In re Strouse

• Decision Date: 15 July 2011
• Docket Number: No. 10–053.,10–053.
• Citation: 2011 VT 77,34 A.3d 329
• Parties: In re Margaret STROUSE, Esq.
• Court: Vermont Supreme Court

2011 VT 77

34 A.3d 329

In re Margaret STROUSE, Esq.

No. 10–053.

Supreme Court of Vermont.

July 15, 2011.

Michael Kennedy, Disciplinary Counsel, Burlington, for Petitioner.

Joel B. Harris and Ross Feldmann of Gravel and Shea, Burlington, for Respondent.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

PER CURIAM.

¶ 1. In this case, we review, on our own motion, a decision of a Hearing Panel of the Professional Responsibility Board, which concluded that respondent, Margaret Strouse, engaged in deceit, violating Rule 8.4(c) of the Vermont Rules of Professional Conduct. The Panel imposed a sanction suspending respondent from the practice of law for six months. By our order, the Office of Disciplinary Counsel has been designated appellant. Disciplinary counsel argues that we should uphold the finding of a violation of the disciplinary rule, but that the sanction is too lenient, and respondent should be disbarred. Respondent argues that the finding of a violation should be reversed, and if upheld, the sanction should be reduced to a reprimand. We affirm the finding of a violation and impose a public reprimand.

¶ 2. The relevant facts are not in dispute. Respondent was admitted to practice law in Vermont in 2001 and was hired to work for a Burlington law firm in January 2006. In November 2007, a client hired the firm to represent her in a divorce from her then-husband. In early February 2008, before becoming aware of her firm's representation of the client, respondent met the client's husband and began dating him. On or about February 19, 2008, respondent saw her firm's client list and realized that she was dating the husband of her firm's client and that the firm was representing the client in a divorce proceeding against the husband. Within several hours of discovering this information, respondent informed the firm's senior attorney that she had recently become romantically involved with the husband. Respondent requested that the firm create a “conflict wall,” which she believed would prevent her from participating in any representation of the client and allow her to continue dating the husband.

¶ 3. The day after meeting with respondent to discuss her conflict, the senior attorney left respondent a message indicating that respondent's employment would be terminated if she refused to end her relationship with the husband. The next day, respondent told the senior attorney that she had terminated the relationship. In reliance on this representation, the senior attorney disclosed the situation to the client. After consulting with another lawyer, and relying on the senior attorney's representation that respondent had terminated the relationship with her husband, the client decided to continue using the firm to represent her in the divorce.

¶ 4. However, respondent did not entirely cease contact with the husband. On February 26, 2008, she ordered a gift of chocolates to be delivered to the husband. At some point between February 21 and March 8, 2008, respondent and her children spent time with the husband and his children at a local health club pool. Respondent and the husband were also together on other occasions during this period.

¶ 5. On March 8, 2008, the client left the state to seek treatment for her health. The client and her husband had previously negotiated an agreement stating that the husband could move into the marital home to care for the children in the client's absence. On the same day that the client left for treatment, respondent and her children joined the husband and his children at the marital home and spent the night. Members of the client's family learned about respondent's stay and contacted the senior attorney about it on March 11, 2008.

¶ 6. The senior attorney confronted respondent about her overnight stay with the husband, and respondent admitted to it and admitted that her relationship with the husband had resumed. The senior attorney immediately terminated respondent's employment with the firm. Respondent and her children continued to live with the husband for several months after the termination of her employment.

¶ 7. In its decision and order addressing respondent's conduct, the Panel found that respondent's relationship with the husband had been romantic in character at all times. The Panel also concluded that actual harm—stress on the client and her children—had resulted from the relationship and that the relationship had created the potential for more serious harm. Furthermore, the Panel was concerned that respondent did not acknowledge the “wrongful nature” of her conduct and felt that she was either evasive or nonresponsive to questions about the details of her relationship with the husband. Ultimately, the Panel concluded that during her relationship with the husband, respondent had engaged in deceit in violation of Rule 8.4(c) and suspended her from the practice of law for a period of six months.

¶ 8. This Court reviews a disciplinary hearing panel's findings of fact under a clearly erroneous standard. A.O. 9, Rule 11(E); In re Farrar, 2008 VT 31, ¶ 5, 183 Vt. 592, 949 A.2d 438 (mem.). A panel's findings are upheld if “clearly and reasonably supported by the evidence,” whether the findings are purely factual or mixed law and fact. In re Blais, 174 Vt. 628, 629, 817 A.2d 1266, 1269 (2002) (mem.) (quotations omitted). We give deference to the recommendations of a disciplinary panel but use our own discretion and make our own determination as to which sanctions are appropriate for violations of the Rules of Professional Conduct. Id. at 630, 817 A.2d at 1269; Farrar, 2008 VT 31, ¶ 5, 183 Vt. 592, 949 A.2d 438.

¶ 9. On appeal, disciplinary counsel argues that respondent violated Rule 8.4(c) because her conduct involved deceit and that, based on the American Bar Association standards and aggravating factors, this Court should disbar respondent. Respondent, in turn, claims that her conduct did not constitute deceit and that, at most, she should have been reprimanded, not subjected to suspension or disbarment. We agree with the Panel's decision that respondent's conduct involved deceit and constitutes a violation of Rule 8.4(c); however, we hold that a public reprimand, not disbarment or suspension, is the appropriate sanction.

¶ 10. It is professional misconduct for a lawyer to “engage in conduct involving dishonesty, fraud, deceit or misrepresentation.” V.R.Pr.C. 8.4(c). The rule is meant to reach only conduct “that reflects on an attorney's fitness to practice law.” In re PRB Docket No. 2007–046, 2009 VT 115, ¶ 12, 187 Vt. 35, 989 A.2d 523.

¶ 11. We begin with an evaluation of the ethical difficulty caused by respondent's conduct. Rule 1.7 of the Rules of Professional Conduct prohibits a lawyer from representing a client without the client's written consent if the representation involves a “concurrent conflict of interest.” V.R.Pr.C. 1.7(a). Such a conflict exists if “there is a significant risk that the representation of one or more clients will be materially limited ... by a personal interest of the lawyer.” Id. 1.7(a)(2). In general, if one lawyer in a firm would be prohibited by Rule 1.7 from representing a client, all are prohibited. See id. 1.10(a). This rule is subject to an exception, however, when the prohibition “is based on a personal interest of the prohibited lawyer” if that interest “does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.” Id. The Comment explains the exception as follows:

The rule in paragraph (a) does not prohibit representation where neither questions of client loyalty nor protection of confidential information are presented. Where one lawyer in a firm could not effectively represent a given client because of strong political beliefs, for example, but that lawyer will do no work on the case and the personal beliefs of the lawyer will not materially limit the representation by others in the firm, the firm should not be disqualified. On the other hand, if an opposing party in a case were owned by a lawyer in the law firm, and others in the firm would be materially limited in pursuing the matter because of loyalty to that lawyer, the personal disqualification of the lawyer would be imputed to all others in the firm.

Id., cmt. [3].

¶ 12. Under Rule 1.7(a)(2), there is a conflict of interest if the firm's senior attorney represented the client in her divorce and, at the same time, another attorney in the firm has a romantic relationship with the client's husband. Such a situation raises serious concerns about loyalty to the client and misuse of confidential information. See id., cmts. [6], [10]. This conflict is closer to the hypothetical from Comment [3] where disqualification is imputed to all firm members, than to the hypothetical where it is not. The situation created a significant material risk that the client's representation would be limited. Continuing representation of the client would have risked violating Rule 1.7(a)(2) had the client's representation continued once respondent recommenced the relationship with the husband.

¶ 13. We recognize that the conflict of interest was not present at the onset of the representation of the client. In these circumstances, the lawyer is required to withdraw from representing the client if “the representation will result in violation of the rules of professional conduct.” Id. 1.16(a)(1); see also id. 1.7, cmt. [3]. We also recognize that in some instances a lawyer may seek consent for continuation of representation despite a conflict of interest. See id. 1.7(b). We doubt that such consent would apply where the client wife was in direct litigation with the husband, but, in any event, the senior attorney chose not to seek consent.

¶ 14. This brings us to whether respondent engaged in “dishonesty, fraud, deceit or misrepresentation” by failing to inform the senior attorney that her relationship with...