Conduct of Weidner, In re
| Court | Supreme Court of Oregon |
| Writing for the Court | Before PETERSON, C.J., CARSON, GILLETTE, VAN HOOMISSEN, FADELEY, and UNIS, JJ., and GRABER; PER CURIAM |
| Citation | 801 P.2d 828,310 Or. 757 |
| Decision Date | 26 November 1990 |
| Parties | In Re Complaint as to the CONDUCT OF Roger G. WEIDNER, Accused. OSB 86-138; SC S36671. |
Page 828
Decided Nov. 26, 1990.
Page 830
[310 Or. 758B] Roger G. Weidner, Portland, argued the cause and filed the briefs pro se for the accused.
Martha M. Hicks, Asst. Disciplinary Counsel, Lake Oswego, argued the cause and filed the brief for the Oregon State Bar.
Page 831
Before PETERSON, C.J., CARSON, GILLETTE, VAN HOOMISSEN, FADELEY, and UNIS, JJ., and GRABER, J. Pro Tem.
[310 Or. 759] PER CURIAM.
In this lawyer discipline case, we determine de novo whether accused violated (1) two disciplinary rules prohibiting conduct involving dishonesty, fraud, deceit or misrepresentation, and knowingly making a false statement of law or fact, and (2) four disciplinary rules regulating conflicts of interest between a lawyer and a client or among multiple clients of the same lawyer. 1
Because the dishonesty or deception charges are not supported by evidence of any knowingly false statement, dishonesty, fraud, deceit, or misrepresentation, we dismiss them, as did the Trial Panel. We also hold that the conflict of interest disciplinary rules depend on the existence of a lawyer-client relationship. Because we are not convinced by the evidence that such a relationship existed between accused and those alleged to have considered themselves his clients in the relevant transactions, we dismiss the conflict of interest charges.
Accused joined Mr. and Mrs. Hartley, Ron Claxton, who was a relative of the Hartley's, and James Sanders to form a trucking-related business corporation. The Hartleys, Claxton, Sanders and accused each received equal shares. During the relevant period, the business was known as Container Transfer Service and also as Marine Transport Company (MTC). Accused served as a corporate officer and performed the company's legal work.
Before events significant to this case occurred, accused was acquainted with George Miljus. Accused once was Miljus' tenant; both were former Portland firefighters. Miljus knew accused was a lawyer but had never employed him as such. Accused knew that Miljus was interested in making secured loans and had lent money to another trucking business.
When a cash-flow problem developed at MTC, accused contacted Miljus seeking a loan to MTC. Miljus knew, [310 Or. 760] at this point, that accused was an officer and a shareholder in MTC.
The transactions giving rise to the Bar's charges were three-sided. MTC sought a loan from Miljus. As part of the security for repayment, MTC offered mortgages on some of its individual shareholders' separate interests in certain real properties. MTC paid these shareholders fees for using their properties as security.
Miljus dictated terms and preconditions to be met before he would loan MTC the funds. Accused performed the tasks required to meet those terms and preconditions. Miljus required that his security be documented. When accused prepared the real property mortgages as part of the loan transactions, he used a legal stationer's preprinted form that provided, among other things, that "mortgagor covenants * * * that he is lawfully seized in fee simple of said premises and has a valid, unencumbered title thereto." The mortgagors did not, however, hold clear titles.
As required by Miljus, accused provided Miljus with title company lot book reports showing the condition of title of the Hartley and Claxton properties, and the tax assessor's appraisal values for them. Miljus reviewed these documents to determine whether the equity values of the properties offered as security, after deducting encumbrances shown in the lot book reports, exceeded by 20 to 25 percent the amount that he was to loan. Bar counsel stipulated that lot book reports were provided to Miljus, that the reports showed the condition of title of the properties, and that the reports were provided before mortgages were executed to secure repayment of the loans. Miljus also personally visited the properties
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to view the nature and condition of improvements.Several loan transactions were entered into over a fourteen-month period. Original loan notes drawing 20 percent interest, executed in 1979 and in July of 1980, were replaced with 24-percent interest notes in December of 1980 and January of 1981, when Miljus agreed to renewal of the loans and refinancing of the principal balances then overdue. Miljus dictated both the 20-percent and the 24-percent interest rates.
Although accused had signed some of the prior notes [310 Or. 761] as Miljus required, individually promising to repay them if MTC defaulted, he did not co-sign the renewal notes, and no one requested that he do so. Miljus testified that, at the time the replacement notes were signed, he was aware that accused had not signed the new notes. There is no evidence of whether the Hartleys knew that accused had not signed the renewal notes; Claxton was not concerned that accused did not sign them.
One part of the renewal and replacement security arrangement involved adding property on Columbia Boulevard offered by Claxton as further security. Accused notarized Claxton's signature executing a mortgage on that property for Claxton, and also "by power of attorney" for Vicki Hansen, who claimed an interest in that property. The Bar and accused disagree as to whether Vicki Hansen's power of attorney, authorizing Claxton to sign for her, was displayed by Claxton to accused at the time accused notarized the Columbia Boulevard mortgages.
When MTC did not repay the 24 percent notes, Miljus hired a lawyer to recover from the loans' security and from accused's professional liability insurance. A 1983 court decision held that Vicki Hansen's interest in the Columbia Boulevard property could not have been encumbered by Claxton because no valid power of attorney existed. Miljus received one of Hartley's properties in part payment but found the equities in the other Hartley and Claxton parcels not worth pursuing.
THE BAR'S CHARGES
DR 1-102, in the form in effect at the relevant time, provided in part:
"(A) A lawyer shall not:
" * * * * *
"(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation." (Emphasis added.)
DR 7-102 provided in part:
"(A) In his representation of a client, a lawyer shall not:
" * * * * *
"(5) Knowingly make a false statement of law or fact." (Emphasis added.)
[310 Or. 762] A. Dishonesty and Deception 2
The Bar charged deception and dishonesty based on three theories: misrepresentation as to condition of title of each parcel by words preprinted on the stationer's mortgage form; misrepresentation that Claxton held an interest in the Columbia Boulevard property and had authority to sign for Vicki Hansen, accomplished by notarizing Claxton's signature for Vicki Hansen "by power of attorney"; and tender of the Columbia Boulevard mortgage to Miljus "when accused had no reason to believe" that Claxton was authorized to sign on Hansen's behalf.
In briefing and argument, the Bar also claimed that accused's failure personally to sign any of the 24-percent replacement notes violated the deception or dishonesty disciplinary rules. This separate argument fails for lack of testimony to support it, from any party to the transaction, that accused was expected to sign or evincing surprise or concern that accused failed to sign. Those who testified said they knew accused did not sign the refinancing notes.
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B. Client Conflicts of Interest
Disciplinary rules regulating conflicts of interest, in effect at the relevant time, provided in part (emphasis has been added):
"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." DR 5-101(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." DR 5-104(A).
"(A) A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of [310 Or. 763] a client will be or is likely to be adversely affected by the acceptance of the proffered employment, except to the extent permitted under DR 5-105(C).
"(B) A lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client, except to the extent permitted under DR 5-105(C).
"(C) in the situations covered by DR 5-105(A) and (B), a lawyer may represent multiple clients if it is obvious that he can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each." DR 5-105.
The words emphasized indicate that the lawyer-client relationship is an element required by each of the conflict of interest disciplinary rules.
The Bar's complaint does not directly or separately allege any specific lawyer-client relationship, but it does allege:
"Both Mr. and Mrs. Hartley and Miljus reasonably assumed that the Accused was acting as their lawyer in handling the note and the mortgage transactions for the benefit of MTC. * * *
"By reason of the Accused being a shareholder and director of MTC, obligating himself jointly on promissory notes to Miljus and failing to disclose to the Hartleys or Miljus the extent of his representation of them. * * *
"By reason of his involvement in the transactions among MTC, the Hartleys and Miljus, all of...
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Crimson Trace Corp. v. Davis Wright Tremaine LLP, (CC110810810
...that the existence of an attorney-client relationship is determined by the reasonable expectations of the client. See In re Weidner, 310 Or. 757, 770, 801 P.2d 828 (1990) (“[T]o establish that the lawyer-client relationship exists based on reasonable expectation, a putative client's subject......
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Bowen v. Smith, No. 91-152
...and as a group. Skarbrevik v. Cohen, England & Whitfield, 231 Cal.App.3d 692, 282 Cal.Rptr. 627 (1991); and In re Conduct of Weidner, 310 Or. 757, 801 P.2d 828 (1990). Conversely, the minority shareholders never independently demonstrated any willingness to be responsible for contribution t......
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In re Gatti
...Or. 560, 569, 784 P.2d 95 (1989). Misrepresentation is a broad term that encompasses the nondisclosure of a material fact. In re Weidner, 310 Or. 757, 762 n. 2, 801 P.2d 828 (1990). A misrepresentation may be a lie, a half-truth, or even silence. In re Greene, 290 Or. 291, 298, 620 P.2d 137......
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Lahn v. Vaisbort, 10CV0382ST
...kind that are traditionally performed by lawyers, or where a putative client has intended that the relationship be created. In re Weidner, 310 Or. 757, 768, 801 P.2d 828 (1990). As to the latter circumstance, the Supreme Court has concluded that"a putative client's subjective, uncommunicate......
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Crimson Trace Corp. v. Davis Wright Tremaine LLP, (CC110810810
...that the existence of an attorney-client relationship is determined by the reasonable expectations of the client. See In re Weidner, 310 Or. 757, 770, 801 P.2d 828 (1990) (“[T]o establish that the lawyer-client relationship exists based on reasonable expectation, a putative client's subject......
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Bowen v. Smith, No. 91-152
...and as a group. Skarbrevik v. Cohen, England & Whitfield, 231 Cal.App.3d 692, 282 Cal.Rptr. 627 (1991); and In re Conduct of Weidner, 310 Or. 757, 801 P.2d 828 (1990). Conversely, the minority shareholders never independently demonstrated any willingness to be responsible for contribution t......
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In re Gatti
...Or. 560, 569, 784 P.2d 95 (1989). Misrepresentation is a broad term that encompasses the nondisclosure of a material fact. In re Weidner, 310 Or. 757, 762 n. 2, 801 P.2d 828 (1990). A misrepresentation may be a lie, a half-truth, or even silence. In re Greene, 290 Or. 291, 298, 620 P.2d 137......
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Lahn v. Vaisbort, 10CV0382ST
...kind that are traditionally performed by lawyers, or where a putative client has intended that the relationship be created. In re Weidner, 310 Or. 757, 768, 801 P.2d 828 (1990). As to the latter circumstance, the Supreme Court has concluded that"a putative client's subjective, uncommunicate......