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Attorney Grievance Commission of Maryland v. Pennington6/22/2005
rs. Butler suffered medical conditions that required that settlement negotiations be delayed until a determination was made as to whether or not those medical conditions were the result of the motor vehicle accident that Mrs. Butler was involved. However, once suit was filed the Respondent was aware of the fact that the Statute of Limitations would soon be expiring. The Respondent had an affirmative duty to ensure that the Complaint was properly filed and docketed and not allow the Statute of Limitations to expire on their claim.
"Thus, the Petitioner has proven through clear and convincing evidence that the Respondent violated this Rule.
D. Rule 1.4 Communication
"There appears to be no dispute that the Respondent violated Rule 1.4(a). The facts clearly indicate the Respondent did not disclose to her clients the error made by the Clerk's Office, that their case was dismissed with prejudice after the Statute of Limitations had expired, and that they no longer had a viable personal injury claim. These undisputed facts alone provide clear and convincing evidence to this Court that Respondent violated Rule 1.4(a).
"However, there is a dispute as to whether the Respondent violated Rule 1.4(b). The Respondent contends that, because the Butlers had stated that they would be satisfied to settle their claim for $10,000.00, no additional information was ethically required to be imparted to the Butlers to allow them to make informed decisions regarding the settlement. This Court disagrees. The Butlers did not know the circumstances surrounding their case or the source of the purported `settlement' checks. The Butlers assumed that the settlement checks were from Amica. The Respondent never disclosed the actual source of the funds or the true circumstances and status of their case after it was dismissed with prejudice. The proper course of action would have been for the Respondent to disclose to the Butlers the status of their case and advise them to seek independent counsel. Only in this situation would the Butlers have been reasonably informed to make an informed decision in this matter.
"This Court therefore concludes by clear and convincing evidence that both provisions of Rule 1.4 were violated.
E. Rule 1. 7(b) Conflict of Interest: General Rule
"A conflict of interest arises when the economic interests of a lawyer are at odds with those of the client. See Attorney Grievance Commission v. Roberson, 373 Md. 328, 818 A.2d 1059 (2003). The Respondent provides, by way of example in her brief, the most obvious situation where a lawyer purports to represent both sides in a dispute. While this is the most obvious and probably the most common, it does not present a complete picture of the conflicted relationships the Rule addresses. See Rule 1.7 Comments.
"The initial engagement of the Respondent by the Butlers did not present a conflict of interest. However, an economic conflict of interest between the Respondent and the Butlers arose as soon as the Butlers' Complaint was dismissed with prejudice.
"The Respondent argues that a conflict occurs when an event is economically detrimental to a client is economically beneficial to the lawyer. That is correct and this case provides an illustration of such a situation. The Butlers were injured because their lawyer never provided them the information necessary to determine if they wanted to accept a settlement offer from the Respondent or pursue their claim against her through a legal malpractice action. The Respondent was benefitted economically because she avoided the costs and expenses of defending a possible malpractice claim that was available to the Butlers.
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