In re Rachal
| Decision Date | 10 June 2021 |
| Docket Number | No. 17-BG-766,17-BG-766 |
| Court | D.C. Court of Appeals |
| Parties | IN RE Anthony M. RACHAL III, Respondent. A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 229047) |
Anthony M. Rachal III, pro se.
Joseph N. Bowman, Assistant Disciplinary Counsel, with whom Hamilton P. Fox, III, Disciplinary Counsel, and Julia L. Porter and Jennifer P. Lyman, Senior Assistant Disciplinary Counsel, were on the brief, for the Office of Disciplinary Counsel.
Before Blackburne-Rigsby, Chief Judge, and Ruiz and Fisher* , Senior Judges.
The Board on Professional Responsibility found that respondent Anthony M. Rachal III violated District of Columbia Rules of Professional Conduct 1.3(b)(2) and 1.7(b)(1), (2), and (3) and recommended that he be suspended from the practice of law for three months and required to complete six hours of continuing legal education courses approved by Disciplinary Counsel, including a course on the representation of multiple clients in civil cases. We accept the Board's determination that respondent violated Rules 1.3(b)(2) and 1.7(b)(1) but impose a different sanction.
Patrick Ridley and his mother, Madlyn Ridley-Fisher, were the sole beneficiaries of the Virginia P. Ridley Trust. Along with Harold Fisher — who is Ms. Ridley-Fisher's husband and was a creditor of the trust — they retained respondent to, among other things, remove Brenda Hopkins as trustee, secure the appointment of a new trustee, and compel the trustee to pay debts owed to Mr. Fisher and distribute trust assets to the beneficiaries. The Hearing Committee found that respondent did not explain potential conflicts of interest to the clients before they entered this agreement or "seek a waiver of conflicts" from them. Nonetheless, respondent acted on behalf of all three clients by filing a complaint in Superior Court that requested the relief described in the retainer agreement.
In November 2010, the court entered a consent order permitting Ms. Hopkins to resign, appointing Brian Hopson as the new trustee, and requiring Mr. Hopson to refrain from distributing trust assets without court approval until the parties resolved Ms. Hopkins’ counterclaims for unpaid trustee fees and related debts. The court subsequently presided over a trial and found for Ms. Hopkins on all pending matters, although it awarded her less in damages than she initially sought.
After the trial court articulated these conclusions in an oral ruling, but before it reduced its decision to writing, Mr. Fisher emailed Mr. Hopson, with his wife's approval, and requested reimbursement for expenses he had incurred on behalf of the trust. Mr. Hopson obliged, paying Mr. Fisher $9,613.34, but later learned that Patrick Ridley objected to the disbursement. Respondent also objected. Respondent demanded that Mr. Fisher and Ms. Ridley-Fisher (the "Fishers") return the funds, asked Mr. Hopson to make the same request of them, and threatened to file a "praecipe" with the court seeking corrective action if the Fishers refused. The Fishers did refuse and informed respondent that they did not want him to file the praecipe. He filed it anyway.
The praecipe stated that the Fishers had obtained trust assets in violation of the consent order and that Trustee Hopson would not have disbursed those funds "but for the misrepresentations to him that the parties were all in agreement." Contrary to respondent's suggestion that the praecipe simply provided an "update [to] the court", the document also stated that "Plaintiff Patrick S. Ridley and Trustee Brian Hopson request that the court enter an Order of Judgment directing the return of these funds ...." Ultimately, the court "denied" appellant's filing, correctly noting that "a ‘praecipe’ is not an appropriate means for seeking court action." But before the trial court issued that order, the Fishers filed a pro se opposition.
In July 2014 Disciplinary Counsel filed a specification of charges alleging that respondent had violated District of Columbia Rules of Professional Conduct. After a hearing, the Committee determined that although Disciplinary Counsel failed to establish that respondent violated Rules 1.3(b)(1) () and 8.4(d) (), he had proven by clear and convincing evidence that respondent violated Rule 1.3(b)(2), which prohibits intentionally prejudicing a client's interests, and Rules 1.7(b)(1), (2), and (3), all of which concern conflicts of interest. The Board "concur[red]" with the Committee's findings concerning the rule violations as well as the sanction it recommended.
Respondent raises both substantive and procedural challenges to the Board's conclusion that he violated Rules 1.3(b)(2) and 1.7(b)(1), (2), and (3). In assessing his arguments, we must defer to the Board's factual findings "unless they are unsupported by substantial evidence of record" but will conduct a de novo review of its findings of "ultimate facts" — that is, facts that have "a clear legal consequence" — as well as its conclusions of law. In re Bradley , 70 A.3d 1189, 1193-94 (D.C. 2013) (per curiam) (internal quotation marks and citations omitted).
Procedurally, respondent argues that the Committee "suppressed" the testimony of two of his witnesses, Brian Hopson and Patrick Ridley. The record tells a different story, however. When scheduling problems arose, respondent decided not to call Ridley and agreed that Hopson's written statement provided an adequate substitute for his oral testimony. Ridley also provided a written statement and, contrary to respondent's allegations, the Committee not only reviewed both statements but also expressly cited each one in its report and recommendation.
The Board did not err in denying either respondent's "Motion to Dismiss and Vacate [the Committee's] Report and Recommendation" or his "Renewed [ ] Motion to Dismiss." Both motions complained that the Committee failed to issue its report within 120 days of the hearing, as required by D.C. Bar R. XI, § 9(a) and Board Rule 12.2, and argued that this failure, among other things, violated due process and made the Committee's findings less reliable. We have previously refused to dismiss charges under Bar R. XI, § 9(a) because the rule is "directory, rather than mandatory," In re Morrell , 684 A.2d 361, 370 (D.C. 1996), and respondent offers no reason to treat Board Rule 12.2 differently. Moreover, we disagree with respondent's bald assertion — without specific argument or support — that the Committee's report is less reliable, and therefore deserves less deference, due to the delay. Cf. id. ().
Turning to the merits, we focus first on the Board's determination that respondent violated Rule 1.7(b)(1), (2), and (3). In brief, those provisions forbid lawyers from representing multiple clients with conflicting interests unless the lawyer obtains their informed consent and "reasonably believes" that he or she can provide "competent and diligent representation." See D.C. R. Prof'l Cond. 1.7(b)(1), (2), (3) and (c).
The Board found that this case presented likely potential conflicts at the outset because one client (Mr. Fisher) was a creditor of the trust while the other two (Ms. Ridley-Fisher and her son Mr. Ridley) were beneficiaries, and all of them were seeking funds from the same limited trust assets. The Board concluded that respondent did not discuss with them how their interests might diverge and obtain their express waiver before undertaking to represent them jointly in litigation against the trustee. Respondent contends that the Board's findings are flawed because the clients: (1) were well aware of their respective positions from multiple pre-engagement meetings with counsel; (2) entered into a written retainer agreement that expressly retained respondent to remove and substitute the trustee, challenge the trustee's fee request, pay the debt owed to one client (Mr. Fisher), and distribute assets to the beneficiaries (Ms. Ridley-Fisher and her son Mr. Ridley); (3) waived any potential conflict by individually signing a verified complaint against the trustee that set out the underlying facts that could arguably give rise to a potential conflict (he calls this "an expressed waiver"); and (4) impliedly continued to consent through a three-year course of conduct. He argues that each client's waiver was reasonable as they had a common objective and benefitted financially from respondent's joint representation as it allowed them to share the cost of attorney fees which were to be paid by them, not on a contingency basis or from trust funds (as the Board mistakenly thought).
We do not finally decide the question related to a waiver of potential conflicts at the outset of the representation because (1) we agree that respondent violated Rules 1.3(b)(2) and 1.7(b)(1) in light of his actions once actual conflicts developed in the course of the representation and (2) we have concluded that resolution of that question would not change our sanction. We therefore refrain from deciding whether respondent violated Rules 1.7(b)(2) and (3).
Respondent clearly violated Rule 1.7(b)(1) when an actual dispute arose among his clients. Once Mr. Ridley demanded that the Fishers return the payment from trust funds, and the Fishers asserted their right to keep it, respondent should have realized that his clients had actually developed adverse positions in the same matter. Even if he obtained informed consent, respondent could not continue representing both Mr. Ridley and the Fishers, as respondent could not "reasonably" believe that he...
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In re Mensah
...permit a somewhat more flexible approach to the appropriate sanction in cases of reckless misappropriation. See, e.g. , In re Rachal , 251 A.3d 1038, 1041 (D.C. 2021) (court does not defer to Board on Professional Responsibility on issues of law). The negotiated-discipline process is design......