Opinion ID: 2209446
Heading Depth: 2
Heading Rank: 2

Heading: Communication with Clients

Text: The Board found that respondent's failure to inform his clients fully regarding the Settlement Agreement violated two rules of professional conduct. We begin with Rule 1.4(a), which provides in part, [a] lawyer shall keep a client reasonably informed about the status of a matter. The evidence showed that respondent did not communicate to his clients many of the critical terms of the Settlement Agreement, including the fee provision, respondent's agreement not to represent any Nix clients against Warner-Lambert, and respondent's agreement not to divulge any information gained during his investigation. Furthermore, the August 26, 1997 letter to his clients did not inform them that the Settlement Agreement was not a release of their claims. The Board found that respondent violated Rule 1.4(a) because he failed to disclose the fee arrangement or the nonrelease of his clients' claims. We agree that nondisclosure of these terms (as well as the other hidden terms) constituted a violation of Rule 1.4(a). Under Rule 1.4(a), lawyers not only must respond to client inquiries but also must initiate contact to provide information when needed. See In re Bernstein, 707 A.2d 371, 376 (D.C.1998); see also R. 1.4 cmt. 2. Because respondent withheld important terms from the Settlement Agreement, his clients became unable to participate intelligently in decisions concerning the objectives of the representation and the means by which they are to be pursued. R. 1.4 cmt. 1. The Board also found that respondent's communication (and non-communication) with his clients violated Rule 8.4(c), which prohibits conduct involving dishonesty, fraud, deceit, or misrepresentation. The Board concluded that respondent had acted dishonestly because he had not disclosed the fee arrangement and his clients' continuing right to sue and he had told Duke in November and December 1997 that he did not represent her during the settlement talks with Warner-Lambert. [13] We have given a broad interpretation to Rule 8.4(c), as recapitulated recently in In re Arneja, 790 A.2d 552, 557 (D.C.2002). [Dishonesty] encompasses conduct evincing `a lack of honesty, probity, or integrity in principle; [a] lack of fairness and straightforwardness . . .' In re Shorter, 570 A.2d 760, 767-68 (D.C.1990) (per curiam) (citation omitted); accord, Slattery, supra, 767 A.2d at 213. See In re Carlson, 745 A.2d 257, 258 (D.C.2000) (per curiam) (dishonesty may consist of failure to provide information where there is duty to do so); In re Jones-Terrell, 712 A.2d 496, 499-500 (D.C.1998) (violation found despite lack of evil or corrupt intent); In re Reback, 487 A.2d 235, 239 (D.C.1985) (per curiam), vacated but adopted and incorporated in relevant part, 513 A.2d 226 (D.C. 1986) (en banc) (dishonesty in filing second complaint to replace one dismissed because of negligent inattention.). Dishonesty is also the most general term in Rule 8.4(c), encompass[ing] fraudulent, deceitful, or misrepresentative behavior. In re Wilkins, 649 A.2d 557, 561 (D.C.1994) (per curiam), but also applying to conduct not covered by the latter three terms, which describe degrees or kinds of active deception or positive falsehood. Shorter, supra, 570 A.2d at 768. Indeed, it has been suggested that sufficiently reckless conduct is enough to sustain a violation of the rule. Jones-Terrell, supra, 712 A.2d at 499. We agree that respondent's failure to divulge the fee provision violated Rule 8.4(c). As discussed previously, the significance of a potential defendant's willingness to pay $225,000 in attorney fees would have been lost on no one, least of all the clients themselves. Respondent was bound to disclose this to his clients but declined to do so. As for the clients' continuing right to sue, when members of a potential class action learn that the opposing party will provide them refunds and their attorneys are dropping their case, it would be only natural for them to wonder if they still have any claims left to pursue. However, respondent declined to assuage their concerns in the August 26, 1997 letter and only informed Duke of her rights after she confronted him three months later. Furthermore, after having told Duke that he did not represent her during the settlement talks, respondent admitted to the Hearing Committee that he had inaccurately described his relationship with Duke. The very first sentence of the Contingent Fee Agreement states, I hereby retain attorneys John Traficonte . . . and Mark Hager . . . to perform the legal services described below. Moreover, as respondent himself noted in his brief to this court, Duke received a July 26, 1997 letter that clearly stated that respondent continue[s] to represent you in the would-be class action against the seller of head lice shampoo. Substantial evidence in the record therefore supports the Board's conclusion that respondent's statements to Duke violated Rule 8.4(c). (We further note that the Hearing Committee, who had the opportunity to hear and observe Respondent firsthand, specifically found that all of the above conduct was intentionally designed by Respondent to dupe [his clients] into believing their interests had been served.) Respondent defends himself against these charges by arguing that his (unsuccessful) attempt to convince Warner-Lambert to disclose the fee negates proof of dishonest state of mind, which a violation of Rule 8.4(c) requires. He also contends that he left out information regarding his clients' continuing right to sue because it [never] even occurred to [him] that his clients would think they had waived their right to sue. [14] The Board was quite unpersuaded by these contentions, and we can hardly conclude the contrary, given all the circumstances presented in this case. [15] Finally, regarding the statements to Duke, respondent argues that they were at worst the result of incorrect legal analysis of a clause in the Contingent Fee Agreement. [16] Respondent in effect argues that he engaged in a conditional representation of his clients. However, the Board had before it the July 26, 1997 letter to Duke acknowledging the attorney-client relationship and thus substantial evidence in the record supports its finding. In sum, we are quite satisfied that the Board was justified in the circumstances of this case in concluding that respondent had violated Rule 8.4(c) as we have defined its scope in our holdings.