Opinion ID: 2330836
Heading Depth: 2
Heading Rank: 2

Heading: Madia Complaint (VI-81-78E)

Text: Complainant Nino Madia was an employee and minor shareholder of Rock Furniture Company, which operated a retail furniture store near respondent's office. On December 10, 1980, complainant was served with a summons and complaint in a Superior Court action demanding return of a $3,000 deposit placed on furniture to be purchased from complainant's store. The complaint named both the corporation and complainant personally as defendants. Complainant went to respondent to discuss the filing of an answer on behalf of complainant personally. Respondent reviewed the complaint and recognized that it alleged a consumer fraud, potentially subjecting complainant to treble damages. Respondent advised complainant of this fact. At the request of Madia, respondent then offered to make a courtesy call to the plaintiffs' attorney to see if a settlement between the parties could be arranged. Complainant agreed to the offer and respondent immediately called plaintiffs' counsel. A settlement, however, could not be reached. After the telephone conversation, respondent testified that he told complainant that the complaint had to be answered within 20 days and that he would have to receive a $350 retainer if complainant wished to retain him. At that point, according to respondent, complainant informed him that his corporation, Rock Furniture Company, was going bankrupt. Respondent suggested that complainant might use the corporation's bankruptcy attorney to represent him personally especially since a $5,000 retainer had apparently been paid. Respondent then returned the summons and complaint to complainant and told him that if he wished to retain respondent, he would have to first pay the $350 retainer. Respondent called complainant shortly thereafter to ask whether he was being retained. Complainant promised to get back to respondent, but never did so. Respondent heard nothing further from complainant until February 1981 when the latter was served with a levy by a deputy sheriff who informed him that a judgment had been entered against him in the civil action. According to complainant, this was the first time he learned that respondent had not represented him by filing an answer or otherwise defending on the suit. In his testimony before the District Ethics Committee, complainant stated that after respondent unsuccessfully attempted to settle the matter over the telephone with the plaintiffs' attorney, that respondent said he would file an answer on complainant's behalf. Respondent did not ask for a retainer at this time, though complainant claimed to have offered him a fee. According to complainant, respondent said that he would stop by complainant's store and drop off his bill. Respondent, however, never did this. After being served with the levy, complainant attempted to communicate with respondent by telephone, but was unable to reach him. Respondent stated that he was unaware of any such attempts being made and that he had specifically told the deputy sheriff who called him in connection with the levy that he did not, and had not, represented complainant. Complainant subsequently retained other counsel in an attempt to have the judgment vacated. The attempt was unsuccessful. Complainant then appealed to the Appellate Division which upheld the denial of the motion to vacate. The Hearing Panel of the District VI Ethics Committee determined that complainant was a client of respondent and that respondent had undertaken the obligation to defend him. The Panel accordingly found respondent guilty of violating DR 1-102(A)(5) and (6); DR 6-101(A)(1); DR 7-101(A)(2) and (3).