We the People ….

The National Constitution Center website provides an interactive guide to the United States Constitution.  You can read the foundation document for the Nation’s legal system.

The Case of the Missing Client

By W. Fletcher McMurry Schrock

McMurry & Livingston, PLLC

Fletcher Schrock is a member of the Kentucky Bar Association Ethics Hotline Committee

The question of how a lawyer should deal with a missing client sounds like the plot of a legal novel.  But it was the subject of the Kentucky Bar Association’s Ethics Opinion KBA E-433 which was issued May 19, 2012. 

Ethical Issues Raised When Lawyer Cannot Communicate With Missing Client

In recent years the Ethics Committee has received an increasing number of inquiries about a lawyer’s ethical obligations to a client who has disappeared.  When a client can’t be located a number of problems present themselves:

-The lawyer can no longer communicate.  SCR 3.130 (Ethics Rule 1.4) dealing with communication states that the lawyer must keep the client reasonably informed and must explain matters in sufficient detail so that the client can make informed decisions.  The client has important decision making authority.  

-The client loses the ability to make an important decision about his case.  Rule 1.2 states that the lawyer must abide by the client’s decisions with regard to the objectives of the representation and must consult with the client regarding the means.

-The lawyer lacks the ability to obtain information which may be necessary to continue the representation, as provided in Rule 3.1. 

-The situation is complicated when there is a settlement offer on the table. 

FAQ for Missing Client

The first question is to determine what stage the lawyer is at in the representation: (1)Before Complaint; (2) After Complaint.  If the case is in the initial stages and no complaint has been filed then the Rules state that the lawyer must abide by the client’s decisions regarding the objectives of the representation and must consult with the client regarding the means.  If the lawyer hasn’t received a clear direction from the client about the filing of the action then he or she cannot ethically proceed with it.  The Rules also require the lawyer to have a sufficient basis in law and fact to proceed with the lawsuit.  If the client has disappeared and the lawyer doesn’t have that basis then he or she cannot proceed.

On the other hand, if the complaint has been filed and the case is on the eve of trial then the situation is only slightly different if the client disappears.  The client will not be available to participate in discovery, assist in the preparation of the case, testify at trial or make critical decisions about the representation.  It may be possible for the lawyer to participate in some of the proceedings like a scheduling conference.  In this situation, the lawyer should continue to try to locate the client while at the same time doing everything he or she can to protect the interests of the client.  The lawyer must not misrepresent the situation to the court.  Under most circumstances, if the client cannot be located after a reasonable amount of time, the lawyer will be unable to continue the representation and will need to withdraw.  See Rule 1.16 for the steps to take to withdraw.

Can the lawyer try to settle the case if he believes the settlement is a good one? 

The Rules say that the client has the authority to settle a case.  Rule 1.2 provides, “a lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter.”  It is difficult for a client to exercise that right if she can’t be located.  There may be rare cases where the client has left specific instructions on an acceptable settlement range.  If that is the case, the lawyer may proceed to accept the settlement.  But the lawyer will still need to determine how the release will be executed.  The lawyer has a duty of fairness and honesty and truthfulness in statements to others.  Because of this, at some point it must be disclosed that the client can’t be found. If the client can’t be located by the time the release needs to be signed, it is doubtful that the lawyer will be able to conclude the settlement.  Because of this it is the Ethics Committee’s view that it is very unlikely that a lawyer could ever negotiate a settlement on behalf of a missing client.  Nevertheless the lawyer should take whatever steps are necessary to protect the client’s interests.

Recommendations

In the above fact scenario, the lawyer cannot settle the case without the client’s authority to settle.  Therefore, the lawyer should: 

-Continue reasonable efforts to locate the missing client.

-Attend the pre-trial conference and advise the court that the lawyer is unable to locate the client. 

-Request that the court allow a postponement of the trial.

-If the court does not grant a continuance then ask the Court for permission to withdraw, because without the ability to communicate with the client, the lawyer cannot comply with his or her ethical duties contained in SCR 3.130(1.2(a), 1.4, and 3.1). 

-If the lawyer is permitted a continuance then continue efforts to locate the client and take whatever steps are necessary to protect the client’s interests.

-If the lawyer is unable to locate the client within a reasonable period of time then the lawyer must file a motion to withdraw, following the procedures set forth in SCR 3.130(1.16) in withdrawing.

Things About Attorney Advertising That I Have Learned (So Far)

By Kerry D. Smith

McMurry & Livingston, PLLC

Kerry Smith is a member of the Kentucky Bar Association Attorneys’ Advertising Commission

Here are ten things that I have learned plus one personal observation that I have made while serving on the KBA Attorneys’ Advertising Commission:

1.         Importance of the TIAA.  The words “THIS IS AN ADVERTISEMENT” must be shown prominently in every ad.  In radio ads the TIAA must be before/after the body of the ad.  In television ads < 60 seconds the TIAA must be on screen as long as the lawyer’s/firm’s name is on screen (in ads > 60 seconds the TIAA must be on screen the entire time).  On websites the TIAA must be on the first screen of every page without scrolling.  See Kentucky Rules of Supreme Court 3.130 (Rule 7.25).

2.         Avoid using “expert” and similar words.  The words expert, specialist, certified, or authority (or variations thereof) cannot be used except for certain exceptions (patent, admiralty, approved state or national organizations, etc.).  See Rule 7.40.

3.         Comparisons to other attorneys/law firms.  Statements making comparisons (“I’m the best lawyer in town.” OR “We’re the best firm in the county.”) are not permitted unless they use objective criteria (example: “Our firm is rated AV Preeminent® in the Martindale-Hubbell® Peer Review Ratings™.”).  See Rule 7.15(c).

4.         Fee/Expense disclaimers.  If a fee is advertised then the work must be performed for the amount advertised.  If court costs are the responsibility of the client, including contingency fee matters (example: “no fee unless we win your case”), then the ad must state: “COURT COSTS AND CASE EXPENSES WILL BE THE RESPONSIBILITY OF THE CLIENT.  See Rule 7.04.

5.         Track record regarding verdict results and adequate disclaimer.  If you include a track record about results obtained then you must include complete information (example: describing a large jury verdict but failing to mention that it was overturned/settled on appeal).  See KBA AAC Reg. 1-D.

6.         Location must be mentioned. Each advertisement must contain the city, town or county of a bona fide location of the lawyer’s office.  See KBA AAC Reg. 1.C.

7.         Facebook.  The current position of the KBA Attorneys’ Advertising Commission is that you can have a Facebook account for your law practice, but make sure to include “THIS IS AN ADVERTISEMENT” on the “About” page.  Remember to submit your Facebook site to the AAC just like any other advertisement.  And make sure that your posts comply with the Rules (nothing false, misleading, improper comparisons, etc.).

8.         Blog.  Web logs (but not web sites) are exempt.  But make sure that it is not a “blog in name only.”  The rules define web logs as “journals on the internet that permit real time communication and exchanges on topics of general interest in legal issues, provided there is no reference to an offer by the lawyer to render legal services.”  Rule 7.02(1)(j) (emphasis added).

9.         Advisory opinions.  An advisory opinion may be sought > 30 days in advance of publication (plus fee).  See Rule 7.06.

10.       Penalties for non-compliance.  Violations may be dealt with by the KBA AAC administratively.  Intentional violations (publication after receiving non-compliance notice, manifest indifference to rules, pattern of disregard) may be referred to the Inquiry Commission.  See Rule 7.07.  Legal fees may be forfeited for illegal/unethical solicitation.  See Rule 7.10.

11.       Personal observation.  How we choose to advertise affects the integrity of our entire profession.  A good description of this point is in the preamble to the ABA Aspirational Goals for Lawyer Advertising:

[W]hen advertising though not false, misleading or deceptive degenerates into undignified and unprofessional presentations, the public is not served, the lawyer who advertised does not benefit and the image of the judicial system may be harmed.  Accordingly, lawyer advertising should exemplify the inherent dignity and professionalism of the legal community. Dignified lawyer advertising tends to inspire public confidence in the professional competence and ability of lawyers and portrays the commitment of lawyers to serve clients’ legal needs in accordance with the ethics and public service tradition of a learned profession.

Kentucky Attorneys Are Still Prohibited from Dueling

According to old-fashioned provisions in Section 228 of the Constitution of Kentucky (which are still good law), lawyers continue to be unable to engage in a duel with deadly weapons:

“Members … of the bar, before they enter upon the practice of their profession, shall take the following oath or affirmation: I do solemnly swear (or affirm, as the case may be) that I will support the Constitution of the United States and the Constitution of this Commonwealth, and be faithful and true to the Commonwealth of Kentucky so long as I continue a citizen thereof, and that I will faithfully execute, to the best of my ability, the office of [attorney] according to law; and I do further solemnly swear (or affirm) that since the adoption of the present Constitution, I, being a citizen of this State, have not fought a duel with deadly weapons within this State, nor out of it, nor have I sent or accepted a challenge to fight a duel with deadly weapons, nor have I acted as second in carrying a challenge, nor aided or assisted any person thus offending, so help me God.”

Bench Trials and the Standard of Review on Appeal

By Zachary D. McMillan

McMurry & Livingston, PLLC

Sometimes the parties to a civil lawsuit will waive the right to a jury trial.  In those situations, the court will conduct a “bench trial.”  A bench trial is similar to a jury trial.  The rules of evidence are the same, the parties each have a right to cross examine witnesses, and both sides can submit evidence.  The main difference is that in a bench trial, the judge (rather than a jury) acts as the fact finder.  In Kentucky, whenever the judge conducts a bench trial, then he or she must make specific “findings of fact” and state separately the “conclusions of law” and render an appropriate judgment.  These findings of fact will receive great deference on appeal.

It is an elementary principle of law that findings of fact of a trial court will not be disturbed by an appellate court unless clearly erroneous.  CR 52.01; Thomas v. Lyons, 586 S.W.2d 711 (Ky. 1979); Greater Cincinnati Marine Service, Inc. v. Ludlow, 602 S.W.2d 427, 429 (Ky. 1980).  Accordingly, “[i]n the absence of clear error, the appellate court should not substitute its opinion for that of the trial court.”  Wells v. Sanor, 151 S.W.3d 819, 822 (Ky. App. 2004) (citing Cole v. Gilvin, 59 S.W.3d 468, 473 (Ky. App. 2001)).

The party seeking to overturn a trial court’s findings of fact has the burden of showing that they are “clearly erroneous conclusions.”  Byerly Motors, Inc. v. Phillips Petroleum Co., 346 S.W.2d 762, 765 (Ky. 1961) (citing Clay, CR 52.01, Comment 6, Notes p. 468; Ohlinger’s Federal Practice, Vol. 3A, Rule 52, Notes pp. 209, et seq.; Moore’s Federal Practice, Vol. 5, Rule 5203, Notes pp. 2609, et seq.).  “A factual finding is not clearly erroneous if it is supported by substantial evidence.” Wells v. Sanor, 151 S.W.3d 819, 822 (Ky. App. 2004) (citing Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414, (Ky. 1998)) (emphasis added).  “Substantial evidence is evidence that, when taken alone or in light of all the evidence, has sufficient probative value to induce conviction in the mind of a reasonable person.”  Id. (citing Golightly, 976 S.W.2d at 414; Sherfey v. Sherfey, 74 S.W.3d 777, 782 (Ky. App. 2002)).

A trial judge acting as fact-finder must both “determine the credibility of witnesses and the weight to be given the evidence.”  Cole v. Gilvin, 59 S.W.3d 468, 473 (Ky. App. 2001).  Thereafter, “due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” CR Rule 52.01.

As a result, a party seeking to overturn a trial judge’s factual findings on appeal does not necessarily have an impossible task, but they do have an uphill battle.  On the other hand, the party seeking to uphold the result of a bench trial has the easier job, but must take care to identify portions of the trial record that show “substantial evidence” supporting the result.

Assistance for Kentucky Attorneys in Matters of Professional Responsibility

By W. Fletcher McMurry Schrock

McMurry & Livingston, PLLC

Fletcher Schrock is a member of the Kentucky Bar Association Ethics Hotline Committee

When an attorney needs guidance concerning the Kentucky Rules of Professional Conduct, he or she should contact the Kentucky Bar Association Ethics Hotline.  Here is an overview of the Ethics Hotline process.

The first step is to attempt to find the answer on your own from available resources.  Those resources include the Kentucky Rules of Professional Conduct at SCR 3.130, the Modern Litigation and Professional Responsibility Handbook, the Kentucky Legal Ethics Opinions and Professional Responsibility Desk book, and the Annotated Model Rules of Professional Conduct.

Next, make sure that you meet the jurisdictional requirements.  SCR 3.530(2) states that “Any attorney licensed in Kentucky or admitted under SCR 3.030(2) who is in doubt as to the ethical propriety of any professional act contemplated by that attorney may request an informal opinion.”  Therefore, only attorneys licensed to practice or permitted to practice in Kentucky are able to use the Ethics Hotline.  The inquiring attorney must be inquiring about himself or herself.  The jurisdiction of the Ethics Hotline attorney is limited to prospective conduct.  And you must not have conferred with another member of the Ethics Hotline regarding the subject matter of your request.  Hotline attorneys are authorized to issue informal opinions on questions of ETHICS, NOT questions of LAW or unauthorized practice.

After doing the above, then you should contact the Ethics Hotline attorney in your area.  In the 1st Supreme Court District of Kentucky, the Hotline attorneys are Byron L. Hobgood in Madisonville, Kentucky, and W. Fletcher McMurry Schrock in Paducah, Kentucky.

The Hotline attorney will ask for a written inquiry.  The contact must be in writing or by telephone followed by a request in writing.  SCR 3.530(2) states that “such request shall be in writing or by telephone followed by a request in writing.”  The request must include all pertinent facts.

Finally, the Hotline attorney’s response should be prompt and include a written informal letter opinion.  Copies of the letter will be sent to the Executive Director of the KBA and to the Chair of Ethics Committee.

Although the informal opinion is advisory only, it will protect the requesting attorney from discipline.  SCR 3.530(5) provides that “[b]oth informal and formal opinions shall be advisory only; however, no attorney shall be disciplined for any professional act performed by that attorney in compliance with an informal opinion furnished by the Ethics Committee member pursuant to such attorney’s written request, provided that the written request clearly, fairly, accurately and completely states such attorney’s contemplated professional act.”

Communications between requesting attorney and Ethics Hotline attorney are required to be kept confidential.

A. Lincoln, Esq.

Before he was a great President he was a great lawyer.  The ABA Journal has an interesting timeline of the legal career of Abraham Lincoln.

Creditor Protection from Dishonest Debtors in Bankruptcy

               

By Phillip L. Little and Kerry D. Smith

McMurry & Livingston, PLLC

The goal of bankruptcy law is to give a “fresh start” to the honest, but unfortunate, debtor who has found himself awash in a sea of debt.  Kokoszka v. Belford, 417 U.S. 642, 645-46 (1974).  But if the debtor has been dishonest in applying for credit, bankruptcy law will limit a debtor’s ability to discharge his debts.  71 Am. Bankr. L.J. 325, 325-326.

An objection to the dischargeability of a particular debt must be brought as an adversary proceeding, not by motion, and is governed by Part VII of the Federal Rules of Bankruptcy Procedure. FED. R. BANKR. P. 7001(6), 4007(e).  In such a proceeding, equitable considerations in favor of the “fresh start” are only applicable to honest debtors, since, by seeking a discharge in bankruptcy, a debtor places the rectitude of his or her prior dealings with creditors directly in issue. St. Laurent v. Ambrose (In re St. Laurent), 991 F.2d 672, 680 (11th Cir. 1993); Caspers v. Van Horne (In re Van Horne), 823 F.2d 1285, 1287 (8th Cir. 1987); Jennen v. Hunter (In re Hunter), 771 F.2d 1126, 1130 (8th Cir. 1985); Thul v. Ophaug (In re Ophaug), 827 F.2d 340, 343 (8th Cir. 1987); and Brown v. Felsen, 442 U.S. 127, 128 (1979).

Although previously in doubt, the proper standard or quantum of proof applicable to all nondischargeability actions which arise under § 523(a) was conclusively established by the United States Supreme Court as the ordinary preponderance of the evidence standard.  Grogan v. Garner, 498 U.S. 279, 283-91 (1991) (rejecting the “clear and convincing” evidentiary standard for dischargeability proceedings under § 523(a)).

Congress set forth with specificity the elements of a non-dischargeability case under § 523(a)(2)(B). The statute prevents a debtor from discharging those debts for money, property, services or credit “to the extent obtained by” (1) the use of a written statement; (2) that is materially false; (3) that is in regard to the debtor’s or an insider’s financial condition; (4) that the debtor caused to be made or published with an intent to deceive; and (5) upon which the creditor actually and reasonably relied to its detriment.  11 U.S.C. § 523(a)(2)(B) (1994).

This statute should assist creditors who have been duped into extending credit to an unscrupulous debtor who later seeks to discharge their debt by taking advantage of the bankruptcy process.  Congress only intended to give honest debtors a “fresh start.”

 

Re-Marriage Does Not Automatically Revoke a Will (or Does It?)

                   

By David C. Booth and Kerry D. Smith

McMurry & Livingston, PLLC

Many times persons prepare a Last Will and Testament to provide for their surviving spouse or, if the spouse is predeceased, then to provide for their children.  But what happens if the spouse dies and the surviving spouse re-marries?  Prior to July 15, 1998, if a person re-married, their old Will was automatically revoked.

However, the law was changed so that now, under current Kentucky law, a Will is not automatically revoked by the marriage (or remarriage) of the person who made the Will.  See KRS 394.090.  That version of the statute went into effect on July 15, 1998.

This change in the law caused an interesting question to arise: Which version of the statute should be applied if a Will were executed at the time the old version of the statute was in effect but that person died when the new version of the statute was in effect?  The answer would have a significant impact on the deceased’s loved ones.

In 2005, the Kentucky Court of Appeals determined that the version of the statute in effect at the time that the Will was signed will determine whether or not a subsequent remarriage had revoked that Will.  In the case of Riggins v. Floyd, 189 S.W.3d 147 (Ky.App. 2005), Mr. Riggins executed his Will in 1990, later married, and then he died in 2002.  The old version of the statute (pre-1998) was in effect at the time that the Will was signed.  But the new version of the statute (post-1998) was in effect at the time Mr. Riggins died.  Since Mr. Riggins failed to prepare a new Will after his marriage, the Court of Appeals found that the Will executed prior to his marriage was revoked by the old version of the statute that had been in effect at the time the Will was executed.  As a result, the Riggins court determined that Mr. Riggins had no Will and died intestate.  So state law (instead of Mr. Riggins’s Will) would determine who would receive Mr. Riggins’s property after his death.

The Riggins case highlights the need to prepare new estate planning documents, including a Will, after a major life-changing event, such as a remarriage.

25 Essential Documents

The Wall Street Journal lists 25 documents that you probably need (or that your loved ones will wish that you had).