Opinion ID: 1745216
Heading Depth: 1
Heading Rank: 4

Heading: False representations to contractor

Text: On August 11, 1988, respondent wrote Fabricated Wood Products, Inc., a potential general contractor and supplier for the Wimbledon project. The letter stated Wimbledon had the necessary financing commitments to complete the project. The next day, respondent, as president of Wimbledon, signed a contract with Fabricated, calling for completion of the project by Fabricated as quickly as possible and committing Wimbledon to monthly payments totalling almost $1 million. In fact, Wimbledon did not have any financing commitments; indeed, it had other contractual obligations aggregating over $1 million for which there was no evident source of payment. Fabricated started work about August 12 but demanded written confirmation of the financial commitment. On August 18 respondent and Krall met with two First Bank officers who indicated a lack of interest in the project. Respondent took from the meeting a working draft of a pledge agreement that the bank had earlier drawn up at respondent's request. Under the draft agreement, the bank would provide a revolving line of credit if a $1 million certificate of deposit were pledged as security. Respondent had his secretary retype the draft agreement with some changes. For example, the words working draft were deleted, and a signature block for one of the bank officials was added to the last page. In his own handwriting and without authorization, respondent wrote the names of Krall and the bank official in the revised document and dated it August 18. A casual reading of the agreement would seem to suggest that Krall had deposited or would be depositing a $1 million certificate of deposit with the bank. Respondent then drafted a cover letter to Fabricated referring to the enclosed Pledge Agreement which Wimbledon Hills has arranged, and adding, I trust this document satisfies your questions and demonstrates to your satisfaction that Wimbledon Hills, Inc. has a $1 million for the sole purpose of paying construction costs of the units to be built by your company   . That same day the cover letter signed by respondent and the revised Pledge Agreement were delivered to Fabricated. Fabricated became suspicious of the documents and on August 23 went to First Bank where they were informed that the agreement was not genuine, that the bank official's signature was not genuine, and that First Bank had no commitment to Wimbledon. When questioned about the document, respondent told the bank and Fabricated that his secretary had made a mistake. The referee found that respondent had intended to deceive the contractor into believing there was a $1 million bank commitment to the Wimbledon project, and that the representations as to financing in the cover letter were false and were intended to deceive. While it would seem that the Pledge Agreement and respondent's cover letter could not have deceived Fabricated for long, nor did it, the evidence is still clear and convincing that respondent made false representations with an intent to deceive. This is a violation of Rule 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation).