Court Opinion

ID: 4713577
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:39:30.013511+00
Date Added: 2024-06-11T08:07:18.353137
License: Public Domain

¶23 (dissenting) — Valley/50th Avenue, LLC (Valley) sued to enjoin the law firm of Morse & Bratt (Firm) and trustee Randall Stewart from foreclosing on real property owned by Valley. Neil M. Rose, Valley’s manager, had signed a representation agreement, a $300,000 promissory note, and a deed of trust to Valley’s real property as security for the note after accruing significant outstanding legal fees with the Firm. The majority claims there are genuine issues of material fact concerning whether the Firm violated former RPC 1.8 (1993) by failing to give both Rose and Valley adequate notice. I disagree because there are no material issues left to be determined. Because Rose acted as Valley’s manager, Valley was aware of everything of which Rose was aware and Valley was bound by Rose’s signature. These agreements were fair, and both Rose and Valley had adequate opportunity to seek independent legal advice.
Sanders, J.
124 Rose has owned and operated several businesses, including Valley. The certificate of formation and the operating agreement were signed by Rose, and Rose was Valley’s manager and its sole member. On May 18, 1998, Rose executed a warranty deed drafted by the Firm transferring *749his property to Valley. After the Firm approached Rose about his ever-increasing fees and costs, Rose signed a promissory note promising to pay the Firm $300,000 on demand. He signed it on behalf of himself as an individual and on behalf of Valley, acting as its manager. This note was secured by “a deed of trust on real property, and other security as set forth in an Agreement between promissors and promissee dated September 1, 1999.” Clerk’s Papers (CP) at 14. Valley specifically agreed to pay any costs, fees, or expenses, including attorney fees, incurred by the Firm in enforcing any obligations secured by the deed. The deed was notarized and signed by “Neil M. Rose, Member,” on behalf of Valley and by Rose as an individual on February 3, 2000. CP at 57.
I. Summary Judgment
|25 Despite the patent fairness of the agreement and negotiations, the majority claims there are outstanding issues of fact concerning the disclosure and the opportunity to seek independent legal counsel. Majority at 746. While some unresolved issues perhaps linger, none are material. To deny summary judgment, there must be a “ ‘genuine issue of material fact.’ ” Ellis v. City of Seattle, 142 Wn.2d 450, 458, 13 P.3d 1065 (2000) (emphasis added) (quoting Trimble v. Wash. State Univ., 140 Wn.2d 88, 92-93, 993 P.2d 259 (2000)). When we consider the plain language of former RPC 1.8, the documents on their face, and the protracted negotiation time between when the promissory note was signed and the deed was executed, we can easily conclude the negotiations were fair and both Rose and Valley had ample time to seek independent legal counsel.
II. Rules of Professional Conduct
¶26 The issue is whether the transaction between the Firm and Rose and Valley was fair. Former RPC 1.8 provides the lawyer:
(a) Shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
*750(1) The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client;
(2) The client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
(3) The client consents thereto.
¶27 Even if the “exact circumstances” of the disclosure are in doubt, see majority at 746, every element of former RPC 1.8(a) is clearly met. The majority claims Rose and Valley are different entities and the Firm owed a separate duty to each under former RPC 1.8.8 Majority at 747. Regardless, Rose has the power to bind Valley and act as Valley’s agent, and Valley was aware of everything of which Rose was áwaré. Therefore, by dealing fairly with Rose, the Firm could not help but deal fairly with Valley.
f 28 Rather than focusing on the facts we don’t know, we should focus on those we do. We know the amount of the promissory note corresponded with both the outstanding and future fees and costs due the Firm and the value of the property used as collateral. We know Valley’s interests mirrored Rose’s. We know the final versions of the documents included the changes made by the Firm based on Rose’s requests. We know these terms were transmitted to Rose in writing, and he certainly was able to understand them as a seasoned businessman who had considerable experience in dealing with attorneys. We know Rose corrected the documents before signing them, so he clearly understood the terms of what he was agreeing to. The terms were fair and reasonable, fully disclosed in writing, and *751understood by Rose and thus Valley. Therefore, former RPC 1.8(a)(1) is satisfied.
¶29 Second, if we assume Rose is correct, and the Firm never said he should have'the documents reviewed by an independent attorney,9 this is immaterial. Former RPC 1.8(a)(2) requires only a “reasonable opportunity to seek the advice of independent counsel.” Certainly the Firm need not demand Rose hire an independent counsel or hold his hand in doing so. We know the negotiations occurred over several months,10 throughout which Rose had access to disinterested lawyers representing him and his various business interests on other matters. What else must we know to conclude Rose and Valley had a “reasonable opportunity to seek the advice of independent counsel”? Rose had ample opportunity to consult with disinterested counsel and the experience to evaluate the utility of doing so. Therefore, former RPC 1.8(a)(2) is satisfied.
f 30 Lastly, both Rose and Valley consented to the transaction, as evidenced by Rose’s signature as an individual and on Valley’s behalf on both the deed of trust and the promissory note. As manager, Rose’s signature also bound Valley. Therefore, former RPC 1.8(a)(3) is satisfied, and the transaction between the Firm and Rose and Valley is fair and enforceable.
f31 The majority relies on In re Disciplinary Proceeding Against McMullen, 127 Wn.2d 150, 896 P.2d 1281 (1995). But McMullen is readily distinguishable from this case. There the attorney acted also as an investment advisor and obtained unsecured loans from an elderly client in declining health. We held the lawyer violated RPC 1.7(b) because he could not reasonably believe the representation would be unaffected by the loan and that the terms of the loans were *752unreasonable under RPC 1.8(a). Unlike the attorney in McMullen, the Firm did not take advantage of an unsophisticated client.
¶32 And even if we apply the McMullen standard, the agreement is still fair and enforceable. The Firm was entitled to the fees and costs accrued in the course of representing Rose and his various businesses, and the documents at issue in this case reflect an arrangement between the parties to resolve the outstanding debt. Rose received billing statements on a regular basis and was aware of how much money he owed the Firm. He decided to encumber Valley’s property to secure payment on the promissory note to ensure the Firm’s continuing representation. There is no information regarding Valley, its property, and the terms of the documents a disinterested attorney could provide Rose that Rose did not already possess through his dealings with the Firm.
¶33 We should affirm the Court of Appeals and hold the Firm did not violate former RPC 1.8 in entering into these agreements. I would also hold Rose had the explicit authority to bind Valley and would grant the Firm’s request for attorney and trustee fees.
¶34 I dissent.
C. Johnson and Owens, JJ., concur with Sanders, J.

 Furthermore, Valley argues the deed is unenforceable because Rose signed the deed as “Neil M. Rose, Member,” and not as manager. CP at 57. To support its claim, Valley points to the operating agreement, which vests the power to manage the affairs of the company in a manager. But Valley conveniently ignores section 5.1.2 of the operating agreement, which provides, “]u]nless authorized to do so by this Agreement or by the Manager, no Member . . . shall have any power or authority to bind [Valley] in any way, to pledge its credit or to render it liable for any purpose.” CP at 31. Therefore, no matter what role Rose was acting in, manager or member, Rose could clearly bind Valley and the deed is enforceable.

 J.D. Nellor, the Firm’s president, testified in his deposition he informed Rose that he was entitled to independent counsel in connection with the representation agreement, the promissory note, and the collateral. Rose contends no one specifically advised him to seek independent legal advice.

 The promissory note and representation agreement carry the effective date of September 1,1999, and the deed of trust was signed by Rose on February 3, 2000.