Opinion ID: 2362113
Heading Depth: 3
Heading Rank: 1

Heading: Violation of MRPC 1.7(b)

Text: Maryland Rule of Professional Conduct 1.7(b) Conflict of Interest: General Rule. (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: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation. Petitioner contends that Respondent, by indicating to Chase Manhattan's counsel that he represented the Bantugs in connection with the foreclosure while simultaneously entering into a contract of sale to purchase the Bantugs' home himself, violated MRPC 1.7(b). Specifically, Petitioner asserts that Respondent acted in his self-interest and adversely to the interest of the Bantugs, who wished to avoid a foreclosure sale, when he forced the foreclosure by breaching the terms of the contract for sale. Specifically, Petitioner argues that Respondent acted in his self-interest exclusively by living in the Bantugs' home for approximately one year and by failing to disclose to the Bantugs that he failed to obtain financing or to bring their mortgages current. In response, Respondent asserts that he did not violate MRPC 1.7(b) because the Bantugs were represented by other counsel when they sold him their home. According to Respondent, a distant relative of the Bantugs, a practicing attorney, was involved in the preparation of the contract of sale and present at closing, where he witnessed the signing of the contract. Respondent specifically disputes the conclusion that such conduct by the Bantugs' attorney/relative does not constitute the practice of law even though there was no retainer agreement, contract, or fee involved. After thoroughly reviewing the record, we agree with Judge Harrington's findings of fact and conclusions of law as they pertain to MRPC 1.7(b). The evidence, such as Respondent's testimony, infra, supports the conclusion that the Bantugs did not know about the foreclosure sale, much less engage Respondent to represent their interests with regard to it. [BAR COUNSEL]: Mr. Johnson, at any time prior to filing the voluntary petition for bankruptcy in the names of Arturo and Rebecca Bantug, did you have authorization, written or oral specifically from Arturo Bantug to file a bankruptcy case in his name? [RESPONDENT]: Yes, I did.    [BAR COUNSEL]: Do you have any written agreements to represent Mr. Bantug? [RESPONDENT]: Yes, I do. [BAR COUNSEL]: Do you have that here with you today? [RESPONDENT]: You have it. It's the contract for purchase of realty.    [BAR COUNSEL]: Can you tell us where in that document it authorizes you to file bankruptcy on behalf of Mr. Bantug? [RESPONDENT]: The last whereas clause on the first page. Whereas, until such time as buyer acquires financing, sellers will take all lawful and necessary steps to protect sellers' and buyers' interest in the premises. [BAR COUNSEL]: And you believe that authorized you to file for bankruptcy on behalf of Mr. Bantug? [RESPONDENT]: That in addition to oral statements.    [BAR COUNSEL]: Was the term `bankruptcy' ever discussed with Mr. Bantug? [RESPONDENT]: Yes, we discussed bankruptcy, as one of many options. [BAR COUNSEL]: In May of 1997, when a bankruptcy was actually filed in the United States Bankruptcy Court, did you speak to Mr. Bantug before filing that? [RESPONDENT]: No, I didn't. I hadn't spoken to Mr. Bantug since June 13th, 1996.    [BAR COUNSEL]: Did you send a copy of the bankruptcy to Mrs. Bantug? [RESPONDENT]: No, I didn't send one to her.... I didn't forward it because I'm not really sure where she was.... We find it incredible that Respondent is unable to recognize the conflict of interest that he explains so clearly. Moreover, we share Judge Harrington's obvious difficulty accepting that Respondent truly believed that the language quoted supra from the contract of sale authorized Respondent to file for bankruptcy on the Bantugs' behalf. Assuming arguendo that such language and the purported oral statements [21] provided him with the authority, then, using Respondent's reasoning, Respondent (buyer) would be authorized to file a bankruptcy petition on the Bantugs' (sellers) behalf so that the Bantugs could protect Respondent's and their own interests in the property. Common sense and well-recognized legal principles indicate this cannot be so. Assuming, arguendo, that the Bantugs were represented by independent counsel in negotiating and executing the contract of sale, Respondent nonetheless acted in his own interest, and against the interest of the Bantugs, when he failed to record the deed transferring title to the property, submitted to Chase Manhattan a proposal on the Bantugs' behalf (but without their knowledge or consent) for a workout of the arrearages of a loan that Respondent was obligated to bring current under the terms of the contract of sale, initiated the bankruptcy proceeding without the Bantugs' knowledge, and failed to take any remedial action to have the unauthorized bankruptcy case dismissed. We conclude, therefore, that Judge Harrington's findings of fact and conclusions of law that Respondent violated MRPC 1.7(b) were based on clear and convincing evidence.