Rapport, Matter of
| Decision Date | 24 September 1992 |
| Citation | 588 N.Y.S.2d 436,186 A.D.2d 344 |
| Parties | In the Matter of Carmi RAPPORT and Carl G. Whitbeck, Jr., Attorneys and Counselors-at-Law. Committee on Professional Standards, Third Judicial Department, Petitioner; Carmi Rapport and Carl G. Whitbeck, Jr., Respondents. |
| Court | New York Supreme Court — Appellate Division |
Mark S. Ochs, Albany, for petitioner.
Carroll J. Mealey, Albany, for respondents.
Before MIKOLL, J.P., and YESAWICH, MERCURE, MAHONEY and CASEY, JJ.
Respondents are partners in a law firm with its main office located in the City of Hudson in Columbia County. Respondent Rapport was admitted to practice by this court in 1958; respondent Whitbeck was admitted by this court in 1975.
Petitioner, the Committee on Professional Standards, accuses respondents of having engaged in improper client solicitation. After a hearing, the referee sustained the charge but dismissed the last of five supporting specifications.
Petitioner moves to confirm the referee's report while respondents have submitted an affidavit in opposition urging rejection of the report and dismissal of the petition.
In 1990, through discussions with one Laurie Pace, the daughter of a client of their firm, respondents learned about L-Tryptophan poisoning and that sufferers thereof were seeking legal representation. As noted by the referee, L-Tryptophan is an over-the-counter food supplement taken for a variety of disorders. It occurs naturally, but is also manufactured by a small number of companies in Japan. In about 1988, a batch of this normally benign product apparently was contaminated in the manufacturing process and, as a result, several hundred people in the United States became ill in varying degrees of severity. Pace suffered from the poisoning and became the leader of a local L-Tryptophan poisoning support group.
In July 1990, respondents' law firm retained Pace as a consultant on L-Tryptophan poisoning matters. She was also expected to recommend the firm to potential L-Tryptophan clients but her remuneration by the firm was not explicitly tied to such referrals. At the time, the firm had no L-Tryptophan clients and no expectation of being retained by L-Tryptophan poisoning victims, absent Pace's efforts.
Over the next few months, Pace did compile a wealth of material on L-Tryptophan poisoning for the firm. More significantly, 14 prospective clients approached the firm because of Pace's recommendations and ten signed retainer letters with the firm.
Pace's consultancy was only loosely supervised, if at all. She worked out of her home and submitted vouchers for payment which were only cursorily reviewed. Her compensation quickly began to approach the $25,000 annual maximum set forth in the July 1990 agreement and her demands for more money became unrelenting.
Respondent Rapport's growing unease over the financial and ethical questions surrounding the firm's relationship with Pace finally led to a discussion with ethics professors in New York City in early October 1990, a meeting with Pace, and a letter to Pace terminating the relationship on October 19. The firm also sent letters to its L-Tryptophan poisoning clients advising them that the firm would no longer be able to represent them.
The termination of the consultancy resulted in a financial loss to the firm of about $22,000, including the $17,000 plus paid to Pace and expenditures for trips by firm attorneys to Boston to discuss L-Tryptophan poisoning with doctors and to Colorado to meet with an L-Tryptophan subgroup of the American Trial Lawyers Association. In addition, the firm never commenced any L-Tryptophan litigation. Finally, Pace's father discontinued his relationship with the firm.
The possibility that Pace might approach petitioner with a complaint about the soured relationship prompted respondent Rapport to voluntarily approach petitioner first. He met with the chief attorney in November 1990 and provided petitioner with a letter narrative of the relationship in January 1991. Petitioner's subsequent investigation and examinations under oath of respondents and several other firm attorneys led to the instant petition.
The single charge of the petition accuses respondents of violating the Code of Professional Responsibility, DR 1-102(A)(5) and DR 2-103(a) (b) and (c) (22 NYCRR 1200.3[a][5]; 1200.8[a], [b], [c] and Judiciary Law § 482 by soliciting employment from persons who had not sought legal advice; compensating a person to recommend or obtain employment by a client; rewarding said individual for making a recommendation resulting in employment by a client; and requesting a person to recommend or promote the use of respondents' services.
We confirm the referee's report sustaining the charge of improper solicitation.
Respondents argue that petitioner has failed to meet its burden of proof because no direct evidence of improper solicitation was offered, for example, by evidence of written agreement or through testimony by Pace or solicited clients, and because respondents testified that solicitation was not a condition or requirement of Pace's employment. However, we conclude that the charge of solicitation is sufficiently supported by proof of the circumstances and the inferences derived therefrom surrounding and undergirding the Pace relationship (see, e.g., Matter of Fisch, 269 App.Div. 74, 54 N.Y.S.2d 126; Matter of Murphy, 254 App.Div. 770, 4 N.Y.S.2d 813; Matter of Bluhm, 254 App.Div. 566, 2 N.Y.S.2d 783). Also, respondents' denials are not dispositive ( see, e.g., Matter of Von Wiegen, 146 A.D.2d 901, 903, 537 N.Y.S.2d 76, motion for leave to appeal denied, 74 N.Y.2d 603, 543 N.Y.S.2d 396, 541 N.E.2d 425).
Respondents also argue that an inference of improper solicitation should not be made from the firm's arrangement with Pace because the arrangement did not implicate the evils the curtailments on solicitation supposedly combat. Those evils have been variously described as stirring up litigation, inappropriate pressures on the solicited individual (including undue influence, intimidation, and overreaching), presentation of biased information to the potential client (including one-sided presentations and information clouded by the pecuniary self-interest of the solicitor), vexatious conduct, a demoralizing effect on the profession of law, and an unseemly rivalry among attorneys in seeking clients (see, e.g., Matter of Clark, 184 N.Y. 222, 233, 77 N.E. 1; Matter of Von Wiegen, 101 A.D.2d 627, 628, 474 N.Y.S.2d 147, modified, 63 N.Y.2d 163, 481 N.Y.S.2d 40, 470 N.E.2d 838, cert. denied, 472 U.S. 1007, 105 S.Ct. 2701, 86 L.Ed.2d 717; Matter of Gondelman, 225 App.Div. 462, 466, 233 N.Y.S. 343; Matter of Rothbard, 225 App.Div. 266, 268, 232 N.Y.S. 582; Roth, Confronting Solicitation of Mass...
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