Opinion ID: 1464230
Heading Depth: 1
Heading Rank: 3

Heading: Conflict of Interest Violations

Text: Due to the similarity of violations involved in Snyder's representations of Dade Royer and the Maryland Troopers Association, we will address these issues together. With regard to Snyder's long-standing representation of Dade Royer, a client relationship which developed while Snyder worked at Snyder & Poole, P.A. and which went sour during Snyder's representation of Royer in his subsequent legal practice following dissolution of the Firm, Judge Woodward found: [Snyder] initially represented Mr. Royer in the 1980's for the purpose of incorporating American Fitness, Inc., which did business as Fitness Works, a fitness club in Hagerstown. Thereafter, [Snyder's] firm represented Mr. Royer and his corporation regarding collections work and bonding issues with the State of Maryland. In early 1992, Mr. Royer sought [Snyder's] advice regarding his financial difficulties and the possibility of filing for bankruptcy and paid [Snyder] a fee. After his discussions with [Snyder], Mr. Royer began operating under a different corporate name instead of filing for bankruptcy. Mr. Royer moved his fitness club to a new location and the landlord at the old location, Northern International Associates (hereinafter, Northern), obtained a judgment in the Circuit Court for Washington County against Mr. Royer and his corporation, American Fitness, Inc., for unpaid rent. In early 1993, due to continuing financial difficulties, Mr. Royer decided to close the fitness club and again sought [Snyder's] advice regarding bankruptcy. [Snyder] suggested that, instead of filing for bankruptcy, Mr. Royer and [Snyder] form a new corporation and open a fitness club in a new location. [Snyder] formed a corporation, Family Fitness, Inc., on or about April 2, 1993 with forty percent (40%) of the stock going to Mr. Royer, as trustee for his children and forty percent (40%) going to [Snyder], as trustee for his children. The remaining twenty percent (20%) would be non-voting shares to be sold to investors for one thousand dollars ($1,000) per share. Mr. Royer viewed [Snyder] as his attorney and relied on him in the business transaction the same as he did in the legal representation. [Snyder] did not advise Mr. Royer to seek the advice of independent counsel regarding this business transaction. [Snyder] testified that he told Mr. Royer he should have the agreement reviewed by separate counsel and suggested the name of Mike Thoms. Mr. Royer denied this and indicated Mike Thoms was an attorney in Pennsylvania with whom he was friendly and had consulted on some matter which he couldn't recall. [Snyder] continued to represent Mr. Royer with respect to Northern's attempt to collect on its judgment despite the fact that conflicts developed between [Snyder] and Mr. Royer over their business endeavor. In early 1994, [Snyder] indicated in correspondence to Mr. Royer his dissatisfaction in Mr. Royer's management of the fitness club and the desire of the shareholders that Mr. Royer turn in his shares. While representing Mr. Royer, but without consulting him, [Snyder] attempted to negotiate a settlement with Northern's attorney whereby [Snyder] or another investor would pay to settle the lawsuit in return for Mr. Royer signing over his shares of stock in Family Fitness, Inc. to [Snyder]. On April 28, 1994, [Snyder] wrote to Mr. Royer and Northern's attorney advising that he did not represent the interest of Mr. Royer individually in the Northern matter. The letter to Mr. Royer was copied to Steve Pearl, one of the other shareholders in Family Fitness, Inc. In March 1994, [Snyder] formed a new corporation, Powershack, Inc. He filed Articles of Amendment on or about May 23, 1994, that changed the name to Powershack of Hagerstown, Inc. This corporation took over the Family Fitness operation and effectively forced Mr. Royer out of the business. Judge Woodward made the following findings of fact with respect to Snyder's relationship with the MTA: On or about February 22, 1990, the Firm [Snyder & Poole, PA] was retained by the Maryland Troopers Association (hereinafter, MTA) to represent that association and its members. Beginning in 1991, [Snyder] also offered a prepaid legal services plan and MTA agreed to pay [Snyder] twenty dollars ($20) per member per year for its members to receive discounted legal services. Individual members could elect to pay an additional eighty dollars ($80) a year to receive a fully prepaid legal services plan. In 1992, MTA purchased two units of interest in a video produced by Snyder Marketing Group, Inc., a business venture controlled and substantially owned by [Snyder], at a cost of five thousand dollars ($5,000) per unit. At a meeting of MTA's Executive Board on February 18, 1992, [Snyder] advised that this was a no risk investment because if MTA failed to recoup its investment within one year, [Snyder] would refund the money. [Snyder] represented that it was urgent that MTA decide that night whether to make the investment and did not advise MTA to seek the advice of independent counsel before making that decision. MTA did not recoup its investment and neither [Snyder] nor Snyder Marketing Group, Inc., returned any funds despite the request of MTA that he do so. On or about February 5, 1993, [Snyder's] successor law firm, Snyder, Attorneys at Law, was discharged by MTA. Respondent argues that the hearing judge improperly admitted into evidence Royer's testimony from the inquiry panel hearing and adopted this testimony in rendering the findings of fact and conclusions of law. Judge Woodward admitted Royer's testimony from the October 21, 1998 inquiry panel hearing pursuant to Maryland Rule 5-804(a), which states: (a) Definition of unavailability. Unavailability as a witness includes situations in which the declarant: (1) is exempted by ruling of the court on the ground of privilege from testifying concerning the subject matter of the declarant's statement; (2) refuses to testify concerning the subject matter of the declarant's statement despite an order of the court to do so; (3) testifies to a lack of memory of the subject matter of the declarant's statement; (4) is unable to be present or to testify at the hearing because of death or then existing physical or mental illness or infirmity; or (5) is absent from the hearing and the proponent of the statement has been unable to procure the declarant's attendance (or in the case of a hearsay exception under subsection (b)(2), (3), or (4) of this Rule, the declarant's attendance or testimony) by process or other reasonable means. At the time of the hearing in the Circuit Court for Montgomery County, Royer no longer lived in Maryland and was not subject to subpoena. See Bartell v. Bartell, 278 Md. 12, 19, 357 A.2d 343, 347 (1976)(stating that the subpoena powers of the State of Maryland stop at the state line). Furthermore, efforts by Bar Counsel to contact Royer by telephone and mail to procure his appearance at the hearing before Judge Woodward proved unsuccessful. Royer was absent at the hearing in the Circuit Court for Montgomery County and his presence could not be procured by process. Thus, respondent's exception to the admission in evidence of Royer's inquiry panel testimony is overruled. With respect to his representation of clients Royer and the MTA, the hearing judge concluded by clear and convincing evidence that Snyder violated Rules 1.7(b) and (c) and 1.8(a) of the MRPC based upon Snyder's participation in personal business transactions with his clients while continuing to provide them with legal representation. In Attorney Grievance Comm'n v. Korotki, 318 Md. 646, 569 A.2d 1224 (1990), we explained: ... to sustain a transaction of advantage to himself with his client, the attorney has the burden of showing, not only that he used no undue influence, but that he gave his client all the information and advice which it would have been his duty to give if he himself had not been interested, and that the transaction was as beneficial to the client as it would have been had the client dealt with a stranger. Id. at 666, 569 A.2d at 1234 (quoting Etzel v. Duncan, 112 Md. 346, 350-51, 76 A. 493, 495 (1910)). In his dealings with both Royer and MTA, Snyder engaged in self-dealing in violation of MRPC 1.7(b) and (c) and failed to advise his clients that they should seek the advice of independent counsel in violation of MRPC 1.8(a). See Attorney Grievance Comm'n v. Johnson, 363 Md. 598, 618-20, 770 A.2d 130, 142-44 (2001)(finding a clear conflict of interest where attorney simultaneously represented clients in connection with a mortgage foreclosure and entered into a contract of sale to purchase the clients' home for himself).