Opinion ID: 1454365
Heading Depth: 1
Heading Rank: 16

Heading: THIRTY-EIGHTH and THIRTY-NINTH CAUSES OF COMPLAINT

Text: The Trial Panel considered these two causes together. We shall do likewise. In both causes the Bar alleged that Griffith violated former rules DR 1-102(A)(2) and (6) and DR 5-104(A), all supra. In the 38th cause the Bar also alleged: In September, 1981, Trans West purchased an airplane from Flightcraft for $2 million and financed $1.4 million of the purchase price through the seller. In February 1983, Trans West was in default on the airplane loan. Griffith and Wolf instructed Brookens to convey to Trans West real property which was then utilized as additional security to refinance the airplane loan. In the 39th cause the Bar also alleged: In April 1983, Trans West was again in default on the airplane loan and the plane was repossessed by Flightcraft. In settlement of the amount due the partners of Trans West signed an agreement providing for periodic payments to be made by Wolf and Griffith on the deficiency. Flightcraft retained the security interest in the real property previously conveyed to Trans West by Brookens. In both causes the Bar pleaded similar allegations to the effect: Griffith and Wolf were legal counsel to Trans West and Brookens relied upon them for professional judgment and advice. The interests of Griffith differed from the interests of Brookens. Griffith did not make the required ethical disclosures to or obtain the informed consent of Brookens prior to the refinancing or settlement agreement. Griffith's answer to both causes was in the nature of a general denial. [30] The issue in both these causes is whether the interests of Griffith and Brookens were different and whether Brookens expected professional judgment and advice from Griffith. The Trial Panel found Griffith not guilty on both causes. Its analysis was similar to that which it used in the 36th cause. It said in part: Neither the Accused nor Wolf advised Brookens that they had conflicting interests in the refinancing and Brookens did not obtain independent counsel to represent him in this matter. The interests of the Accused differed from the interest of Brookens regarding the refinancing of the airplane loan to Flight Craft.    Although the interest of the partners in settling the debt and avoiding the potential remedies of the lender on default were the same, the interests of each partner in the terms of the settlement conflicted.    Brookens as a result of the refinancing was relieved of substantial personal contingent liability, however, he did pledge the Woodland property which did have substantial value and in the end he did have to pay approximately $100,000 to Flightcraft to prevent foreclosure by Flightcraft on the Woodland property.    In this case, the lawyer was already part of the business transaction with the client. At the time the formation of Trans West was undertaken the interests of the lawyer and client were not different. However, with passage of time, and specifically at the time of the refinancing of the transaction, the interests of the various partners did differ. The Accused had a responsibility under DR 5-105 to advise Brookens to obtain independent counsel and to withdraw from representing him in the refinancing. However, that charge has not been made by the Bar in this cause of action. [31] Our conclusion is much the same as that which we reached in the 36th cause. This is a former DR 5-104(A) case and not a former DR 5-105(B) case. See In Re Moore, supra . If there ever was a situation in which a person needed an independent lawyer it was Brookens in February to April, 1983. The flagship Columbia Pacific had sunk. The schooner First Northwest had been scuttled. Griffith, Wolf, and Brookens were floating around on an army surplus life raft that was leaking. We find by clear and convincing evidence that Griffith violated former DR 5-104(A). Griffith also violated former DR 1-102(A)(6). In re Magar, supra . Former DR 1-102(A)(2) does not apply.