Ankerman v. Mancuso, 17086.

• Citation: 271 Conn. 772,860 A.2d 244
• Decision Date: 16 November 2004
• Docket Number: No. 17086.,17086.
• Court: Connecticut Supreme Court
• Parties: William L. ANKERMAN v. Jack C. MANCUSO.

860 A.2d 244

271 Conn. 772

William L. ANKERMAN v. Jack C. MANCUSO.

No. 17086.

Supreme Court of Connecticut.

Argued September 9, 2004.

Decided November 16, 2004.

James Colin Mulholland, Salem, for the appellant (defendant). Darcy W. Ankerman, with whom was William L. Ankerman, pro se, for the appellee (plaintiff).

BORDEN, NORCOTT, KATZ, PALMER and VERTEFEUILLE, Js.

VERTEFEUILLE, J.

In this certified appeal, the defendant, Jack C. Mancuso, appeals from the judgment of the Appellate Court reversing the judgment of the trial court that was rendered in his favor. See Ankerman v. Mancuso, 79 Conn.App. 480, 830 A.2d 388 (2003). The defendant claims that the Appellate Court improperly determined that a violation of rule 1.8(j) of the Rules of Professional Conduct¹ by the plaintiff, William L. Ankerman, does not bar enforcement of a promissory note executed by the defendant for payment of legal fees for services rendered by the plaintiff. See id., at 487, 830 A.2d 388. We affirm the judgment of the Appellate Court.

The following facts and procedural history, as noted in the record and in the Appellate Court's opinion, are relevant to our resolution of this appeal. At all relevant times, the plaintiff was an attorney licensed to practice law in Connecticut. The defendant retained the plaintiff as his attorney from October, 1988, to August, 1991. The plaintiff brought the present action to recover legal fees due to him under a promissory note executed by the defendant. The plaintiff sought only to obtain judgment on the promissory note and did not seek to fore-close the mortgage that secured the note. The defendant originally had retained the plaintiff to represent him in two separate actions: a paternity action and an action involving title to property at 17-19 Keller Avenue in Enfield (Keller Avenue property).

In July, 1990, the plaintiff and the defendant agreed that the defendant would sign a promissory note to evidence the obligation to pay the legal fees that he owed to the plaintiff as of June 4, 1990, and that the defendant also would secure the note with a mortgage. The defendant thereafter signed a promissory note to the plaintiff for payment of fees accrued as of that date and also executed a mortgage on the Keller Avenue property securing the note. At the time that the note was executed, the plaintiff was representing the defendant in an appeal from a judgment concerning title to the Keller Avenue property, in which the defendant had been ordered to transfer one half of the title to another party. When the plaintiff sent the note and mortgage to the defendant to be signed, he included a letter encouraging the defendant to consult another attorney before signing the note and mortgage in compliance with rule 1.8(a)(2) of the Rules of Professional Conduct,² which governs transactions between attorneys and their clients. The defendant returned the executed note and mortgage, along with the recording fee, to the plaintiff in August, 1990. In December, 1990, the appeal involving the title to the Keller Avenue property was resolved against the defendant and he was ordered to convey full title to the property to the other party.³ The plaintiff ceased representing the defendant on August 12, 1991. In September, 1991, the defendant wrote a letter to the plaintiff demanding the removal of the mortgage on the Keller Avenue property. The mortgage was not removed and remains on the property as a second mortgage.

"On February 25, 1997, the plaintiff brought [the present] action in a single count complaint. The defendant filed several special defenses.... The case proceeded to trial, and the court issued an oral decision in favor of the defendant on the complaint.... The [trial] court found that the defendant had not paid the plaintiff the $6218.81 incurred for legal services rendered. The [trial] court then turned to the first special defense, which alleged a violation of rule 1.8 of the Rules of Professional Conduct as a bar to the enforcement of the note and mortgage, and found that the plaintiff had violated the ethical rule by taking a note secured by a mortgage on property that was the subject of the appeal he was prosecuting on the defendant's behalf. The [trial] court concluded that the plaintiff had violated rule 1.8 and the public policy underlying that rule [and thus found that the note and mortgage were unenforceable]." Id., at 482-83, 830 A.2d 388.

The trial court thereafter rendered judgment for the defendant, and the plaintiff appealed from that judgment to the Appellate Court, claiming that the trial court improperly had concluded that the plaintiff's violation of rule 1.8(j) barred enforcement of the promissory note and mortgage executed by the defendant. The Appellate Court reversed in part the judgment of the trial court, concluding that the plaintiff's ethical violation of the Rules of Professional Conduct was not a legally sufficient basis upon which to preclude the enforcement of an otherwise valid promissory note and mortgage. Id., at 488, 830 A.2d 388.

We thereafter granted the defendant's petition for certification to appeal limited to the following issue: "Did the Appellate Court properly conclude that the trial court improperly refused to enforce a secondary mortgage loan transaction made by an attorney with a client despite its finding that the transaction violated the public policy underlying rule 1.8(j) of the Rules of Professional Conduct?" Ankerman v. Mancuso, 266 Conn. 925, 926, 835 A.2d 471 (2003). This appeal followed.

After reviewing the record and the parties' briefs, and after considering the claims of the parties during oral argument in this court, we now conclude that the certified issue should be rephrased to more precisely reflect the issue before us. See, e.g., Stamford Hospital v. Vega, 236 Conn. 646, 648-49 n. 1, 674 A.2d 821 (1996) (this court may rephrase certified questions in order to render them more accurate in framing issues that case presents). Accordingly, we consider the following revised question: "Did the Appellate Court properly conclude that the trial court improperly refused to enforce a promissory note made by a client in favor of his attorney despite the trial court's finding that the attorney's acceptance of the mortgage securing the promissory note violated the public policy underlying rule 1.8(j) of the Rules of Professional Conduct?" We affirm the judgment of the Appellate Court, albeit on different reasoning.

The reframed certified question requires us to determine whether a promissory note from a client to an attorney stating an obligation to pay attorney's fees is enforceable if it is secured by a mortgage of questionable ethical posture. Whether the Appellate Court properly determined that a promissory note is enforceable under these circumstances presents a question of law over which our review is plenary. Olson v. Accessory Controls & Equipment Corp., 254 Conn. 145, 156, 757 A.2d 14 (2000).

We begin our analysis with a brief review of the fundamental difference between a promissory note and a mortgage securing the promissory note. "A note and a mortgage given to secure it are separate instruments, executed for different purposes...." (Internal quotation marks omitted.) New England Savings Bank v. Bedford Realty Corp., 238 Conn. 745, 759, 680 A.2d 301 (1996). A promissory note is simply "a written contract for the payment of money." Appliances, Inc. v. Yost, 181 Conn. 207, 210, 435 A.2d 1 (1980). A mortgage, however, is "[a] conveyance of title to property that is given as security for the payment of a debt...." Black's Law Dictionary (7th Ed. 1999).

A promissory note and a mortgage securing the note thus give rise to separate causes of action. "[I]n this [s]tate action for foreclosure of the mortgage and upon the note are regarded and treated, in practice, as separate and distinct causes of action...." (Internal quotation marks omitted.) New England Savings Bank v. Bedford Realty Corp., supra, 238 Conn. at 759, 680 A.2d 301. It is well established in Connecticut that a creditor may pursue either cause of action against a debtor. "[A creditor] has two separate and distinct causes of action against a defaulting mortgagor. A [creditor] may pursue an action at law for the amount due on the promissory note, or it may pursue its remedy in equity and foreclose on the mortgage." (Internal quotation marks omitted.) Federal Deposit Ins. Corp. v. Voll, 38 Conn.App. 198, 206, 660 A.2d 358, cert. denied, 235 Conn. 903, 665 A.2d 901 (1995).

With these principles in mind, we turn to the text of rule 1.8(j) of the Rules of Professional Conduct, which, by its terms, prohibits an attorney from acquiring a proprietary interest in litigation in which he or she represents a client: "A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may: (1) Acquire a lien granted by law to secure the lawyer's fee or expenses; and (2) Contract with a client for a reasonable contingent fee in a civil case." Rule 1.8(j) "states the traditional general rule that lawyers are prohibited from acquiring a proprietary interest in litigation. This general rule ... has its basis in common law champerty and maintenance...." Rules of Professional Conduct 1.8, commentary. "Champerty is simply a specialized form of maintenance in which the person assisting another's litigation becomes an interested investor because of a promise by the assisted person to repay the investor with a share of any recovery." C. Wolfram, Modern Legal Ethics (1986) § 8.13, p. 490; see also Richardson v. Rowland, 40 Conn. 565, 570 (1873). Rule 1.8 is intended to avoid conflicts of interest between attorneys and clients. Specifically, the rule addresses the concern that "the lawyer will not seek and accept client guidance on major decisions in the lawsuit because of the lawyer's own economic...