In re Seth Adam Robbins
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On Report and Recommendation of the Board on Professional Responsibility (Board Docket No. 15-BD-118) (BDN-431-13)
(Argued May 17, 2018 Decided August 30, 2018)
Arthur D. Burger for respondent.
Hamilton P. Fox, III, Disciplinary Counsel, with whom Julia L. Porter, Senior Assistant Disciplinary Counsel, was on the brief, for the Office of Disciplinary Counsel.
Before FISHER, BECKWITH, and MCLEESE, Associate Judges.
I.
Mr. Robbins was admitted to the District of Columbia Bar in May 2001 and has no record of professional discipline. At the time of the alleged misconduct, he was a partner аt a law firm and responsible for one of the firm‘s clients, Persaud Companies, Inc. (Persaud), a government contractor and construction company founded and owned by its CEO Andy Persaud. This case arose when Mr. Robbins invited his friend and client, Gary Day, to serve as an indemnitor for Persaud‘s surety bonds on future projects. The evidence presented to the Hearing Committee was as follows.
Hudson Insurance Company had previously served as surety on Persaud‘s government contracts, issuing payment and performance bonds. In 2011, Persaud asked Hudsоn to furnish bonds on future construction projects, but Persaud was unable to produce certified audited financial statements. Hudson thus agreed to remain as surety on future projects but on two conditions. First, Hudson wanted Persaud to engage an escrow agent to receive and disburse funds from the government agencies with which it contracted. Hudson suggested Chesapeake Escrow Services,
Second, Hudson wanted Persaud to add a third indemnitor. In the past, Persaud and Andy Persaud had served as indemnitors for Hudson. Mr. Robbins knew Gary Day through the work Mr. Robbins‘s firm had done for Mr. Day‘s family and the work Mr. Robbins had done for Mr. Day, and Mr. Robbins and Mr. Day had since become friends. Mr. Robbins approached Mr. Day about this opportunity and explained that the requirement of an additional indemnitor was the result of Andy Persaud‘s need to rearrange funds, but assured Mr. Day that Persaud and Andy Persaud had sufficient assets to protect Mr. Day in the event that Hudsоn paid a claim and sought indemnification. Mr. Day testified that he was not aware of Mr. Robbins‘s interest in Chesapeake, whereas Mr. Robbins testified that Mr. Day was aware because Mr. Day had seen the escrow agreements.
According to his testimony, Mr. Day understood that Mr. Robbins would represent Mr. Day‘s interests in negotiating the terms of the indemnification agreement. Specifically, Mr. Day expected Mr. Robbins to ensure that the agreement included a provision that if Persaud failed to perform on a contract and Hudson had to pay out its bonds, Hudson would look to Persaud and Andy Persaud before turning to Mr. Day. In addition, Mr. Day requested a provision that would require his explicit approval before he indemnified future contracts, as well as a provision that both he and Mr. Robbins would be notified of any future indemnifications. Mr. Robbins successfully negotiated the second two terms with Hudson, but did not obtain the provision in the agreement that would ensure that Hudson looked to Persaud and Andy Persaud before turning to Mr. Day.1 Mr. Day explained that, based on reassurances from Mr. Robbins, he signed the indemnity agreement without reading or understanding it, and did so again with each revised copy Mr. Robbins sent him. Mr. Day did not feel the need to read the documents carefully because he trusted Mr. Robbins and “didn‘t know enough about this stuff.” Throughout this time, Mr. Day believed Mr. Robbins was his lawyer, despite never receiving an invoice for Mr. Robbins‘s services.
Over time, Mr. Robbins learned that Persaud may be having financial problems. In February 2012 Chesapeake loaned Persaud close to $1 million from its escrow account but did not receive immediate repayment. Later that year, Persaud fell behind on its performance on one of the contracts on which Mr. Day was an indemnitor, became subject to a federal criminal investigation, and stopped escrowing funds with Chesapeake as required by its agreement with Hudson. Mr. Robbins did not convey any of this information to Mr. Day. In July 2012 a lawyer for Hudson named Richard Pledger sent Mr. Day a demand letter because Persaud was failing to pay its bills on certain projects, resulting in claims against the surety bonds for $1,215,242. Mr. Day emailed Mr. Robbins the letter. Mr. Robbins replied, “It‘s all good . . . . I am working out with Hudson. Yоu do not need to be concerned,” and Mr. Day wrote back, “Yeah, figured. Thanks for the update.” The two also spoke over the phone.
Over the next few months, Mr. Robbins continued to communicate with Richard Pledger about the claims against the surety bonds. In September, Mr. Pledger sent
In January 2013, Mr. Pledger, on behalf of Hudson, filed suit against Persaud, Andy Persaud, and Mr. Day, and sent a letter to the parties informing them that he was delaying service in hopes of working out a resolution. The letter referred to Mr. Robbins as their “former counsel.” Mr. Pledger sent the letter to Mr. Day directly because оf Mr. Robbins‘s statement that he would not be involved after a suit was filed because of a conflict of interest. Days later, Mr. Robbins texted Mr. Day to say “[t]he Persaud crap is not good . . . . I think you are going to need to hire an atty to deal with the surety.” Mr. Day said he understood this to mean that he needed to hire an attorney who specialized in surety bond litigation, not that Mr. Robbins had never represented Mr. Day in any capacity with regard to the indemnity agreement. Mr. Day ultimately hired an attorney and paid $1.7 million to resolve the litigation.
Disciplinary Cоunsel filed a petition and specification of charges against Mr. Robbins in December 2015 and a hearing was held before the Hearing Committee. The Hearing Committee concluded that Mr. Robbins had entered into an attorney-client relationship with Mr. Day and that he violated
After Disciplinary Counsel filed its specification of charges, Virginia Bar Counsel filed identical charges against Mr. Robbins in Virginia, where Mr. Robbins was also a member of the bar. The parties in Virginia submitted the record created in the proceedings before the D.C. Hearing Committee, including the Hearing Committee‘s final report and recommendation, to a three-judge panel in Virginia—the final arbiter of disciplinary proceedings in that jurisdiction. Without hearing any live testimony, the Virginia court dismissed the case with prejudice upon determining that the evidence of an attorney-client relationship between Mr. Robbins and Mr. Day fell short of clear and convincing evidence, “but barely so.” The D.C. Board on Professional Responsibility declined to give the Virginia determination preclusive effect and
II.
Mr. Robbins takes exception to the finding of an attorney-client relationship between him and Mr. Day, the findings of professional misconduct, the Board‘s decision not to adopt Virginia‘s recommended sanction, and, in the event we agree with the Board‘s findings, the recommended disciplinary sanction.
A. Attorney-Client Relationship
At the outset, Mr. Robbins argues that the Board erred by finding an attorney-client relationship between Mr. Robbins and Mr. Day. Mr. Robbins argues that the Board erred in concluding that such a relationship existed by ignoring important exсulpatory evidence and unfairly construing some of the evidence to the disadvantage of Mr. Robbins. When reviewing a disciplinary proceeding, we “accept the findings of fact made by the Board unless they are unsupported by substantial evidence of record.”
Whether an attorney-client relationship existed depends on the circumstances of each case. See, e.g., In re Bernstein, 707 A.2d at 375; In re Lieber, 442 A.2d 153, 156 (D.C. 1982). “[N]either a written agreemеnt nor the payment of fees is necessary to create an attorney-client relationship. In re Lieber, 442 A.2d at 156. All that is needed “is that the parties[,] explicitly or by their conduct, manifest an intention to create” the relationship. In re Dickens, 174 A.3d 283, 296 (D.C. 2017) (quoting In re Ryan, 670 A.2d 375, 379 (D.C. 1996) (internal quotation marks omitted)). Although the client‘s perception of the relationship is relevant, it is not dispositive. See In re Dickens, 174 A.3d at 297; In re Fay, 111 A.3d at 1030.
The Hearing Committee credited Mr. Day‘s testimony about his understanding of his relationship with Mr. Robbins based on Mr. Day‘s credible demeanor and other facts in the record supporting the conclusiоn that Mr. Day‘s belief was reasonable. For instance, the Hearing Committee found that Mr. Robbins had a history of representing Mr. Day in other business deals. After presenting the opportunity to sign on as an indemnitor to Mr. Day, Mr. Robbins negotiated part of the indemnification agreement on Mr. Day‘s behalf and memorialized it before sending Mr. Day a copy for his review. Mr. Day only signed the agreement upon confirming with Mr. Robbins that he should do so. When Mr. Pledger sent a demand letter on behalf of
As the Board and Hearing Committee recognized, not all facts supported the existence of an attorney-client relationship. Among other examples, Mr. Day did not explicitly ask Mr. Robbins to represent him, no formal document established an attorney-client relationship, Mr. Day did not pay Mr. Robbins for his services in this matter, he knew that Mr. Robbins was representing Persaud, and Mr. Robbins testified credibly that he did not believe he was doing legal work for Mr. Day. Mr. Robbins contends that the Hearing Committee failed to acknowledge eleven additional exculpatory facts, as did the Board in its review of the Committee‘s findings. But the Hearing Committee is not required to enumеrate every fact that has possible relevance to an issue in its report. See, e.g., Sturgis v. District of Columbia Dep‘t of Emp‘t Servs., 629 A.2d 547, 554 (D.C. 1993). Its job is to ensure that each finding is supported by clear and convincing evidence,3 and on review, this court will uphold those findings, as we do here, where there is substantial evidence to support them—even where evidence may support a contrary view as well. See In re Szymkowicz, 124 A.3d 1078, 1084 (D.C. 2015) (per curiam); see also In re Nace, 98 A.3d 967, 974 (D.C. 2014) (per curiam).4
Furthermore, although Mr. Day did not pay Mr. Robbins for this specific transaction, Mr. Robbins had never had a written fee arrangement with Mr. Day, despite having formally represеnted him in other matters. Mr. Day also testified that in this matter, he and Mr. Robbins had discussed payment, but Mr. Robbins had indicated that he would be compensated based on his other roles in the transaction.
Because substantial evidence supports the finding that Mr. Robbins entered into an attorney-client relationship with Mr. Day, Mr. Robbins was obliged to exercise all ethical duties arising out of that relationship. Although Mr. Robbins filed an exception to the Board‘s findings of professional misconduct, he does not meaningfully challenge these findings on appeal. We conclude that substantial evidence supports each violation.
Finally,
In sum, substantial evidence from the record supports the Hearing Committee‘s finding of each violation.
B. Effect of the Virginia Decision
Mr. Robbins argues that the Hearing Committee‘s findings aside, the Board was obligated by principles of collateral estoppel to defer to the Virginia court‘s final adjudication that Mr. Robbins had not entered into an attorney-client relationship with Mr. Day.
The doctrine of collateral estoppel renders conclusive an issue of fact or law essential to a determination where there has been a final judgment on the merits that has been actually litigated by the same parties or their privies. E.g., In re Wilde, 68 A.3d 749, 759 (D.C. 2013). Whether these requirements are met is a legal issue that we review de novo. Modiri v. 1342 Rest. Grp., Inc., 904 A.2d 391, 394 (D.C. 2006). Missing here is privity between Disciplinary Counsel and its Virginia counterpart. Privies are sometimes described as “those who control an action although not parties to it; those whose
Moreover, the doctrine of collateral estoppel arose because “the public interest in judicial economy and in ending repetitious litigation dictates that it would be unjust to permit one who has had his day in court to reopen identical issues by merely switching adversaries.” Jackson v. District of Columbia, 412 A.2d 948, 953 (D.C. 1980) (internal quotation marks omitted). This rationale applies with less force where there has already been a full hearing on the merits in our jurisdiction, and all that awaits is a final decision based on that record. See In re Perrin, 663 A.2d 517, 523 (D.C. 1995) (holding that “where the Hearing Committee had already held an evidentiary hearing” before the attorney was disbarred elsewhere, “it simply makes no sense to disregard the Committee‘s findings and the Board‘s recommendation in favor of the other jurisdiction‘s sanction“); In re Cerroni, 683 A.2d 150, 151 (D.C. 1996) (per curiam) (agreeing with the Board that we were not required to enter reciprocal discipline where our Hearing Cоmmittee had held a hearing before the subject attorney was suspended elsewhere). The Virginia court based its decision on the identical record made before the Hearing Committee, albeit without the benefit of live testimony. Cf. In re Zilberberg, 612 A.2d 832, 835 (D.C. 1992) (holding that a record must be augmented, ordinarily by a de novo hearing before the Hearing Committee, where an existing record from an original disciplining jurisdiction is insufficient for establishing a greater sanction is warranted); see also Doe v. Georgetown Ctr. (II), Inc., 708 A.2d 255, 256–57 (D.C. 1998) (affording deference to the adjudicator who has the opрortunity to observe witnesses and consider evidence “in the context of a living trial rather than upon a cold record” (quoting Hughes v. Pender, 391 A.2d 259, 263 (D.C. 1978))). In reaching its final decision, the Virginia court concluded simply that local Bar Counsel had not proven by clear and convincing evidence that an attorney-client relationship existed, but offered no analysis to support its conclusion. Rather, the court stated only that it found “that the evidence falls short, but barely so.”
For these reasons—Disciplinary Counsel‘s lack of participation in thе Virginia proceeding, the Virginia Court‘s reliance on an inferior record, and the Hearing Committee‘s full hearing on the violations before Virginia‘s decision—the Virginia decision is not entitled to preclusive effect.7
Having concluded that the Board‘s findings are supported by substantial evidence and that we are not bound to apply Virginia‘s decision, we turn to the question of the appropriate sanction. We adopt the Board‘s recommended sanction “unless to do so would foster a tendency toward inconsistent disрositions for comparable conduct or would otherwise be unwarranted.”
We have on numerous occasions imposed suspensions of sixty days and longer for conflict-of-interest rule violations. E.g., In re Shay, 756 A.2d 465 (D.C. 2000) (per curiam) (ninety-day suspension for violation of
Mr. Robbins contends, however, that the Board and Hearing Committee gave short shrift to the finding that he did not believe that he was doing legal work for Mr. Day. Specifically, Mr. Robbins argues that because the Hearing Committee credited his belief that he did not believe he was doing legal work for Mr. Day, and likewise found that Mr. Robbins was not being dishonest, then Mr. Robbins could not have intentionally violated any of the conflict-of-interest rules. Contrary to Mr. Robbins‘s assertion, we do not equate the Hearing Committee‘s finding with the conclusion that Mr. Robbins necessarily acted only negligently in committing the conduct underpinning each rule violation. The Committee made the finding that Mr. Robbins highlights in the course of evaluating aggravating or mitigating factors relevant to the appropriate sanction, rather than in the context analyzing the conduct underpinning the found rule violations.
We therefore conclude that the sixty-day suspension recommended in this case is consistent with the discipline imposed in comparable cases and is not otherwise unwаrranted.
III.
For the foregoing reasons, we adopt the recommendation of the Board and order that Mr. Robbins be suspended from the practice of law in the District of Columbia for a period of sixty days, effective thirty days from the date of this opinion. We direct Mr. Robbins‘s attention to
So ordered.