Weiner, Matter of

• Citation: 586 P.2d 194,120 Ariz. 349
• Decision Date: 25 October 1978
• Docket Number: No. SB-137,SB-137
• Parties: In the Matter of a Member of the State Bar of Arizona, Sidney Bernard WEINER, Respondent.
• Court: Arizona Supreme Court

Page 194

586 P.2d 194

120 Ariz. 349

In the Matter of a Member of the State Bar of Arizona, Sidney Bernard WEINER, Respondent.

No. SB-137.

Supreme Court of Arizona, In Banc.

Oct. 25, 1978.

Gust, Rosenfeld, Divelbess & Henderson by James F. Henderson, Phoenix, State Bar Counsel.

Clark L. Derrick and Goldstein, Flynn & Mason, Ltd. by John J. Flynn and Thomas C. Mason, Phoenix, for respondent.

HAYS, Justice.

Respondent Sidney B. Weiner was charged with unethical conduct arising out of his dealings with John E. Dennerline and Mary B. Dennerline. After hearings before a Special Administrative Committee, the Committee made findings and recommended that Weiner be disbarred. The Disciplinary Board adopted the findings of the Administrative Committee, with one minor modification, and also recommended disbarment.

Pursuant to 17A A.R.S. Supreme Court Rules, rule 36, the matter was transmitted to the Supreme Court. Respondent filed objections and an opening brief.

The factual background as viewed by the Administrative Committee and the Disciplinary Board is set out in the findings as follows:

"FINDINGS

"1. At all times relevant hereto Weiner was involved both in the law practice, in providing investment advice to persons who were also his legal clients and in investing both as agent for his clients and for his own account.

"2. He was a stockholder, officer, director, employee and attorney for several business corporations which he used as vehicles for investment for his clients and for his own account.

"3. These corporations had offices adjacent to Weiner's law office and with connecting doors. They had employees common to Weiner in the practice of law. "4. Mary (Mrs. John) Dennerline received approximately $225,000 from the sale of a family business. She and her husband desired to invest the funds in some enterprises which could provide a greater rate of return than ordinary savings accounts. They consulted with Jack Hilfinger, a private detective who was employed either by Weiner or by one or more corporations controlled by him.

"5. Hilfinger recommended that the Dennerlines talk to Weiner who had knowledge of investment opportunities and was currently involved in a restaurant enterprise called 'Butler's Pantry.'

"6. The Dennerlines made an appointment with Weiner and went to his home where Weiner explained to them the nature of the restaurant venture.

"7. Weiner, Weiner's uncle, and Weiner's client, Murray Cohen, had already made an equity investment in the restaurant venture. Weiner offered to sell to Dennerlines a mortgage on the restaurant property and a five percent stock interest in the corporation for $100,000. They accepted.

"8. Weiner prepared all of the documents necessary to consummate the transaction and a 'closing statement.' The Dennerlines met Weiner in his office for the closing. They said they had certain questions concerning the documents and wanted to consult other counsel. Weiner said that they did not need an attorney, that he would act as their attorney in the transaction and that he would answer any questions they might have.

"9. The Dennerlines relied on Weiner's advice, signed the documents and turned over checks for $100,000 to Weiner.

"10. The relationship of attorney and client existed between Weiner and Cohen as of the date of the transaction.

"11. The relationship of attorney and client existed between Weiner and the Dennerlines as of the date of the transaction.

"12. Weiner permitted the Dennerlines to believe, and they did believe, that the relationship of attorney and client existed.

"13. There existed a fiduciary relationship between Weiner and the Dennerlines.

"14. Weiner's self-interest and the interest of Cohen were inconsistent and in direct conflict with the interests of the Dennerlines.

"15. Weiner failed to disclose the precise nature and extent of these conflicts to the Dennerlines.

"16. Weiner failed to explain to the Dennerlines the speculative nature of the investment, the risks inherent in the transaction and the full significance of the representation by him of conflicting interests, including his own personal interests.

"17. Weiner's failure to make full disclosure to the Dennerlines of the nature and extent of his interest and that of Cohen, the direct conflict of those interests and the interests of the Dennerlines, the risks inherent in the transaction and the full significance to all the parties of Weiner's representing conflicting interests, including his own, violated Canon 6. ( ^*

"18. Weiner abused and took advantage of the confidence reposed in him by his clients (the Dennerlines) for his personal benefit in violation of Canon 11.

"19. Immediately following the closing of the restaurant transaction, the Dennerlines expressed to Weiner their interest in purchasing some mountain real estate. Weiner advised them that his client Cohen owned some lots in Prescott that might be for sale.

"20. Weiner told the Dennerlines that the price was $50,000 and that it was a fair market price.

"21. At Weiner's direction, Hilfinger showed the property to Dennerlines who decided to purchase it.

"22. Weiner prepared all the documents necessary to consummate the transaction. "23. The relationship of attorney and client existed between Weiner and Cohen as of the date of the transaction.

"24. The relationship of attorney and client existed between Weiner and the Dennerlines as of the date of the transaction.

"25. Weiner permitted the Dennerlines to believe, and they did believe, that the relationship of attorney and client existed.

"26. There existed a fiduciary relationship between Weiner and the Dennerlines.

"27. The Dennerlines relied on Weiner's advice, signed the documents and paid the purchase price of $50,000.

"28. Weiner failed to disclose to the Dennerlines the fact that there was a direct conflict of interest between Cohen's interest and the Dennerlines' interest, the risks inherent in the transaction and the full significance to both parties of Weiner's representing conflicting interests.

"29. Weiner's failure to make full disclosure to the Dennerlines of the direct conflict between Cohen's interest and that of the Dennerlines, the risks inherent in the transaction and the full significance to both parties of Weiner's representing conflicting interests, violated Canon 6.

"30. On or about August 6, 1969 Weiner presented to Dennerlines a proposal that they lend to Weiner and Cohen the sum of $75,000 to assist them in purchasing an apartment complex in San Diego. The Dennerlines accepted.

"31. Under the terms of the undertaking the Dennerlines received a promissory note bearing interest at seven percent per annum secured by a collateral assignment of beneficial interest in a land holding trust subject to the liens of two senior mortgages and the right to receive five percent of 'Net cash spendable available funds' from the apartment complex after payment of all debt service, operating, management, promotional and administrative costs.

"32. Weiner prepared all of the documents necessary to consummate the transaction.

"33. The Dennerlines relied on Weiner's advice, signed the documents and turned over checks for $75,000 to Weiner.

"34. The relationship of attorney and client existed between Weiner and Cohen as of the date of the transaction.

"35. The relationship of attorney and client existed between Weiner and the Dennerlines as of the date of the transaction.

"36. Weiner permitted the Dennerlines to believe, and they did believe, that the relationship of attorney and client existed.

"37. There existed a fiduciary relationship between Weiner and the Dennerlines.

"38. Weiner's self-interest and the interest of Cohen were inconsistent and in direct conflict with the interests of the Dennerlines.

"39. Weiner failed to disclose the precise nature and extent of these conflicts to the Dennerlines.

"40. Weiner failed to explain to the Dennerlines the speculative nature of the investment, the risks inherent in the transaction and the full significance of the representation by him of conflicting interests, including his own personal interests.

"41. Weiner's failure to make full disclosure to the Dennerlines of the nature and extent of his interest and that of Cohen, the direct conflict of those interests and the interests of the Dennerlines, the risks inherent in the transaction and the full significance to all the parties of Weiner's representing conflicting interests, including his own, violated Canon 6.

"42. Weiner abused and took advantage of the confidence reposed in him by his clients (the Dennerlines) for his personal benefit in violation of Canon 11.

"43. The Dennerlines did not unreasonably delay filing their written complaint with the State Bar of Arizona.

"44. The State Bar did not unreasonably delay acting upon the complaint.

"45. To the extent that there was delay in acting upon the complaint, it was substantially caused or contributed to by respondent in (1) disqualifying and attempting to disqualify members of the Administrative Committee and Bar Counsel, and (2) resolving conflicts of professional engagements of respondent's attorney.

"46. Respondent was not substantially prejudiced by delay.

"47. This proceeding is not barred by laches."

Respondent argues that since the transactions in question were fair to the client, no...