*1 4, 1984, rehearing suspended December accused Argued October submitted 29, 1985 January denied the Conduct as to Complaint In re BROWN, RAY G.
Accused. S30283) 82-89; (OSB SC P2d 107 Portland, cause and filed Dobbins, argued the G. Richard Dobbins & briefs was him on the for accused. With briefs McCurdy, Portland. for the Portland, the cause McCulloch, argued
Mark Bar. Oregon State
PER CURIAM
PER CURIAM complaint against Bar filed a State separate in two conduct him of unethical accusing G. Brown advanc- improperly Brown The first cause accuses causes. Brown alleges cause The second ing money to client. an affidavit the client by obtaining from created false evidence money. denying the advancement 15,1983.1 served March The Bar’s both causes. guilty The Trial Board found Brown Brown Board found Disciplinary Review six member cause. find of the second We guilty first cause and guilty of the causes. both incident, to this years prior approximately For Ander- and father of Deonna the mother represented 2, On October money. them he had loaned son. On occasion she years age, 1981, approximately Anderson was when in an automobile collision. On November was involved Black, lawyer, to B. a Portland employed she Jarvis personal injury in connection with her claim represent her Thereafter from the collision. property damages resulting money. He her some requested that Black loan *3 refused. 27, 1982, Anderson the January
On Brown loaned day, day following on the same sum of Sometime $35.00. that she wanted Black’s and told him Anderson went to office to loan agreed had represent Brown to her because “Brown in the event judgment the settlement or money against he would transfer agreed to trial.”2 Black that went [her case] On day back in a or two. file and told Anderson to come Black’s office 29, 1982, Anderson returned to January (as included the second receipt for the file which signed a following: paragraph) Attorney Ray my transferring file and claim to “I am this 97204, Street, Portland, Brown, Oregon
G. 430 S.W. Morrison me, money for agreed to loan me represent because he has relating 618, changes chapter laws made substantial Laws any proceeding pending However, chapter provides lawyers. discipline January 1,1984, completed provided in the former statutes. as shall testimony upon finding the Trial Board. Black’s before make this based We my personal repaid needs and to be from the proceeds recovery in the above damages.” claim for February 4, 1982,
On Brown filed a with the clerk of the court for Anderson against the owner of the other vehicle involved in the accident.
Cancelled checks on Brown’s office account show that he loaned Anderson these further sums on the following days:
February 15,1982 $157.40 27,1982 March 50.00 April 13,1982 118.60 All of the loans were made for Anderson’s living expenses.
On April 21,1982, gave in full $361 payment of all previous loans. This payment prior was made to the settlement of her against case the owner of the second vehicle. 5,May
On a grievance was filed Black with the Oregon State Bar concerning Brown’s above described conduct. May 17, 1982,
On Anderson met with Brown in his office concerning the charges that had been filed with the Bar. Anderson expressed anger about wording portion of the receipt set out above. prepared and Anderson signed following affidavit: “1. I up make this deny to clear and to receipt gave
statement I picked up my Jarvis Black when I file order to take the case to G. Brown. Mr. Black paper telling receipt handed me a me it was a for the file and reading signed Today without it I I it. read it for the first time. paragraph The second absolutely of the statement untrue. *4 I Mr. my wanted Brown to handle case because for “2. years about my attorney, 25 he has been father’s he has represented my years mother three cases and about three ago he arising handled an item for me out of an automobile any agreement accident. At no time was there between me and
289 personal needs money to me for lend Mr. Brown that he would purpose.”3 expenses or for other to the Bar then forwarded Anderson’s affidavit was investigation. drop it to its persuading purpose for the Bar filed its 1, 1983, Oregon State On March forth complaint sets complaint against Brown. formal are summarized as follows: separate two causes which (1) represent January, to In Brown undertook damages arising out of respect claim for Anderson4 with to a receipt her signed a for an automobile collision. Anderson changing previous attorney acknowledging that she was attor money neys her for agreed Brown had to advance because personal expenses. Brown on four different dates did advance money expenses than those incurred to Anderson for litigation. Brown’s conduct was unethical and due to 5-103(B). DR violation of
(2) complaint Oregon was made to the State Bar After advancing money he accusing Brown of to his client obtained client, from the Anderson. Brown’s conduct a false affidavit (A) (5) (6), (4), was unethical and violation of 1-102 7-102(A)(4) (6).” cause,
In to the first Brown admitted that answer for other than had advanced the to Anderson cause, by incurred In answer to the second litigation. those Anderson, the affidavit Brown admitted that he obtained Board: Jarvis Black testified before Trial (Receipt January [By you A Bar’s Did hand her Exhibit dated “Q. Counsel] 1982) (Anderson’s) signature? her Yes, “A. I did. your presence? A in Did she read exhibit
“Q.
“A. I her read it. She did. asked appear reading her time in the instrument? Did she to take
“Q. reads, slowly impression I “A. I don’t know how fast or how she but had completely if in there was true and she read it because I asked her what was had my ‘yes’ ‘okay, you sign did in I date it and it’ which she she said and said presence. any questions in there? about the matter contained Did she have “Q.
“A. whatsoever.” None changed By Anderson had the time the State Bar filed its marriage. to refer to her as surname Davis reason of We shall continue prevent confusion. *5 specifically the facts were false and
“but denies that knew in in are denies that the facts set forth said affidavit further fact false.” either cause was further denied that the conduct in
unethical. to this matter are as Disciplinary Rules relevant
follows: Acquisition Litigation. in Avoiding
“DR of Interest 5-103 in “(A) lawyer acquire proprietary interest A shall not a litigation he subject action or matter of the cause of client, except may: conducting for a that he “(1) Acquire granted by law to secure his fee a lien expenses.
or “(2) con- Contract with a client for a reasonable
tingent fee in a civil case. “(B) representing a client connection with While contemplated litigation, lawyer pending
or a shall guarantee financial assistance to not advance or client, lawyer may guaran- except that a advance or costs, expenses litigation, including of court tee expenses investigation, of of medical examination, presenting obtaining and and costs of evidence, ultimately provided the client remains expenses. for such liable 1-102 Misconduct. “DR
“(A) lawyer A shall not:
a* * * * * dishonesty,
“(4) involving Engage in conduct fraud, deceit, misrepresentation. or “(5) prejudicial to the Engage in conduct that is justice.
administration “(6) adversely conduct that Engage practice
reflects on his fitness to law. the Bounds of the Representing a Client Within “DR 7-102 Law. client, lawyer
“(A) shall not: representation In his <<$ * * * *
“(4) testimony or false Knowingly perjured use
evidence. * *
* * preservation of “(6) or Participate the creation he knows or it obvious evidence when the evidence is false.
“(7) in conduct that or assist his client Counsel illegal or fraudulent.” knows to both guilty Brown not The Trial Board found found Review Board complaint. Disciplinary causes of cause, on the second cause of the first but guilty (7). 7-102(A)(4) It violating him found a violation of DR prove found the Bar did not specifically (6) evidence. It did 1-102(A)(4),(5) convincing clear and (A)(6).5 not mention DR 7-102 *6 cause, violating is accused of DR
In the first
Brown
5-103(B).
who makes
position
It is the Bar’s
expenses acquires an
personal
living
to a client for
advances
in
subject
litigation.
interest
in the
matter of the
The Bar
its
upon
quotes
length
brief in this court relies
at
(Dated
Opinion
September
Bar’s Ethics
No. 67
Oregon State
24,1958). Although
opinion
advisory only
predates
is
Responsibility
Professional
on
adoption
of the Code of
re
in In
30, 1970,
may
December
we
consider
it. This court
Brown,
731, 733,
(1977),
277 Or
“The sources of the rules are the Court, opinions decisions of this of the Committee on * * * merely Legal present provisions a more Ethics. The are Canons, precise original Rules and decisions statement of the of this court.” upon by 67 relied portion Opinion
A of Ethics No. Bar is as follows: practice advancing living expenses
“The of and other litigation properly the actual is connected with prospective simply repaid of from a an advance funds to attorney settlement or verdict. An who makes such advances 5 speculation finding by Disciplinary This that the Review Board could lead to 7-102(A)(7) guilty typographical find of DR error and that it intended to was a 7-102(A)(6). guilty plead violating DR DR The did not of 7-102(A)(7). court, guilty this claims that he cannot be On review to Chambers, 670, 676, 7-102(A)(7) In re 286 292 Or 642 P2d because of lack of notice. (1982). this matter because we find Brown This makes no difference the result of any violating a different reason. section of DR 7-102 for thereupon acquiring subject is an interest in the matter of the litigation. payments tendency
“Such or encourage advances have a either the commencement or the legal proceed continuance of ings. acquisition subject interest matter of litigation also results a conflict of interests between the attorney and the client attorney’s which could result in the considering his in determining pro own interest whether a posed accepted rejected. possible settlement should be Such conflict of clearly interest must be avoided. It is inconsistent attorney’s duty with the fidelity of undivided to his client.”6 position It is Brown’s that he made the loans to Anderson but they had no connection with her claim for personal injuries and property damages against the' owner of the other vehicle. Anderson testified that the loans were to be repaid (PIP) from the injury protection payments from her insurance carrier.7 Brown testified that the loans were to be repaid by Anderson from her coverage PIP or a “personal injury protection type coverage” that she had employer. with her Anderson in repaid fact the loan on April 21, 1982, from a check that she received from Farmers Company’s Insurance PIP coverage. payment was made before the settlement of against Anderson’s case the owner of the other vehicle and before the start of the Bar’s investiga tion. 6Oregon Opinion approval State Bar Ethics No. 67 refers with to Canon Opinion Canons of Professional Ethics of the American Bar Association and the Committee on Professional Ethics of the American Bar Association. It 5-103(B) interesting to note that the American Bar Association’s version of DR except Oregon’s, identical to that it contains a footnote which reads: “See ABA Canon
42; (1954).” opinion appears ABA cf. Thus it State Bar Ethics Opinion Opinion No. American Bar Association’s Canon and 288 are the 5-103(B). “legislative history” Oregon’s of
Canon 42 is as follows:
“EXPENSES OF LITIGATION lawyer may properly agree pay “A with a client that the shall may litigation; good expenses bear of be faith advance as a matter of convenience, subject but to reimbursement.” Opinion The headnote to the American Bar Association’s 288 is: attorney may living injured “An members not advance costs to an client or the costs, fees, family may pending witness of his while suit is but advance court expenses resulting litigation other from the conduct of the itself.” 7 ORS 743.800.
Thus, Brown contends that the loans were to because repaid repaid and in were PIP fact Anderson’s coverage, acquire litigation— did he an interest against case Anderson’s owner of other vehicle to damages personal injury property damage. recover for hold of case,
We that under facts this Brown did acquire litigation by advancing an interest in the to Opinon Anderson No. use. for We note Ethics speaks supra, “acquiring subject of an interest in the litigation” prohibition matter of the and does not limit the to an subject interest in final settlement or case. verdict potential litigation
matter of the in this case included arising all of the matters out of the collision between Ander- son’s vehicle the other vehicle. theory prevail
To case, under Brown’s he would have Anderson, to admit that when he advanced the to $361 acquired coverage. an interest in her PIP Farmers Insurance Company coverage. carried PIP Anderson’s When accepted Black, the file from included statement which showed that Black had sent to “letters Farmers Insurance Company enclosing telephone medical bills” and had “calls to and from Farmers Insurance re for forms claim under PIP coverage wages charges.” lost and medical
Under some circumstances Farmers Insurance Com- pany against could be entitled to lien Anderson’s cause of against action the owner the of second vehicle for the amounts paid coverage. to her under PIP ORS 743.828.Under Company circumstances, Farmers Insurance could be entitled by way subrogation proceeds to “the settlement judgment” might that Anderson it for the recieve reimburse payments. PIP event, ORS 743.830. In either would repayment directly find loans to Anderson related to judgment personal injury the settlement or from the action against the driver of the second vehicle.
What would if Brown do Farmers Insurance Com- pany pay for some unforeseen reason refused Anderson coverage? required PIP Would he be and tell withdraw acquired coverage? Anderson that he had an interest in that represent liability Could he continue to questions claim? We think that these in hair- result *8 294 repre It to allow the
splitting impractical decisions. would litigation matter to be subject of a client on the of sentation lawyer the could divided in areas so that in some situations money in he could not. Clients loan the client and others result. not understand the fine distinctions that would spirit of DR To violate the intent and hold otherwise would 5-103.8 cause, convincing and by
On
first
we find
clear
the
5-103(B). The
violating
is
of
DR
evidence that Brown
money, the amounts involved
fact that Anderson needed the
in
hurt,
mitigation
and no one
are matters of
were small
was
Heider, 217 Or
determining a
re Otto W.
proper sanction. In
439,
Berlant,
134, 159,
(1959).
In re
485 Pa
In the second cause Brown (6). (6) 7-102(A)(4) 1-102(A)(4),(5) and and and DR disciplinary 7-102. That First we will consider DR DR example, For simply rule does not fit this situation. client, 7-102(A)(4) lawyer a representation “In his of a states: testimony false evidence.” knowingly perjured shall use prece- a is a condition phrase The client” “representation of words, operative of the rule. In other dent to the subdivisions a representing rule is violate the unless he lawyer the cannot was from Anderson who client. Brown the affidavit obtained the scope a He outside the of his on different issue. was client asked he dictated and relationship when attorney-client procured He sign the affidavit. 8 Oregon’s. DR 5-103 identical to South Carolina’s Reaves, (1978), case, Matter SC 250 SE2d In Carolina a South of 5-103(B) lawyer charged loaning money and his in of clients violation with making lawyer soliciting in admitted business concert with a medical doctor. The court used funds to take a vacation. and in one instance the client loans lawyer and held: disbarred Board, Panel, finding by agreement of with the concurred “We are reject 5-103(B), doing respondent Disciplinary in so violated Rule respondent’s necessary violation that is a element of such contention by proscribed acquire as proprietary of itself interest the cause action by clearly prohibited 5-103(A), by respondent type made of loans provisions.” its SC at 214. complaint, do reach first we we reach on the cause Because result necessary Supreme for us to question It is not Court. decided the South Carolina 5-103(A). 5-103(B) independent of defines an offense decide if own defense in a matter with the State If Bar. for, had a prepared client when he asked and received affidavit, it was himself. Next, we the alleged consider violations of DR (5) 1-102(A)(4), (6). Brown’s defense the second cause has been of a something mystery. portion *9 gave Anderson’s affidavit which rise to the second cause is: «* * * any agreement At no time there between was me and money personal Mr. Brown that he wouldlend and to me for needs purpose.” or for Brown’s admits formal answer to the Bar’s affidavit, he that obtained the specificallydenies that he facts knew the werefalse and
“[B]ut further denies that the facts set forth in said affidavit are in fact false.”
Brown’s answer had previously admitted paragraph the IV of Bar’s complaint: “The money Accused advanced sums of for [Anderson]
expenses other than those incurred his litiga- due to client’s * * tion
The Disciplinary Review Board found that Brown prepared a false affidavit for sign. Anderson to It weighed testimony Brown’s before the Trial against Board It him. referred to separate five pages in the trial transcript where Brown testified to the effect that the sums advanced Anderson were personal loans promised which she to repay.
Anderson testified before the Trial Board. Her testi- mony part is as follows:
“Q. Anderson, you Mrs. did money? Mr. Brown in loan fact my knowledge, “A. Not to no.”
Thereafter the Bar had as marked exhibits the four checks showing that Brown had advanced the various sums testimony Anderson. The resumed: “Q. Anderson, [By going you Bar Mrs. I’m to hand counsel] January
what has been as marked Exhibit C check dated [the 27,1982 in purports the amount of and it to be a check $35.00] your drawn on the account Brown with name on it and the on indicates backside of the check it’s reflected there as well. It
your your signature, signature? is that Yes, loan, I only a loan until “A. it is. But it wasn’t a it was Insurance, just got my but didn’t come check from Farmers money. give no No. out and me
Thereafter, were the balance of the checks identified evidence. into received Before the Trial Board Brown insisted that spite pleadings in the affidavit was correct admission money for testimony advanced was thought no that Brown loans. There was indication out of it had been left ambiguous any part affidavit was due to a scrivener’s error. admissions, testi-
Through judicial exhibits and Bar mony, established that Brown loaned By together with money personal expenses. this evidence affidavit, plain the Bar established meaning Anderson’s case on the second cause prima before the Trial Board facie words, by testing against In other complaint. Appar- false. clear that affidavit was the evidence was the Trial Board ently, explanation defense or before Brown’s no there to Anderson but was that he loaned to do agreement so. *10 later, Disciplinary after the
Then months and eight cause guilty found Brown not of the first Review Board had cause, position and of second he shifted his guilty and the this, his brief to court: argued for the first time in “Admittedly, Affida- paragraph second of Ms. Anderson’s the capable interpretations. artfully is of two vit is not drafted and paid simply phrase the was to be added ‘that Had the Accused of proceeds my injury to the last sentence out of the of claim’ affidavit, of the true paragraph the Ms. Anderson’s second meaning would have been clear.” of the Affidavit the sen- words, last arguing
In other Brown of the affidavit should read: tence me Mr. any agreement between and “At no time was there and me for needs that would lend Brown out the paid to be purpose that was or of my injury proceeds claim.” about grievance It must remembered May Bar on State conduct was filed with Brown’s days Then, with Brown in his office 5,1982. Anderson met beginning May 17,1982. during this was later on Because investigation, Bar’s it is to infer reasonable that the Bar representing seen the had not four cancelled checks the loans to Anderson. The last loan Brown to Anderson had been April paid on and the made loans were in full on April prepared 21,1982. When Brown the affidavit for Ander- signature May way 17th, son’s on there was no that he could forgotten previous question have of whether Brown had critical to the Bar’s overlooked loans. The fact made loans to Anderson was
investigation. highly probable We find is prepared false that the to affidavit was and forwarded to the Bar persuade drop investigation. it to its If Bar in fact had investiga- value, believed tion affidavit and taken it at face hand, would have been at an end. On the other if the quoted phrase affidavit had included the above now which Brown urges, investigation would have continued and under today guilty our decision on the first cause. would have still been found prepared We hold that the affidavit which Brown signature May ambiguous 17, 1982, Anderson’s on was not suggested afterthought. and the addition is an prepares signature
A who and obtains guilty affidavit which he knows to be false is of conduct involving dishonesty and that such conduct reflects on his practice Therefore, fitness convincing law. find we and clear 1-102(A)(4) guilty
evidence that Brown is of DR (6). guilty 1-102(A)(5) and We find him DR because the any authority Bar has cited to us to the effect that a bar proceeding meaning comes within of “administration justice” question as set out in rule. This has not been argued or briefed. violating G. found DR
5-103(B) 1-102(A)(4) violating on the first cause and DR (6) 5-103(B) on the second cause. violation of under standing case, alone, the facts circumstances of this probably public only reprimand, warrant but the violations (6) 1-102(A)(4) preparation of DR in the of a false *11 extremely suspension affidavit is and a serious demands practice Ray suspended period of of law. G. Brown is State Bar for a years.9 The two shall recover costs.
9 E. In the case of In re M. In similar cases our have been sanctions as follows:
CARSON, J., dissenting. G. Brown to have court finds
The
of the
majority
fraud, deceit, or
dishonesty,
involving
in conduct
engaged
(A)(4)
having
1-102
violating DR
thus
misrepresentation,
a false
signature to
Deonna Anderson’s
obtained
prepared and
thing,
a
intentionally
does such
lawyer
If a
affidavit.
adversely on
reflecting
breach
professional
a
certainly
grave
court,
law,
by the
as found
practice
to
his or her fitness
sanction.1
disciplinary
a severe
1-102(A)(6),
deserving of
inten
this accused
proof
is whether
question
convinc
is “clear and
a false affidavit
prepare
so
tionally did
(1980).
Galton,
565,
statement, knowing it to be false. “(2) swearing A misdemeanor.” is a Class False *12 constituting false and intended to it in a manner dishon- use fraud, deceit, esty, misrepresentation as those terms are used in DR 1-102. prevail by
The Bar issue clear and must this convincing opinion proceeds evidence. The majority to recite possible says two the “apparently” “defenses.” It that accused’s defense the Trial before Board was that he loaned the It prior agreement says without to do so. then court, that in this expla- the accused’s brief shifts to another nation: that deny the affidavit was meant to the accused had agreed against proceeds to make loans the of Anderson’s injury claim, receipt by as recited in the prepared Jarvis Black. represented by
The accused was different counsel before trial and disciplinary court, the boards and before this they it is true that explanations offered alternative affidavit. the is question But not one of alternative “defenses,” as the majority question would have it. The what as plausible we consider the more reading of document but proved whether the Bar what the accused meant to have Anderson swear to when he prepared the affidavit. That must record, arguments determined the not from the counsel.
The accused’s answer Bar’s did not deny obtaining the affidavit deny from Anderson and did not her lending money for personal expenses. falsity It denied of the affidavit and the knowledge any falsity. accused’s Clearly the by issue framed the answer was not what said prepared affidavit but what the accused meant when it.
The Bar called accused as a witness. The direct examination took him through the evidence of the loans and repayment. their agreement accused testified with repay Mrs. was that she would them out of her income, monthly PIP coverage, coverage pro- insurance employer. vided testimony pri- Much of the related marily charges to the under an DR 5-103. On existence of agreement, the accused was asked:
“Q. question your you There no mind that had an Anderson, agreement repay with that she Deonna loans? question
“A. No whatsoever.” later recalled for direct examination The accused was by his own counsel. He was asked: Brown, you
“Q. prepared. the Affidavit that Mr. that’s you is, you you My question know or have ever do now respect? any known that Affidavit was false any “A. I’ve had to the effect that No. never information any part of it was false.” point. questions Bar asked no on this
Counsel why accused attempt pursue made No further He was respect. was not false in believed that the affidavit he meant. The record shows no explain never asked to what testimony concerning the accused’s inquiry and no direct at or his intentions either understanding of *13 hearing. or time the prepared the affidavit was at the time entirely is to This left inference. record, majority this the would infer the
From deliberately a to swear to false accused induced client head off an investigation affidavit with the intent to Black Con- receipt. into facts asserted in the Jarvis Bar greater risk of ceivably lawyer choose the much might in outright potentially criminal lie submitting an and relatively into a investigation less belief that it would end an experi- an But the likelihood that disciplinary charge. serious unethical behavior with no known record of enced compel- to inference do is not so as make the great would so testified the accused ling. possible. Other inferences are When of his agreed repayment he client as to the and his had true, he must have loans but that nonetheless the affidavit was read, in full: mind. The affidavit explanation had some deny up to and “1. I make this clear to my picked up I receipt gave in a I Jarvis Black when statement file Black take case to G. Brown. Mr. order to receipt paper telling me it for the file and handed me a was a Today reading I I it for the first time. signed it. read without absolutely untrue. paragraph of the statement second my for case because “2. I wanted Mr. Brown to handle my attorney, he has years he father’s about 25 has been years represented my in three and about three mother cases arising me out of an automobile ago he handled an item for any me and agreement time between accident. At no Mr. was there personal needs money me for that he lend to purpose.” expenses and or for specifically prepared in the of the statement as a denial It was receipt investigation rested, which Bar’s on which the my personal money “agreed to me for loan that the accused proceeds repaid of the at the to be from the needs recovery hearing Perhaps damages.” claim for in the above to he the affidavit accused meant that intended money agreement deny to the client an lend that there was transferring office, lend her to his or to case return proceeds repaid otherwise related to to be from or any agreement at the time claim, about loans or that there was asked, and we do accused was not of the transfer. The know. probable may convincing inter- not be or even
These repeat, pretations present affidavit, to of the words of the but give meaning those we would words. issue not what question knew them to be false is whether the accused Bar. them deceive the State and intended use prove. But the Bar’s examina- That was the Bar’s burden to question hearing pursue accused at the did not tion understanding the time he of his of the affidavit then at though deny prepared it, that the affidavit was continued to be false. The evidence that the accused knew the affidavit convincing false be clear and before he can be found must violating disciplinary the record rules. From hearing, made at this the inference that he knew intended may plausible inference, it is not clear the falsehood be one but testimony, convincing. board, The trial which heard the did draw inference. record, the not find the accused
On this court should *14 complaint. guilty of the second cause of the Bar’s dissenting join J., Linde, Roberts, in this J. and opinion.