CI-1175
April 13, 1987
SYLLABUS
A lawyer defending a lawsuit brought by a condominium owners' association, may not give advice other than to obtain counsel to unrepresented individual members of a condominium association not parties to the lawsuit, where there is a reasonable possibility that the interests of the unrepresented members may conflict with interests of the lawyer's client.
A lawyer's dissemination of pleadings, explanation of defenses and posture of case, and question-answer session to unrepresented members would constitute prohibited advice to persons of adverse interest.
References: MCPR DR 7-104(A)(2).
TEXT
A condominium owners' association and individual members of the association's Board of Directors are plaintiffs in a lawsuit against various defendants, including the developer corporation and two individuals who are the shareholders of that corporation. Plaintiffs allege, inter alia, that the shareholders of the developer corporation sat as directors of the condominium association and that this dual role constituted a conflict of interest. Although the lawsuit was originally commenced as a class action on behalf of the individual members of the condominium association, the class was never certified and the class action claim has been dismissed. Therefore, individual members of the condominium association are not parties to the lawsuit.
The lawyer for one of the individual defendants, who is also a member of the condominium association, has learned that many condominium residents are upset about assessments levied against them to fund plaintiff's lawsuit. The client believes that the members of the association would not approve the continuation of the lawsuit if they were adequately informed. The lawyer asks whether it would be ethically permissible to invite individual members of the condominium association who are not named plaintiffs to a public meeting for the purpose of providing copies of pleadings, setting forth defenses raised, explaining the posture of the case, and answering questions about the lawsuit. The plaintiffs' lawyer would also be invited to attend.
MCPR DR 7-104 states:
"(A) During the course of his representation of a client a lawyer shall not:
"(1) Communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.
"(2) Give advice to a person who is not represented by a lawyer, other than the advice to secure counsel, if the interests of such person are or have a reasonable possibility of being in conflict with the interests of his client."
The prohibition on communicating with a represented adverse party, stated in MCPR DR 7-104(A)(1), is not applicable in the current situation because the individual condominium association members who would be invited to the meeting are not "parties" to the lawsuit and are not being represented as individuals by plaintiffs' lawyer. See, ABA Op 1410 and ABA Op 1377, holding that in a corporate context only individuals who can commit the corporation, such as officers or responsible employees, are "parties" interchangeable with their corporation under the rule.
MCPR DR 7-104(A)(2), however, prohibits giving advice to an unrepresented "person," other than the advice to secure counsel, if the interests of such persons "are or have a reasonable possibility of being in conflict with" the interests of the lawyer's client. In this inquiry, the client shares an interest with other condominium association members in holding down plaintiffs' legal fees. However, the condominium association members have at least a "reasonable possibility" of having interests adverse to the client. If the client, as a shareholder in the condominium association, breached his fiduciary duty to association members, members may have been personally damaged and may conceivably have individual causes of action against the client. The fact that the proposed class of association members was not certified does not necessarily remove the "reasonable possibility" of an adverse interest between individual condominium association members and the client. Because there is at least a "reasonable possibility" of an adverse interest, MCPR DR 7-104(A)(2) prohibits the client's lawyer from giving advice to condominium association members, other than the advice to secure counsel.
The question arises whether it would be possible for the lawyer to have a purely "informational" meeting with association members without giving "advice" prohibited under MCPR DR 7-104(A)(2). What constitutes improper advice under DR 7-104(A)(2) is the subject of some debate. For example, The American Bar Foundation's Annotated Code of Professional Responsibility (1979), pp 340-41, notes that ABA informal opinions have been inconsistent:
"For the purpose of applying DR 7-104(A)(2), what constitutes improper 'advice' is not at all clear. In Informal Opinion 1140, January 20, 1970, the Committee held that under DR 7-104(A)(2) the attorney for the plaintiff in a domestic relations case could not request the unrepresented defendant to sign a form waiving issuance of and service of summons, the right to contest jurisdiction and venue, and further notice. Three years later, the Committee (citing Informal Opinion 1140) held that it was not improper for the attorney who was representing one party in a domestic relations case to submit to the unrepresented party a form for signature waiving issuance of summons and entry of appearance so long as the form was not accompanied with any advice. In such a case, the document 'would constitute only communication with an unrepresented party and, accordingly would be ethical and proper' (Informal Opinion 1269, May 22, 1973). The Committee did not explain the apparent discrepancy in the two opinions. In a no-fault divorce case, it is not ethical, however, for a plaintiff's attorney to submit form responsive pleadings to an unrepresented party even if the party is simultaneously advised to contact an attorney and if the plaintiff's attorney knows of no contested issues. The document in such a case is a responsive pleading and therefore constitutes improper advice. The fact that the attorney knows of no contested issue does not overcome the DR 7-104(A)(2) restriction against the attorney's offering advice if 'a reasonable possibility' of conflict exists (Informal Opinion 1255, December 15, 1972)." Emphasis added. [Accord, Op 85.]
"The lack of clarity in the Committee opinions about what constitutes 'advice' under the DR 7-104(A)(2) has caused other authorities to grope for some definitional guidelines. One court thought that the rule seemed to apply to advice on the law and that if the lawyer did not offer legal advice or suggest a course of conduct to the unrepresented party, the rule should not apply. W T Grant Co. v. Haines, 531 F2d 671; 676 n.3 (CA 2, 1976)."
It has also been held, somewhat surprisingly, that lawyers for insurance companies could permissibly negotiate settlements with tort victims and workers' compensation claimants because such conduct did not constitute giving "advice" prohibited by the rule. Hazard and Hodes, The Law of Lawyering, Prentice-Hall, (1986), p 440.
Much of the confusion surrounding the definition of "advice" arises in cases where a lawyer performs an act (for example, presentation of a settlement document or pleading to an unrepresented person without explanation) which arguably constitutes "implicit advice." See Wolfram, Modern Legal Ethics, (1986), 11.6.3. The current case does not present a situation, however, where line drawing is difficult. The series of actions contemplated by the inquiring lawyer -- disseminating pleadings, explaining defenses and postures of the case, answering questions of condominium association members -- must fall squarely within anyone's concept of prohibited "advice." At the proposed meeting, the inquiring lawyer inevitably would be communicating not only public information about the status of the case. Further, a question and answer session surely would involve the giving of advice. Finally, the inquiring lawyer admits that the purpose of having the proposed meeting is to provide information which could lead to a specific course of action by condominium association members, i.e., pressuring plaintiffs to discontinue the lawsuit. Regardless of uncertainties at the margins of the definition of "advice," certainly the giving of information based upon superior legal knowledge with the hope and expectation that recipients will act on that information qualifies as advice prohibited by MCPR DR 7-104(A)(2). Therefore the proposed meeting cannot ethically be held.