Opinion ID: 836006
Heading Depth: 2
Heading Rank: 1

Heading: Mantow Matter

Text: Mantow lived near the accused's office and began going to the accused's office to visit in the mid-1970s, probably because he and the accused had mutual friends. Mantow and the accused talked about gardening and books, and reminisced about other matters of common interest, such as World War II. Mantow and the accused sometimes went out for coffee, and Mantow occasionally brought flowers from his garden for the accused's office. The accused enjoyed visiting with Mantow, because Mantow was a very interesting person who remained interested in life. Because of his friendship with Mantow, the accused would do just about anything for the old gentleman. The accused did not represent Mantow in any legal matters until December 1987, when Mantow paid the accused $225 to start a file to investigate pursuing a claim on Mantow's behalf regarding an investment that Mantow had made in a company that had gone bankrupt. Mantow wrote additional checks to the accused between 1988 and 1992 for the accused's efforts to recover some of Mantow's investment in the bankrupt company. During the time that the accused knew Mantow, Mantow became paranoid about people stealing from his bank accounts. Mantow believed that having a second signature on the accounts would make it more difficult for others to withdraw money from them. Mantow asked the accused to cosign on several of the accounts, and the accused did so. [1] The accused expressed concern to Mantow about the ramifications of having the accused's name on the accounts, and he told Mantow that Mantow should look into it. The accused believed that Mantow had a lawyer, because Mantow had talked to the accused about his lawyer on various occasions. The accused also believed that Mantow had talked to bank personnel after the accused told Mantow that the accused was concerned about the ramifications of having the accused's signature on Mantow's accounts. The accused did not believe that he was entering into a business relationship with Mantow by signing the cards, and the accused did not believe that Mantow was well-off financially. Mantow died on April 28, 1996. His will, which another lawyer, Holmes, had drafted in January 1988, left his entire estate to members of Mantow's family. Shortly after Mantow died, Vice, Mantow's nephew and the personal representative of Mantow's estate, went to the accused's office to talk to the accused. At that time, the accused learned that there was approximately $115,000 in Mantow's bank accounts. [2] During Vice's visit and thereafter, the accused maintained that he did not claim to be entitled to the money in the accounts and that he was concerned only about the ramifications of having his name on the signature cards. Because Mantow's bank accounts had so much money in them, the accused decided that he needed legal advice from a probate lawyer. The accused called Cartwright, whose practice emphasizes probate matters. The accused followed up his telephone conversation with a letter to Cartwright on June 11, 1996. In that letter, the accused explained his relationship with Mantow and that Mantow had asked the accused to cosign on some bank accounts, and concluded by stating that the accused did not know why [Mantow] set up the accounts as he did, and your thoughts on this situation will be greatly appreciated. The accused also told Cartwright that the accused was not interested in having the money in the accounts but that he did not know what Mantow had intended. Cartwright explained to the accused that, under former ORS 708.616(1) (1995), repealed by Or. Laws 1997, ch. 631, § 567, [3] the accused was now the owner of any accounts in joint tenancy. Two days later, on June 13, 1996, Vice's lawyer, Babka, wrote to the accused telling him that, if any of the accounts with Mantow had been mistakenly set up as a joint account initially, then it is your ethical obligation to see that the funds go into the estate since you did not correct the error at the time the account was established. Babka's intent was to convince the accused to turn the funds over to Mantow's estate. Babka's letter also stated that, if the accused claimed any interest in any bank account that Mantow had owned, the accused should file a claim against the estate immediately so that the matter could be heard before a probate judge. Finally, Babka's letter stated that the accused had violated disciplinary rules concerning solicitation, legal employment, and fees for legal services in his meeting with Vice. The accused sent Babka's letter to Cartwright and wrote to Cartwright, in part: I do not believe I have any claim against the estate; I only wish some clarification as to what my position is as to the accounts which [Mantow] set up, and included me in some way.      If an account or accounts were mistakenly set up, that fact is unknown to me, since [Mantow] set them up without my help or advice. As I have stated before, I want to conduct myself and my office in the highest ethical way possible, and I do not appreciate Babka dictating my actions until I have more facts and know what the situation is to a greater extent than I now know. Cartwright again told the accused that, by operation of law, legal title to the funds in the joint bank accounts had vested in the accused upon Mantow's death, that the accused could claim ownership and defend his position, that the accused could turn the funds over to Vice, or that Cartwright could try to find out what Mantow's intent had been in having the accused cosign on the accounts. The accused asked Cartwright to try to find out what Mantow's intent had been, because the accused was not willing to turn the funds over to the estate in the face of Babka's threats. Cartwright talked to Babka and to Holmes in an effort to obtain information about Mantow's intent when he asked the accused to cosign on the bank accounts. On August 9, 1996, Vice, on behalf of Mantow's estate, filed a complaint against the accused in circuit court. The trial court subsequently determined that the matter should proceed in probate court. Three days later, on August 12, 1996, Cartwright, acting on the accused's behalf, filed a petition in probate court For Determination of Rights to Bank Accounts. The petition alleged that the accused was a party as that term was defined in former ORS 708.600(6) (1995), repealed by Or. Laws 1997, ch. 631, § 567, [4] with present rights to four of Mantow's bank accounts held in joint tenancy with the accused. The accused's purpose in filing the petition was to have the court determine ownership of the funds. The accused had no need or interest in [the] money, but he was concerned about the ethical, financial, and tax implications if he owned the funds as a matter of law. To make clear that the accused was contending only that he was considered by law to be the owner of the accounts under former ORS 708.616(1), Cartwright parroted the statute in writing the petition. The petition asked the court to issue an order determining the title to, rights in and ownership of the accounts. [5] Because the accused merely wanted the judge to tell him what to do, and not to treat the petition as an adversary matter, Cartwright did not file a trial memorandum. Before the probate hearing began on the accused's petition, the judge called Cartwright and Fiorino, the estate's lawyer, into chambers. The judge asked whether anyone had reported the accused to the Bar because he had filed the petition, and she indicated to Cartwright and Fiorino that the accused should relinquish the accounts and settle the matter. The accused thereafter did so. Mantow's estate incurred more than $14,000 in legal fees before the matter was resolved. In its first cause of complaint, the Bar alleged that, by claiming ownership of the accounts on which he had cosigned with Mantow, the accused violated DR 1-102(A)(3) and DR 7-102(A)(2). DR 1-102(A)(3) provides that [i]t is professional misconduct for a lawyer to    [e]ngage in conduct involving dishonesty, fraud, deceit or misrepresentation[.] DR 7-102(A)(2) provides that in representing the lawyer's own interests, a lawyer shall not    [k]nowingly advance a claim or defense that is unwarranted under existing law   . The trial panel found that the accused had violated both rules. The Bar's complaint did not specify whether it relied on dishonesty, fraud, deceit, or misrepresentation in its charge under DR 1-102(A)(3). See In re Brandt/Griffin, 331 Or. 113, 138, 10 P.3d 906 (2000) (better practice is to identify theory or theories on which Bar proceeds under DR 1-102(A)(3)). However, in its trial memorandum, the Bar argued that the accused had engaged in dishonesty and misrepresentation by claiming ownership of the accounts. We confine our analysis to those two theories. Dishonesty is conduct that indicates a disposition to lie, cheat, or defraud; untrustworthiness; or a lack of integrity. See Hockett, 303 Or. 150, 158, 734 P.2d 877 (1987) (so stating). A misrepresentation is a false statement of a material fact or a nondisclosure of a material fact. In re Starr, 326 Or. 328, 343, 952 P.2d 1017 (1998). A fact is material if it could or would influence significantly the hearer's decision-making process. In re Benett, 331 Or. 270, 277, 14 P.3d 66 (2000) (quoting In re Gustafson, 327 Or. 636, 649, 968 P.2d 367 (1998)). To establish a violation of DR 1-102(A)(3), the Bar must present clear and convincing evidence that the accused lawyer's misrepresentations, whether direct or by omission, were knowing, false, and material. In re Eadie, 333 Or. 42, 53, 36 P.3d 468 (2001). The Bar contends that the accused was dishonest and made a misrepresentation when he stated in the Petition for Determination of Rights to Bank Accounts that he was, in the Bar's word, entitled to the funds in Mantow's accounts. The accused responds that, by operation of law, he was the owner of the accounts and that his statements in the petition were accurate. Under former ORS 708.616(1), which, as noted, was in effect when the accused filed the petition, sums remaining on deposit at the death of one of the parties to a joint account belong to the surviving party    as against the estate of the decedent, unless there is clear and convincing evidence of a different intention at the time the account is created. The Bar does not dispute that, under the unambiguous wording of that statute, the accused became the owner of the funds in the joint accounts upon Mantow's death, unless clear and convincing evidence showed the contrary. The Bar's argument, which the trial panel apparently found persuasive, is that, because the accused repeatedly had asserted that he had no claim against Mantow's estate, he was dishonest and made a misrepresentation by filing and pursuing a claim alleging that, under the statute, the funds were his. We disagree. Contrary to the Bar's assertion, the accused's petition did not state that he was entitled to the funds. Rather, it asked the court to make a determination of the ownership of the funds. From the outset, the accused told Cartwright that he was not claiming the funds and that he wanted to behave in an ethical manner. The record does not contain evidence that, by filing the petition, the accused had a disposition to lie, cheat, or defraud, or that the accused demonstrated untrustworthiness or lack of integrity. Neither is the statement in the petition that sums remaining on deposit on the death of decedent belong to petitioner as against the estate of the decedent a misrepresentation of a material fact. The Bar has failed to prove by clear and convincing evidence that the accused violated DR 1-102(A)(3) in the manner that the Bar asserts. The Bar also has failed to prove that, in filing the petition, the accused violated DR 7-102(A)(2). As we have explained, by operation of former ORS 708.616(1), upon Mantow's death, the accused became the owner of any sums that he held in joint tenancy with Mantow, unless clear and convincing evidence showed to the contrary. By asserting in the petition to the probate court that he was the owner of the funds under the statute, the accused did not advance a claim that was unwarranted under existing law. In its second cause of complaint, the Bar alleged that the accused had violated DR 5-101(A)(1) and DR 5-101(B) in connection with the Mantow matter. DR 5-101(A)(1) provides, in part: Except with the consent of the lawyer's client after full disclosure, (1) a lawyer shall not accept or continue employment if the exercise of the lawyer's professional judgment on behalf of the lawyer's client will be or reasonably may be affected by the lawyer's own financial, business, property, or personal interests. DR 5-101(B) provides that [a] lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer    any substantial gift from a client[.] The trial panel concluded that the accused had not violated either of those rules. The Bar argues that it was in the accused's personal or financial interest to maintain his relationship with Mantow and to continue to represent Mantow, which required that [the accused] make full disclosure to Mantow and obtain his consent to the representation. Because the accused made no disclosure and provided no advice when he signed the bank cards, the Bar concludes, the accused violated DR 5-101(A)(1). Because the accused later claimed an interest in Mantow's accounts, the Bar argues that it may therefore be argued that he prepared documents that gave him a substantial gift and violated DR 5-101(B). The accused responds that the Bar failed to present evidence that the accused had done work that could have been affected by coownership of bank accounts. Moreover, the accused argues, his judgment could not have been affected because, when he performed legal work for Mantow, he did not believe that Mantow had much money in his savings accounts. The record contains no evidence that the accused's work for Mantow in the bankruptcy matter was or reasonably would be affected by coowning the bank accounts. We agree with the trial panel that the Bar has failed to prove by clear and convincing evidence that the accused violated DR 5-101(A)(1). We turn to DR 5-101(B). The trial panel concluded that, because the accused did not believe that he was receiving any substantial gift from Mantow when he signed the bank cards, the accused did not violate the prohibition in that rule. However, we need not decide whether DR 5-101(B) addresses a lawyer's subjective belief about the amount of a gift when the lawyer receives a gift from a client. That is so because the rule prohibits a lawyer from preparing an instrument that gives the lawyer a substantial gift from a client. Assuming without deciding that bank signature cards are legal instruments for purposes of DR 5-101(B), the record contains no evidence that the accused prepared the signature cards that gave him a joint interest in the bank accounts. Rather, Mantow obtained the cards from the bank and took them to the accused's office for the accused's signature. The Bar has failed to prove by clear and convincing evidence that the accused violated DR 5-101(B).