Title: In the Matter of Jeffrey S. Rasley and, In the Matter of David M. Wood
Citation: N/A
Docket Number: 49S00-0808-DI-467, 49S00-0808-DI-468
State: Indiana
Issuer: Indiana Supreme Court
Date: December 11, 2009

ATTORNEY FOR THE RESPONDENT 
Julia Blackwell Gelinas 
Amy S. Wilson 
Indianapolis, Indiana 
 
 
 
ATTORNEYS FOR THE INDIANA SUPREME COURT  
DISCIPLINARY COMMISSION 
Donald R. Lundberg, Executive Secretary 
Laura Iosue, Staff Attorney 
Indianapolis, Indiana 
 
_____________________________________________________________________________ 
 
In the 
Indiana Supreme Court  
_________________________________ 
 
No. 49S00-0808-DI-468 
 
IN THE MATTER OF: 
 
 
 
 
 
 
 
 
 
JEFFREY S. RASLEY, 
 
 
 
 
 
 
 
 
Respondent. 
_________________________________ 
 
No. 49S00-0808-DI-467 
 
IN THE MATTER OF: 
 
 
 
 
 
 
 
 
 
DAVID M. WOOD, 
 
 
 
 
 
 
 
 
Respondent. 
_________________________________ 
 
 
Attorney Discipline Action 
Hearing Officer Robyn L. Moberly 
_________________________________ 
 
 
 December 11, 2009 
 
Per Curiam. 
This matter is before the Court on the report of the hearing officer appointed by this 
Court to hear evidence on the Indiana Supreme Court Disciplinary Commission's Verified Com-
plaints for Disciplinary Action against Respondent Jeffrey S. Rasley ("Rasley ) and Respondent 
David M. Wood ("Wood"), and on the post-hearing briefing by the parties.  Rasley's 1979 admis-
FILED
CLERK
of the supreme court,
court of appeals and
tax court
Dec 11 2009, 11:59 am
 
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sion and Wood's 1995 admission to this state's bar subject them to this Court's disciplinary juris-
diction.  See IND. CONST. art. 7, § 4.   
 
We find that Respondent Rasley engaged in attorney misconduct by representing a client 
when the representation was materially limited by his own self-interest in violation of Profes-
sional Conduct Rule 1.7.  For this misconduct, we suspend Rasley from the practice of law in 
this state for 120 days without automatic reinstatement. 
 
We find that Respondent Wood engaged in attorney misconduct by representing a client 
when the representation was directly adverse to another client, i.e., Rasley, in violation of Pro-
fessional Conduct Rule 1.7.  For this misconduct, suspend Wood from the practice of law in this 
state for 30 days with automatic reinstatement. 
 
Background 
 
“Seller” was in the business of rehabilitating and selling distressed real estate.  In 2002, 
Seller wanted to sell several of  his properties, including one located on South Evison Street in 
Indianapolis (the "Property").  A third party brought "Buyer" to Seller, and Seller sold the 
Property and several others to him by separate land sale contracts.  Seller gave control of the 
Property to Buyer, who collected the rent from the tenants.  Seller was required to continue 
making payments on his own first mortgage and needed Buyer's contract payments to do so.  The 
parties' goal was for Buyer to secure permanent financing and pay off the balance of the Property 
land sale contract.   
   
To make improvements to the Property, Buyer borrowed $11,500 from Respondent 
Rasley ("the Loan").   The same third party that brought Buyer and Seller together made the 
connection with Rasley.  The Loan was evidenced by a two-month note ("Note") calling for 
repayment of $12,266.71, signed by Buyer, which was to be secured by a second mortgage on 
the Property.  Because Seller was the title holder, he had to give his permission for Buyer to use 
the Property as collateral for the Loan.  To do this, Seller signed a “Mortgage” on June 25, 
2002—the same date the Note was executed.  The hearing officer found Seller believed he was 
 
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simply giving permission for the Property to be used as collateral.  The Mortgage stated, 
however, that the mortgagor (i.e., Seller) and Buyer were to "pay all indebtedness secured by this 
mortgage" in the event of default by Buyer.   
     
Buyer fell behind on his payments both to Seller and to Rasley.  On November 5, 2003, at 
Rasley's instruction, his law partner, Respondent Wood, sent a letter informing Buyer and Seller 
that Rasley was declaring the Loan and Mortgage in default, and that he would proceed with 
foreclosure if they did not cure the default.  On November 17, 2003, Rasley sent a letter to Seller 
and to Buyer informing them that Wood would not file a foreclosure action on Rasley's behalf so 
long as the monthly interest payment (about $383) on the Note was paid to him.  Knowing that 
Buyer had no means to pay Rasley, Seller interpreted this letter as demanding interest payments 
from him personally.  Based on Rasley’s letters to him, Seller believed that he was liable on the 
Loan.  Wood and Rasley also believed Seller was liable on the Loan by virtue of the Mortgage.    
 
Up to this point, no attorney-client relationship existed between Seller and either Rasley 
or Wood.   Seller approached Wood about hiring Respondents' firm ("Firm") to represent him in 
his dispute with Buyer concerning the Property and the other properties Buyer was buying from 
Seller on contract.  Seller believed it would be advantageous to hire the Firm rather than different 
counsel because Rasley would bear some of the litigation expenses (i.e., the expense of asserting 
Rasley's claim against Buyer and foreclosing on the Property) and Rasley would refrain from 
asserting his claim against Seller while seeking a global resolution.   
 
On November 25, 2003, Seller and Rasley conferred by phone.  Rasley testified that the 
first topic of conversation was "how to resolve any issues between [Seller] and me as to our 
conflicting interests in [the Property]."  They agreed Seller would assume Buyer's obligation to 
Rasley, continue making interest payments, and pay the principal when the Property was sold.  
Rasley and Seller agreed that they would jointly sue Buyer if necessary, with the Firm as counsel 
for both Seller and Rasley.  Rasley did not advise Seller of any alternative courses of action or 
potential defenses Seller might have against Rasley's claim.  Neither Rasley nor Wood advised 
Seller that he may wish to consult independent counsel. 
 
 
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After unsuccessful settlement negotiations, Seller and Rasley filed suit against Buyer on 
December 12, 2003.  Seller and Rasley later met with Buyer to discuss settling the case.  At that 
time, Rasley asked Seller to sign a document entitled “Assumption of Liabilities,” which would 
explicitly obligate Seller to assume Buyer’s debt to Rasley.  Seller did not sign the document.  
On several subsequent occasions, Rasley or Wood asked Seller to sign this document, and Seller 
declined.  On January 31, 2004, while still represented by Respondents and on their advice, 
Seller signed a settlement agreement under which he regained his properties from Buyer, he 
assumed liability for Buyer’s debt to Rasley, and Buyer was released from his liability to Rasley.  
Rasley's release of Buyer's liability to him was needed for Buyer to agree to the global 
settlement.  Seller testified that if he had thought that he was not already liable on Buyer’s debt 
to Rasley, he would not have agreed to assume it.   
 
On February 17, 2004, Rasley sent Seller a letter asking him to sign the previously 
requested acknowledgment of "the priority of my lien on the [Property]" and pay the Firm's bill 
for attorney fees.  The letter stated that if Seller did not comply by February 25, 2004, Rasley 
would file suit against Seller the next day.  Seller did not comply.  On February 26, 2004, Rasley 
and the Firm filed suit against Seller.  Seller ultimately agreed to settle the case by paying Rasley 
$15,600.  
  
Discussion 
 
Professional Conduct Rule 1.7.  Professional Conduct Rule 1.7, as effective at the time at 
the time of the alleged misconduct, provided: 
(a) A lawyer shall not represent a client if the representation of that client will 
be directly adverse to another client, unless: 
 
(1) the lawyer reasonably believes the representation will not adversely 
affect the relationship with the other client; and 
 
(2) each client consents after consultation. 
 
(b) A lawyer shall not represent a client if the representation of that client may 
be materially limited by the lawyer's responsibilities to another client or to a 
third person, or by the lawyer's own interests, unless: 
 
 
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(1) the lawyer reasonably believes the representation will not be adversely 
affected; and 
 
(2) the client consents after consultation. . . .  
 
Prof. Cond. R. 1.7 (2003)1 (emphasis added).   
 
 
Rasley is charged with violation of Rule 1.7(b) (2003) based on his representation of 
Seller.  Wood is charged with violating Rule 1.7(a) (2003) for his representation of both Rasley 
and Seller.   
 
Rasley's adverse interest to Seller.  A chief point of contention in this case is whether 
Seller was liable to Rasley on the Note prior to his explicit assumption of the liability as part of 
the global settlement.  Respondents seem to believe there would be no disqualifying conflict of 
interest if only Seller had confirmed that he did not dispute his pre-existing personal liability on 
Buyer's debt to Rasley.  However, even if this obligation were undisputed, Rasley and Seller 
would still have adverse interests as creditor and debtor.  "The debtor-lender relationship is 
always potentially, and often inherently, adversary in nature."  Matter of Burns, 516 N.E.2d 35, 
36 (Ind. 1987).  Moreover, even if the Mortgage did not make Seller personally liable for Buyer's 
debt to Rasley, Rasley indisputably held a mortgage lien on Seller's property, which secured the 
Note.  Thus, Respondents' representation of Seller had the clear potential of being adversely 
affected by Rasley's claims against Seller and/or his property.  Had Seller been represented by 
independent counsel during attempts to reach a global settlement, his counsel would have been 
free to negotiate for maximum concessions from Rasley to get it accomplished.  Rasley 
apparently gave up some of his rights under the Note as part of the settlement, but his self-
interest would have tended to motivate him to give up as little as necessary to get the deal done.  
Moreover, Seller's repeated refusal to sign an express assumption of Buyer's liability should have 
alerted Rasley and Wood that there was an unresolved conflict of interest between Rasley and 
Seller.   
 
                                                 
1 This rule was amended and its parts restructured effective January 1, 2005.  The rule as in effect at the 
time of the alleged misconduct will be indicated by (2003), and the rule as currently effective will be in-
dicated by (current).   
 
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Even if Respondents could have reasonably believed their representation of Seller would 
not be adversely affected by Rasley's interest, the representation would have been proper only if 
Seller "consent[ed] after consultation."  Prof. Cond. R. 1.7(a)(2) and (b)(2) (2003).  Rule 1.7 now 
requires written "informed consent," Prof. Cond. R. 1.7(b)(4) (current), which is defined as "the 
agreement by a person to a proposed course of conduct after the lawyer has communicated 
adequate information and explanation about the material risks of and reasonably available 
alternatives to the proposed course of conduct."  Prof. Cond. R. 1.0(e) (current).  Although this 
requirement was not in effect at the time of the alleged misconduct, then-existing case law 
provided the following guidance:  
Consent after full disclosure necessitates the disclosure of the existence of a 
conflict, the nature of the conflict, advisement that the exercise of the lawyer's 
independent professional judgment could be affected by the lawyer's own 
interests, and an insistence that the client seek independent legal counsel.    
 
Matter of Smith, 572 N.E.2d 1280, 1284 (Ind. 1991) (construing former Disciplinary Rules 5-
101(A) (acceptance of employment) and 5-104(A) (entering into business transaction with 
client)).2  We conclude that Rasley's consultation with Seller was not adequate to satisfy Rule 1.7 
(2003).         
 
Because Rasley's representation of Seller could have been materially limited by the his 
own interests, we conclude that Rasley violated Rule 1.7(b) (2003).  Because Rasley and Seller 
had directly adverse interests, we conclude that Wood's representation of both violated Rules 
1.7(a) (2003).3 
 
Discipline.  Both Respondents lack insight into their misconduct and have expressed no 
remorse for it.  This may be due in part from the lack of focus by all involved on the inherent 
                                                 
2 Although Rule 1.7 (current) does not explicitly require an attorney with a conflict of interest to advise a 
client to seek independent legal counsel, the requirement that the attorney explain alternatives to the 
client, see Prof. Cond. R. 1.0(e) (current), suggests that the attorney should at least advise the client of the 
option of consulting independent counsel.  We note that the rule concerning entering into a business 
transaction with a client explicitly requires that the client be given a reasonable opportunity to seek the 
advice of independent counsel in the transaction.  See Prof. Cond. R. 1.8(a) (current).  
  
3 The Commission also charged Wood with violating Professional Conduct Rules 1.9(a) and 1.10(a).  We 
conclude these charges are not supported by clear and convincing evidence.  See Admis. Disc. R. 
23(14)(h). 
 
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conflict of interest arising from Rasley's claim against Seller and his property, which existed 
whether or not Seller disputed the claim.  Respondents did not intentionally harm Seller and 
worked diligently to achieve what he indicated he wanted most—to regain control over his 
properties from Buyer as soon as possible.  Neither Respondent has any disciplinary history, and 
Rasley has an extensive history of legal, church, and community service.  Under these 
circumstances, we conclude that Rasley should be suspended from practice for 120 days without 
automatic reinstatement, and that Wood should be suspended from practice for 30 days with 
automatic reinstatement because of his lesser role in the misconduct and his junior position to 
Rasley in experience and within the Firm.  
    
Conclusion 
 
The Court concludes that Respondent Rasley's representation of Seller violated Rule 
1.7(b) (2003).  For this professional misconduct, the Court suspends Respondent Rasley from 
the practice of law in this state for a period of at least 120 days, without automatic 
reinstatement, beginning January 22, 2010.  Respondent shall not undertake any new legal 
matters between service of this opinion and the effective date of the suspension, and Respondent 
shall fulfill all the duties of a suspended attorney under Admission and Discipline Rule 23(26).  
At the conclusion of the minimum period of suspension, Respondent Rasley may petition this 
Court for reinstatement to the practice of law in this state, provided Respondent pays the costs of 
this proceeding, fulfills the duties of a suspended attorney, and satisfies the requirements for 
reinstatement of Admission and Discipline Rule 23(4).    
 
The Court concludes that Respondent Wood's representation of both Rasley and Seller 
violated Rules 1.7(a) (2003).  For this professional misconduct, the Court suspends Respondent 
Wood from the practice of law for a period of 30 days, beginning January 22, 2010.  
Respondent shall not undertake any new legal matters between service of this order and the 
effective date of the suspension, and Respondent shall fulfill all the duties of a suspended 
attorney under Admission and Discipline Rule 23(26).  At the conclusion of the period of 
suspension, provided there are no other suspensions then in effect, Respondent Wood shall be 
 
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automatically reinstated to the practice of law, subject to the conditions of Admission and 
Discipline Rule 23(4)(c).   
 
The costs of this proceeding are assessed against Respondents.  The hearing officer 
appointed in this case is discharged. 
 
The Clerk of this Court is directed to give notice of this opinion to the hearing officer, to 
the parties or their respective attorneys, and to all other entities entitled to notice under 
Admission and Discipline Rule 23(3)(d).  The Clerk is further directed to post this opinion to the 
Court's website, and Thomson Reuters is directed to publish a copy of this opinion in the bound 
volumes of this Court's decisions. 
 
 
All Justices concur.