Court Opinion

ID: 9564491
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:01:45.784242+00
Date Added: 2024-06-11T09:18:27.687244
License: Public Domain

CORCORAN, Justice,
dissenting:
I respectfully dissent.
FACTS
Both the hearing committee of the State Bar of Arizona and the disciplinary commission of this court have recommended that this court disbar respondent Duane Norman Varbel. And with good reason.
The hearing committee, the disciplinary commission, and this court all have found that respondent did not communicate the $18,000 written settlement offer to his clients, Mr. and Mrs. R. All conclude that the evidence was clear and convincing. See rule 54(c), Rules of the Arizona Supreme Court. The majority of the court parts company with the hearing committee, the disciplinary commission majority, and this dissent as to whether respondent lied to Mr. and Mrs. R, lied to the committee, lied to the commission, and lied to this court when he told all and testified that he had in fact orally communicated the written $18,000 offer to Mr. and Mrs. R.
The committee did not merely find that respondent and his long-time secretary lacked credibility, and therefore respondent should be disbarred. The hearing committee found that
The respondent attempted, willfully and deliberately, to mislead the State Bar and this committee as to whether he had conveyed the settlement offer to [Mr. and Mrs. R], both through his own testimony and through the testimony and affidavit respondent elicited from [his secretary] ____ [T]he committee ... concluded that respondent, during the course of these State Bar proceedings, intentionally, and/or knowingly, made false statements of material fact in order to conceal his failure to communicate that offer [to Mr. and Mrs. R]---- [T]he respondent had violated or attempted to violate the Rules of Professional Conduct by the making of false statements of material fact and by knowingly assisting or inducing others to do so, to-wit: his secretarial staff.
Respondent engaged in conduct involving dishonesty, fraud, deceit or misrepresentation ....
The underlying facts of this disciplinary proceeding are fairly simple. Respondent undertook the representation of Mr. and Mrs. R in a landlord-tenant dispute. The case was very difficult, but respondent secured a favorable jury verdict in November 1988. Judgment was entered in favor of Mr. and Mrs. R for $11,500 in compensatory damages and $75,000 in punitive damages. However, the defendants recovered judgment on a counterclaim against Mr. and Mrs. R in the amount of $2,500.
The following month, the attorney for the defendants made an $18,000 written offer of settlement to respondent. Respondent rejected this offer. The committee, the commission, and this court (unanimously) find by clear and convincing evidence that respondent did not communicate the settlement offer to Mr. and Mrs. R, in violation of Ethical Rules 1.2 and 1.4.
I believe that the disciplinary commission is correct in saying, “it is highly probable that Mr. and Mrs. R would have rejected the offer themselves, had they been aware of it.” A settlement of $18,000, with a net recovery of $10,000-$12,000, probably would not have been sufficient for Mr. and Mrs. R to stave off bankruptcy. But, the offer might have brought about discussions leading to a settlement which would have been acceptable to them. Ultimately, Mr. and Mrs. R did file for bankruptcy, and their debts were dis*457charged. If the parties had settled for $18,-000, respondent would have retained one-third, or approximately $6,000.
Because the $18,000 settlement offer was rejected by respondent, the appeal proceeded. Respondent associated an attorney with whom respondent shared office space to handle the appeal. If on appeal the judgment in favor of Mr. and Mrs. R had been affirmed, respondent would have retained approximately $28,000 as his contingent fee. He had agreed to pay the associated counsel $10,000 in the event of a successful defense of the judgment in favor of Mr. and Mrs. R.
Defendants successfully appealed and the court reversed the $86,500 judgment in favor of Mr. and Mrs. R. That left Mr. and Mrs. R still obligated to pay the $2,500 judgment to the defendants on the counterclaim, along with court costs and attorneys’ fees. The mandate was issued by the court of appeals in April 1990. Within a few weeks, the attorney for the defendants wrote to respondent proposing a “settlement” whereby Mr. and Mrs. R would pay the defendants the $2,500 judgment, interest, and taxable appellate and trial costs, totalling $8,075.52, and defendants would forego the claim for attorneys’ fees in the trial court and in the court of appeals. In the letter, the following sentence appeared in paragraph 2:
This action is taken despite the fact that your clients [Mr. and Mrs. R] were unwilling to entertain the settlement offer made by my clients at the beginning of the appellate process.
Respondent mailed a copy of this letter to Mr. and Mrs. R. He asked them to review the letter and contact him as to how to proceed in the case.
Mrs. R discussed making a criminal complaint against respondent with an officer of the Payson Police Department. The officer suggested that Mrs. R telephone respondent and discuss the “settlement offer” referred to in the letter because Mrs. R had indicated that no settlement offer had been communicated to them. Mrs. R telephoned respondent and tape-recorded the conversation. Both the tape recording and a transcript of it were admitted in evidence in the proceedings before the hearing committee.
After discussing the fact that the supreme court had denied Mr. and Mrs. R’s petition for review, and the court of appeals had issued its mandate, Mrs. R indicated that “we don’t want to go bankrupt.”
Mrs. R then inquired about the reference in paragraph 2 of the defendants’ attorney’s letter to the fact that Mr. and Mrs. R were “unwilling to entertain the settlement offer ... at the beginning of the appellate process.” In response, respondent referred only to a purported offer of $10,000 made orally by the defendants’ attorney before he and respondent left the courthouse immediately after the verdict favorable to Mr. and Mrs. R was returned. Mrs. R protested that no such $10,000 offer was mentioned to her. Respondent stated:
But the only offer they’d [defendants] ever give us was that one.
In his testimony before the commission, respondent stated:
In the true sense of the word offer, there was only one offer. That would have been the $18,000 [written] offer December 23rd.
Respondent refers to the $10,000 “offer” made at the courthouse as the defendants’ attorney “just putting out some feelers.” During the recorded phone conversation, respondent did not mention the $18,000 written offer of settlement. Mrs. R did not ask about it because she said in her testimony that she did not know about it. Before the taped telephone conversation was over, Mrs. R asked if she could pick up all of her papers. Respondent indicated that she could.
When Mr. and Mrs. R obtained the file from the attorney respondent had associated to handle the appeal, they reviewed its contents. They found the December 23, 1988, letter to respondent from the defendants’ attorney offering $18,000 as full settlement of the case.
*458Mr. and Mrs. R made a complaint to the State Bar that respondent had not informed them of the written offer of settlement in the amount of $18,000.
Thus began a period of dissembling and lying by respondent and his secretary.
The story told by respondent and his secretary was that they received the letter from defendants’ attorney dated December 23, 1988. It is a short letter directly making the offer of $18,000 to Mr. and Mrs. R “as full settlement.” The' letter asked for a response. Respondent did not send the letter to Mr. and Mrs. R. His secretary testified that she phoned Mrs. R at her home in Payson, informed her that respondent had received an offer of settlement, and set up a meeting in Phoenix. The secretary did not state what the offer was; Mrs. R did not ask what the offer was. Mrs. R drove from her home in Payson to respondent’s office in Phoenix.
Respondent’s secretary testified that while Mrs. R was waiting for her appointment with respondent, she, the secretary, told Mrs. R the amount of the offer. Respondent testified that he then had a conference with Mrs. R, during which he explained various options that were available. Mrs. R rejected the $18,000 offer. Mrs. R testified that she never had a meeting with respondent or his secretary at which they discussed the $18,000 offer. The fact is that Mrs. R could have been saved driving from Payson to Phoenix and back by simply relaying the offer over the telephone or by mailing a copy of the letter making the offer to Mr. and Mrs. R. This was not done.
Neither respondent nor his secretary produced any physical evidence, such as records of the telephone company confirming a phone call from respondent’s office to Mr. and Mrs. R after the December 23,1988, $18,000 written offer of settlement was received, other phone messages or records, or appointment books showing a calendared appointment with Mrs. R.
DISCUSSION
I
1. The majority must decide what misconduct respondent was involved in and what respondent should be sanctioned for. It appears that the majority agrees with everyone, including this dissent, that there is clear and convincing evidence that respondent did not communicate to his clients, Mr. and Mrs. R, an offer to settle their case for $18,000. It also appears that the majority is finding that when respondent testified under oath that he did communicate the offer to his clients, there is no clear and convincing evidence that he was “intentionally lying.” There is something wrong with the second finding.
I agree with the hearing committee and the disciplinary commission that respondent did not communicate the $18,000 written settlement offer to his clients, and that he lied .to and attempted to mislead the State Bar into believing that he had communicated the offer to his clients. The record contains clear and convincing evidence supporting these conclusions. In deciding whether there is clear and convincing evidence under rule 54(c), Rules of the Arizona Supreme Court, we must find that
[t]he State Bar has met its burden if it shows that it is “highly probable” that the allegations in the complaint are true.
In re Wolfram, 174 Ariz. 49, 52, 847 P.2d 94, 97 (1993). I have found no discussion of what “clear and convincing” is in disciplinary cases. However, our court of appeals has discussed this standard of proof in a criminal case, where the standard of proof for the insanity defense is “clear and convincing” evidence. That court said
The clear and convincing standard is reserved for cases where substantial interests at stake require an extra measure of confidence [above a preponderance of the evidence] by the fact finders in the correctness of their judgment, though not to such degree as is required to convict of crime [beyond a reasonable doubt].
State v. Renforth, 155 Ariz. 385, 387, 746 P.2d 1315, 1317 (App.1987). I conclude that the State Bar has met the burden as required by rule 54(c).
2. The majority notes that “respondent refused to change his story.” This is true. *459Respondent has consistently lied throughout these proceedings. I do not think consistently lying is a virtue.
The majority also notes that “respondent made no attempt to destroy or hide from his clients the letter referencing the offer he supposedly knew that he never told them about.” This reference to “supposedly” is disturbing: the majority agrees with the hearing committee, the disciplinary commission, and this dissent, that there is clear and convincing evidence that respondent did not communicate the settlement offer to his clients.
3. The majority makes the point that respondent “not only mailed it [the letter referencing the offer] to them [Mr. and Mrs. R] but had a copy placed in their file. He made no effort to remove it, even after Mrs. R told him she intended to pick up all her papers. He also left the original written settlement offer in the file.” Some time had passed between the receipt of the settlement offer and this unscheduled telephone call from Mrs. R. Respondent did not know what Mrs. R was looking for. The old adage is true that
he who has not a good memory should never take upon him the trait of lying.
Michel Eyquem de Montaigne, Of Liars, in 1 Essays, ch. 9 (1580-1595).
II
The majority attempts to foist off on this dissent a conclusion that respondent and his secretary committed the crime of perjury. See footnote 3 of the majority opinion. This dissent does not confuse the civil preponderance of evidence standard (which the majority apparently finds is satisfied regarding respondent’s lies), the civil clear and convincing evidence standard (which the majority finds was not satisfied and this dissent finds is satisfied regarding the evidence of respondent’s lies), and the criminal standard of beyond a reasonable doubt. This dissent does not confuse this case, which deals with non-criminal lawyer misconduct, with a criminal charge against respondent for perjury. See State v. Renforth, 155 Ariz. at 386-87, 746 P.2d at 1316-17. A perjury charge is within the jurisdiction of the Attorney General or a county attorney—and this is a matter they should earnestly review.
In an appropriate case, I have no “discomfort” with the majority opinion using the word “perjury” (as is stated in n. 3 of the majority opinion). But, “perjury” is not the issue in this case.
Ill
In re Fresquez is a case in which we did the right thing—we disbarred that attorney. 162 Ariz. 328, 783 P.2d 774 (1989). In re Fioramonti 176 Ariz. 182, 859 P.2d 1315 (1993), is a case in which a division of this court did the wrong thing—we suspended rather than disbarred that attorney. See Fioramonti 176 Ariz. at 189, 859 P.2d at 1322 (Corcoran, J., dissenting). Unfortunately, we are making the same mistake in this case that we made in Fioramonti This court should disbar respondent.