Court Opinion

ID: 9562355
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:26:57.110423+00
Date Added: 2024-06-11T09:17:18.401390
License: Public Domain

CORCORAN, Justice,
dissenting:
I respectfully dissent.
I view the facts in this case differently from the majority. The respondents Fee and Montijo lied to the settlement judge so that they would get more money and their client would get less money. It is especially egregious for a lawyer to lie to a judge for the purpose of increasing his own fees at the direct expense of his client. I cannot agree with the committee, the commission, and the majority that respondents lacked dishonest or selfish motives. Bes ipsa loquitur. Such conduct warrants at least a suspension and not a mere censure.
*603Respondents allege that they intended to reveal their side fee agreement to the trial judge. See Rule 3, Uniform Rules of Practice for Medical Malpractice Cases (requiring attorneys for all parties to submit their fees for court approval and requiring plaintiff's attorney to disclose client’s net recovery). However, this assertion does not ring true. If respondents had disclosed their side fee agreement to the trial judge and opposing counsel, which would have required admitting that they had lied to the settlement judge, 4 things might have happened: (1) the trial judge could have refused to honor the side agreement; (2) the trial judge could have referred the matter back to the settlement judge who possessed the most information about the case; (3) defendants’ attorneys could have sought to enforce the settlement agreement as communicated to the settlement judge; or (4) defendants’ attorneys could have sought to withdraw their settlement offer. Any one of these events would have ruined respondents’ scheme to collect attorneys’ fees in excess of those communicated to the settlement judge. In addition, all parties who became aware of the secret fee agreement would have been required to report respondents’ misconduct to the state bar. See ER 8.3(a), Arizona Rules of Professional Conduct; Canon 3(D)(2), Arizona Code of Judicial Conduct; Robert J. Corcoran, In re Himmel: Am I My Brother’s Keeper?, Ariz. Att’y, Oct. 1989, at 15. In fact, when the settlement judge learned of respondents’ misconduct, he filed a complaint with the state bar, pursuant to Canon 3(D)(2).
I agree with the majority that: (1) “[t]he bulk of ethical rules seem to have been designed with litigation scenarios in mind,” and (2) there are “few formal guidelines for judicial officers acting as mediators.” That, however, does not excuse the misconduct here. For lawyers dealing with judges, whether they be trial or settlement judges, the guiding rule is never lie to or mislead a judge. See ER 3.3, Arizona Rules of Professional Conduct. Respondents claim that they were lying in order to secure the best settlement agreement for their client. Nonetheless, it is often the case that lawyers who lie for the client will also lie to the client.
I also emphasize that the terms of respondents’ fee agreement in conjunction with the secret side agreement would have resulted in respondents receiving an overwhelmingly disproportionate share of the client’s up-front cash payment. The client signed three fee agreements dated October 29, 1986, January 29, 1987, and December 19, 1989. Only the last fee agreement addressed the possibility of a structured settlement. It provided that “[i]n the event this case is settled by way of a structured settlement ... the attorney’s fees will be computed on the basis of a percentage of the present value of the settlement. The attorney’s fees will be paid out of the initial cash payment(s).” If respondents had successfully recovered $485,000 in attorneys’ fees payable from the initial cash payment, as contemplated by the side fee agreement, they would have received 84% of the client’s up-front cash recovery (excluding the $55,000 designated as costs). Furthermore, by collecting their fees from the up-front cash payment, respondents left the client to bear all the risk that the annuity provider would become insolvent. See Smith v. Myers, 181 Ariz. 11, l4-15, 887 P.2d 541, 544-45 (1994). A less onerous fee agreement is one in which the plaintiffs attorney collects his fees only if, as, and when the plaintiff receives the funds. See Comment, Timing Payments of Attorney’s Fees in Structured Settlements: Avoiding Problems with the “When Received” Approach, 24 Willamette L.Rev. 993, 1006-09 (1988); cf. Carter v. Industrial Comm’n, 182 Ariz. 128, 130-31, 893 P.2d 1291, 1293-94 (1995). Under an “if, as, and when received” fee arrangement, respondents would only have been entitled to 40% of the client’s up-front cash recovery, or $230,000.
For the above reasons, I agree with the hearing committee, the disciplinary commission, and state bar counsel that respondents Fee and Montijo should be suspended.