*1 S.E.2d 579 ETHICS, COMMITTEE LEGAL ON

Complainant, Michael FRAME J.

Clark

Benninger, Respondents.

No. 21627. Appeals

Supreme Court Virginia.

of West

Submitted June 1993. July

Decided 1993. Goodman, Charleston,

Sherri D. for com- plainant. B. Benning-

Clark Frame and Michael J. er, pro se.

PER CURIAM: hearing panel of the Committee on Legal (“the Committee”) Ethics has found attorney Clark violated Frame of the West Rules of Profes- through following Conduct ac- sional (1) failing impor- tions: understand tance of client existed; (2) conflict of interest failing to discuss the issue of the conflict either client once all facts were known; away trying rationalize conflict of interest its acknowl- when edgement unquestionably inconvenient *2 642 telephone by representative The with an Erie to its client. the firm and law allegedly Erie reprimand and was advised that would public recommends

Committee offer to settle the case for Mr. Baamonde’s he be assessed against Mr. Frame and that Subsequent hospital and medical bills. proceeding. the costs of conversation, that Ms. McMillenhad no fur- although at- that found Committee Clawg- Mr. ther contact with either Erie or Benninger torney J. Michael and es assumed that the lawsuit had been he stages, final should in its the conflict resolved. genuine at- disciplined to his due not be 1989, early In Ms. McMillen contacted partners of the tempts his senior to alert regarding representation in a Having reviewed the record conflict. During divorce action. their initial consul- matter, adopt the recommendations 1989, 7, tation on March Ms. McMillen dis- public repri- and order of Committee cussed her interest in Markwoods her and Frame, as- of Mr. costs of $840.20 mand her any concern that husband not receive Frame, no further against Mr. and sessed company through portion of the di- Benninger. against Mr. action Although unclear, is vorce. evidence apparently there was was some reference I. during meeting to the Baamonde suit. 10, 1988, Wesley Metheney, a August On testified Mr. Frame Wilson, firm of Frame member of law suing her if his firm was asked Virgi- Metheney Morgantown, & tion. Ms. McMillen also testified she Baamonde, nia, civil action entitled filed a impression had been under the Inc., Markwoods, dba J & J Home et al. matter had been settled and that she did “Markwoods”). (hereinafter Mr. Sales significance not understand the of the dis- alleged injured his Baamonde that he had cussion. walking up steps inspect knee while Mr. Mr. mobile home on J & J Home Sales’ lot. Frame assumed of $500,000 sought damages complaint and Ms. McMillen and filed a divorce Baamonde $100,000 1989, damages April May for her behalf. In Mr. loss consortium on and complaint his wife. summons and Frame’s Ms. McMillen’s Secretary meeting and served on the State divorce case included with her on were 25, April 11 Lynn April receiving to Ms. Vickie forwarded financial information, president manager family- hearing and scheduling vice a final 8, Meanwhile, company, home Markwoods. for June owned mobile 1989. the Baa- on pretrial Ms. McMillen received these documents monde action was scheduled for 1988, 16, 15, 1989, August provided May them to her conference on and Mr. Mr. agent day. that same Ms. Frame and were local insurance identified plaintiffs J trial employed pre- McMillen had been J & as counsel for the 1978, 26, having completed by trial memorandum April Homes Sales since become fifty- holding stockholder 1989. percent outstanding two shares. 1, 1989, On June Ms. McMillen met with insurer, Insurance, Erie re- Mr. Frame and Mr. Markwoods’ learned that Frame had Jr., Clawges, trial tained Russell to defend a criminal which conflicted with the 1989, 8, Ms. Clawges hearing. Mr. contacted McMil- scheduled June divorce action. August Benninger rep- her Mr. len on and informed Michael then assumed Clawges pre- representation. his Mr. resentation of Ms. as substitute complaint preparation hearing, for- pared an answer to counsel. for the copy Benninger on of it to Ms. McMillen Mr. met with McMillen and warded Ms. father, September Clawges spoke Mr. 1988. her received additional financial formation, again September Ms. with her on 1988. and consulted with McMil- Benninger McMillen then had no further communica- len’s accountant. Mr. also at- 8,1992, Clawges September hearing as the final tion with tended June through speak May 1989. She did Ms. McMillen’s counsel. se, summary Benninger, pro as Upon receipt of a motion well Ms. McMillen Markwoods, Clawges, judgment on behalf of and Mr. the subcommittee recom- *3 Benninger requested Mr. Metheney that mended sanctions respondent Mr. in the mo- legal raised research the issues public reprimand. Frame in the form of a Ms. Benninger noticed tion. When Mr. Although Benninger party Mr. was a affidavit, included within McMillen’s stages, conflict its final the Committee summary judgment, he realized motion for subject recommended that he be to no fur- representing firm Ms. McMil- that his discipline. ther her suing len in her divorce while separate action. He also under- tion in a II. going appear to as an stood that she was 1.7(a) the West Rules of the trial of thé Baa- adverse witness at provides Professional Conduct as follows: Benninger Mr. researched monde action. “(a) A lawyer represent shall not a client if question and con- potential conflict of that client will be Frame. ferred with Mr. and Mr. directly adverse to another unless: They concluded that there was no conflict (1) lawyer reasonably rep- believes the of interest because their firm had sued the adversely resentation will not affect corporate entity rather than Ms. McMillen client; with the other they personally. They also concluded that each client consents after consultation.” need not discuss the issue with either Ms. Respondents they maintain that had no they per- McMillenor the Baamondes since duty refrain to or ob- no conflict of interest. ceived adversity tain consent because no direct 27, 1989, for reasons not now On June clients, existed between the two Ms. McMil- to Ms. she first realized apparent definition, By len and Baamonde. no firm her in the di- that the if violation Rule can occur represented plaintiff vorce action also directly of one client not sentation will corporation. McMillen con- suing her Ms. regard adverse to another client. With to Clawges on or June tacted Mr. about interpretation phrase “directly of the perceived complained of what she adverse,” 1.7(a) pro- the comment to Rule day a conflict of interest. On the to be following guidance: vides the trial, July Baamonde the scheduled Thus, lawyer ordinarily may act as not Clawges disquali- to orally moved person advocate Wilson, firm of Frame Methe- fy the law & matter, represents in some other even if alleged ney upon the conflict of based wholly it is unrelated. the other On motion, The lower court denied the terest. hand, representation in simultaneous un- information had ruling that no confidential related matters of clients whose interests disclosed and that the motion was been adverse, only generally are such as com- proceeded, and the untimely. The trial re- peting enterprises, economic does not policy Upon limits. case settled within quire respective consent of the clients. McMil- proceedings, Ms. conclusion (a) rep- Paragraph applies only when the anger her and sense of be- expressed len of one client direct- resentation would be Benninger to trayal to Mr. and travelled to the other. attorney Virginia Hop- Kingwood to hire counsel in the divorce kins to substitute as Re- The Committee maintains that action. representation Mr. Baamonde spondents’ personal injury in his lawsuit was 15, 1989, McMillen September Ms. On capacity in her adverse to McMillen complaint with the West filed an ethics shareholder, hearing A was held Virginia State Bar. Respon- manager of 29,1992, Markwoods. August disciplinary matter although Ms. McMillen Charleston, dents contend Bar at the State Center sides opposing Baamonde were on and Mr. member Re- Virginia, subcommittee action, personal injury upon presiding. Based evi- becca A. Betts representing were not by Mr. Frame and Mr. dents submitted dence Co., MacQueen, They simply ley injury action. & Inc. v. personal in that (1992). case, in a divorce ac- represented Ms. McMillen S.E.2d representing Mr. Baamonde tion while recognized being named as a personal injury action. Mr. unrelated prerequisite creating is not a lawsuit no informa- acknowledges that adversity the direct element needed es- sought by the Re- disclosed or tion was Morgan tablish a conflict of interest. case, concerning the Baamonde spondents Stanley attempt disqualify involved an to identi- and Ms. McMillenwas also unable based, part, upon provisions law firm resulting fy any prejudice or misfortune 1.7(a). represented of Rule The firm both *4 misrepresentation. from the simultaneous employees the and certain in State state .did, however, appear as a the State’s action to recover investment regarding in the Baamonde case witness finding In fund losses. that a conflict of Markwoods and general the business of existed, explained interest also we by cross-examined was po- critical issue is the existence or “[t]he Respondents’ law firm. the tentiality of conflicts of interest and not question is whether The conclusive parties the inclusion of all in adverse a directly client representation of one was lawsuit.” Id. at 416 S.E.2d at 60. explained in to the other. As we Similarly, per- while Ms. McMillen was not Hamilton, ex rel. McClanahan v. State sonally named as a defendant in the Baa- 430 569 189 W.Va. S.E.2d suit, majority monde her status as a share- interest, An adverse also termed a con- corporation holder of the named defendant interest, variety in flict of can occur actual, potential, if not created a conflict of impossible to situations.... It is devise interest. single statement that will reveal wheth- agree findings We the Committee’s er an interest is adverse. The resolution Respondents' determining of the issue rests on first Baamonde “was adverse to exist- whether substantial capacity Ms. McMillen in her as a clients’ interests. ed between the two shareholder, Next, given by manag- consideration should be attorney’s Markwoods, the court as to whether the er of Inc.” While exercise of individual to one client directly represent dents did not Ms. McMil- might client or whether harm other suit, personal injury they len in the did his zealous will induce represent Ms. McMillen in an unrelated di- him to use confidential information that action; vorce she still their adversely affect the former client. could applies. Respondents still at 430 S.E.2d at 573. Id. appear place great emphasis also on the impact fact that no deleterious was actual- Zakaib, In Garlow representa- created the simultaneous (1991), recognized S.E.2d that the begs question. tion. That To establish comment to Rule 1.7 enumerates several 1.7(a), an ethical violation under Rule one relevant factors in “directly requirement prove prejudicial impact, has does not have to adverse” result, satisfied. These include the “dura- negative exchange been or an of confi- lawyer’s intimacy tion and relation- only prerequisites dential information. involved; ship with the clients functions for the establishment of an ethical violation performed by lawyer; likelihood of ac- itself; clearly are those set forth in the rule conflict; prejudice.” tual and likelihood of namely, representation of one client that is is, at 413 S.E.2d at 117. It as the Id. “directly client without adverse” to another “ explains, question ‘proximi- comment “directly the consent of each client. The ” ty degree.’ Id. language imply that a adverse” does not representa- before bad result must occur “directly

We also addressed adverse” It is the interests of requirement Morgan impermissible. ex rel. tion is State Stan- plained attorney the rule is con- an should “not be clients with which cerned, result permitted put not the obtained.1 position himself where, unconsciously, even he will be case, representation of present In the tempted pedal’ to ‘soft his zeal in further- Mr. Baamonde entailed cross-examination ing the interests of one client order to contends Ms. McMillen. The Committee clash automatically exists avoid obvious with those of anoth- adversity direct lawyer’s representation of one when er.” Id. at 99. The American Bar Associa- entails cross-examination of an ad- client opinion tion further notes that cross-exami- lawyer’s is also the verse witness who lawyer’s poten- nation of a own client could 92-367, opinion issued client.2 formal tially jeopardize “First, client confidences. by the American Bar Association Commit- lawyer’s general familiarity to the extent a Responsibili- tee on Ethics and Professional with how a client’s mind works is relevant “A ty, explained: the Committee information, may useful it also be dis- course of a client who qualifying information within the contem- examines another client as an adverse wit- 1.8(b)_”3 Second, plation of Rule lawyer’s ness a matter unrelated *5 opinion explains lawyer that if the had ac- client, representation of the other ... will quired confidential information relevant to likely disqualifying is face a conflict that cross-examination, lawyer may ov- appropriate of client consent.” the absence ercompensate and fail to cross-examine ful- Lawyers’ Profes- ABA/BNA Manual on ly adequately represent and fail to the liti- (1993). 1001: 149 sional Conduct § gation client. “lawyer’s ex- concluded that a Committee amining lawyer’s client as an adverse We conclude that the simulta witness, conducting third[-]party or discov- representation neous of Mr. Baamonde and ordinarily present a ery of a will fortunately resulting while of interest....” The Committee conflict harm, dangers presented in no actual such discovery or opined that such examination contemplated as above and constitutes a following likely problems: create the is to 1.7(a). previous violation of Rule We have (1) pit duty loyalty to each to following: ly explained the “The ... against duty [Rules to the client mini of Professional state the other; (2) breaching duty of to risk Conduct] client-witness; no confidentiality and mum level of conduct below which law present being subject a tension between the law- to disci yer can fall without in continued yer’s pecuniary own interest plinary Syl. Pt. on action.” Committee employment by the client-witness and the Tatterson, Legal Ethics “ ability effectively represent lawyer’s (1984). ‘This is the 319 S.E.2d 381 Court litigation client. legal problems ethics final arbiter make the ultimate decisions about must opinion Bar Association The American public reprimands, suspensions or annul Theatres, Estates Inc. v. Colum- also cites practice attorneys’ licenses to Industries, Inc., ments F.Supp. Pictures bia on Le- (S.D.N.Y.1972), Syllabus ex- Point Committee in which the court law.’ position representa- is that the cross- The Committee’s results of simultaneous 1. While the presented actual evidence of the examination dispositive determination as are not of the tion representation. element of the dual occurred, the an ethical violation has to whether negative consequences suf- were fact that no 1.8(b) Virginia Rules of Pro- of the 3.Rule certainly provides in our de- merits consideration as follows: “A law- fered fessional Conduct yer relating discipline not use information appropriate for shall termination disadvantage of a client to the sentation violation. such client consents after consulta- client unless the tion, except permitted required Rule 1.6 as or status as sharehold- 2. Mrs. McMillen’s revealing prevent [regarding confidences er, manager corpora- of a or a claim of a crime or to establish commission being Mr. Frame sued should have alerted tion lawyer] or Rule 3.3 on behalf of the defense positions of the clients and to the adverse informing [regarding a tribunal having Mrs. potential enabling for to cross-examine to make tribunal material facts formed decision]” McMillen. gal Ethics v. Blair, ^[174] W.Va. [494], 327 Ms. McMillen is fact two steps re- moved from the arena of the Baamonde (1984).” Syl. Pt. S.E.2d 671 Committee party in case: the real interest in that case Charonis, 184 W.Va. Legal Ethics v. not Ms. McMillen and was not the (1990). 400 S.E.2d 276 corporation in which Ms. McMillen owns a controlling interest, but rather the protection For their own unity tion’s insurer. Under the of interest charges of ethical violations and consid doctrine, there is no of a interests, attorneys clients’ eration of their “directly client adverse” to another client poten remain mindful of actual or should where, here, corpo- the suit is resulting tial conflicts of interest from si ration’s insurer and not the individ- representation. Any doubt re multaneous corporation ual or the the individual owns garding a conflict exists should be actually gored. in terms of whose ox will client(s) informing resolved favor of When Ms. McMillen retained Clark allowing client(s) of the concerns and lawyer, Frame as her divorce opportunity rep to consent to continued her of his informed in the counsel. resentation or to seek new Baamonde matter. Ms. McMillen ex- pressed no concern. Ms. McMillenobvious- Respon- The Committee found that the among retained Mr. Frame because he is present poor dents in the case exercised lawyers the foremost in West judgment.4 To the extent that the reputation has a clients disciplinary dents could have averted aggressively successfully. Had Mr. *6 by assuring proceeding that Ms. Frame failed to disclose to Ms. McMillen ap- and Mr. Baamonde understood and posture actually cases while proved of the between the Baa- conflict, possible aware of the his actions Respondents’ law monde’s suit would deserve sanction. Had Ms. McMil- firm, agree. findings adopt We (who immediately len was soon if not recommendation of the Committee and knowledge full armed with of the nature of hereby public reprimand against order a actions), registered objection both dur- Mr. Frame and further order that the costs ing months continued contact with Mr. proceeding of this him. be assessed Frame, plausible. her case would more Instead, gets this ridiculous reprimand ordered. Public because, opportunity obviously, to act out get perspective

she did not what from her perfect would have been a result in her NEELY, Justice, dissenting: divorce action. Meanwhile the escutcheon majority accurately sets out highly-regarded lawyer of a in this state is standard needlessly besmirched. sentation of one client is adverse to intimacy

another: the duration and

lawyer’s relationship the clients in-

volved; performed by the functions conflict;

lawyer; the likelihood of actual prejudice. If Ms.

and the likelihood of

McMillen were a named in the Baa- action,

monde the case

would be unassailable. improper emphasize

4. We that neither this Court nor the We therefore attribute no motive to assigns any to Mr. Committee Frame in this matter. As the Committee ed unethical intent any Mr. Frame or member of his law firm. point- out, example poor judg- the incident is an deceptive ment rather than malicious or intent.