LEO: Fees - Misconduct - Representing a Client LE Op. 1308

 

Fees - Misconduct - Representing a Client Within the Bounds of the

Law: Attorney Who Files a Motion for Attorneys' Fees After Entry

of Order Dismissing Matter Subject to Joint Stipulation Which

Precluded Seeking Attorneys' Fees.

 

October 19, 1990

 

You have advised that a member of the Virginia State Bar is a member of

an out-of-state firm which filed suit in a federal district court located

in Virginia, asserting against agencies and officials of the Commonwealth

of Virginia two claims pursuant to 42 U.S.C. 1983. The suit was

dismissed and an appeal was filed in the United States Court of Appeals

for the Fourth Circuit. Before the appeal was decided, the parties

negotiated a settlement which provided that (1) the litigation, which in

the prayer for relief sought attorneys' fees under 1988, would be ended; (

2) the parties would file a joint stipulation asking the court of appeals

to dismiss the appeal with prejudice; (3) the district court would be

asked to dismiss with prejudice whatever was left of the case if any

remand occurred before the settlement had been completely approved; and (4)

the parties would bear their own costs.

 

You have further indicated that the appellate court accepted the joint

stipulation before any decision was rendered and dismissed the appeal

without any remand. You relate that, thirty days after entry of the order

of dismissal, the firm representing the plaintiff filed motions for

attorneys' fees in both the court of appeals and the district court, "

claiming to be a 'prevailing party" ' under the applicable U.S. Code

section and asserting "in its pleading that an agreement waiving fees was

not a 'special circumstance ' that should bar the award of fees under the

statute."

 

Finally, you have informed the Committee that the official of the

Commonwealth who approved the settlement has submitted an affidavit

stating unequivocally that it was his understanding that the settlement "

was intended to end the litigation in its entirety including the prayer

for attorneys' fees," an understanding with which his counsel in your

office agrees entirely.

 

You ask that the Committee opine on the propriety of the conduct of the

firm, in particular the firm member who is a member of the Virginia State

Bar, in moving the courts for awards of attorneys' fees following the

entry of the settlement agreement and in light of the Committee's prior

opinion number 536. In addition, you ask for the Committee's determination

as to the obligation of involved lawyers in the Office of the Attorney

General to report the matter to the appropriate disciplinary authority.

 

The appropriate and controlling rules relative to your inquiry are DR:7-

102(A)(2), which precludes a lawyer from knowingly advancing a claim or

defense that is unwarranted under existing law, except that he may advance

such claim or defense if it can be supported by good faith argument for an

extension, modification, or reversal of existing law, and DR:1-103(A)

which, in pertinent part, requires that a lawyer, having information

indicating that another lawyer has committed a violation of the

Disciplinary Rules that raises a substantial question as to that lawyer's

fitness to practice law in other respects, shall report such information

to the appropriate professional authority.

 

In rendering its prior LE Op. 536, the Committee was presented with an

inquiry which recited that an agreement on attorneys' fees had in fact

been reached during settlement negotiations in a federal civil rights

action. The inquiry specifically requested an opinion predicated on the

plaintiff's attorney having agreed to "whatever the defendant offer[ed] as

to attorneys[ '] fees, so as not to hinder in any way the most

advantageous settlement for the client." Thus, the inquiry presented

hypothetical facts which demonstrated that a meeting of the minds on

attorneys' fees had occurred. The Committee is not constituted to resolve

factual disputes since those are legal issues beyond the purview of the

Code of Professional Responsibility. Thus, LE Op. 536 is not dispositive

of the question you raise since, in your facts, there appears to be a

material difference between the parties as to the intent of the settlement

agreement with regard to whether the term "costs" refers also to

attorneys' fees and whether, therefore, an agreement was reached on that

issue. Since there is a factual dispute, this Committee declines to render

an opinion based on DR:7-102(A)(2) in determination of the propriety of

the attorney's or firm's conduct. Such a determination must be made by a

finder of fact and may apparently be made by the court of competent

jurisdiction, ostensibly within its ruling on the pending motion(s) for

attorneys' fees.

 

Since no determination has yet been made by a finder of fact as to the

propriety of the attorney's conduct in filing motions for attorneys' fees,

the Committee is of the opinion that any obligation to report such conduct

is not yet ripe. Should a conclusion be reached by the court which finds

the conduct to have been improper and violative of the Code of

Professional Responsibility, and should lawyers of the Office of Attorney

General who were involved in the matter also believe that such violation

raises a substantial question as to that lawyer's fitness to practice law

in other respects, they would then have the duty to report that

information to the appropriate authority. (See LE Op. 1093) The

reporting of misconduct in the absence of a factual finding, however, is

based upon a subjective determination that the lawyer has "information

indicating" such a violation and even then reporting is not obligatory

unless the complainant is satisfied that the violation which has occurred

raises a substantial question as to that lawyer's fitness to practice law

in other respects. The Committee recognizes the obligation to report

misconduct as an integral part of a lawyer's professional responsibility,

but cautions that such reports must be made in concert with factual

determinations and an analysis of the impact on the offending lawyer's

fitness to practice law. (See In re Himmel, 125 Ill.2d 531, 533 N.E.2d 790 (

1988))

 

Committee Opinion October 19, 1990

 

CROSS REFERENCES

 

See also LE Op. 1346, LE Op. 1351, LE Op. 1359, and LE Op. 1362.