Professional Responsibility Review 2016

JurisdictionConnecticut,United States,Federal
Publication year2021
CitationVol. 91 Pg. 277
NO. 91 CBJ 277
Connecticut Bar Journal
January 1, 2018

By Brendon P. Levesque [*] and Hon. Kimberly A. Knox [**]

Carlson was charged with stealing a Mercedes Benz, and after a long trial, the jury acquitted him. Later that day Carlson came back to the judge who had presided at the hearing. "Your honor," he said, "I wanna get out a warrant for that dirty lawyer of mine." "Why?" asked the judge. "He won your acquittal. What do you want to have him arrested for?" "Well, your honor," replied Carlson, "I didn't have the money to pay his fee, so he went and took the car I stole."

Many of us joined the legal profession with laudable intentions, such as the ability to create societal change and the desire to help others. Even so, there's no denying that lawyers, like all other professionals, need to make a living. The need to make money, however, is no excuse for an ethics violation. The year 2016 witnessed an all-time high of fee violations, both in Connecticut and throughout the nation. Supreme, appellate and trial courts took up issues of everything from fee sharing to unpaid fees to IOLTA violations. The American Bar Association and the Connecticut Bar Association also frequently chimed in on the subject. If there is anything to be learned from 2016, it is to be precise and equitable when managing and distributing fees.

I. Case Law Developments

A. Connecticut Supreme and Appellate Courts

Ethical issues surrounding attorney's fees were a national concern in 2016. They were also an issue in Connecticut, as the most notable Connecticut Supreme Court ethics decision of the year concerned a fee dispute. In Disciplinary Counsel v. Parnoff,[1] the Court affirmed that there was no violation of Practice Book Section 2-47A where an attorney unilaterally transferred disputed fees of more than $350,000 into his own account

The dispute came about after Parnoff and his client signed an agreement for a 40% contingency fee for his representation in a work-related injury case which exceeded the 33% statutory maximum.[2] The client later found out about the statutory limit and agreed to pay Parnoff a lower amount of $125,000.[3] After their relationship grew complicated through years of litigation, Parnoff transferred $363,960 from escrow into his personal account.[4] In deciding his case, the Supreme Court embarked on an extensive construction of section 2-47A.[5] The Court ended up ruling in Parnoff s favor and sustained the trial court's finding that he did not act with the requisite intent to steal his clients' funds.[6]

In an atypical decision, the Appellate Court ruled in favor of a habeas corpus petitioner in Helmedach v. Commissioner of Correction.[7] After being convicted of felony murder, robbery in the first degree and conspiracy to commit robbery in the third degree, the petitioner claimed ineffective assistance of counsel.[8] She alleged her attorney failed to notify her about a plea offer often years until after she testified at her criminal trial at which point the offer was no longer open. She was instead sentenced to thirty-five years in prison.[9] The offer was communicated to her attorney the morning of the day the petitioner testified.

Her petition for writ of habeas corpus was granted and the court concluded that counsel's failure to communicate the favorable offer in a timely manner fell below the standard of reasonableness.[10] The court first defined "promptly" because it is not defined in Rule 1.0. Concluding that the plain meaning of "promptly" meant "immediacy or a lack of delay." Based on that construction, the Court concluded that counsel did not act promptly in this matter.[11] This prevented the petitioner from properly exercising her constitutional right to plead guilty and decide whether to testify on her own behalf.

In citing the Strickland test established by the US Supreme Court, the Sixth Amendment and Rules 1.2 and 1.4 of the Rules of Professional Conduct, the Appellate Court held that the petitioner's counsel's trial strategy was not a reasonable strategic decision and that even if it were, it was unreasonable in this case.[12] Counsel's defense that he "was concerned about relaying [the offer] to the petitioner immediately prior to her testimony because she was young and flustered, and he believed that this unexpected news would negatively impact her decision" proved unsuccessful.[13]The upshot is that plea deals need to be communicated to the client immediately.

B. Connecticut Superior Court

Attorney's fees were also of matter in the Connecticut Superior Courts. In Brignole, Bush & Lewis, LLC v. Freeman,[14] the plaintiff law firm brought a case against a former attorney of the firm. At issue was the recovery of a proportionate share of fees from some of the twenty cases the former attorney took when he left to practice at a different firm.

The Superior Court granted the defendant's motion to strike the plaintiffs CUTPA and breach of fiduciary duty claims but denied the motion to strike the conversion and accounting claims.[15] The court found that the plaintiff was able to sustain a claim for conversion because it "sufficiently alleged an interest in discrete, identifiable funds, to which the plaintiff had a legal right."[16] The Court explained that although clients have the right to switch attorneys, attorneys also have a right to receive payment for their services.[17]A claim for accounting was also sufficient because a formal relationship of trust was created when the plaintiff released client files to the defendants, relying on their promise to protect its fee lien.[18]

In another fee sharing case originally brought by the plaintiff law firm to recover unpaid legal fees, the court determined that it would consider the defendant’s special defense involving Rule 1.5(b) of the Rules of Professional Conduct even though case law is not clear on whether the rules may be asserted as a special defense.[19]Rule 1.5(c) mandates that an attorney must put in writing any contingent fee agreement and provide that agreement to the client.[20] The court, however, allowed for an exception in this matter because the client was regularly represented by the firm and the firm charged the client the same rate for the services it provided on another matter.[21]

A client's futile attempt to avoid payment of legal fees failed in another case. In Rucci, Burnham, Carta, Carello & Reilly, LLP,[22] the firm successfully recovered legal fees against a client based on a written fee agreement. The court also awarded 18% interest, costs and attorney's fees based on the express provisions of the agreement.[23]

In Seals v. Havey,[24] a lawyer closed on residential property where there was a recorded judgment lien for another attorney's legal fees. The court denied the closing lawyer's motion for summary judgment on conversion and unjust enrichment.

The code of honor between friends is best preserved by following the ethics rules. In Cohan v. Minicozzi,[25] an attorney agreed to represent his attorney-friend in two litigation matters. At the end of the day, in the absence of a written fee agreement, or anything in writing for that matter, these friends could not agree on the amount of legal fees (so much for their gentlemen's understanding). The court found both lawyers understood that compensation would be paid for the legal services and applying the factors in Rule 1.5(a) awarded contractual damages based on the reasonable value of the services.[26]

C. United States Supreme Court and Second Circuit Court of Appeals

The executive branch has not been the only division of government to experience recusal issues in the past year. In 2016, the United States Supreme Court held in Williams v. Pennsylvania that the Due Process Clause did not permit a Pennsylvania Supreme Court justice to rule on the affirmance of a death penalty which he previously sought as a district attorney.[27] Although there is no specific test for government recusal in this kind of matter, the Court determined that there is an "impermissible risk of actual bias" when a judge engaged in significant personal participation as a prosecutor in a "critical decision" involved in the defendant's case.[28]

The Second Circuit issued an opinion in 2016 that will have significant ramifications for Connecticut attorneys. In Shoenefeld v. Schneiderman,[29] the court held that a "brick and mortar" requirement for out of state attorneys did not offend the Privileges and Immunities Clause of the U.S. Constitution. The New York statute involved required nonresident members of the state bar, but not resident members, to maintain an "office for the transaction of law business" within the state.[30] The Second Circuit explained that the law does not serve a protectionist purpose but merely attempts to put residents and nonresidents on equal footing.[31]

Judge Peter W. Hall sharply dissented and noted that the New York Ethics Board in a previous ruling also allowed only resident members to maintain a "virtual law office" in New York even if their practice was primarily out-of-state.[32]The United States Supreme Court denied a petition for certification in this matter.[33] The discussion of the privileges and immunities clause makes for an interesting read.

In another Second Circuit case remarkable both procedurally and factually, the Court granted a non-party's petition for writ of mandamus to disqualify its previous legal counsel BakerHostetler from representing the defendant.[34]The non-party Hermitage is an investment advisory firm, which previously engaged the BakerHostetler law firm about a calamity known as the Russian Treasury Fraud.[35]This event involved a group of corrupt Russian officials and other persons referred to as the Organization, who raided Hermitage's corporate offices and its Russian law firm office and stole corporate portfolios controlled by...

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