Opinion ID: 1137118
Heading Depth: 1
Heading Rank: 2

Heading: Acquiring proprietary interest in subject matter of litigation.

Text: The second charge of the complaint alleges that [i]n reference to the transactions described in the first cause of complaint, the accused acquired a proprietary interest in the subject matter in question. Both the Trial Board and the Disciplinary Review Board found the accused to be not guilty of this charge. DR 5-103(A) provides: A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client   . (with certain exceptions not relevant to this case.) It is clear from the facts found by the Trial Board and by the Disciplinary Review Board, as accepted by the accused, that Mr. Lamb, the client of the accused, had at least a potential cause of action to enforce a lien against the property which was the subject of this controversy and that the accused purchased that property in his own name. It also appears to be true, as found by the Disciplinary Review Board, that the accused was then having an extremely difficult problem in collecting an attorneys fee from an obstreperous client; that he had previously discussed with Lamb the matter of the accused purchasing the property from Rosenbaum; that after purchasing the property he offered to sell it to Herzman on the same terms as purchased by him; that his client, Mr. Lamb, never complained of his purchase of the property, and that no one was harmed by what he did. In addition, it appears from the record (although not referred to by the Trial Board or the Disciplinary Review Board) that the accused testified, without contradiction, that before purchasing the property he not only discussed the matter with Mr. Lamb, but that two or three days later Mr. Lamb called him and said he had been thinking about it and wanted me, if I would, to go ahead and buy the property. The accused also testified, again without contradiction, that before doing so he also called Mr. Hebert, General Counsel for the Oregon State Bar, and had the following conversation with him: I told Mr. Hebert the problem about the fees and the impasse that had developed and what I had proposed to my client. And asked him if there was any ethical problem that I should concern myself about that I was not aware of. And he said he could see nothing wrong with the transaction as far as he was concerned. He directed me to phone Mr. Bill Duhaime, who was the chairman of the local ethics committee in Medford, Oregon to discuss the matter with Mr. Duhaime. I phoned on the very same day after talking to Mr. Hebert and discussed the matter with Mr. Duhaime, laying out the arrangement. And again I was told, Mr. Duhaime told me that based upon the facts that I presented to him, he could see nothing or was not aware of any ethical problem with my proceeding as I had outlined to him. This testimony was not controverted or otherwise questioned by the Oregon State Bar. Both the Trial Board and the Disciplinary Review Board, apparently on the basis of these facts, found that the accused was not guilty of the second charge of the complaint and that the conduct of the accused constituted no more than the appearance of impropriety. It may be that the provisions of DR 5-103(A) (relating to the acquisition of an interest in litigation), which do not provide an exception in the event of consent by the client, as does DR 5-104 (relating to business relations with a client), prohibit the acquisition of such an interest even though consented to by the client because of the potential for conflict of interest and abuse of fiduciary responsibility. Cf. In re Boivin, 271 Or. 419, 428, 533 P.2d 171 (1975), and In re Sandblast, 210 Or. 65, 307 P.2d 532 (1957). We need not decide that question in this case. Neither need we decide whether consent by a client would be a defense to such a charge in the absence of independent legal advice. In this case the accused not only sought and secured the express consent of his client, but also consulted with the general counsel of the Oregon State Bar and the chairman of the local ethics committee, and secured their apparent approval before proceeding to purchase the property. We do not mean to encourage consultation with the general counsel of the Oregon State Bar by suggesting that his or her advice can provide a defense to disciplinary violations. It cannot. We believe, however, if there was any violation of DR 5-103(A) or DR 5-104 by the accused in this case, it was not of any great severity or magnitude, and that under the circumstances of this case, including the fact that the accused sought the advice of the general counsel of the Oregon State Bar, he should not be disciplined by this court for any such violations.