Court Opinion

ID: 5111170
Source: CourtListenerOpinion
Date Created: 2021-10-02 15:24:44.425012+00
Date Added: 2024-06-11T08:21:34.616601
License: Public Domain

JIM HANNAH, Chief Justice, concurring. I concur in the result reached by the majority, but I write separately to set out the analysis by which I reach that same result. Brown correctly argues that Arkansas Code Annotated section 16-22-211 (Supp.2009) “cannot control the outcome of this case because the statute intrudes on this court’s exclusive power.” A statute, being an enactment of the legislative branch, may not control what is within the exclusive authority of the judicial branch. As the highest court in the judicial branch of government, this court holds exclusive authority over the regulation of the practice of law.1  The authority to regulate the practice of law arises from the Arkansas Constitution and the common law. Under amendment 28 to the Arkansas Constitution, this court “shall make rules regulating the practice of law.” “The power to regulate the practice of law is also an inherent power of the courts.” Ligon v. Stilley, 2010 Ark. 418, at 3, 371 S.W.3d 615, 623. 1 inThe circuit court decided this case largely on an analysis of section 16-22-211, and while this was in error, the circuit court nonetheless reached the right result. “It is axiomatic that this court can affirm a circuit court if the right result is reached even if it is for a different reason.” Wade v. Ferguson, 2009 Ark. 618, at 4, 2009 WL 4723356. Section 16-22-211 should not control or be the focus of this court’s analysis. Rather the analysis should be based on this court’s precedent and analysis under our authority to regulate the practice of law. An attorney may not serve two masters. If an attorney is an employee of the insurance carrier responsible for paying the legal fees, costs, and any settlement or judgment of an insured in a lawsuit, then that attorney may not represent the insured in that lawsuit. The reason is sim-pie. Such an attorney’s loyalties are divided between the insured, who does not pay the attorney, and the insurance carrier employer, which does. This conflict is inherent in every case where a company lawyer attempts to represent the legal interests of his or her employer’s clients or customers. The attorney-client relationship “cannot exist between an attorney employed by a corporation to practice law for it, and a client of the corporation, for he would be subject to the directions of the corporation and not to the directions of the client.” See Rhode Island Bar Ass’n v. Auto Serv. Ass’n, 55 R.I. 122, 179 A. 139, 145 (1935). Further, an insurance carrier, for example, is a business and is naturally concerned with profits and retaining as much of the insurance premiums as possible, which translates in a lawsuit into a desire to pay as little in fees, costs, and judgments as possible. The insured’s interests are not the same as the insurance company’s, and those interests may vary greatly. For example, an [^insured may be concerned about the effect a settlement may have on his or her business reputation, and may wish to proceed to trial, whereas an insurance carrier may determine it is in its best interest to settle the case and cut the costs. In Arkansas Bar Ass’n v. Block, 230 Ark. 430, 435, 323 S.W.2d 912, 914 (1959) (modified by Creekmore v. Izard, 236 Ark. 558, 565, 367 S.W.2d 419, 423 (1963) (Block modified to provide that a real estate broker may be permitted to fill in blanks in simple standardized real estate forms)), this court stated that a corporation may not practice law, which would be the case if its attorneys were representing the corporation’s clients in legal matters.2 According to the analysis in Block, “[artificial creations,” such as corporations cannot provide the confidential and undivided allegiance due a client by an attorney. Id., 434 S.W.2d at 915. The relation of an attorney to his client is pre-eminently confidential. It demands on the part of the attorney undivided allegiance, a conspicuous degree of faithfulness and [^disinterestedness, absolute integrity and utter renunciation of every personal advantage conflicting in any way directly or indirectly with the interest of his client. Id. at 435, 434 S.W.2d at 915 (quoting State Bar Ass’n of Connecticut v. Connecticut Bank & Trust Co., 145 Conn. 222, 140 A.2d 863, 870 (1958)). Where an attorney is called on to represent the clients of his or her employer, a conflict of interest arises between the duty owed by the attorney to his or her employer and the duty that attorney owes to the client. The conflict is not resolved by consent of the client because the attorney in that setting cannot provide the required undivided allegiance to his or her employer’s clients. Based on our precedent and our authority to regulate the practice of law, I believe that the circuit court correctly disqualified Brown. BROWN and BAKER, JJ., join.  . In Creekmore v. Izard, 236 Ark. 558, 565, 367 S.W.2d 419, 423 (1963), this court stated the following: Therefore we are ruling that the decision in Ark. Bar Ass’n v. Block, 230 Ark. 430, 323 S.W.2d 912, should be modified to provide that a real estate broker, when the person for whom he is acting has declined to employ a lawyer to prepare the necessary instruments and has authorized the real estate broker to do so, may be permitted to fill in the blanks in simple printed standardized real estate forms, which forms must be approved by a lawyer; it being understood that these forms shall not be used for other than simple real estate transactions which arise in the usual course of the broker’s business and that such forms shall be used only in connection with real estate transactions actually handled by such brokers as a broker and then without charge for the simple service of filling in the blanks.