Opinion ID: 1353826
Heading Depth: 2
Heading Rank: 3

Heading: Count III: False and Misleading Statements During Discovery

Text: Count III alleges that both Carey and Danis, individually, submitted false discovery responses in Chrysler v. Carey & Danis in violation of Rules 4-3.3(a)(1), 4-3.4(a), 4-3.4(d), 4-8.4(c), and 4-8.4(d). Under these rules, a lawyer shall not knowingly make a false statement of material fact or law to a tribunal or offer evidence the lawyer knows to be false. Rule 4-3.3(a)(1), (4). A lawyer shall not unlawfully obstruct another party's access to evidence or unlawfully ... conceal any document or material having potential evidentiary value. Rule 4-3.4(a). A lawyer shall not fail to make a reasonably diligent effort to comply with a legally proper discovery request by an opposing party. Rule 4-3.4(d). Finally, a lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation or engage in conduct that is prejudicial to the administration of justice. Rule 4-8.4(c), (d). Discovery is a vital aspect of the truth-seeking mechanism of the adjudicative process. State ex rel. Bar Ass'n v. Lloyd, 787 P.2d 855, 859 (Okla.1990). Any conduct that misleads one's adversary in the latter's search for truth anterior to trial impedes and impairs the integrity of forensic fact-finding process. All pretrial discovery, whether carried out by voluntary or involuntary means, must be treated alike .... In the conduct of our adversary litigation process no stage affords a license for an advocate's use of misleading tactics to impede or thwart the foe's legitimate pursuits. Id. Abuse of the discovery process and misrepresentation to the court is an affront to the fundamental and indispensable principle that a lawyer must proceed with absolute candor towards the tribunal. In the absence of that candor, the legal system cannot properly function. Caranchini, 956 S.W.2d at 919-20. Honesty and integrity are chief among the virtues the public has a right to expect of lawyers. Any breach of that trust is misconduct of the highest order and warrants severe discipline. In re Disciplinary Action Against Thedens, 602 N.W.2d 863, 865 (Minn.1999). These principles are as applicable to lawyers who are party litigants as they are to lawyers serving in their representative capacity. [16] The CDC argues that respondents are collaterally estopped from denying the allegations of misrepresentation because the federal district court found that respondents had submitted false discovery responses. The collateral estoppel doctrine precludes parties from relitigating issues of ultimate fact that have previously been determined by a valid judgment. Traditionally, collateral estoppel was limited by the concept of mutuality, which meant that a judgment could not be used for estoppel purposes unless both parties had been parties to the original judgment. However, this Court has since abandoned the mutuality requirement. Although collateral estoppel is more commonly invoked by defendants, it is also used by plaintiffs offensively to estop defendants from relitigating issues that have been determined by a prior valid judgment. This Court has also approved a variation of the doctrine called offensive non-mutual collateral estoppel that may be invoked where the plaintiff was not a party to the earlier judgment. .... [F]our factors should be considered when applying non-mutual collateral estoppel: 1) the identity of the issues involved in the prior adjudication and the present action, 2) whether the prior judgment was on the merits, 3) whether the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication, and 4) whether the party had a full and fair opportunity in the prior adjudication to litigate the issue for which collateral estoppel is asserted. In re Caranchini, 956 S.W.2d 910, 912-13 (Mo. banc 1997) (citations omitted). Here, the only factor at issue is whether respondents had a full and fair opportunity in the prior adjudication to litigate the issue for which collateral estoppel is asserted. Respondents had a full and fair opportunity sufficient to satisfy the requirements of due process. That conclusion is based on the Eighth Circuit's analysis of the issue: [W]e find that Carey and Danis received a hearing adequate to satisfy the dictates of due process. The letter was brought to the court's attention shortly before the noon recess. Some discussion was had between counsel and the court as to the origin of the letter and why it had not been produced. The court then compared the letter to various interrogatories and document requests and determined that the responses to them were plainly false. The court also noted the connection between the letter and the forty-two documents introduced earlier. Counsel was then permitted to argue to the court on the issue of prejudice. After lunch, defense counsel was allowed to offer another explanation as to why the letter had not been produced, and there was a significant amount of discussion between counsel and the court. The court then recessed for about an hour to review interrogatories, document requests, the responses, and the record. After the recess, the court recapped the discovery in the case and presented its conclusion that sanctions were appropriate. The court then invited defense counsel to argue in support of a sanction less drastic than that asked for by Chrysler. Defense counsel did so at length in a soliloquy covering five pages of transcript. The court then struck the defendants' answer. Contrary to the defendants' clear assertion, the district court did not decline to grant them a hearing despite repeated requests by the defendants. The record clearly shows no such requests were made prior to the imposition of the sanction. The following Monday morning, defense counsel was again allowed to argue against the sanction, and present segments of deposition testimony to bolster the claims made earlier that the letter had been innocently withheld. Defense counsel was also permitted to make an offer of proof on the testimony of Joseph Danis, if he were questioned about the creation and subsequent handling of the letter. However, we find nothing in the offer of proof that is different from the arguments that had already been presented by defense counsel.... The lack of any new argument shows that Carey and Danis had a full opportunity to argue their case before the district court. Due process is satisfied if the sanctioned party has a real and full opportunity to explain its questionable conduct before sanctions are imposed. Chrysler Corp. v. Carey, 186 F.3d 1016, 1022-23 (8th Cir.1999). Accordingly, collateral estoppel applies. The federal district court found that respondents repeatedly lied during the discovery process, denying the existence of conversations and documents which had in fact occurred and did exist. Chrysler Corp. v. Carey, 186 F.3d at 1021. Consequently, both Carey and Danis are estopped from denying these facts at this time. In applying this doctrine, we must make clear that the federal court sanctions are not used as a basis for automatic discipline. In re Caranchini, 956 S.W.2d at 912. The facts found in the federal proceeding are merely used to make an independent determination of whether the Missouri Rules have been violated. Id. Review of the record reveals substantial and persuasive evidence supporting the facts found by the federal district court. Both Carey and Danis, in their briefs to this Court, concede that their answers to Interrogatory No. 2 and Document Request No. 12 were inaccurate. [17] Neither Carey nor Danis revealed the meeting with Stan Grossman in New York where Joseph Danis and his father discussed joining Beam with Grossman's class of plaintiffs. Nor did either respondent reveal the luncheon meeting with attorneys from Danis, Cooper and the Blumenfeld firm at which they first discussed aspects of the Beam case. Respondents knew they were receiving correspondence from other attorneys regarding Chrysler ABS cases and still they answered no such documents exist. Respondents knew that they discussed, even if casually, the Chrysler ABS cases with other lawyers and still they both identified David Danis as the only attorney with whom such communication was made. Respondents knew that Chrysler was specifically seeking discovery on these communications when they were served with interrogatories. Respondents each provided sworn answers to Chrysler's interrogatories on October 28, 1996. Carey & Danis received eleven pieces of correspondence after that date, yet neither respondent amended or supplemented the answers to their sworn interrogatories. Judge Perry issued orders pertaining to a number of discovery issues, including Document Request Nos. 8 and 25. Request No. 8 required respondents to produce all documents that pertained or referred to actual or anticipated litigation against Chrysler Corporation regarding anti-lock brakes, heater cores or vehicle latches. Request No. 25 sought all documents which refer or relate to fee sharing or joint representation agreements with any attorneys or law firms concerning a client represented by Carey & Danis. Respondents told Chrysler and the court that no such documents exist. Respondents refuse to concede that their response to Request No. 25 is inaccurate. Both Carey and Danis go to great lengths in their respective briefs to analyze and dissect the term agreement. Respondents contend that the distinction between agreement and proposal renders their answer to Request No. 25 truthful because there was never a final contractual fee agreement or joint representation agreement between Carey & Danis or any other firm in a suit involving Chrysler. While it is true that under contractual analysis there is a difference in meaning of agreement and proposal, respondents walk too fine a line here. The CDC cites four pieces of correspondence that are responsive to Request No. 25. Only the Grossman letter is addressed here as it is the most clearly egregious. [18] The Grossman letter stated: Gentlemen: Both my father, David Danis, and I enjoyed meeting with you last Sunday. We look forward to working with you in this matter and the other matters we discussed in the future. We have preliminarily discussed your suggestion of consolidating our cases and pursuing the matter [in New Jersey]. Your suggestion has merit, and we are seriously entertaining the invitation.... Please provide us with a general analysis of what you anticipate our role in the litigation would be if we consolidated our case, the Mississippi case and join the other plaintiffs we have lined up in other states to your suit. It is my suggestion that we negotiate some percentage of attorney fee allocation at the outset to protect both of our interests, and leave some flexibility for the remainder so that it may be adjusted according to the amount of work and contribution provided by each party in the litigation.... This case has good merit and there will be plenty of money for all of the participants.... .... Very truly yours, CAREY & DANIS, L.L.C. /s/ Joseph P. Danis Respondents maintain that, because they were not attorneys of record in the New Jersey ABS action and because there was never a contractual fee agreement reached, Request No. 25 was accurately answered. Respondents are incorrect. Judge Perry ordered production of all documents which refer or relate to fee sharing or joint representation agreements with any attorneys or law firms concerning a client represented by Carey & Danis. (Emphasis added). In his letter, Danis discussed joining the Beam plaintiffs to Grossman's class action suit against Chrysler and was quite concerned about fee allocation. It is clear that the Grossman letter refers and relates to both a joint representation and a fee sharing agreement. The Grossman letter is also clearly covered by Request No. 8. Judge Perry ordered the production of all documents that pertained or referred to actual or anticipated litigation against Chrysler Corporation regarding any anti-lock brakes, heater cores or vehicle latches. (Emphasis added). Referring to the Beam class action and Grossman's class of ABS plaintiffs, Danis wrote, We have ... discussed your suggestion of consolidating our cases ... and asked Grossman to provide us with a general analysis of what you anticipate our role ... would be. The Grossman letter unambiguously refers to both actual and anticipated anti-lock brake cases against Chrysleras do many of the forty-two documents Chrysler uncovered. Both Carey and Danis admit in their respective briefs that there were no fewer than nine documents that were responsive to Chrysler's discovery requests but were not produced. When forced to confront the inaccuracies in the discovery responses, respondents defended themselves by placing blame on their attorneys and, when that failed, by saying we didn't mean to do it. Respondents have refused to take responsibility for the misleading discovery responses to Chrysler and to the court. When asked about his responses to Chrysler's discovery, Danis replied, the discovery requests were served upon my attorney, my attorney received a request for production, and Mr. Wuestling prepared a response. Both Carey and Danis contend that any factual inaccuracy was [not] the result of conduct by respondents, but was the fault of their attorneys. At the disciplinary hearing, when Chrysler could not produce a signed copy of Danis' interrogatory responses, Danis went so far as to deny ever having executing his interrogatory answers. He denied executing his responses even though he testified earlier, in his deposition, that I actually recall this being sent for my execution and that he reviewed the responses for their authenticity and genuineness. Respondents are attorneys with a background in litigation. Each was responsible for vast amounts of contentious discovery while defending Chrysler in products liability class actions suits and later when representing plaintiffs. The federal court found, and the evidence supports, that by denying the existence of the documents and information requested in Interrogatory No. 2 and Requests for Production Nos. 8, 12, and 25, respondents purposefully withheld evidence from opposing counsel in violation of Rule 4-3.4(a) and Rule 4-3.4(d), and made misstatements of material fact to the court in violation of Rule 4-3.3(a)(1), Rule 4-8.4(c) and Rule 4-8.4(d).