Opinion ID: 1442167
Heading Depth: 1
Heading Rank: 2

Heading: the bar's charges

Text: DR 1-102, in the form in effect at the relevant time, provided in part: (A) A lawyer shall not:      (4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.  (Emphasis added.) DR 7-102 provided in part: (A) In his representation of a client, a lawyer shall not:      (5) Knowingly make a false statement of law or fact.  (Emphasis added.)
The Bar charged deception and dishonesty based on three theories: misrepresentation as to condition of title of each parcel by words preprinted on the stationer's mortgage form; misrepresentation that Claxton held an interest in the Columbia Boulevard property and had authority to sign for Vicki Hansen, accomplished by notarizing Claxton's signature for Vicki Hansen by power of attorney; and tender of the Columbia Boulevard mortgage to Miljus when accused had no reason to believe that Claxton was authorized to sign on Hansen's behalf. In briefing and argument, the Bar also claimed that accused's failure personally to sign any of the 24-percent replacement notes violated the deception or dishonesty disciplinary rules. This separate argument fails for lack of testimony to support it, from any party to the transaction, that accused was expected to sign or evincing surprise or concern that accused failed to sign. Those who testified said they knew accused did not sign the refinancing notes.
Disciplinary rules regulating conflicts of interest, in effect at the relevant time, provided in part (emphasis has been added): Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property, or personal interests. DR 5-101(A). A lawyer shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise his professional judgment therein for the protection of the client, unless the client has consented after full disclosure. DR 5-104(A). (A) A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, except to the extent permitted under DR 5-105(C). (B) A lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client, except to the extent permitted under DR 5-105(C). (C) in the situations covered by DR 5-105(A) and (B), a lawyer may represent multiple clients if it is obvious that he can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each. DR 5-105. The words emphasized indicate that the lawyer-client relationship is an element required by each of the conflict of interest disciplinary rules. The Bar's complaint does not directly or separately allege any specific lawyer-client relationship, but it does allege: Both Mr. and Mrs. Hartley and Miljus reasonably assumed that the Accused was acting as their lawyer in handling the note and the mortgage transactions for the benefit of MTC.    By reason of the Accused being a shareholder and director of MTC, obligating himself jointly on promissory notes to Miljus and failing to disclose to the Hartleys or Miljus the extent of his representation of them.    By reason of his involvement in the transactions among MTC, the Hartleys and Miljus, all of whom had adverse interests in the transactions and each of whom believed himself or herself to be represented by the Accused. The Bar alleged that accused's acts in the loan transactions violated the relevant disciplinary rules. In effect, the Bar argues that, because some of the services performed by accused were of the kind that lawyers traditionally perform for clients, all the persons involved on all three sides of the transaction were the clients of the lawyer performing the services. The Bar and accused agree that MTC was accused's client when he performed the tasks. The Bar asserts that both Miljus and the shareholders who put up their property interests as security were also his clients in the transactions.