Ethics Opinion No. 313
Adopted September 15, 2000
Improper influence and ex parte contacts with eminent domain commissioners.
A landowner’s attorney in an eminent domain proceeding agrees to a contingency fee based upon the difference between the Commissioners’ award and the ultimate jury award or settlement. Should the landowner’s attorney or the condemning authority’s attorney be allowed to provide ex parte material to the Commissioners for use in making their report, which influences a low award, which is not provided to the other party’s attorney, or which is different from and contrary to the evidence intended to be used at trial to establish value.
A lawyer who improperly influences the valuation of property in an eminent domain proceeding acts unethically. Also, in withholding discoverable information from the opposing counsel or providing contrary information to the Commissioners and the court, the attorney violates several provisions of the rules, including the requirement of candor toward the tribunal.
Court awarded attorney fees are authorized in condemnation proceedings if the jury verdict exceeds the Commissioners valuation by at least 10 percent 66 O.S. § 55(D) The sum awarded is paid by the condemning authority The burden is on the condemning authority to prove the excessiveness of an attorney fee award Oklahoma Turnpike Authority v. New Life Pentecostal Church of Jenks, 870 P.2d 762 (Okla. 1994) (upholding a 40 percent contingent fee contract in an eminent domain proceeding).
It may be argued that because the client is not responsible for paying the attorney fees directly from the property award, the client’s interests are not adversely affected if an attorney seeks to recover a higher fee by influencing the Commissioners to return a low valuation. Once the condemning authority pays money to the court, however, the landowner loses all interest in the condemned property, other than the right to further proceedings for the judicial determination of the sufficiency or insufficiency of the compensation. 66 O.S. § 54. Thus, an attorney’s conduct which artificially lowers the Commissioners’ award presumably forces the client and the condemning authority into protracted litigation which may delay the landowner from being made whole.
In such circumstances, the conduct implicates Rule 1.7(b). This rule provides:
A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interest, unless:
1. the lawyer reasonably believes the representation will not be adversely affected; and
2. the client consents after consultation. (emphasis added)
This conflict rule addresses two scenarios. The first considers the situation when a lawyer represents more than one client with conflicting interests. The second part addresses those instances when the lawyer acts in his own self interest to the detriment of the client.
The second provision is raised in the present inquiry. For example, there is no guarantee that the condemning authority will not rely on the Commissioners’ evidence to persuade the jury to ultimately find a lower value than what would have been awarded in the absence of the lawyer’s influence. In such circumstances, all costs in the district court may be taxed against the landowner. 66 O.S. § 55(A) Thus, the lawyer’s self interest ultimately proves detrimental to the client, and possibly to the lawyer.
The Rule provides, however, that a lawyer may represent a client when there is a conflict of interest so long as it is disclosed to the client and the client consents. Therefore, in order to avoid violating Rule 1.7, a landowner’s attorney must fully inform the client of the litigation strategy and advise the client of any potential problems.
An attorney also has an ethical duty to refrain from concealing evidence from opposing counsel Rule 3.4(A) provides in part:
A lawyer shall not:
A. unlawfully obstruct another party’s access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value A lawyer shall not counsel or assist another person to do any such act;
Therefore, in the situation described, a lawyer may not provide information to the Commissioners and then withhold this evidence from the opposing lawyer. The comments to Rule 3.4 state:
The procedure of the adversary system contemplates that the evidence in a case is to be marshaled competitively by the contending parties. Fair competition in the adversary system is secured by prohibitions against destruction or concealment of evidence, and properly influencing witnesses, obstructive tactics in discovery procedure, and the like.
In the present inquiry, the goal of the landowner’s lawyer and the condemning authority may be one and the same, namely to encourage the Commissioners find a lower value. By concealing evidence from a condemning authority’s counsel, however, a landowner’s attorney may distort the competitive purpose of the adversary system.
Rule 3.3(a) requires the lawyer in dealing with a tribunal to (1) not make a knowingly false statement; (2) not fail to disclose a fact to avoid a criminal or fraudulent act of a client; and (3) not offer knowingly false evidence. Similarly, in dealing with third parties, a lawyer is bound by Rule 4.1 to the same requirements as Rule 3.3(a)(1) and (2). According to this inquiry, if the landowner’s attorney presents false evidence to the Commissioners which eventually is presented to the court, the lawyer would be required to inform the court of the falsity of the evidence.
Rule 3.5 also provides:
A lawyer shall not:
A. seek to influence a judge, prospective juror or other decision maker except as permitted by law or the rules of the tribunal;
B. in an adversary proceeding, communicate or cause another to communicate as to the merits of the cause, with a judge or an official before whom the proceeding is pending except:
1. in the course of the official proceeding in the cause;
2. in writing if the lawyer promptly delivers a copy of the writing to the opposing counsel or to the adverse party if not represented by a lawyer;
3. orally upon notice to opposing counsel or to the adverse party if not represented by a lawyer; and
4. as otherwise authorized by law; or
C. communicate directly or through another with a juror or prospective juror except as permitted by law or the rules of the court; or
D. engage in conduct intended to disrupt a tribunal.
In engaging in ex parte communications with the court appointed Commissioners outside the scope of the proceeding, a lawyer must adhere to Rule 3.5(b) because the Commissioners may be considered “officials” or “other decision makers” before whom the action is pending. Should the lawyer fail to follow the dictates of Rule 3.5(b), the lawyer risks engaging in unethical conduct. Furthermore, should a lawyer find himself/herself in an ex parte proceeding with a commissioner, all material facts must be disclosed for an informal decision in accordance with Rule 3.3(d).
Finally, a lawyer who acts dishonestly and with self interest in the course of an eminent domain proceeding also violates provisions of Rule 8.4 which provides:
It is unprofessional misconduct for a lawyer to:
A. violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
B. commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects;
C. engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
D. engage in conduct that is prejudicial to the administration of justice;
E. state or imply an ability to influence improperly a government agency or official; or
F. knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law.
As previously discussed, the conduct described in this inquiry potentially violates several rules, therefore, Rule 8.4(a) applies. In addition, any attorney who attempts to influence the valuation of property by withholding information from the court or an adverse party engages in dishonest and deceitful conduct in violation of Rule 8.4(c). This action, likewise, violates Rule 8.4(d) because it is prejudicial to the administration of justice.
In sum, the foregoing inquiry indicates a variety of ethical concerns, principally the lawyer’s duty to his client and the court. The attorney who improperly influences the Commissioners and the court for his own personal gain or that of his client, serves neither his client nor his profession. Violations of the cited rules should be considered professional misconduct.