Opinion ID: 2615014
Heading Depth: 4
Heading Rank: 7

Heading: Count 9: Abril's Claims Against Cunningham

Text: Count 9 of the bar complaint alleges that respondent's institution and maintenance of the suit against attorney John R. Cunningham on behalf of Abril violated E.R. 3.1 and 4.4. As with Lewis, the cause of action against Cunningham was for strict liability for unauthorized representation. Count 9 of the bar complaint was based on the following facts. As previously indicated, Cunningham had been employed by Harris to assist with the appellate brief in the Globe appeal. Harris agreed to pay Cunningham directly for his work; Abril was not to be billed for Cunningham's work. Harris testified that Cunningham spent an enormous amount of time on the brief. Harris testified that Abril fired him a few days before the brief was due; Harris did not feel that respondent could prepare an appropriate brief on such short notice, and, because he was still counsel of record, Harris testified: I was very concerned about protecting that judgment. I was concerned about it, quite frankly, about protecting it for me, because I had what I believed to be a vested, accrued interest in 1.3 million dollars. Cunningham testified that he did not believe Abril had an absolute right at that point to fire Harris because of Harris' contingent interest in the judgment. Because Cunningham and Harris were still counsel of record in the court of appeals, Cunningham felt, in my opinion we had not only a right but a duty on behalf of the client as counsel of record to proceed with our representation. Cunningham testified that, shortly before the brief was filed, respondent called him, advising me that he was going to be taking over as Abril's counsel, and asking if I would be interested in continuing my association but with him as opposed to with Harris & Palumbo. Cunningham declined. On August 5, 1985, Kenneth J. Sherk, Cunningham's counsel, and respondent agreed by phone to enter into a stipulation for dismissal with prejudice, with each party to bear their own fees and costs. On August 8, Sherk sent a proposed stipulation to respondent, which included respondent's concession that there was not nor is there now, a valid claim, in fact or law, against defendant John R. Cunningham.... On August 16, respondent returned the unsigned stipulation to Sherk, with the following explanation: I cannot in good faith sign the Stipulation which you proposed for several reasons. First of all, the language of the order is not true. Secondly, it could expose my client and myself to a separate lawsuit in tort for abuse of civil process or malicious civil prosecution. Thirdly, I certainly don't want to give Judge Hendrix the erroneous impression that my client or I go around filing lawsuits against people for no reason. Such an impression could prejudice my client's case against the remaining defendants. On September 10, 1985, Sherk sent respondent a revised form of stipulation, providing that Cunningham would not only waive his claim for attorney's fees and costs, but also for any claim for damages. Sherk also noted that the trial court had dismissed Lewis and granted attorney's fees, and that, if respondent did not sign the stipulation without further delay, Cunningham would also move for summary judgment with an award of fees and costs under A.R.S. § 12-341.01(C) and Rule 11. On September 13, respondent replied: I, of course, will leave to my client the final decision as to whether or not to sign your proposed Stipulation. All I can tell you is that I do not like the form that you have proposed, because it ask[s] me to stipulate to an Order that contains language that is not true. There was and is a valid claim against John R. Cunningham for willfully undertaking to represent my client after he had actual notice that he had been discharged[.] I believe that his conduct violated Rule 29(b) of the Rules of the Supreme Court and subjects him to liability to my client. As I have told you many times, my client is willing to dismiss your client with prejudice with each party to bear their own costs but with no other agreement or stipulation of any kind. If this is not agreeable to your client, I certainly don't have any objection to his remaining in the litigation if he insists on this. On December 6, 1985, after Sherk had noticed Abril's deposition at his office, Sherk again returned the proposed stipulation to respondent. On December 13, respondent replied: My client will not authorize me to sign your proposed Stipulation, but wishes me to proceed with a motion for summary judgment and to seek attorney's fees and costs, by reason of the defenses which you interposed in this matter which have caused my client unnecessary delay and a needless increase in the cost of this litigation. On December 19, 1985, Sherk deposed Abril, who testified that he had never spoken to Cunningham, nor paid him any fees. Abril had left the decision whether to dismiss Cunningham to respondent, in his best judgment. On December 26, 1985, Sherk spoke to respondent again about the stipulation; they agreed to change the language to indicate that no valid claim existed against Cunningham at the present time, because respondent was concerned about potential Rule 11 violations and state bar disciplinary proceedings if he conceded that there never was a valid claim against Cunningham. On January 16, 1986, the parties signed the stipulation, and on January 21, 1986, the trial court ordered Cunningham dismissed from the suit. Sherk testified that his fees for representation of Cunningham in this matter totalled $9,700.65, which was paid for by Harris' malpractice carrier. Cunningham testified that his inclusion in this suit had a financial impact on him both personally and professionally because he was required to report the suit to his malpractice carrier for a five-year period, and the suit caused a tremendous amount of trouble with his mortgage lender while he was purchasing a home in late 1985, and untold grief in getting his family moved into their new home. In finding ethical violations on this count, the committee noted the long delay in respondent's dismissal of Cunningham after respondent had conceded that Abril had no claim, and noted, Respondent's actions in pursuing Cunningham are truly perplexing in light of Respondent's attempt to hire Cunningham to continue to prepare the Abril brief after Harris was discharged by Abril. The committee concluded, there was no good faith basis to file suit against Cunningham, the suit was frivolous and the delay in dismissing the case was due to Respondent's selfish motive of avoiding sanctions and his apprehension of a bar complaint. The commission adopted the committee's finding and, in addition, noted, The Commission finds the suit against Mr. Cunningham only slightly less offensive than the suit against Mr. Lewis, as Mr. Cunningham did provide legal services on behalf of Mr. Abril. (Emphasis in original.) On appeal, respondent argues again that, because the commission expressly recognized that a cause of action for unauthorized representation might reasonably be argued, no ethical violation for a frivolous claim can exist. He also argues that the commission erred in considering respondent's personal motives. As we have previously discussed, respondent's motives are relevant to whether he presented a good faith claim. Furthermore, even assuming, without deciding, that the legal basis of the claim against Cunningham was objectively reasonable when made, we find that respondent's actions in delaying the dismissal for months after he had acknowledged he had no claim against Cunningham violated E.R. 3.1 and 4.4. We therefore agree with the committee and commission that the ethical violations in count 9 were established by clear and convincing evidence.