In re Charges of Unprofessional Conduct in Panel File No. 41755

912 N.W.2d 224

IN RE CHARGES OF UNPROFESSIONAL CONDUCT IN PANEL FILE NO. 41755

A17-1002

Supreme Court of Minnesota.

Filed: May 23, 2018

Paul C. Peterson, William L. Davidson, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, Minnesota, for appellant.

Susan M. Humiston, Director, Cassie Hanson, Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for respondent.

OPINION

PER CURIAM

This case involves Minn. R. Prof. Conduct 4.2, the no-contact rule, which limits a lawyer’s communications "with a person the lawyer knows to be represented by another lawyer in the matter." The Director of the Office of Lawyers Professional Responsibility (the Director) issued an attorney a private admonition for violating Rule 4.2 by communicating with a represented party in a defamation case in which the attorney represented another party. Following an evidentiary hearing, a panel of the Lawyers Professional Responsibility Board (the Panel) affirmed the Director’s admonition. The attorney appealed. We conclude that the Panel did not clearly err in finding that the attorney violated Rule 4.2. We further conclude that the appropriate discipline for this isolated misconduct is a private admonition.

FACTS

Appellant was admitted to practice law in Minnesota in 1982, and primarily practices in the area of insurance litigation. He has no prior disciplinary record. Appellant was retained in 2014 to represent J.W., who was a defendant, along with others, in a defamation action.

J.W.’s brother, N.W., was a co-defendant.¹ N.W. was represented by an attorney (complainant here) hired by N.W.’s insurer, Liberty Mutual. Complainant was defending N.W. subject to a reservation of rights, meaning that Liberty Mutual had reserved the right to deny coverage to N.W. as the case developed. Complainant practiced at a captive law firm as a direct employee of Liberty Mutual. Complainant did not—and could not—represent N.W. on insurance coverage issues because the reservation of rights created a conflict of interest with her employer.

Trial was set for February 16, 2016. On Friday, February 5, 2016, the parties attended a mediation. N.W.’s attorney, complainant, was unable to attend the mediation, but she sent substitute counsel and an insurance claims representative in her stead. At mediation, J.W. orally agreed to settle with the plaintiffs for $75,000, and the claims against the other two defendants also settled. Only the claims against N.W. remained unresolved.

The following Monday, February 8, 2016, the plaintiffs, by letter, expressed their willingness to extend a Miller - Shugart settlement offer to N.W. for an unspecified dollar amount.² That same day, Liberty Mutual offered the plaintiffs $35,000 to settle the claims against N.W. The next day, February 9, 2016, plaintiffs counter-offered with a settlement demand of $75,000 cash or, alternatively, a Miller - Shugart agreement in the amount of $695,000. Complainant did not immediately discuss these offers with her client, N.W., because she wanted to first communicate with Liberty Mutual. She left N.W. a voicemail the next morning, on February 10, 2016, but never discussed the offers with him.

N.W. spoke with his brother J.W. about the Miller - Shugart offer on February 9, 2016.³ J.W. then contacted his own attorney, appellant, and asked him to speak with N.W. Appellant agreed, and N.W. sent the proposed Miller - Shugart settlement agreement for appellant’s review.⁴

On the morning of February 10, 2016, N.W. telephoned appellant for legal advice. At that time, appellant understood that "[c]omplainant [was] not ... representing N.W. regarding the coverage issues ... or the plaintiffs’ Miller - Shugart settlement offer because of the likely personal conflict of interest [c]omplainant had." As appellant correctly observes, the Miller - Shugart settlement offer created a conflict for complainant between her client N.W.’s interests and her employer Liberty Mutual’s interests. See, e.g. , Pine Island Farmers Coop v. Erstad & Riemer, P.A. , 649 N.W.2d 444, 450 (Minn. 2002) (recognizing that "the interests of the insured and the insurer may conflict, making it difficult for defense counsel to remain loyal to ... and exercise his or her independent professional judgment for the benefit of [the] client").

During this phone call, appellant gave N.W. legal advice about the proposed Miller - Shugart agreement and the effect of Liberty Mutual’s reservation of rights on N.W.’s personal exposure. Appellant understood that he was "acting as N.W.’s independent counsel" and that he "had an attorney-client relationship with N.W." Appellant testified that he was "talking to [N.W.] about an unrelated matter" because he "wasn’t talking about the defamation case"—he "was talking about the coverage concerns" and "what happens with the Miller - Shugart and how [N.W.] can protect himself." Appellant further testified that he did not know about, and did not give legal advice regarding, the $35,000 or $75,000 settlement offers.

Later that morning, N.W. signed the Miller - Shugart offer, without complainant’s advice or knowledge.

Thereafter, complainant filed an ethics complaint regarding appellant’s conduct. The Fourth District Ethics Committee investigated and concluded that appellant had not violated any rule of professional conduct. The Director, however, independently determined that appellant had violated Minn. R. Prof. Conduct 4.2, and issued a private admonition. See Rule 8(d)(2), Rules on Lawyers Professional Responsibility (RLPR).

Appellant appealed the admonition to a Panel of the Lawyers Professional Responsibility Board. See Rule 8(d)(2)(iii), RLPR. The Panel held an evidentiary hearing and heard testimony from appellant, complainant, and appellant’s expert witness. See Rule 8(d)(4)(ii), RLPR. Reviewing the matter de novo, the Panel (with one member dissenting) affirmed the admonition. See Rules 8(d)(2)(iii), 9(j)(2), RLPR. Pursuant to Rule 9(m), RLPR, appellant appealed the admonition to our court.

ANALYSIS

I.

We will uphold a panel’s findings "when those findings have evidentiary support in the record and are not clearly erroneous." In re Panel File No. 41310 , 899 N.W.2d 821, 825 (Minn. 2017). But "[i]nterpreting the Minnesota Rules of Professional Conduct ... presents a question of law, which we review de novo." Id. In interpreting the plain language of the Rules of Professional Conduct, we may consider dictionary definitions, as we do when we interpret statutes. See, e.g. , In re Torgerson , 870 N.W.2d 602, 610 (Minn. 2015) ; In re Panel Case No. 19453 , 690 N.W.2d 716, 720 (Minn. 2005). We may also consider the comments to the Rules; precedent from our court and foreign jurisdictions; and outside resources, such as the Restatement and the A.B.A. Model Rules. See, e.g. , Panel File No. 41310 , 899 N.W.2d at 826; In re Panel File No. 39302 , 884 N.W.2d 661, 665–68, 670 (Minn. 2016).

The rule at issue here is Minn. R. Prof. Conduct 4.2, "Communication with Person Represented by Counsel," which provides as follows:

In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.

This rule essentially has three elements and one exception:

(1) In representing his or her own existing client,

(2) A lawyer shall not communicate about the subject of the representation,

(3) With a person whom the lawyer knows to be represented by another lawyer in the matter,

(4) Unless: (a) the lawyer has the other lawyer’s consent, or (b) is otherwise authorized to do so by law or court order.

The purpose of Rule 4.2 is to "protect[ ] a person who has chosen to be represented by a lawyer in a matter against possible overreaching by other lawyers who are participating in the matter," including against "interference by those lawyers with the client-lawyer relationship." Minn. R. Prof. Conduct 4.2 cmt. 1. The rule is also intended to "protect[ ] the right of counsel to be present during any communication between the counsel’s client and opposing counsel." State v. Miller , 600 N.W.2d 457, 464 (Minn. 1999). Although we have referred to the language of Rule 4.2 as "plain and unambiguous," State v. Clark , 738 N.W.2d 316, 339 (Minn. 2007), we have never parsed the language to explain what each element and the exception means, as we are required to do here.

A.

We begin with the first element of Rule 4.2 : "[i]n representing a client." Appellant argues for a purpose-driven interpretation of this phrase, in which the element is satisfied only if the attorney acts "in furtherance of" representing his or her own client. The Director disagrees, arguing that the phrase refers to the temporal duration of the attorney-client relationship. This element was satisfied under either interpretation.

When appellant gave legal advice to N.W., he was representing J.W. Appellant had not filed a notice of withdrawal with the court or otherwise executed a document formally terminating the attorney-client relationship with J.W. See Minn. Gen. R. Prac. 105 ("After a lawyer has appeared for a party in any [civil] action, withdrawal will be effective only if written notice of withdrawal is served ... and is filed...."); see also In re Milloy , 571 N.W.2d 39, 43 (Minn. 1997) ("If there is any doubt ... the burden falls on the attorney to clarify, preferably in writing, that the [attorney-client] relationship has ended." (citation omitted) (internal quotation marks omitted) ). Although J.W.’s case had been settled by verbal agreement, appellant had not completed his representation because the settlement had not been reduced to writing or submitted to the court. See Minn. R. Prof. Conduct 1.16 cmt. 1 ("Ordinarily, a representation in a matter is completed when the agreed-upon assistance has been concluded."). We therefore conclude that a...