Opinion ID: 2615014
Heading Depth: 4
Heading Rank: 1

Heading: Count 1: Filing of Abril v. Harris Complaint

Text: As previously indicated, count 1 of the bar complaint alleged that the filing of the complaint against Harris, Palumbo, and Harris & Palumbo, P.C., in the Abril lawsuit violated E.R. 3.1 and 4.4. This litigation was based on two allegations of wrongdoing by Harris against Abril's interests: first, Harris' execution of the fee agreement with Piatt, and second, Harris' role in assisting Piatt in renewing the Johnson judgments against Abril. Abril's cause of action against Palumbo and, undoubtedly, Harris & Palumbo, P.C., was derivative of his claim against Harris for the judgment renewal, because at the time of the acts complained of, Harris and Palumbo were practicing together. [6] The suit alleged three causes of action against Harris: breach of contract, bad faith, and a request for a declaratory judgment that Harris take no fees from the Globe litigation. [7] The trial court found that defendants had established that Abril was not damaged by Harris' actions in entering the Piatt fee agreement or in consulting with Piatt regarding the judgment renewals: The Court has tried to disregard the animosity which exists between plaintiff's counsel and defendants' counsel. The Court has reflected upon plaintiff's testimony in his depositions. The Court must take as true that a wrong was suffered but no damage sustained. The Court concludes it is a very unusual plaintiff who brings a lawsuit when no loss has been sustained. It is also a very unusual plaintiff who finds fault with an attorney who has been so successful on the plaintiff's behalf. It is a very unusual plaintiff who would be concerned as to whether Harris or Levine & Harris, P.C. is the person or entity which might possibly, in the future, be entitled to a percentage of any recovery from an insurance company. The Court finds a portion of the case to be groundless. The Court finds a portion of the case was not brought in good faith. The Court finds a portion of the case was brought for harassment purposes. The Court finds this litigation has been motivated more by greed than the desire to rectify wrong. Because a majority of the case was brought without substantial justification, pursuant to A.R.S. § 12-349, defendants shall be entitled to recover reasonable attorney[']s fees to be assessed against plaintiff's counsel. (Emphasis added.) The committee agreed with these findings, and independently concluded that respondent had no good faith basis for bringing the lawsuit and, in fact, brought the suit for the selfish motive of obtaining all of the Abril fee in the bad faith suit. The lawsuit was frivolous pursuant to E.R. 3.1, Rule 42, Rules of the Supreme Court. The commission adopted the findings of the committee, with one exception. The commission disagreed with the reasoning of both the trial court and the committee that Abril was not damaged by Harris' role in renewing the Johnson judgment because an existing excess judgment was necessary to show damages in the Globe bad faith litigation, recognizing that case law supported respondent's contention that a judgment need not necessarily exist in order to obtain relief in a bad faith suit. See generally Frankenmuth Mut. Ins. Co. v. Keeley, 433 Mich. 525, 447 N.W.2d 691 (1989); Brown v. Guarantee Ins. Co., 155 Cal. App.2d 679, 319 P.2d 69 (1957). However, the commission found by clear and convincing evidence that the suit was frivolous under E.R. 3.1 on the basis that respondent brought the action for improper purposes. The Commission believes Respondent, only after the commencement of the disciplinary proceedings, began embracing the more noble purposes of extending, modifying or reversing the existing law. On appeal, respondent argues that both the committee and the commission erred in rejecting the opinions of his expert witnesses that the Abril v. Harris litigation was not frivolous. All four witnesses testified that they believed the merits of Abril's claims against Harris were objectively well-grounded in legal theory and factual basis. The committee rejected these opinions on the ground that they were based upon insufficient information. The Commission agreed. Respondent argues that these findings were factually incorrect. The simple answer to any allegation that either the committee or the commission misweighed the evidence before it is that this court is the ultimate trier of fact in disciplinary cases. In re Bowen, 160 Ariz. 558, 560, 774 P.2d 1348, 1350 (1989), citing In re Kersting, 151 Ariz. 171, 172, 726 P.2d 587, 588 (1986). From our own review of the expert testimony, it is apparent that respondent's witnesses had less than a complete story before them upon which to opine. For example, James W. Hill testified that he was not aware that Harris had agreed to credit Abril with any fees received from Johnson as a result of the Piatt fee agreement. He also assumed that the Johnson judgment would have abated but for Harris' assistance. In response to committee questions, Mr. Hill testified that if Harris was not the moving force in renewing the Johnson judgments, then Harris hasn't done anything to the detriment of Mr. Abril. Similarly, G. David Gage, respondent's strongest expert witness, testified that he had never talked to Abril or assessed his credibility, that he had never been provided with any documentation indicating that Abril might have known of the fee arrangement between Harris and Piatt, and had no knowledge whether respondent had discussed the potential liability of his own law firm with Abril before undertaking representation. Gene Gulinson testified that he was not provided with Piatt's deposition testimony establishing that Piatt called Harris regarding the renewal of the judgments, but that fact would obviate one of the causes of action against Harris. He also conceded that if the fee agreement resulted in Harris' crediting Abril with the Johnson fee payments, then Abril would be benefitted, not harmed, by the Harris-Piatt agreement. Finally, W. Thomas McLaughlin testified that he was not aware from the materials with which he was provided that Abril was credited with the amount Harris received from Johnson, and that he was under the impression that Harris reminded Piatt to renew the Johnson judgments. Under these circumstances, we agree with the committee and the commission that the opinions of these experts need not be accorded great weight in establishing the objective reasonableness of Abril's claims against Harris. [8] In reviewing the record as the ultimate trier of fact and law, and giving considerable deference to the bar's recommendation, we find that the record supports by clear and convincing evidence the above violations on this count. See In re Cardenas, 164 Ariz. 149, 151, 791 P.2d 1032, 1034 (1990). Respondent had previously assisted Abril in filing two bar complaints in April and May 1985, based on the same allegations, which the bar had dismissed as without merit. Additionally, respondent wrote a letter to the bar in June 1985 asking for reconsideration of those complaints. The committee properly recognized that the dismissal of a bar complaint does not necessarily preclude a right to file a lawsuit for substantive relief. However, the filing of a complaint based on these same grounds within a few days of the rejection of the bar complaints, seeking $41,300,000 in damages for conduct that was implicitly determined not to injure his client, lends strong support to the improper motive and objective unreasonableness of the theories asserted in the complaint against Harris and Palumbo.