Knowingly Operating Under a Conflict is Not Dishonest Conduct – NH Supreme Court

In Appeal of David Stacy, 164 N.H. 706 (March 29, 2013), the New Hampshire Supreme Court appears to have split a very fine hair concerning a lawyer’s actions while subject to a known conflict of interest.  While the distinction drawn by the Court prevented a claimant from draining funds from the Public Protection Fund, it may spawn coverage litigation and raise questions about professional discipline that the Court failed to anticipate.

An earlier case before the Court set the stage for this ruling.  In Wyatt’s Case, 159 N.H. 285 (2009), the Court suspended an attorney for knowingly operating under a conflict of interest when he simultaneously represented the conservatorship estate of the petitioner, and the petitioner.  The petitioner made a claim against the attorney for the fees paid him during the period of the conflict, and then subsequently sought reimbursement from the Fund for the balance of the unrecovered fees and costs.

The Court noted that the Rule creating the Fund is consistent with the ABA’s Model Rule, pursuant to which public protection funds generally reimburse losses caused by the dishonest conduct of lawyers.  The Court found “dishonest conduct” meant wrongful acts in the nature of theft or embezzlement of money, or the wrongful taking or conversion of money, property, or other things of value.  The Court found, however, that “knowledge of a conflict of interest is not the equivalent of knowingly dishonest conduct,” and ruled that Wyatt’s actions were not conversion.  In so ruling, the Court protected the Fund and made it more difficult to recover against lawyers, but did it open up other questions?

For example, in making the precise distinction it did, the opinion could make for more confusion in coverage questions.  When is knowing conduct that involves a conflict going to be covered?  Equally important, how will the Attorney Discipline Office apply this standard in future claims of unethical behavior?  Only time will tell if the Appeal of Stacy is the last word on Attorney Wyatt’s actions, or the first of many decisions examining the consequences of knowingly operating under a conflict.

For more information on professional liability matters, contact attorney Bill Saturley at 603.410.1500 or a member of Preti Flaherty's Professional Liability Group.

Expert's Testimony that Lawyer Violated Rules When He Loaned Money to Client is Excluded, As Violating the Role of the Jury

Prospective opinions from an expert, that a lawyer violated the Rules of Professional Conduct when he loaned money to a client during certain business transactions, documenting the loans with promissory notes, were excluded from the collection action against the debtor by Judge Richard McNamara, sitting in the Merrimack County (New Hampshire) Superior Court Business Session.  Order, May 16, 2012, Murdock v. Nalbandian, 218-2008-CV-1062.

Murdock was treasurer or sole general partner of entities that loaned money to Nalbandian.  Murdock eventually filed suit to collect.  In response, Nalbandian alleged that Murdock violated the Rules when he entered into the contracts, and they were void as a matter of public policy as a result.  The proffered expert so concluded.

In his ruling, Judge McNamara observed that:

1. expert testimony is admissible when it will aid the jury in understanding the evidence or making a decision on a pertinent issue
2. experts can testify on the ultimate issue in a case; but
3. no witness, expert or otherwise, may testify to conclusions of law, as this would be inconsistent with the role of the judge and jury
4. the Rules have the force and effect of law; and
5. to determine whether a violation has occurred, one need look no further than the Rules themselves.

Finding that the expert’s testimony would “resonate as a lawyer’s closing argument rather than an expert analysis,” the judge ruled the testimony would usurp the role of the jury, and excluded most of the opinions.

For more information on Professional Liability legal issues, such as attorney discipline, contact attorney Bill Saturley at 603.410.1500 or visit Preti Flaherty's Professional Services Practice Group page to learn more.

New Hampshire Attorney Liability Case Raises Questions About Doctrine of Quasi-Judicial Immunity: Should Immunity Apply to Guardians Ad Litem?

In an opinion issued April 20, 2012, in Suprenant v. Mulcrone, the New Hampshire Supreme Court upheld the dismissal of claims against a guardian ad litem (“GAL”) under the doctrine of absolute quasi-judicial immunity.  The GAL had been appointed by the Superior Court in a contested marital matter to investigate how parenting time and residential responsibility should be divided between a child’s parents.  The GAL stated in her report to the Court that it was “troubling” that the father had not disclosed to the GAL prior charges and convictions for sexual assault, resisting arrest, criminal trespassing, kidnapping and other crimes.  The father filed suit against the GAL, alleging that the statements in her report were negligently made and breached an implied contract with the Plaintiff to observe reasonable standards of care and fair dealing.  Preti Flaherty’s Professional Services Group represented the GAL and moved to dismiss the father’s claims, on the ground that the GAL’s actions were taken in her capacity as a court-appointed GAL and that she was therefore immune from liability under the doctrine of absolute quasi-judicial immunity.  The trial court granted the motion to dismiss.

The Supreme Court affirmed the dismissal of plaintiff’s claims, reasoning that because the GAL’s actions that were allegedly negligent and in breach of an implied contract were “closely associated with the judicial process,” judicial immunity applicable to the judge extended to the acts of the GAL.  The Court noted that the immunity afforded a GAL acting within the scope of her quasi-judicial duties is “absolute,” so that the immunity applies even if the GAL is alleged to have acted maliciously or corruptly.

The Supreme Court’s decision in Suprenant v. Mulcrone has been criticized by some as an unwarranted extension of judicial authority.

Learn more about Preti Flaherty’s Professional Services Practice Group here or contact attorney Bill Saturley or Mark Puffer for more information.

New Hampshire Attorney Discipline System Overhaul Being Considered by NH Supreme Court

A report critiquing the New Hampshire Lawyer Discipline System is currently under review by the New Hampshire Supreme Court. 

Produced by the ABA Standing Committee on Professional Discipline, the December 2011 Report is authored by a team of attorneys from across the country, who conducted an on-site visitation from July 12-15, 2011. The Report suggests sweeping changes in such areas as the claim screening process, oversight of the Attorney Discipline Office (ADO), the composition of the ADO, and training procedures for the ADO’s members.  The report and related documents have been made available for free download by Preti Flaherty's Professional Services Law Group here.

The Report contains a total of 18 specific recommendations, broadly categorized into the areas of Structure; Procedures; and Sanctions.
  
Chief Justice Dalianis has invited comment from the members of the Bar. The New Hampshire Bar Association has prepared an 8-page Summary comparing the current system to the proposals contained in the Report.

For additional information regarding New Hampshire attorney discipline, the proposed changes or their potential impact on lawyers involved in the attorney discipline system, please contact Preti Flaherty attorney Bill Saturley at (603) 410-1500 or learn more about his Professional Services Law Practice here.