LOUISIANA ATTORNEY DISCIPLINARY BOARD
IN RE: LEROY A. HARTLEY
HEARING COMMITTEE OPINION
This matter came on for hearing (on the briefs, by consent of the parties) before Hearing Committee No. 8.
This case involves an attorney who, at the client’s consent and direction, prepared a power of attorney enabling him to pay the client’s bills (including the attorney’s own legal bills). The power was witnessed and notarized after the fact. ODC argues the hypothetical use to which the document might have been put (though indisputedly was not) rendered it violative of several rules.
The parties reached the following stipulations and introduced these stipulated exhibits:
By letter dated June 14, 2002, to the Hearing Committee Chair, the notary in this matter has requested that her identity be protected pursuant to the provisions of Louisiana Supreme Court Rule XIX Section 16D. The notary involved accepted private disposition; thus, it would appear to be appropriate to honor her request pursuant to Rule XIX Section 16A. ODC suggested that the name of the Notary Public, while obviously included on the document in question, should be omitted from the Hearing Committee report, the Board’s report, and the Court’s opinion in this matter. The Committee agreed.
The Committee finds the facts are as stipulated by the parties.
ODC charges Hartley with violating Rules of Professional Conduct: 1.7(b); 1.8(a); 5.1(a)(b)(c); and 8.4(a)(c) which provide:
RULE 1.7(b) CONFLICT OF INTEREST: GENERAL RULE
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests, unless;
i. The lawyer reasonably believes the representation will not be adversely affected; and
ii. The client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
RULE 1.8(a) CONFLICT OF INTEREST: PROHIBITED TRANSACTIONS
(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
(1) The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client;
(2) The client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
(3) The client consents in writing thereto.
RULE 5.1(a)(b)(c) RESPONSIBILITIES OF A PARTNER OR SUPERVISORY LAWYER
(a) A partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the rules of professional conduct.
(b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the rules of professional conduct.
(c) A lawyer shall be responsible for another lawyer’s violation of the rules of professional conduct if:
(1) The lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or
(2) The lawyer is a partner in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
RULE 8.4 (a)(c) MISCONDUCT
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation.
ODC argues Hartley violated: (i) Rule 1.7(b) because the power of attorney, without evidence of adequate waiver, gave him the authority to set and pay his own fees; and (ii) Rules 5.1 and 8.4 because the witnesses and notary signed separately. ODC urges the power of attorney was required to be notarized because it authorized transactions in immovables, though the stipulated documents show none occurred.
Hartley argues there was no conflict because the fee agreements were set out in the engagement letters and all disbursements were reviewed with the client without objection. Hartley further argues the notarial irregularity deceived no one and was unnecessary in any event.
On the stipulated facts it is clear that the signatures on the documents were genuine, all parties intended the results obtained thereby, there were no transactions in immovables, the disbursements were discussed with the client without objection, and there was no harm. The document could have been written better and those involved should have been more attentive to its notarization (or not); but this is a case of “no harm, no foul.”
The Committee therefore finds that ODC has not established any violations of Rules 1.7(b), 5%.1 or 8.4 by clear and convincing evidence.
ODC argues for a reprimand:
Given the stipulations it is clear that Mr. Hartley had a conscious awareness of the nature of the attendance circumstances of the conduct, but without the conscious objective or purpose to accomplish a particular result adverse to the client. Accordingly the mental element involved, as set by the definitions portion of the ABA Standards, is knowledge or knowing. Mr. Hartley’s failure to avoid the conflict of interest is a violation of a duty owed to a client. The misrepresentations made on the face of the document, where it falsely claimed to be executed by all of the signatories in front of the Notary, is a violation of a duty owed to the public. Any person who viewed the document might reasonably, normally and erroneously conclude that the document was executed as it purports to have been executed. This false representation in the execution of the document is also a violation of a duty owed to the legal system and to the profession.
ABA Standard 4.32 provides that a suspension is generally appropriate when a lawyer knows of a conflict of interest and does not fully disclose that conflict causing injury or potential injury to a client. While no actual injury occurred here, the potential for injury exists when a lawyer has such a conflict of interest being the one who sets, approves and pays to himself his own fees.
ABA Standard 5.53(a) indicates that a reprimand is generally appropriate when a lawyer demonstrates a failure to understand appropriate legal procedures and causes injury or potential injury to a client. Mr. Hartley’s failure to follow proper procedure in having this document executed, as it purports on its face to have been executed, caused no actual injury. There is potential for injury any time that such a document is not properly executed, particularly when a lawyer has one of his employees notarize a document granting the lawyer authority over the property of another without having seen the principal sign the document.
Rule 5.13 suggests that a reprimand is generally appropriate when a lawer knowingly engages in other conduct involving deceit or misrepresentation (such as having the document purport to have been fully executed before the Notary when in fact it was not) which is not otherwise listed in Standard 5.11.
ABA Standard 7.2 suggests a suspension when a lawyer knowingly engages in conduct in violation of a duty owed to the profession and causes potential injury to a client. That standard likewise appears to be applicable. Given the ABA Standards, the appropriate baseline sanction would appear to be either a suspension or a reprimand.
Most of the disciplinary jurisprudence involving notarizations arises in situations where there was a falsity, a forged signature, or the filing of a document into the public record or in court. Please see the following cases: In LSBA v. David C. Jones, 573 So.2d 1131 (La. 1991), a lawyer was suspended for one year and one day for notarizing an assignment with a forged signature. In LSBA v. Richard J. Boutall, 597 So.2d 444 (La. 1992), a lawyer was suspended for 18 months for signing a false affidavit. In Re Eddie L. Stevens, 645 So.2d 1133 (La. 1994) a lawyer was suspended for 18 months for notarizing a forged affidavit before filing it inot the record to oppose a motion for summary judgment, (please see also the Hearing Committee and Disciplinary Board Reports in Stevens, under number 92-DB-029 which should be available from the Disciplinary Board offices and/or the Disciplinary Board’s website). In Re Cheryl Hensley, 96-0425 (La. 9/13/96); 679 So.2d 384 is a case in which a client presented a second olographic will, which the lawyer proceeded to file for probate. The lawyer failed to inform the court of the prior forgery, and the second will was later discovered to be a forgery. Ms. Hensley was suspended for 6 months.
In the case sub judice none of those factors actually apply. The document on its face does falsely represent that all of the signatures were applied or executed in front of a notary. However the document itself contains no other falsity, the record and the stipulations do not establish that there was any forged signature, and the document was not filed into the public record in a court proceeding of any sort, or in any real estate transaction. Accordingly this case is distinguishable from the above cited cases.
FACTORS IN AGGRAVATION AND/OR MITIGATION
The applicable ABA Standard 9.22 aggravating factors are: (g) refusal to acknowledge the wrongful nature of the conduct; and (I) substantial experience in the practice of law (Mr. Hartley was admitted on September 9, 1971).
The ABA Standard 9.32 mitigating factors which are applicable are: (a) absence of a prior disciplinary record; (b) absence of a dishonest or selfish motive; (e) full and free factual disclosure to the disciplianry system; and (g) prior good character and reputation.
Hartley argues no sanctions are necessary, alternatively for a public reprimand (ODC having previously offered a private admonition).
The Committee finds no sanction is warranted.
For these reasons, the Committee recommends the Board and Court dismiss this proceeding. The Committee agrees this opinion may be executed in multiple counterparts.
Date: ______________ ____________________________
Thomas K. Potter, III
John J. Uhl
Raymond A. Osborne, Jr.
Lawyer Member discipline: