counsel in the custody proceedings, [Mrs. A] by [O], Esquire and [Mr. A] by [Mr. N].
(49) Respondents were promptly advised of the involvement of these attorneys. Each counsel retained wanted [respondent 1 's] help in reconciling the existing problems.
(50) On January 26, 1984 [Mr. M] filed a complaint in divorce on behalf of [Mrs. A] against [Mr. A] in the Superior Court of New Jersey, [ ] County.
(51) [Respondent 1] continued to communicate with [I] on behalf of [Mrs. A] and [Mr. A] with respect to [Mrs. A's] treatment.
(52) [Respondent 1] advised Dr. [P] he would be personally responsible for payment of [Mrs. A's] treatment.
(53) In or about April 1984, [respondent 1] paid Dr. [P] $1,350 by his own check, and then reimbursed himself from the . trust.
(54) [Respondent l's] letter to [Mr. C] of July 2, 1984 that he advanced the $1,350 to pay Dr. [P's] bill was not false. Indeed, respondent correctly believed that [I] would eventually be obligated to pay Dr. [P's] bill and, ultimately, [I] did pay the bill.
(55) The [Cs] in November 1984, obtained counsel to represent [Mrs. A] in the [B] suit. This attorney, [Q] Esquire, notified [respondent 1] of his involvement in .the case.
(56) Despite [Q's] urging, [respondent 1] did not release , his files to new counsel because he did not believe that [Mrs. A] was competent to hire new counsel.
(57) After hearing from various attorneys purporting to represent the interests of [Mrs. A] and/or the [Cs], [respondents 1 & 2] did not withdraw their appearances because they felt that this was the latest attempt by the [Cs] to interpose their will, and that this was not [Mrs. A's] true desire and, fiirthermore, were not convinced that she was competent to make such decisions.
(58) However, on May 10, 1985, after further proceedings concerning the appointment of a guardian in the [B] suit, Judge [G] ordered that [respondent 1] withdraw his appearance and, furthermore, appointed [R], Esquire as counsel for [Mrs. A].
On June 24, 1984, [respondent 1] withdrew his appearance as counsel for [Mrs. A] and has, at all times cooperated with [Mrs. A's] court appointed counsel. By order of August 27, 1985, Judge [G] appointed [S], Esquire as guardian ad litem for [Mrs. A].
(59) [Mr. A] retained new counsel in the [B] suit, who entered his appearance on April 23, 1987. Partly as a result of [respondent 1 's] original efforts, the action against [B] was, at the time of the last hearing before this panel, on the verge of a very successful culmination.
(60) Some 17 months subsequent to the establishment of the trust, the Superior Court held, for the first time, that a "double dip payment" under the Pennsylvania No-Fault Motor Vehicle Insurance Act was to be paid to the injured person, and not the owner of the policy (Steppling v. Pennsylvania Manufacturers' Association Insurance Company, 328 Pa. Super. 419, 447 A.2d 515, [1984]).
Based on the Steppling case, various lawsuits were instituted which resulted in, among other things, a settlement whereby respondents contributed the fees which they had been previously paid from the trust.
III. LEGAL CONCLUSIONS AND ANALYSIS
The petition for discipline charges violations of 23 separate disciplinary rules. This committee would be presumptuous in suggesting that these multiple allegations, with all of their permutations and variations, are easily subject to a process of simplification. Yet, a general overview of petitioner's primary focus and contentions leads to a helpful lumping together of various areas of concern.
First, petitioner claims that [respondent 1 's] original decision to represent both husband and wife in the litigation arising from the accident constituted a conflict of interest. Petitioner further maintains that once family difficulties arose, which were primarily between the [Cs] and [Mr. A], that a conflict between [Mr. & Mrs. A] then clearly emerged requiring that they each have separate independent counsel.
The next set of disciplinary rule violations alleged arise from respondents' failure to have the court appoint a guardian ad litem for [Mrs. A] once it was determined that she was probably incompetent.
Lastly, petitioner alleges that several disciplinary rules were implicated from respondents' handling and ultimate dissipation of much of $195,000 paid by [I] as "double dip payments" to a trust fund established for [Mrs. A] by [respondent 1] and [Mr. A].
We have considered the evidence and arguments of all parties and reach the following conclusions:
A. Respondents' Representation of Both [Mr. & Mrs. A] in the Litigation Arising From the Automobile Accident Did Not Constitute an Impermissible Conflict of Interest
The evidence presented at the hearing in the form of both oral testimony and documentary exhibits failed to disclose that the facts of the underlying claim established an adverse position between [Mr. & Mrs. A].
Indeed, the investigation conducted by [respondent 1] ineluctably led to the conclusion that the accident and [Mrs. A's] consequential injuries were caused solely by the [B] jeep's propensity to roll over under similar circumstances.
[Respondent 1 's] research showed that this particular make and model jeep had a design defect that caused similar circumstances. Moreover, no evidence was presented from which we can reasonably conclude that [Mr. A] was in any way responsible for the accident. Indeed, there are disciplinary rules that are potentially implicated when a lawyer engages in collusion with his clients in order to make it appear that compensable fault exists where none does. Accordingly, it carnlot be said that [respondent 1] was wrong in initially concluding that he could represent both the husband and the wife.
At the inception of the litigation there was apparent harmony between the [Cs] (i.e. [Mrs. A's] parents) and [Mr. A]. Both [Mr. A] and [Mr. C] sought out [respondent 1]. Clearly, both trusted [respondent 1] and believed that his friendship and affection for [Mrs. A] would cause him to extend himself beyond what could be expected from a lawyer who was not so personally involved with the family. On this score, they were prophetically correct. Not only did [respondent 1] actively pursue the [B] litigation, he immersed himself in the lives of his clients and their families. It is true, as petitioner maintains, that [respondent 1] tried to be all things to all people. It would, however, be disingenuous to attribute some pejorative labeling of [respondent 1] for his substantial efforts to reconcile family conflicts that he believed had nothing to do with [Mr. & Mrs. A]. Both respondents obviously believed that the [Cs] would eventually be mollified once [Mrs. A] (and, derivatively, the [Cs]) was compensated for [Mrs. A's] serious injuries.
[Respondent 1] knew that [Mrs. & Mr. A] had an excellent marriage before the accident and honestly believed that there was not, in fact, any irreconcilable discord between them. [Mrs. A] met with [respondent 1] in his office, and outside of the presence of her parents, expressed only affection and love for her husband.
Respondents were also encouraged by medical professionals who contended that it was in [Mrs. A's] best interest to keep the marriage intact. [Mr. A], too, wanted the marriage to survive and sought the assistance of respondents to resolve the family problems that arose from the rupture of his relationship with his wife's parents. Accordingly, respondents were clearly attempting to serve the interests and wishes of their clients (including young [J]) by doing all that they did to try to resolve the conflicts engendered by [Mrs. A's] parents. As time passed, this task became progressively more difficult as the [Cs] became even more alienated from [Mr. A]. Because of [Mrs. A's] fragile condition, respondents believed that the [Cs] were exercising unfair influence on [Mrs. A] who they were caring for in their home. Petitioner's efforts to make it appear that respondents were calculating lawyers attempting to manipulate the parties for their own interest is inconsistent with the facts as we find them. At no time, did either party intentionally fail to seek the lawful objectives of their clients, as they saw them.
Disciplinary Rules 5-105(A) and (C) are designed to promote an attorney's undivided loyalty and fidelity in representing the interests of his client. These rules direct that a lawyer shall not accept employment which may affect his independent judgment in behalf of a client or involve him in representing differing interests unless (a) it is obvious that he can represent the interests of each adequately and (b) each consents after full disclosure of the possible effect of such representation on the exercise of his independent judgment. In the present case, respondents viewed the legal interests of [Mrs. & Mr. A] in the litigation spawned by the accident as being in perfect harmony. They did not conclude that there was any conflict in their interests that would affect their independent judgment on behalf of each client. Therefore, as no conflict was perceived, no waiver was required.
Respondents, and especially [respondent 1] acted as lawyers, counselors, conciliators, and ombudsmen for all legal and emotional problems that arose from the tragic accident. Mistakes in judgment were mistakes of the heart, as all decisions were calculated to serve the interests of their clients.
B. Under the Circumstances of the Present Case, Respondents ' Failure To Seek the Appointment of a Guardian for [Mrs. A] Did Not Violate D.R. 1-102(A)(5) or D.R. 1-102(A)(6)
From the outset, [respondent 1] discussed with [Mr. C] and [Mr. A] his belief that it would probably be necessary to have a guardian appointed for [Mrs. A]. [Mr. C], who was not [respondent 1 's] client, adamantly opposed any judicial process that would result in a declaration of [Mrs. A's] incompetence. At the same time, [Mr. A], who was [respondent 1 's] client, initially wanted to appease the [Cs] and, likewise, opposed the appointment of a guardian. Nonetheless, [respondent 1] made it clear that a guardian would eventually be required if a settlement offer was made or a trial commenced. [Respondent 1] also points out in his argument that the decision whether to have a guardian appointed must be viewed in light of the effect that this judgment would have had on his client. In this regard, [respondent 1] cites Rule 1.14 of the Rules of Professional Conduct, and its comment relating to "Clients Under Disability." The rule provides in relevant part that despite a client's mental disability, the lawyer should, "as far as reasonably possible, maintain a normal client/lawyer relationship with the client." The comment provides in relevant part.
"...if the person has no guardian or legal representative, the lawyer often must act as de facto guardian....
"In many circumstances, however, appointment of a legal representative may be expensive or traumatic for the client. Evaluation of these considerations is a matter of professional judgment on the lawyer's part."
[Respondent 1 's] counsel thus concludes that the rules contemplate circumstances which would allow a lawyer, in the interest of his client, to refrain from having a guardian appointed.
However, it is clear that a lawyer cannot perform any act or make any decision which the law requires his client to perform or make. Thus, there are circumstances in which the client must act for himself if competent, or through a duly constituted representative if legally incompetent. Here, respondents knew, or should have known, that [Mrs. A] was incompetent and that applicable provisions of the Pennsylvania Probate, Estates and Fiduciary Code were triggered by her condition. The PEF Code, section 5505(1) requires appointment of a guardian for an incompetent where the real and personal estate of the incompetent has a value in excess of $10,000.
Despite the opposition of the [Cs] and [Mr. A] respondents should have sought the appointment of a guardian in a more timely fashion. Eventually, in late 1984, [respondent 1] did petition the court for the appointment of a guardian.
Respondents' failure to act was not prompted by anything other than a desire to accommodate the wishes of his client, [Mr. A] and his client [Mrs. A's] parents. Since [respondent 1] himself could have literally designated the personal representative when he was in control of the litigation, he had absolutely nothing to gain personally by failing to petition the court earlier.
Because of the tumultuous relationship that developed between [Mr. C] and [Mr. A], and [Mr. A's] insistence that respondents assist him in resolving the marital conflicts engendered by his difficulties with his in-laws, respondents delayed petitioning the court for a guardian.
Other factors prompted this decision. First, [Mrs. A's] doctors suggested that it would be at least one full year before the extent of [Mrs. A's] injuries would be known. Respondents obviously knew that the litigation would not be concluded before that time. Most significantly, respondents did not perceive any conflict between [Mr. & Mrs. A's] interests, and felt that [Mr. A] was only concerned with maintaining the family unit. Clearly, self-interest did not motivate respondents' decision to forestall the appointment of a guardian. Their decision was prompted only by their desire to accommodate the wishes of everyone, and maximize the chance of restoring family harmony.
In the present case, under the present circumstances, it cannot be said that respondents' failure to petition for a guardian at an earlier time constituted conduct that rises to a violation of D.R. 1-102(A)(5). We do not conclude that this conduct was "prejudicial to the administration of justice." Likewise, we find that their motives were pure and that anyone objectively viewing their conduct would necessarily conclude that their behavior did not "adversely reflect on his (their) fitness to practice law."
As respondents have conceded, mistakes in judgment were made. However, a violation of D.R. 1-102(A)(6) did not occur.
C. [Respondent 1] Did Hot Have a Conflict of Interest in Setting Up the Trust, But Did Have a Conflict of Interest in the Administration of the Trust
Petitioner claims that respondents, particularly [respondent 1], mishandled and misappropriated funds that were paid by [I] insurance division for medical bills incurred by [Mrs. A]. These funds were $195,859. Because [K] coverage had already satisfied these bills, the [I] funds amounted to duplicative benefits or, as is commonly referred to, a "double dip" payment.
The briefs for Disciplinary Counsel and respondents contain much discussion of who was legally entitled to the double dip funds ([Mr. & Mrs. A]), and who first suggested the idea of putting the double dip funds in trust for [Mrs. A]. The briefs then contain various legal conclusions depending on how these questions were answered.
Regardless of who was entitled to the funds, certain facts are clear. [I], [respondent 1] and [Mr. A] all agreed to the trust for [Mrs. A].
Although each may have had their own reasons for agreeing to the trust, the trust was established and the funds paid into it.
This being the case, we conclude that it is technically immaterial whether [I] might properly have paid the funds to [Mr. A] rather than [Mrs. A]. The funds were not paid to [Mr. A].
The propriety of the conduct of [respondents 1 & 2] now under scrutiny must be judged against the fact that the funds were paid to the trust; not against some other hypothetical scenario which might have happened but did not.
On the other hand, if [respondent 1] believed that the double dip funds were going to be paid by [I] directly to [Mr. A], then it is to his credit as a counselor that he spoke out for a trust for [Mrs. A's] benefit and this belief bears heavily on his good faith in subsequent disbursements of the trust funds.
At the outset, we should examine, under the Disciplinary Rules, [respondent 1 's] conduct in setting up a trust for his client [Mrs. A] rather than urging direct payment of the funds to his client [Mr. A]. We make the conclusion of law that [respondent 1] had no conflict of interest in this respect because [Mr. A] consented to the trust after full disclosure. Examining the specific expenditures made by [respondent 1] to [Mr. A] from the trust fund, we find as follows:
We first consider payments of approximately $62,000 to [Mr. A] and conclude that they were directly or indirectly for the benefit of [J] and [Mrs. A] and consistent with the trust document. For example the disbursements included an amount to replace [Mr. A's] jeep which was destroyed in the accident. This was also for the benefit of [Mrs. A] and [J] in providing transportation for [Mr. A] to visit them.
It must be remembered that the trust document was broadly drawn with view toward benefiting both [Mrs. A] and her son as well as toward preserving the [A] family unit.
Consider next, the various payments by [respondent 1] from the trust funds to himself or [respondent 2] including the amounts paid as fees for domestic relations services. We have found that respondents provided the services claimed and we believe that these services were for the benefit of [Mrs. A] in maintaining family unity, and were also clearly a result of the accident, since all the evidence is that the marriage was a very loving one, and the expense was incurred by [Mr. A] who requested and approved the services.
Unfortunately, payments to [respondent 1 & 2] for reimbursement of these expenses of the [B] suit, are not so easily disposed of.
[Respondent l's] reimbursement of these expenses is clearly contrary to the contingent fee agreements he had previously signed separately with [Mr. & Mrs. A]. In both of these agreements it was provided that expenses would be reimbursed out of the verdict or settlement award, if any. The fact that co-trustee [Mr. A] may have approved the payment is immaterial since there was no guardian for [Mrs. A], to act for her and she was incompetent by [respondent 1 's] own admission.
Indeed, [respondent 1] himself has offered no justification for the payments other than the involved claim in his brief (page 55) where he attempted to equate the double dip funds to a litigation settlement.
Accordingly, we find as a conclusion of law that [respondent 1 's] payment, as co-trustee, to himself and [respondent 2] as attorneys for the [As], of the [B] expenses was a conflict of interest and a violation of D.R. 5-105(B). We also find that the payments were a clear violation of the contingent fee agreements, and a violation of D.R. 1-102(A)(5).
[Respondent 2's] predicament with respect to reimbursement of the [B] expenses is no better than [respondent 1 's]. Although representing [Mr. & Mrs. A], [respondent 2] had no fee agreement with either client and thus was not entitled to any reimbursement of expenses. Indeed [respondent 2] does not argue that he was. We find that [respondent 2] violated D.R. 1-102 (A)(5).
IV. CONCLUSION
In view of the aforesaid finding of breach of the Disciplinary Rule a further hearing will be held with regard to the proposed sanctions.
* Hearing Committee Member [ ] will be filing a separate dissenting opinion.