Conduct of O'Byrne, In re

• Decision Date: 22 January 1985
• Citation: 694 P.2d 955,298 Or. 535
• Parties: In re Complaint as to the CONDUCT OF T. Leonard O'BYRNE. OSB 82-64, SC S30028.
• Court: Oregon Supreme Court

Page 955

694 P.2d 955

298 Or. 535

In re Complaint as to the CONDUCT OF T. Leonard O'BYRNE.

OSB 82-64, SC S30028.

Supreme Court of Oregon,

In Banc.

Argued and Submitted June 5, 1984.

Decided Jan. 22, 1985.

T. Leonard O'Byrne, Portland, argued the cause and submitted the briefs for accused, pro se.

James C. Rhodes, Portland, argued the cause and filed the brief for the Oregon State Bar.

PER CURIAM.

The Oregon State Bar filed a complaint against T. Leonard O'Byrne accusing him of unethical conduct in three separate causes. All the causes arise or result from O'Byrne's relationship with William and Ann Pfefferle, husband and wife. ¹ The Pfefferles were citizens of Canada who wanted to live in the United States. They delivered the sum of $46,000 to O'Byrne to start a business venture to give them "investor status" in order that they might qualify for permanent resident visas. Three years later when the Pfefferles had not received the visas and O'Byrne had not repaid them all their money, a grievance was filed with the Bar. O'Byrne contends that the Pfefferles were not clients but "co-venturers" and the $46,000 was a loan.

The first cause alleges that O'Byrne violated:

"DR 5-101 Refusing Employment When the Interests of the Lawyer May Impair his Independent Professional Judgment.

"(A) Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property or personal interests.

The second cause alleges that O'Byrne violated:

"DR 5-104 Limiting Business Relationships with a Client.

"(A) A lawyer shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise his professional judgment therein for the protection of the client, unless the client has consented after full disclosure.

The third cause alleges that O'Byrne commingled the Pfefferles' funds with his own funds and used their funds for unauthorized purposes and thereby violated:

"DR 9-102 Preserving Identity of Funds and Property of a Client.

"(A) All funds of clients paid to a lawyer or law firm, including advances for costs and expenses, shall be deposited in one of more identifiable trust accounts maintained in the state in which the law office is situated. No funds belonging to the lawyer or law firm shall be deposited there except as follows: [Exceptions do not apply here.] ²

" * * * * *

"(B) A lawyer shall:

" * * * * *

"(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them."

"(4) Promptly pay or deliver to the client as requested by the client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive."

The chief issues which must be decided in this case are: (1) Did an attorney-client relationship exist between O'Byrne and the Pfefferles? (2) Was the $46,000 delivered by the Pfefferles to O'Byrne a loan or trust funds?

The Trial Board found O'Byrne guilty of all three causes of complaint and recommended that he receive a public reprimand and be required to pass a legal ethics examination. Four members of the Disciplinary Review Board found O'Byrne guilty of all three causes and recommended that he be suspended for a period of three years. ³

We find O'Byrne guilty of the first and second causes. We find him not guilty of the third cause. We suspend him from the practice of law for a period of four months.

O'Byrne grew up in Saskatoon, Saskatchewan, Canada. He came to the United States in 1958 to attend Gonzaga University in Spokane, Washington. In addition to attending school, O'Byrne played and officiated professional hockey in the Western International League. ⁴ He graduated from law school and moved to Portland in 1968. After arriving in Portland, O'Byrne continued his association with hockey as an official in a professional league and as the president of an amateur club. Because of this association, he became acquainted with many other Canadians including former professional hockey players Bill Davidson and Con Madigan.

In October 1978, Bill Davidson and his wife introduced William and Ann Pfefferle to O'Byrne. The Pfefferles were Canadian citizens who had a home under construction in Phoenix, Arizona and wanted to move there permanently in the fall of 1979 when their son started college. The Pfefferles had done some investigation toward obtaining permanent resident visas but were confused about the immigration laws and asked the Davidsons if they knew anyone who could help them. Permanent resident visas are commonly referred to as "green cards." The Davidsons were Canadian citizens who had green cards.

O'Byrne, at the first meeting with the Pfefferles in his law office, told them that they would be required to invest a minimum of $40,000 in the United States to qualify for green cards. He also told the Pfefferles that it might look better if they invested $46,000 instead of the minimum. The Pfefferles' investment in the residence in Phoenix would not help to qualify them for permanent resident visas under the immigration laws. They were aware that O'Byrne had previously entered into business ventures with other Canadians including the Davidsons and the Madigans.

Ann Pfefferle made notes of the first meeting in O'Byrne's office. Those notes in part read: "To qualify--$40,000 U.S. minimum--Len [O'Byrne] suggests $46,000? Green cards not far away. He [O'Byrne] has contacts. No risk as he [O'Byrne] will pay us interest on our money until we are qualified."

O'Byrne's version of the first meeting with the Pfefferles as to the $46,000 is as follows:

"We agreed that they [Pfefferles] would put up $46,000 and I would pursue a venture for us. * * * I told the Pfefferles * * * that for me to pursue a business venture would be time-consuming on my part and would take away from other income producing time I would otherwise have in other areas. Therefore, it was clearly intended the $46,000 would be used by me as I needed it while taking the time to get a venture going for us. They were protected by the fact that, if I couldn't get a venture going, I would return their money and pay them maximum interest for the use of it. If the venture was successful, I would provide them with stock or partnership property worth the amount of their investment, and I would assist them with obtaining the necessary immigration documents. * * * " ⁵

On October 31, 1978, after the Pfefferles had returned to Canada, they sent O'Byrne checks totaling $20,000. These checks were made payable to "T. Leonard O'Byrne, Attorney at Law."

In November 1978, O'Byrne according to his own statement spent a "great deal of time and effort" investigating business opportunities in Newport, Oregon as a basis for a venture with the Pfefferles. This included advancing $1,000 to an architect to investigate a particular building. He also "went several times to the Immigration and Naturalization Service and obtained information on how the Pfefferles could go about qualifying as an 'investor,' in order to be sure I structured our venture in the proper way." On November 27, 1978, O'Byrne wrote to William Pfefferle acknowledging receipt of the $20,000 and stating that it was "deposited in my attorney-at-law savings account."

In December, 1978, O'Byrne called William Pfefferle in Canada and told him that there might be some difficulty with obtaining the green cards.

On January 11, 1979, O'Byrne wrote to the Pfefferles that he had been "working with the immigration people on the green cards." He wrote to them again on February 6, 1979, saying that he had conducted "some rather lengthy investigation and research" into the immigration matter and that they should send the additional contribution of $26,000 to "our venture." On March 16, 1979, the Pfefferles forwarded a United States Dollar draft in the amount of $26,000 to "Mr. T. Leonard O'Byrne--Attorney at Law." Ten days later O'Byrne acknowledged receipt of the draft and forwarded to the Pfefferles his promissory note in the amount of $46,000. ⁶ The letter of transmittal in part reads: "This is simply security for you until such time as I have finalized the documents. It is specifically understood that this note will be surrendered to me in return for and upon the issuance of stock in the corporation or other satisfactory documentation to be used for the purposes of qualifying you as an investor under the immigration laws."

On April 19, 1979, O'Byrne wrote to the Pfefferles stating that he had missed a couple of appointments with "his immigration person" because of scheduling difficulties. He expressed a desire to get "our venture" underway because he felt an obligation "to not only handle your immigration matter but also to make you a decent return on your investment." He also indicated that he had put money into "a couple of things" and then changed his mind, but would not charge the Pfefferles for them.

All of the previously mentioned letters to the Pfefferles were written on "T. Leonard O'Byrne Attorney at Law" stationery.

The record does not disclose any correspondence from O'Byrne to the Pfefferles for over a year between April of 1979 and May of 1980. ⁷ However, the principals were in touch by telephone and held at least one conference in Portland. ⁸ O'Byrne contends that during this period of time, he was busy trying to start a business venture for the Pfefferles. He considered and investigated the building of a motel in the Government Camp area and later unsuccessfully attempted to "get the Pfefferles involved" in a motel in Newport in which he had an interest. By this time, interest rates were rising rapidly and the development business in Oregon was on the down...