By Charles Berwanger
This article discusses an attorney’s ethical duty of honesty not only in all aspects of the law practice but in all personal matters as well. It also presages the California Legislature’s imposition on attorneys the ethical duty to report to the State Bar another attorney’s act of dishonesty.
The Rules of Professional Conduct as well as the State Bar Act are replete with the ethical imperative for attorneys to be honest. The rules include 1.2.1, 3.3, 3.4, 4.1, 7.1 through 7.5 and 8.4; and further implicating the duty of honesty are Business and Professions Code sections 6068 (d), 6106, and 6128. The enforcement tools available to and used by the State Bar include disbarment, suspension, and public reprovals, all of which are a professional death sentence. In a word, the State Bar is empowered to impose the most serious of professional sanctions on counsel for failure to abide by the many rules requiring attorney honesty.
This article will focus on the ethical duty of honesty imposed on attorneys in their handling of negotiations, documenting transactions, and even in their private lives.
We all have been involved in negotiations often times in the context of a settlement conference or mediation. Must an attorney be honest in the course of such negotiations?
A recent opinion issued by the State Bar California Standing Committee on Professional Responsibility and Conduct (COPRAC) Formal Opinion number 2015 – 194 addresses the issue of “when an attorney is engaged in negotiations on behalf of the client, are there ethical limitations on the statements the attorney may make to third parties, including statements that may be considered ‘puffing’ or posturing?” COPRAC’s opinions are advisory only and not binding on the State Bar, although they are often cited by the California Supreme Court and the California State Bar Court in determining whether or not conduct is consistent with the State Bar Act or the Rules of Professional Conduct.
Opinion 2015 – 194 posits a settlement conference where two attorneys engage in exchanges obviously meant to advance their clients’ interests. The hypothetical involves an automobile accident in which plaintiff was injured and seeks compensation for lost income. Undoubtedly all counsel made representations regarding the strength of their respective cases in what any reasonable observer would conclude to be puffery and statements not reasonably to be relied upon. However, plaintiff’s counsel knowing that his client earned $50,000 per year represents that she earns $75,000 a year. Such counsel also knows that his client has found alternative employment and was able to work. Nonetheless, plaintiff’s counsel represents that she is unable to work. Defense counsel, not to be outdone, represents that his client if pushed too hard will file for bankruptcy, knowing that his client is ineligible for such a filing.
COPRAC concludes that both counsel engaged in unethical dishonesty. Such representations go well beyond mere puffery and violate what is now Rule of Professional Conduct 4.1 and Business and Professions Code section 6106, 6128 (a), and possibly 6068 (d) if a judicial officer was in charge of the settlement or mediation conference. The opinion reasons that where there is a false statement of material fact intended to induce reliance by a third-party ethically sanctionable dishonesty has been committed. The opinion also notes that the determination of ethically improper dishonesty does not require the same proof as does fraud, but that the elements overlap.
The drafting of a contract or other such document can, if accompanied with dishonesty, also trigger a State Bar disciplinary proceeding.
Bryant v. State Bar California (1942) 21 Cal. 2d 285 involves an attorney who was suspended for 18 months for having violated Business and Professions code section 6106. Bryant’s dishonesty included his having provided a usurious interest provision in a promissory note, but telling promissor’s counsel that Bryant would not commence an action to enforce the note. Bryant misrepresented his intention. The California Supreme Court in upholding the suspension advised that an attorney must have a blameless moral character; and that Bryant had engaged in moral turpitude; that is, he had committed an act “contrary to justice or honesty.”
The duty of honesty is all-encompassing applicable to an attorney’s private affairs.
Business and Professions Code section 6106 states that “the commission of any act involving moral turpitude, dishonesty or corruption, whether the act is committed in the course of his relations as an attorney, whether the act is a felony or misdemeanor or not, constitutes a cause for disbarment or suspension.”
The COPRAC opinion cites as an example of a matter involving an attorney who commits a dishonest act in his capacity as a private citizen Segretti v. State Bar (1976) 15 Cal. 3rd 878. Mr. Segretti, in acts not committed while he was acting as a lawyer, performed so-called dirty tricks on behalf of Richard Nixon. For example, he prepared and distributed a letter on letterhead entitled Citizens for Muskie (then a candidate for the Democratic nomination for president) accusing Hubert Humphrey and Henry Jackson of sexual improprieties (they too were candidates). Needless to say, Mr. Segretti’s communication was false.
The California Legislature has before it the proposed addition of Business and Professions Code section 6090.8. It provides that “a licensee of the State Bar who knows that another licensee is engaged in professional misconduct that raises a substantial question as to that licensee’s honesty, trustworthiness, or fitness as an attorney in other respects, shall inform the State Bar.” There appears to be a high likelihood that the section will be enacted.
In conclusion, among the many reasons why honesty is in fact the best policy, the State Bar has a wide-ranging mandate to take disciplinary action against attorneys who act dishonestly.