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Ethics Opinion

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RI-76

March 8, 1991

SYLLABUS

    A lawyer may seek the appointment of a guardian or take other protective action with respect to a client, who has a history of mental illness and who has refused to accept a personal injury settlement or pay for an appeal, only when the lawyer reasonably believes the client cannot adequately act in the client's own interest.

    Petitioning for such protective action does not create an impermissible conflict of interest between the lawyer who would collect a fee upon acceptance of the settlement offer and the client who has rejected settlement when an independent adjudicator determines the client's disability and whether the settlement should be accepted.

    If not otherwise compensated, the lawyer may petition the probate court for reasonable compensation for filing the petition for a protective order or conservator on behalf of a client.

    References: MRPC 1.2(a), 1.7(b), 1.14; RI-51; CI-1055; MCL 700.461, 700.469, 700.469(2), 700.474.

TEXT

A lawyer was retained to file a legal malpractice action against a client's former lawyer. The fee agreement specifically excluded appeals. The major part of the malpractice case was dismissed by summary judgment upon a theory of in pari delicto. The defendant has offered to settle the case, but the client, who has a history of mental illness, refuses to accept the settlement or pay for an appeal and the circuit court on motion found it had no authority to order the settlement. The lawyer asks:

  1. May the lawyer decline to follow the client's rejection of the settlement offer?
  2. May the lawyer file for conservatorship for the client?
  3. If the lawyer files for conservatorship of a client in order to enter into a settlement to which the client has not agreed, has the lawyer created an impermissible conflict of interest?
  4. May the lawyer recover fees and expenses, in addition to the contingency fee agreed upon, for the lawyer's efforts in filing the petition for conservatorship?

MRPC 1.2(a) states in part:

    ". . . A lawyer shall abide by a client's decision whether to accept an offer of settlement or mediation evaluation of a matter . . . ."

The comment to MRPC 1.2(a) states in part:

    ". . . In a case in which the client appears to be suffering mental disability, the lawyer's duty to abide by the client's decisions is to be guided by reference to Rule 1.14 . . . ."

MRPC 1.14 states:

    "(a) When a client's ability to make adequately considered decisions in connection with the representation is impaired, whether because of minority or mental disability or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.

    "(b) A lawyer may seek the appointment of a guardian or take other protective action with respect to a client only when the lawyer reasonably believes that the client cannot adequately act in the client's own interest."

We have previously held that if a lawyer believes a client is unable to make decisions concerning representation or is incompetent, the lawyer should seek the appointment of a guardian or conservator for the client, RI-51 and CI-1055. The latter opinion also states that the lawyer's professional judgment concerning the client's competency should be corroborated by professional consultations and reports. The lawyer may also consult with close relatives of the client with the client's consent and whose advice the client might respect to determine if the refusal to accept the settlement is the result of a significant disability rather than simply unreasonable, ABA i89-1530. Further, continued representation should not violate the lawyer-client privilege nor prejudice the client's interests by informing the adversary of the client's mental condition. In this instance, a motion to enter the settlement has already been argued in the circuit court, and opposing counsel is aware of the client's condition.

Therefore, if the lawyer reasonably believes that the client cannot adequately act in the client's best interest by refusing to accept the settlement is this sufficient? A lawyer may petition the probate court for appointment of a person to act in the client's interest or a protective order which would authorize the acceptance of the settlement offer pursuant to MCL 700.469(2) which provides:

    "When it is established in a proper proceeding that a basis exists as described in section 461 [MCL 700.461] for affecting the property and affairs of a person the court, without appointing a conservator, may authorize, direct or ratify any contract, trust or other transaction relating to the protected person's financial affairs or involving the person's estate if the court determines that the transaction is in the best interests of the protected person."

This section would allow ratification of the settlement by the probate court without the appointment of a conservator, if the client is not otherwise in need of a conservator. MCL 700.461(b) sets forth the conditions precedent for the appointment of a conservator or other protective order.

MRPC 1.7(b) states:

    "A lawyer shall not represent a client if the representation of that client may be materially limited by . . . the lawyer's own interests, unless:

      "(1) the lawyer reasonably believes the representation will not be adversely affected; and

      "(2) the client consents after consultation . . . ."

Forcing a settlement on an unconsenting client so that the lawyer can obtain a contingency fee is a conflict of interest. However, MRPC 1.2 allows a lawyer to consider MRPC 1.14 when evaluating whether or not to abide by a client's decision. As a neutral party, the probate judge will be making the ultimate decision on behalf of the client as to whether the proposed settlement is in the client's best interest. Therefore, the lawyer could reasonably believe the representation will not be adversely affected by the petition pursuant to MRPC 1.14, and the conflict of interest is not an impermissible one.

As to the matter of the recovery of fees by the lawyer for time, effort and costs expended in petitioning the probate court for a conservator or protective order in order to gain approval of the settlement, MCL 700.474 states:

    "If not otherwise compensated for services rendered, a guardian ad litem, visitor, lawyer, physician, conservator, or special conservator appointed in a protective proceeding is entitled to reasonable compensation from the estate."

Should the lawyer not be otherwise compensated, the lawyer may petition the probate court for reasonable compensation. MCL 700.474 does not specifically authorize fees for a lawyer filing a petition who is not appointed by the probate court. The probate court should and in reality probably will consider whether the fee to be earned by the lawyer if the settlement is approved adequately compensates the lawyer for all services rendered or is sufficiently inadequate to justify an additional fee for the probate court proceedings.

 
     

 

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