Bidding Farewell to a Lawyer Regulatory Legend

The December featured Case of the Month has been chosen for its symbolic significance
more than for the lawyer misconduct outlined in the decision. It is a relatively intricate case
involving a conflict of interest in a real estate matter, but it really has larger meaning. It is the
last truly substantive professional responsibility disciplinary decision to issue in Indiana in 2009.
For almost two decades, the Indiana lawyer disciplinary authority has been in the
forefront of bringing critical and often remarkable professional responsibility cases to the
attention of its state supreme court. This is solely due to the fact that Donald R. Lundberg, the
Indiana Supreme Court Disciplinary Commission Executive Secretary who took control of the
disciplinary agency in December 1991, has an innate understanding of what type of cases should
be brought to a licensing court, how those cases should be argued, and why it is sometimes
necessary to educate the practicing bar regarding difficult professional responsibility topics
within the context of a disciplinary case. His service prior to becoming a lawyer regulator hinted
at why he exercised the degree of discretion that he did while in office. Prior to his work at the
Indiana Supreme Court, he served for fifteen years in a number of positions for the Legal
Services Organization of Indiana, Inc., and ultimately became director of litigation. It was
probably all of those years in the trenches that provided him with the insights and judgment that
motivated him to file and plead certain cases in order to create a body of exemplary substantive
ethics law in Indiana.

The Case of the Month involves a man who was in the business of rehabilitating and
selling distressed real estate. He wanted to sell several properties, including a parcel in
Indianapolis. A third party brought a buyer to the man, and the man sold the property and several
others by separate land sale contracts. The man gave control of the Indianapolis property to the
buyer, who then collected rent from the tenants. The man was required to continue making
payments on his own first mortgage and needed the buyer's contract payments to do so. The
parties hoped that the buyer would secure permanent financing and pay off the balance of the
land sale contract. To make improvements to the property, the buyer borrowed $11,500 from
lawyer Jeffrey S. Rasley. The same third party that brought the buyer and seller together made
the connection with Rasley. The loan was evidenced by a two-month note calling for repayment
of $12,266.71, signed by the buyer, which was to be secured by a second mortgage on the
Property. Because the seller was the title holder, he had to give his permission for the buyer to
use the property as collateral for the loan. To do this, the seller signed a mortgage on the same
date the note was executed. The hearing officer found that the seller believed he was simply
giving permission for the property to be used as collateral. The mortgage stated, however, that
the mortgagor (i.e., the seller) and the buyer were to "pay all indebtedness secured by this
mortgage" in the event of default by the buyer. Inevitably, the buyer fell behind on his payments
both to the seller and to Rasley. At Rasley's instruction, his law partner, David M. Wood, then
sent a letter informing both buyer and seller that Rasley was declaring the loan and mortgage in
default, and that he would proceed with foreclosure if they did not cure the default. Up to this
point, no attorney-client relationship existed between the seller and either Rasley or Wood. The
seller approached Wood about hiring the firm to represent him in his dispute with the buyer. The
seller believed it would be advantageous to hire the firm, rather than different counsel, because
Rasley would bear some of the litigation expenses (i.e., the expense of asserting Rasley's claim
against buyer and foreclosing on the Property) and Rasley would refrain from asserting his claim
against seller while seeking a global resolution. After unsuccessful settlement negotiations, the
seller and Rasley filed suit against the buyer. The seller and Rasley later met with the buyer to
discuss settlement. At that time, Rasley asked the seller to sign a document entitled “Assumption
of Liabilities,” which would explicitly obligate the seller to assume the buyer’s debt to Rasley.
Eventually, the seller signed the document. As a result, the buyer was released from all liability
to Rasley. Later, Rasley sent his client a letter asking him to sign the previously requested
acknowledgment of "the priority of my lien on the [Property]" and pay the firm's bill for attorney
fees. The letter stated that if seller did not comply, Rasley would file suit against the seller. The
seller did not comply. True to the promise, Rasley and his firm sued the seller, who ultimately
agreed to settle the case by paying Rasley $15,600. The Supreme Court, in reviewing these
transactions, concluded that the firm’s representation of the seller could have been materially
limited by Rasley’s own interests, and thus Rule 1.7(b) was implicated. Because Rasley and the
seller had directly adverse interests, Rule 1.7(a) was violated. As a factor in aggravation, the
Court noted that both Respondents “lack insight into their misconduct and have expressed no
remorse for it.” According to an informed source in Indiana, the sanction here was pretty
aggressive. Perhaps it was attributable to the fact that both lawyers were pro se at the hearing
stage and only hired counsel to assist in petitioning the Court for review. Rasley, who was
admitted in 1979, was suspended for at least 120 days without automatic reinstatement. Wood,
who was admitted in 1995, was suspended for 30 days. The case is In the Matter of Jeffrey S.
Rasley and David M. Wood , 49S00-0808-DI-467 and 49S00-0808-DI-468 (Ind. Dec. 11, 2009).

Although this Case of the Month is Indiana’s last real substantive conflict of interest
disciplinary decision to issue in 2009, it should be noted that Mr. Lundberg did not personally
participate in the matter as he recused himself due to a conflict of interest; he knew one of the
Respondents from back in their college days. Greg Anderson, serving as the Acting Executive
Secretary, prosecuted the matter. His handling of the case suggests that office staff have been
well versed to consider ethics issues in the Lundberg manner.

Regrettably for the lawyer regulation community, Mr. Lundberg ended his long tenure as
Executive Secretary on January 1, 2010. Don left the discipline business in order to accept a
position at Barnes and Thornburg LLP as a partner and deputy general counsel to the firm.
During his years in government service, however, he was truly a trailblazer. Few lawyer
disciplinarians have had such a significant track record of developing substantive professional
responsibility law. Even in many seemingly innocuous cases, the observer can divine that the
cases that chose to prosecute were brought for an instructive purpose. Perhaps this is attributable
to Don’s ability to truly grasp the substance and subtleties of ethics law and his substantial ability
to teach professional responsibility concepts. For many years, Don served as an adjunct faculty
member at Indiana University in Bloomington and at Indiana University School of Law in
Indianapolis. In 2006, he was selected as one of 25 Inaugural Fellows of the National Institute
for Teaching Ethics and Professionalism.

The following very cursory listing of certain decisions taken from the NOBC Current
Developments database serve, in this editor's opinion, to provide some highlights of the many
interesting cases that Don chose to prosecute over the years:

Confidentiality

Matter of William A. Goebel , 703 N.E.2d 1045 (Ind., Dec. 30, 1998). Goebel’s partner
represented a client in a guardianship proceeding. At the same time, Goebel represented a
defendant in a criminal proceeding wherein the guardianship client’s husband was a police
informant and key state’s witness. The criminal defendant was aware that the informant’s wife
was a client of Goebel’s law firm. The criminal defendant demanded that Goebel provide him
with the informant’s wife’s address so he could locate the informant and kill him. Goebel
attempted to dissuade his client from committing any violent act. One day, the criminal
defendant appeared in Goebel’s law office, insisted on being provided the address of the
informant and his wife, and threatened harm to Goebel and Goebel’s family if he did not get the
address. In response, Goebel displayed an envelope that the law firm had sent to the guardianship
client which indicated that it had been returned to the law firm by postal authorities because there
was “No Such Street” as that indicated on the envelope. The address on the envelope was 3813
East 300 South. The criminal defendant wrote down the address and left the office. Goebel never
alerted police authorities and did not warn the guardianship client or her husband about the death
threat. Two days later, the informant was murdered at the home he shared with his spouse at
3813 South 300 East. The criminal defendant was charged and convicted of the informant’s
murder and was sentenced to life in prison without parole. Goebel was charged with revealing
confidential information gained during the course of the firm’s representation of the guardian
client, an address that, while it did not indicate precisely where the guardianship client could be
located, did suggest where the guardianship client could be found. Goebel contended that he
revealed incorrect information in order to prevent a client from committing a criminal act. The
Court rejected this argument, reasoning that, had he genuinely desired to prevent a criminal act,
he would have notified law enforcement of client’s stated intent to kill a witness in a criminal
case. The Court found that he was motivated by self-interest in revealing the information, “albeit
understandably so for his own interest of self-preservation” and publicly reprimanded him. Note:
Indiana law does not mandate that a lawyer reveal the intent of a client to commit death or
seriously bodily harm but follows the ABA Model Rules by making such a revelation
discretionary.

Fund Account Management

In the Matter of Franklin A. Webster, 02S00-0102-DI-94 (Indiana, October 23, 2002).
This is an interesting case regarding the distinction between commingling and conversion.
Webster has a debt collection practice and also owns and operates a debt collection agency. Both
businesses were conducted at the same address, but had separate offices, telephone lines, bank
accounts, etc. A leasing company hired Webster to collect their debts. The referral would
initially go to the collection agency. If the agency’s attempts at collection were unsuccessful the
matter would be referred to the law office. Everyone was happy until Webster notified the
leasing company that he would charge extra for defense of counter claims. The leasing company
would not agree. At that time, Webster was handling 123 accounts on behalf of the leasing
company. Webster asserted a lien based on quantum merit. He held between $20,000.00 and
$30,000.00 of disputed funds. Initially, the funds were held in the collection agency account,
then transferred to the law office account, and eventually deposited into Webster’s personal
custodial account. The fee issue was litigated and the trial Court determined that Webster was
entitled to $11,000.00 under quantum merit. The trial Court also fund that Webster’s payment to
himself of the disputed fees constituted criminal conversion. When all of his appeals were
exhausted, Webster repaid the client, including interest and attorneys fees. The disciplinary
hearing officer found commingling but not conversion. Because he had notified the client he was
asserting a lien, that he did not use the funds for purposes unrelated to the client, and he promptly
remitted the funds to the client at the conclusion of the litigation he had not exercised “knowing
and intentional” unauthorized control of the funds. The Supreme Court agreed. “The
respondent’s ignorance about his rights relative to asserting a lien was sufficiently profound to
avoid our finding that he knowingly exercised control of the funds.” Webster is suspended for six
months.

Prosecutorial Misconduct

Matter of Patrick S. Ryan , No. 20S00-0402-DI-84 (Indiana, March 31, 2005). This is a
unique case of prosecutorial misconduct was based on a conflict of interest. Ryan was a part-time
deputy prosecutor assigned to Goshen City Court. Among the cases he routinely prosecuted were
charges based on driving without a license or driving without a license in possession. The usual
court practice was to reduce the charge to a violation if the defendant provided proof of obtaining
a valid license. Being an enterprising sort, Ryan formed, with his wife, a business venture that
assisted defendants in obtaining international drivers licenses, for a cost of $275.00. He enlisted
the court’s interpreter (many of the defendants only spoke Spanish) to recruit defendants to use
his company to obtain the license. He paid the interpreter $20.00 for each referral. The
interpreter would collect the money and deliver it to Ryan, who would obtain the license. He
would then give the license to the interpreter, who would pass it on to the defendant. The
defendant would then present the license in court, and Ryan would reduce the charge. Ryan has
resigned as prosecutor. The Court found a violation of Rule 1.7(b). Ryan apparently did not seem
to 'get it' because in his affidavit consenting to discipline, he asserted that the licenses were valid.
He was suspended for at least nine months.

Public Service Misconduct

Matter of Jack R. Riddle , 700 N.E.2d 788 (Ind. 1998). Riddle was the elected prosecutor
in Crawford County and initially served as a part-time prosecutor while continuing to engage in
private practice part-time. After about a year, he elected to be a full-time prosecutor, at which
point Indiana law required him to devote his full professional efforts to his public office. At this
same time, he entered into an agreement with a young Indiana lawyer to operate Riddle's private
law practice and also become Riddle's part-time chief deputy prosecutor. Interestingly, that law
practice continued to be publicly identified as "Riddle Law Office" and it was a sign in front of
his old law office that provided one starting point for the disciplinary authority's investigation of
Riddle. The arrangement between the prosecutor and his chief deputy was that the chief deputy
would receive state pay as chief deputy and that receipts from the private law practice would be
split between the prosecutor and chief deputy. During the first seven months of the chief deputy's
employment, according to the chief deputy's testimony, he was ready, willing and able to
function as a chief deputy, but the prosecutor assigned him virtually no work. He was secretly
sworn in as chief deputy by Riddle and signed his deputy's oath in private. Neither the circuit
court judge, the public defender, nor the other employees of the prosecutor's office were aware of
his appointment as a part-time chief deputy. During that seven months, receipts from the private
law practice were used to pay substantial sums to Riddle and to pay for his private office
overhead, with a mere $500 left over as net profit to the chief deputy. Finally, after seven months
operating under this scheme, Riddle publicly announced the chief deputy's appointment and
asked that the circuit court judge to swear him in as chief deputy. Notwithstanding the total
absence of evidence that the chief deputy did any work of substance during the first seven
months of his secret employment, Riddle testified in his discipline case that the chief deputy had
done a "vast amount" of legal research. In effect, this scheme resulted in the use of the chief
deputy's state salary to subsidize Riddle's private law practice for the personal financial benefit
of the prosecutor. The Indiana Supreme Court concluded that Riddle had committed a criminal
act, ghost employment, which reflected adversely on his honesty, trustworthiness or fitness as a
lawyer in violation of Rule 8.4(b). It also concluded that his conduct was dishonest, fraudulent,
and deceitful in violation of Rule 8.4(c). The Court found that Riddle knowingly made false
statements of material fact in violation of Rule 8.1(a) when he testified that the chief deputy had
done vast amounts of legal research during the term of the initial, secret employment, and when
he falsely represented to the disciplinary authority that he received no fees from the private
practice after becoming full-time prosecutor. Riddle also violated Rule 1.5(e) by impermissibly
splitting fees with another lawyer without client consent. In this case, no split of fees was
permissible because of the statutory prohibition on a full-time prosecutor maintaining an outside
legal practice. Finally, the Court concluded that Riddle violated Rule 7.2(b) by keeping his name
on the law firm after assuming full-time public office. The Court disbarred Riddle.

Professional Fees

In the Matter of Peter L. Benjamin , 718 N.E.2d 1111 (Ind., Nov. 10, 1999). Benjamin,
who was admitted in 1978, was publicly reprimanded. His client’s husband died in a Fort Wayne
hospital while undergoing treatment. The client hired Benjamin’s office mate to pursue a medical
malpractice claim wherein the attorney would receive “40% of total recovery not to exceed
attorney fee of 200,00 (sic).” Benjamin and the lawyer eventually formed a partnership. No new
fee agreement was drafted. When that partnership was dissolved in May 1995, Benjamin retained
the client’s case in his office. Later, the hospital and the client reached a settlement where the
hospital would pay $100,000, its maximum liability under Indiana law. Upon receipt of an initial
$50,000 payment, Benjamin immediately took $40,000, and forwarded $10,000 to the client.
Later, he filed a petition with the state patient compensation fund for damages in excess of the
hospital payment. He settled the fund claim for $335,000 and retained $134,000, 40%, as his fee.
Indiana statutes limit attorneys fees in fund cases to 15%. He was charged with charging an
unreasonable fee and the Court found that he had obtained a fee greater than allowed by statute.
More interesting, the Court ruled that his retention of 40% of the initial $100,000 settlement
from the first installment was unreasonable.

Matter of Richie Douglas Hailey , 49S00-0009-DI-560 (Indiana, August 8, 2003). Hailey
was hired to represent a 13 year-old boy who was badly injured in a car accident. The boy is
permanently confined to a wheelchair. The boy’s uncle is an attorney in Alabama. The uncle
contacted another Alabama attorney, who referred the family to Hailey. The Alabama attorney
did no substantive work on the case. Without the knowledge of the family, Hailey agreed to a 1/3
referral fee to the Alabama lawyer. Hailey had a written fee agreement with the client that
provided a 40 percent contingent fee arrangement. The agreement did not address how the fee
would be calculated in the event of a structured settlement. However, the case was resolved via a
structured settlement. Hailey took his total portion of the fee from the first payment rather than
as the payments were actually received. He also did not factor in the time value of the money,
resulting in an unreasonable fee. The Court made it clear that a written fee agreement must
specifically address structured settlement calculations. Additionally, Hailey’s fee arrangement
with the Alabama attorney, which he honored, constituted an impermissible fee splitting
arrangement. He also did not provide the clients a written explanation of how the funds were
distributed despite numerous requests from clients and their new attorney. Lastly, there were
significant delays between Hailey’s receipt of the funds and his payments of medical bills.
Because this was a case of first impression, Hailey received a public reprimand. The Court
warned that future similar violations could result in more substantial discipline.

Matter of Michael C. Kendall , No 49S00-0009-DI-561 (Indiana, March 24, 2004). In
this disciplinary case, the Indiana Supreme Court attempts to clarify two important fee issues.
First, can a lawyer charge a non-refundable fee? Second, do advance fee payments belong in the
client account or business account? Kendall made it a practice to include a provision in his fee
agreement that fee advancements were “non-refundable.” As a practice, however, he did not
enforce this part of the agreement, and made refunds of the unearned portion of the retainer. He
would deposit the funds into his operating account. Kendall was placed into bankruptcy, and his
business account, with client funds in it, became an asset of the bankruptcy estate. The Indiana
Court concluded that making an advance fee payment nonrefundable makes the fee unreasonable
and in violation of Rule 1.5. The Court draws a distinction between advance fees and flat fees. A
flat fee may be non-refundable as it is earned on receipt. The lawyer’s agreement should
specifically reflect that a flat fee is non- refundable except for failure to perform the agreed legal
services. The Court further concluded that advance fees must be deposited into the clients
account, but that flat fees do not. Kendall received a public reprimand.

Common Fund Doctrine

In re Robert E. Lehman , No. 49S00-9510-DI-1244 (Ind., Dec. 31, 1997). In a case of
first impression there, Indiana declines to adopt the common fund doctrine as it applies to
subrogation payments in personal injury cases. In 1994, a client retained the Respondent to
represent him in a personal injury claim. The client was hurt in an automobile accident while
driving a vehicle owned and insured by his wife. State Farm provided the med-pay coverage for
the wife and the client's medical expenses were also paid through the Laborers and Hod Carriers
Welfare Fund. The client signed a fee agreement wherein the Respondent would receive a onethird
contingent fee of any and all amount recovered. Soon thereafter, the Respondent, with the
client's consent, negotiated a $12,000 settlement. At the time of the disbursement of proceeds,
the Respondent provided the client with a written statement reflecting that he was taking a
$4,000 fee from the proceeds and that he would be deducting a total of $4,898.00 from the
settlement for the two subrogation lien holders, the Hod Carriers and State Farm. Thereafter, he
deducted an amount equal to one-third of each insurer's subrogation rights as additional fees to
him and forwarded the balance to the carriers. At no time, however, did he ever inform the client
that he would be retaining additional monies from the carriers. The attorney relied on his
interpretation of an Indiana statute providing that an insurer claiming a subrogation lien shall pay
out of the amount received from the insured, the insurer's pro rata share of attorney's fees. The
statute does not provide, however, who, between the insured and the insured's attorney, is
entitled to retain those fees. The Disciplinary Commission charged the Respondent with
collecting an unreasonable fee, failing to disclose to his client the basis and the rate of his fee,
engaging in a Rule 1.7(b) conflict, and other unethical acts. The Respondent argued that he was
relying upon his good faith interpretation of the statute and asked the Court to provide guidance
to the Bar in dealing with the issue. The Court provided that guidance by reprimanding the
Respondent. Rejecting a hearing panel suggestion that he not be disciplined, the Court found that
his failure to ever explain to the client that he would be receiving a total fee award of 47% of the
gross settlement, 14% over the amount listed in the contract and the settlement agreement, was
wholly objectionable. Further, the Court interpreted the statute to provide that lawyers may not
retain undisclosed contingent fees beyond that agreed to with the client. There is an interesting
discussion relative to Rule 1.7(b), the Court finding that the Respondent had a conflict of interest
because he did not "disclose the potentially different views" of the statute in question.

Non-Refundable Fees

Matter of Michael C. Kendall, No 49S00-0009-DI-561 (Indiana, March 24, 2004). In
this disciplinary case, the Indiana Supreme Court attempts to clarify two important fee issues.
First, can a lawyer charge a non-refundable fee? Second, do advance fee payments belong in the
client account or business account? Kendall made it a practice to include a provision in his fee
agreement that fee advancements were “non-refundable.” As a practice, however, he did not
enforce this part of the agreement, and made refunds of the unearned portion of the retainer. He
would deposit the funds into his operating account. Kendall was placed into bankruptcy, and his
business account, with client funds in it, became an asset of the bankruptcy estate. The Indiana
Court concluded that making an advance fee payment nonrefundable makes the fee unreasonable
and in violation of Rule 1.5. The Court draws a distinction between advance fees and flat fees. A
flat fee may be non-refundable as it is earned on receipt. The lawyer’s agreement should
specifically reflect that a flat fee is non- refundable except for failure to perform the agreed legal
services. The court further concluded that advance fees must be deposited into the clients
account, but that flat fees do not. Kendall received a public reprimand

Interim Billings

In re Patrick R. Taylor , 741 N.E.2d 1239 (Ind. Feb. 12, 2001). Taylor, who was admitted
in 1968, was suspended for no less than 24 months. He represented a woman in a divorce. The
client, who was disabled, unable to work, and had no income or savings, had a marital estate
totaling approximately $66,000. The two principal assets of the marriage were the husband’s
pension plan and the jointly owned marital residence in which the client lived and which had a
fair market value of $25,000. Taylor told the client that the fees would be about $2,500 and that
her husband would be asked to pay the obligation. The client believed that she was not
responsible for the payment of any fees. In a letter to the client, Taylor specified his hourly rate
of $120, but the letter did not set forth, and Taylor never explained, what services would be
billed how charges would be computed, or the frequency with which she would receive bills.
During the course of his representation, he never provided her with interim billings and, at the
conclusion of proceedings, he tendered an invoice to her for almost $13,000. Without advising
her to seek independent counsel, he had the client execute an assignment of all her rights in the
marital home and obtained the client’s signature on a quitclaim deed transferring all interest in
the property to him. At the time of the transfer, her equity interest was approximately $17,000.
He later sold the home for a net profit of at least $17,800 and returned no portion of that amount
to the client. The opinion contains an interesting discussion of interim billing, where the Court
noted: While interim billing may not per se be required during every representation, the
respondent’s failure to do so in this case amounted to a lack of adequate communication with his
client…given the amount by which the respondent’s actual fees exceeded his initial
projections…The client’s inability to pay the fees was a reason to provide interim billing, not a
justification for avoiding them. Taylor has an extensive disciplinary history.

Professionalism and the First Amendment

In the Matter of Michael A. Wilkins , 49S00-0005-DI-341 (Indiana October 29, 2002).
This is a very interesting case regarding the limits of an attorney’s First Amendments rights
when submitting an appellate brief. Wilkins served as local counsel for Michigan Mutual
Insurance. An adverse verdict had been entered against Michigan, and an appeal was filed with
the Court of Appeal, who affirmed the lower Court’s judgment. Primary counsel for Michigan
prepared a draft brief to accompany a Petition to Transfer to the Indiana Supreme Court, and
forwarded the draft to Wilkins. Wilkins “toned down” the tenor of the brief, edited it, and
submitted it to the Supreme Court. The Court found some of the statements to be offensive, and
the following footnote to be particularly egregious: Indeed, the Opinion is so factually and
legally inaccurate that one is left to wonder whether the Court of Appeals was determined to find
for Appellee Sports, Inc., and then said whatever was necessary to reach that conclusion
(regardless of whether the facts or the law supported its decision).The Supreme Court denied the
petition, and struck the brief as a “scurrilous and intemperate attack on the integrity of the Court
of Appeals.” Wilkins called both the Chief Judge of the Court of Appeals and the Chief Judge of
the Supreme Court to schedule a meeting to offer his personal apology. However, he received a
notice that he was under investigation before he could do so. The Court found a violation of Rule
8.2. The Court recognized there was a colorable First Amendment issue, but concluded that “In
this case, the state’s interest in preserving the public’s confidence in the judicial system and the
overall administration of justice far outweighed any need for the respondent to air his
unsubstantiated concerns in an improper forum for such statements.” The majority suspended
him for 30 days. There are two dissents. The first dissent concludes that Wilkins statement was
“rhetorical hyperbole,” incapable of being proved true or false, and therefore protected speech.
The second dissent, while finding the statement tasteless, found that it appeared no different from
many attacks lawyers and non-lawyers have made on Court decisions. In fact, the dissent points
to a concurring decision authorized by Justice Scalia in which Scalia claimed that assertions by
Justice O’Connor were “irrational” and “cannot be taken seriously.” The judge essentially
warned his colleagues not to be so thin skinned.

Trial Publicity

In re Steven C. Lutz , 721 N.E.2d 258 (Ind., December 30, 1999). Lutz, who was
admitted in 1984, was publicly reprimanded. He defended a woman accused of neglect of a
dependent. A jury found her guilty but a state appellate court reversed, holding that the trial court
had erred in excluding evidence of battered women’s syndrome. While a retrial of the case
proceeded, Lutz caused to be published in several newspapers a letter which stated that his client
had committed no crime, criticized the prosecutor’s decision to retry the case as “abominable,”
and mentioned that his client “was given a lie detector test (which she passed) to make sure that
she had not hurt her daughter and that she had been raped.” Later, Lutz filed a motion for change
of venue due to “prejudicial pre-trial publicity.” Disciplinary authorities later charged Lutz with
violating Indiana Rule 3.6, a provision that appears to be based upon pre-Gentile model rule
standards. The Court found:[T]he respondent’s letters created an environment where a fair trial
was much less likely to occur. Additionally, the respondent effectively set the stage for his own
subsequent motion for change of venue based on prejudicial pre-trial publicity…We view the
respondent’s actions as a purposeful attempt to gain an unfair advantage in retrial of his client’s
case. Although the respondent had no real selfish motive (and instead apparently sought only to
advocate zealously his client’s cause), he nonetheless was bound to do so only within the bounds
of our ethical rules.

Lack of Lawyer Cooperation in Disciplinary Process

In re Danny Ray Hill, 840 N.E.2d 316 (Ind. January 10, 2006). Hill has been the subject
of more petitions to show cause for failure to cooperate than any other attorney in Indiana
history. Over a two-year period, the Disciplinary Commission filed nine such petitions and the
Supreme Court issued nine rules to show cause. In each of the nine cases, the Commission made
numerous unsuccessful attempts to correspond with Hill about the information the Commission
sought before it petitioned to the Court. Inevitably, Hill would comply with the requests for
information. The Supreme Court, however, decided to definitively address Hill’s predisposition
to malinger by holding him in contempt. He was suspended indefinitely. The Court noted:
Respondent has demonstrated a serious lack of regard for the disciplinary process. His failures to
cooperate have resulted in needless expenditure of Commission time and resources that could
have been better spent dealing with other issues. He has also taken up an inordinate amount of
this Court's time in dealing with his repeated refusals to cooperate. Though respondent has
apologized to the Court and expressed remorse for his conduct, his apology is not consistent with
his continuing failure to cooperate with Commission demands for information…Unfortunately,
we are seeing a limited number of lawyers who do not timely respond to Commission requests
for information...As with the respondent in this case, lawyers who choose to disregard
Commission requests will do so at their peril. In the future, we will have far less tolerance for
lawyers who fail to cooperate timely with the Commission and, as here, will not hesitate to take
significant action. Hill later became the subject of reciprocal discipline in Illinois. In re Danny
Ray Hill, M.R. 20833, 06 RC 1501 (Ill. May 16, 2006).

Rule 4.2 Issues

Matter of John Capper, 757 N.E.2d 138, (Ind. Nov. 2, 2001). Capper made the mistake
of relying on his own client’s claims that the opposing party was no longer represented by an
attorney. In the first matter, he represented the former husband on a post divorce issue regarding
the children. The former wife was represented by counsel when the hearing was scheduled. The
case was continued with no further action. Several months later the husband advised Capper that
a new issue of custody had developed. The client advised Capper that the wife wanted to save
money so she would not be using an attorney. Capper prepared an agreement for both parties to
sign, and gave it to his client to obtain the ex-wife’s signature. He did not contact opposing
counsel. When he received the signed agreement, he filed it with the Court. He violated Rule 4.2
by not confirming the wife was unrepresented and using his own client to communicate directly
with the opposing matter. In a second matter, he represented another husband in a divorce case.
The wife was represented by counsel. The husband and wife appeared at his office, and the wife
told Capper she was dissatisfied with her attorney and had terminated his services. Capper did
not contact the other attorney to verify this. He discussed settlement with her, and got her to sign
a settlement agreement that he submitted to the Court without notifying the other counsel. The
other attorney was still counsel of record. Capper was reprimanded. The Court stated: this case
serves as a vivid reminder that lawyers should independently verify that opposing parties
wishing to communicate directly with them are in fact not represented by counsel, especially
where the lawyer knows that the party had previously been represented in the matter.

Multi-Jurisdictional Practice and Solicitation

In the Matter of John P. Coale and Phillip B. Allen, 98S00-9303-DI-309 (Indiana, July
29, 2002). Coale and Allen are partners in a small law firm known as Coale, Allen and Van
Susteren. Neither is admitted to practice in Indiana. On February 6, 1992, a Kentucky Air
National Guard plane crashed into buildings in Evansville, Indiana. Besides the crew members,
11 people died and several others were injured. Coale and Allen sent videotapes, personal letters,
and firm brochures to seven widows, widowers or surviving parents of the deceased crash
victims or to the surviving crash victims. The materials were not marked advertising, and were
not sent to the Disciplinary Commission as required. The solicitations also violated the rules
which prohibit communications which “appeals primarily to a lay person’s fear, greed, desire for
revenge, or similar emotion,” and that the solicitations contained false, fraudulent, misleading,
deceptive, self-laudatory, or unfair statements. The Indiana Court rejected a claim of lack of
jurisdiction over Coale and Allen, holding that by communicating to the victims, they were
holding themselves out to the public as lawyers in Indiana, and by this conduct, they engaged in
professional legal activity in Indiana, over which the Court has exclusive regulatory authority.
The Court also rejected a claim by Coale that the evidence wouldn’t support a claim that he
personally was involved in sending the material. Coale either had supervisory capacity over
whomever forwarded the materials and failed to take remedial measures, or he ratified the
conduct. Coale also raised a due process claim based on the fact that his disciplinary matter
ensued after the Chief Justice of the Indiana Supreme Court held a press conference during
which they called for an investigation. The Court held that the Disciplinary Commission is a
distinct entity, and could have chosen not to pursue this matter. The Court concluded that their
“gross violation” of the rules governing solicitation warrants them being barred from acts
constituting the practice of law in Indiana until further order of the Court.

Imputation of Conflict of Interest

In re James R. Recker , No. 49S00-0506-DI-302, (Indiana March 11, 2009).This is an
unusual and unique case to see in a disciplinary context. The primary issue for the Supreme
Court of Indiana was whether a part-time Public Defender, James R. Recker, and another parttime
Public Defender, Laura Paul, were "associated in a firm" at the time of the relevant events
such that Paul's client could also deemed to be Recker’s client. Indiana’s Putnam County has no
centralized public defender office. Instead, indigent defense services are provided when a trial
court appoints a part-time public defender to represent a client. Recker, of Indianapolis, was
appointed to serve as a part-time public defender by the Putnam County Circuit Court. The
Putnam Superior Court appointed Paul, of Terre Haute, to serve in a similar capacity. Both
Recker and Paul maintained respective independent private practices. Putnam County provided
office space in the old law library of its courthouse for attorneys providing indigent defense
services. In part, due to budgetary constraints, the office had no doors on its cubicles and only
one incoming phone line. The county provided office stationery that listed both the Circuit Court
and the Superior Court and printed the words “Office of the Public Defender” (“PD”) on its
letterhead. The stationery did not list the names of any specific attorney. Part-time secretarial
assistance was provided by court employees hired by the judges. The “office manager” of the
office was one of the secretaries. Files were kept in a central location. The office manager
allowed a file to be checked out only by attorneys who had entered an appearance in a particular
case. The Public Defender’s Office in Putnam County had no established policies or procedures
relating to potential or actual conflicts of interest. In 2004, Recker was appointed to represent an
indigent client, Jeremy Farris, in a criminal case where Farris had been charged in the death of
his girlfriend’s four-year-old son. He was also appointed to represent Farris in a Child in Need of
Services (“CHINS”) hearing involving Farris’ own child. At the time of the appointment, Recker
had been licensed in Indiana approximately four years. Subsequently, Farris retained a private
attorney, James H. Holder Jr., for the criminal matter, but Recker continued to represent Farris in
the CHINS proceeding. Meanwhile, Paul was appointed to represent a criminal defendant,
Manuwell T. Ross, in Superior Court. Farris and Ross were housed together with at least one
other person in a holding cell in the Putnam County jail. In 2005, Timothy Bookwalter, the
Putnam County Prosecutor, met with Paul at the PD’s office space. Recker was not present in the
office at the time of the meeting. Bookwalter told Paul that Paul’s client, Ross, had passed a note
to the Sheriff stating that Recker’s client, Farris, had told Ross some incriminating details about
the death of the four-year-old. Ross told the Sheriff that he wanted to speak with Paul before
revealing more information. Paul believed the prosecutor was offering a deal to her client in
exchange for providing information about Recker’s client. When Recker returned to the PD’s
office, Paul told him of her conversation with the prosecutor and asked his advice about the
matter. During their discussion, she revealed Farris’ name, but not the name of her client, Ross.
Paul was then unaware that Recker represented Farris in his capacity as a public defender in the
CHINS proceeding. Recker believed that Paul was representing a private client and not an
indigent individual. After the conversation with Paul, Recker contacted Holder, and told him that
Farris had been talking about the killing to his cellmates. Holder then contacted Farris and
related the information he learned from Recker. Farris opined that Ross was the jail house snitch.
Later, Bookwalter, the prosecutor, learned that Farris suspected Ross of being an informer.
Upset, Bookwalter immediately caused Ross to be removed from Farris’ jail cell and confronted
both Paul and Recker about the situation. He first approached Paul and asked her, “How did this
happen?” He asked Recker three or four times whether he had contacted Holder, but Recker told
the prosecutor that he did not have to answer his questions. Eventually, Farris was tried and
convicted of murder. Ross testified against Farris at trial and provided testimony on two key
points that the State had not otherwise been able to establish. The Indiana Supreme Court
Disciplinary Commission filed a disciplinary complaint against Recker. Essentially, the
disciplinary authority argued that once Recker became aware that Ross was adverse to Farris, he
had an untenable conflict of interest and was obligated to withdraw from representing Farris
without revealing Ross’ confidences. Further, the conflict was non-consentable. The conflict
could have had disastrous consequences as Recker’s revelation to Holder put an innocent person,
Ross, who was Recker’s client by imputation, at risk of death or serious bodily injury. After
reviewing the evidence, a hearing officer concluded that Recker did not engage in misconduct
because Paul and Recker were not members of a law firm for purposes of imputing the conflict.
As a result, owed no duty to Ross when he communicated information he had learned from Paul
to Holder. The Commission filed a petition for review to the Indiana Supreme Court. The
Commission argued that the hearing officer erred as a matter of fact and law in his findings. The
Commission suggested that the issue regarding the Public Defender’s Office being considered a
“law firm” was not merely theoretical as Recker’s disclosure to Holder placed Ross, the
informer, at risk of death or substantial bodily injury. The Commission further asserted that the
hearing officer failed to consider the firmly established principle that two or more attorneys are a
law firm for certain discreet purposes, namely maintaining confidential information related to the
representation of all of the firm’s clients, and for the purpose of imputing conflicts of interest.
The Commission averred that the hearing officer ignored the Court’s precedent in Matter of
Sexson , 613 N.E.2d 841 (Indiana 1993). In Sexson, the Court held that if attorneys “present
themselves to the public in a way that suggests they are a firm, or conduct themselves as a firm,
they should be regarded as a firm for purposes of the Rules.” In Sexson, the Court ruled that
certain attorneys were indeed associated in a law firm because they used a common letterhead,
shared phone lines, had apparent access to each other’s information, and shared office personnel.
In Sexson, the Court said that it was reasonable to assume that a client could conclude that the
attorneys were part of a “firm.” The Commission saw Sexson as being closely analogous to the
Recker situation. The hearing officer, however, concluded that the principal secretary of the
Public Defender’s office, the “office manager,” was something like an “uber gatekeeper” (the
Commission’s characterization) of all confidential client files; thus, neither Paul nor Recker had
access to confidential information related to each other’s cases. The Commission countered by
stating that this finding, if adopted by the Court, would mean that groups of lawyers sharing
office space could avoid the application of the ethics rules simply by promising to stay out of
each other’s files. At any rate, the Commission argued, since Paul and Recker shared a secretary,
they each had potential, indirect access to the information in all of each other’s files. The
secretary had access to all client files, and she served them both. The Commission advocated the
position that indigent defendants should be secure in believing that that information received by
their public defender would never be used to their disadvantage (except as permitted or required
by the professional discipline rules) by a fellow public defender in the same office without the
client’s informed consent. The Commission argued that it was absurd to believe that an
inexperienced attorney, Paul, sharing office space with a more seasoned attorney, Recker, would
not also share client confidences. If adopted, the hearing officer’s approach would functionally
prohibit an inexperienced public defender from ever consulting with an officemate. Finally, the
Commission made clear that it was not asserting that any violation of the attorney client privilege
had occurred between Paul and her client. Paul received the information she revealed to Recker
from the prosecutor, who was not her client. The information that she imparted to Recker was
confidential, however, under IRPC Rule 1.6. Therefore, Recker should have maintained
confidentiality as a member of the same “firm” as Paul. The Court, in a per curium opinion,
concluded that Paul and Recker were not part of the same firm when reviewing the facts
presented here. For example, though the common space, staff, letterhead, and unitary phone line
might in some circumstances tend to give the impression that Recker and Paul constituted a firm,
Recker and Paul had no say in their working arrangement. The office was provided to them by
the Putnam County Courts. They did not hold themselves out for business of any sort to
members of the public at the office location. The Court accepted the hearing officer’s finding
that attorneys in the PD’s office only had access to the information in the specific files of the
clients that they represented. Therefore, the Court held, this case was distinguishable from the
circumstances of Sexson. Recker and Paul were not deemed by the Court to be members of the
same law firm, at least when considering that information acquired by one lawyer in a firm is
automatically imputed to another lawyer in the firm. The Court cautioned that, even if attorneys
are considered to be practicing independently, they must take care not to disclose confidential
information about their client with another lawyer. Attorneys sharing office space may benefit
from consulting with one another about legal issues, but this can be done ethically only after
determining that the interests of both attorneys’ clients are not compromised. The Court
expressed no opinion as to whether Paul violated her duty to her client, because the issue was not
before the Court. The Court also expressed no opinion as to whether Recker had a duty to try to
prevent Paul from disclosing confidential information to Recker, because Recker was not
charged with wrongdoing in that regard. Fundamentally, Recker could not improperly
compromise Paul’s client’s interests because Paul’s client information could not be imputed to
be Recker’s based on a “firm” relationship. The Court found the hearing officer’s findings to be
supported by the evidence and agreed with his conclusion. It ruled Recker engaged in no conflict
of interest and did not breach any confidentiality. Justice Sullivan dissented from the majority
opinion, offering that the relevant standard should be a “reasonable client belief” (rather than a
reasonable lawyer belief) that attorneys were associated in a “law firm”. The Justice said that a
reasonable client would have believed that the Public Defender’s Office was a firm based upon
the operating details of the PD’s office in this matter. In Justice Sullivan’s view, the Court would
not have to apply the “reasonable client” test to this case to reach a different result. Paul, an
attorney, must have thought she was in the same firm as Recker or she wouldn’t have disclosed
confidential information to him. The dissent quoted a passage from an old law review article,
Maurice Hines Alford Comment, Public Defender’s Office is a ‘Law Firm’ for Purposes of
Determining Whether Conflict Exists in Representation of Codefendants, 5 Fla. St. L. Rev,
492, 504-05 (1977). Justice Sullivan mentioned that many jurisdictions have adopted this
position as a rule of criminal procedure. He offered Commonwealth v. Green , 550 A. 2d 1011
(Pa.Super. 1988) as one example. He concluded by noting, “While the necessity of securing
“conflict” counsel presents some negative fiscal and other consequences in counties large and
small, they are part of the price that our legal system has long paid to maintain the inviolability
of client confidences in criminal cases.”

JAMES J. GROGAN, DACC, Illinois ARDC
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