Opinion 24-79

May 9, 2024

Digest:  Where a judge concludes that there is a substantial likelihood that an attorney has deliberately deceived an infant client’s guardian into signing an onerous financing agreement with the attorney’s sibling, the judge must report the attorney to the appropriate grievance committee.

Rules:   22 NYCRR 100.2; 100.2(A); 100.3(D)(2); Opinions 23-36; 22-123; 21-78; 20-213; 20-151; 20-67; 19-107; 15-180; 13-77; 10-85; 05-105/05-108/05-109; 02-85.

Opinion:

          The inquiring judge asks if he/she must report an attorney who is appearing before him/her on a civil matter.  The attorney represents an infant, with a parent as guardian, in a petition for an infant compromise order.  On reviewing the petition, the judge learned that the parent/guardian had signed an English-language financing agreement with a company owned by the attorney’s sibling to fund certain litigation expenses “at a rate of 65% for the first six months” and subject to future increase.  The judge inquired of the parent/guardian on the record and learned that the parent does not speak English and never met with the financing firm.  According to the parent, the attorney mailed him/her the agreement, entirely in English, and said to “just sign it and send it back.”  There is no indication that the familial relationship was disclosed.  Indeed, under direct questioning by the judge, the parent denied borrowing any money at all, and thus apparently did not understand that he/she had agreed to finance the litigation costs.  It seems that the parent had the impression that the agreement “was part of the case” and that the parent “had to sign it.”  The attorney was not present for the hearing and the attorney’s colleague present at the hearing said they were merely “covering” for the other attorney and had no knowledge of the events in question.

          A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]).  When a judge receives information indicating a “substantial likelihood” that a lawyer has committed a “substantial violation” of the Rules of Professional Conduct, the judge must take “appropriate action” (22 NYCRR 100.3[D][2]).  If the two-prong test is met and the apparent misconduct is so egregious that it seriously calls into question the attorney’s honesty, trustworthiness, or fitness as a lawyer, the judge must report the conduct to the appropriate disciplinary authority (see e.g. Opinions 21-78; 10-85).

          Although each step of the analysis is ordinarily left to the judge’s discretion, the facts set forth in this inquiry make clear that the two-prong test is met here.  The “substantial likelihood” prong is satisfied because the judge gained personal knowledge of all relevant elements of the alleged misconduct in the course of presiding over the action and speaking with the parent/guardian.  The “substantial violation” prong is also met where, as here, the information available to the judge suggests that the attorney simply directed the infant client’s non-fluent parent/guardian to sign an English-language agreement obligating the parent to pay extremely high financing fees to the attorney’s sibling’s company.  Indeed, the alleged conduct, if it occurred as described, appears to be deceptive and exploitive.  It could potentially also be coercive, if the attorney in fact told the parent/guardian that the financing agreement “was part of the case” and that the parent “had to sign it.” 

          Since the two-prong test is met, the sole issue for our consideration is what constitutes “appropriate action” under the circumstances (see 22 NYCRR 100.3[D][2]; Opinion 19-107).  While a judge ordinarily has discretion to make this determination, sometimes an inquiry describes alleged misconduct that, if true, seriously calls into question the attorney’s honesty, trustworthiness, or fitness as a lawyer (see Opinion 20-213).  In such instances, we have required reporting (id.).  Thus, reporting is mandatory when a judge concludes that an attorney “engaged in a deliberate deception intended to perpetrate a fraud and deceive the parties and/or the court” (Opinion 02-85; see e.g. Opinions 23-36 [attorney disregarded court directive and engaged in deliberate deception]; 22-123 [attorney deliberately misrepresented to their client that they had obtained adjournment, resulting in default judgment, and then refused to appear when matter was restored to calendar]; 13-77 [attorney falsely advised client that lawsuit was settled but had discontinued suit and paid settlement out of their own funds]).

          In our view, if the attorney’s conduct occurred as described, it implicates the attorney’s honesty, trustworthiness, and fitness as a lawyer.  While the judge is, of course, in the best position to assess whether his/her observations and conclusions about the situation are accurate, the serious nature of the factual statements by the parent/guardian, along with the unsatisfactory response of the attorney’s colleague, “are of a kind best sorted out by an independent agency with investigative capability” (Opinion 05-105/05-108/05-109).  Accordingly, reporting to the attorney grievance committee is mandatory unless the judge knows this specific conduct has already been reported (see Opinions 15-180; 13-77).  However, reporting may await the conclusion of the proceedings (see e.g. Opinions 22-123; 19-107).

          As a reminder, after a judge reports an attorney, he/she must thereafter disqualify in all cases involving that attorney during the pendency of the disciplinary complaint and for two years after its resolution (see e.g. Opinions 20-151; 20-67; 19-107).  This disqualification is not subject to remittal unless the attorney grievance committee imposes public discipline, or the reported attorney waives confidentiality (id.).