State Bar of Arizona Ethics Opinions
94-08: Limitation on Representation; Reporting Misconduct; County Attorney Contract
Private practitioner offered a contract to represent a county commission may not agree to terms that would require the attorney to seek prior approval of the board of supervisors before proceeding beyond filing an answer. Opinion also discusses whether it is an ethical violation to offer such a contract.
The inquiring attorney is a private practitioner who was selected by the County Merit System Commission to represent the Commission in specified litigation. The Commission is an independent agency of the County whose function is to serve as a neutral quasi-judicial body in connection with appeals by employees who have been disciplined or discharged by the County. A deputy county attorney prepared a contract by which the County would hire the inquiring attorney to represent the Commission in specified litigation in which the County is the plaintiff and the commission is a defendant. The aggrieved county employee, as the real party in interest, would also be a defendant in each instance. The attorney's client would be the Commission, not the County, but the County would pay the attorney's fees.
The contract provides that the attorney shall "file answers and certify the record for review" in specified cases, but that any and all other services would require appropriate prior approval from the Board of Supervisors or its designated agent. The inquiring attorney believes that, while some of the cases may require little if any additional work beyond filing the answer and certification of the record, in some cases policy issues or other matters may arise which would necessitate active participation by the attorney for the Commission; or situations may arise where the client Commission would wish to have some additional steps taken as part of the representation.
1. May the inquiring attorney ethically sign such a contract without violating ER 5.4(c) and other applicable rules?
2. Is the preparation of such a contract and its tender to the inquiring attorney a violation of the deputy county attorney's obligations under ER 8.4(a)?
3. If the private practitioner selected by the Commission declines for ethical reasons to accept the contract offered by the County, and the County (but not the Commission) selects and contracts with another attorney, may that attorney appear on behalf of the Commission without the consent of the Commission?
4. If the preparation and tender of the contract is an ethical violation on the part of the deputy county attorney, is another attorney having knowledge of the facts required to report the matter to the disciplinary arm of the State Bar under ER 8.3, or under the doctrine of In re Himmel?
ETHICAL RULES INVOLVED
ER 1.2. Scope of Representation
(a) A lawyer shall abide by a client's decisions concerning the objectives of representation,... and shall consult with the client as to the means by which they are to be pursued....
(c) A lawyer may limit the objectives of the representation if the client consents after consultation.
ER 1.7. Conflict of Interest: General Rule
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to...a third person,... unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
ER 1.8. Conflict of Interest: Prohibited Transactions
(f) A lawyer shall not accept compensation for representing a client from one other than the client unless:
(1) the client consents after consultation;
(2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by ER 1.6.
ER 5.4. Professional Independence of a Lawyer
(c) A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services.
ER 8.3 Professional Misconduct
(a) A lawyer having knowledge that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority, except as otherwise provided in these rules or by law.
(c) This rule does not require disclosure of information otherwise protected by ER 1.6.
ER 8.4. Misconduct
It is professional 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;
The County Merit System Commission is established pursuant to A.R.S. Sections 11-351 et seq. and by county ordinance. The primary function of the Commission is that of conducting hearings on a quasi-judicial basis for appeals by county employees who have been disciplined or discharged by the County. The findings and decision by the Commission are subject to administrative review pursuant to A.R.S. Sections 12-901 et seq. See A.R.S. Section 11-356 (D). The Commission is thus an agency of the County, but is amenable to suit by the County should the Board of Supervisors wish to challenge a decision by the Commission. See Sackey v. Cochise County Merit Commission, 122 Ariz. 586, 596 P.2d 724 (App. 1979).
Several prior opinions of this committee are relevant. In our Opinion No. 94-03 (March 1, 1994), an attorney who was retained by a liability insurer to defend its insured was held to represent, and owe primary allegiance to, the insured rather than the insurer. The Arizona courts have held that, when an insurer engages an attorney to defend an insured, the insured is the attorney's client, and the attorney does not represent the insurer.
See Barmat v. John and Jane Doe Partners A-D, 155 Ariz. 519, 520, 747 P.2d 1218, 1219 (1987); Farmer's Insurance Company of Arizona v. Vagnozzi, 138 Ariz. 443, 448, 675 P.2d 703, 708 (1983); and Parsons v. Continental National American Group, 113 Ariz. 223, 227, 550 P.2d 94, 98 (1976). Because the insured is the attorney's client, the attorney owes him undeviating and single allegiance. Vagnozzi, 138 Ariz. at 448. Hence, our Opinion No. 94-03 determined that an attorney representing the insured client could file a motion for summary judgment in a third party's action against the insured only after consulting with the insured client if the granting of the motion would ultimately benefit the insurer and might be disadvantageous to the insured.
In our Opinion No. 87-13 (June 17, 1987), the inquiring attorney was the acting director of a public defender agency. The manager of the governing body which funded the public defender agency directed that the inquiring attorney institute no policies or procedures without the manager's prior approval, and report directly to and receive instructions from the manager. Our opinion held that, in any instances where the attorney's independent professional judgment on behalf of the client might be impaired by the directions of the manager, the attorney was ethically bound to follow his own counsel and the Rules of Professional Conduct.
Finally, our Opinion No. 90-18 (December 28, 1990) is almost squarely on point. There, the Department of Economic Security proposed a contract with county attorneys for the provision of services by those attorneys' offices to persons in need of legal services for child support or paternity matters. A county attorney felt that other procedures beyond those outlined in the contract might better serve the needs of clients. It was held that the limitation or direction by contract of an attorney's use of procedural remedies was directly violative of ER 5.4(c).
May the inquiring attorney ethically sign such a contract without violating ER 5.4(c) and other applicable rules?
The correspondence from the inquiring attorney states that the contract provides that no additional work beyond that specified in the contract is permissible without prior approval of the Board of Supervisors. This prohibition is in direct violation of ER 5.4(c) since the Commission, and not the County, is the client. Similarly, ER 1.8(f) would be violated because the inquiring attorney is accepting compensation from the County under circumstances where the County retains the right to direct the attorney's independent professional judgment, even though the County is not the client. Additionally, ER 1.2(a) and ER 1.7(b) would necessarily be violated if the Commission wished certain action to be undertaken on its behalf but the attorney was bound by the contract with County to obtain County approval prior to undertaking such representation. Consequently, the inquiring attorney may not ethically sign the proposed contract.
Is the preparation of such a contract and its tender to the inquiring attorney a violation of the deputy county attorney's obligations under ER 8.4(a)?
This question concerns the ethical propriety of conduct by an attorney other than the inquiring attorney. Under Paragraph 4 of our Statement of Jurisdictional Policies, such an inquiry is beyond our jurisdiction.
If the private practitioner selected by the Commission declines for ethical reasons to accept the contract offered by the County, and the County (but not the Commission) selects and contracts with another attorney, may that attorney appear on behalf of the Commission without the consent of the Commission?
Question 3 presents solely a legal question, namely, whether an attorney selected by the County without the approval of the Commission, may nevertheless appear on behalf of the Commission without its consent. As such, this question is beyond the jurisdiction of the Committee. It suffices to note, however, that if the attorney thus hired is deemed to be an attorney for the Commission, ER 1.16(a) (1) would require that the attorney not represent the Commission, or must withdraw from representation if the representation has already commenced, since continued representation would result in a violation of ER 5.4(c) and the other ethical rules cited in response to Question 1, supra.
If the preparation and tender of the contract is an ethical violation on the part of the deputy county attorney, is another attorney having knowledge of the facts required to report the matter to the disciplinary arm of the State Bar under ER 8.3, or under the doctrine of In re Himmel?
Under ER 8.3(a), an attorney is obligated to inform the appropriate professional authority when he has "knowledge that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, ...." The reporting requirements of ER 8.3 are mandatory -- an attorney with the requisite knowledge must report the violation, provided doing so will not result in disclosure of information protected by ER 1.6. ER 1.6(a) provides in part that: "A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation,...."
This committee's Opinion No. 90-13 (October 16, 1990) interpreted this rule to mean that a member of the Bar must report an ethical violation by another attorney when: (1) the reporting attorney has actual knowledge that a violation has occurred, (2) the violation raises substantial questions regarding the other attorney's honesty, trustworthiness, or fitness to practice law, and (3) revealing the violation would not cause the reporting attorney to violate the confidentiality provisions of ER 1.6. (The reader is referred to Opinion No. 90-13 for a more complete discussion of the issues.) This opinion will separately address each of the three factors identified above.
1. Does the inquiring attorney have actual knowledge of an ethical violation?
This opinion has determined, in answer to Question 2, supra, that this issue is beyond the jurisdiction of the committee. Accordingly, the inquiring attorney should consider all the facts known to him to determine if offering the contract for compensation constitutes the requisite knowing inducement under ER 8.4.
2. Does the violation raise substantial questions regarding the other attorney's honesty, trustworthiness, or fitness to practice law?
This committee does not possess sufficient facts to determine whether the deputy county attorney's action in tendering the contract to the inquiring attorney raises the requisite substantial questions regarding the county attorney's honesty, trustworthiness, or fitness to practice law. The inquiring attorney should consider all facts known to him and reach an independent determination as to whether the deputy county attorney's conduct violated ER 8.3. If it did, reporting would be required under that rule. (See our Opinion No. 90-13, supra, for a discussion of the different standards applicable under In re Himmel, 125 Ill.2d 531, 533 N.E.2nd 790 (1988), and ER 8.3.)
3. Will revealing the ethical violation violate the confidentiality provisions of ER 1.6?
The standard under ER 1.6(a) is quite inclusive – information "relating to representation of a client" shall not be revealed without client consent. As our Opinion No. 90-13 noted, "[i]t applies not merely to matters communicated in confidence by the client but to all information relating to representation, ‘whatever its source’." (Id., p. (90-13) 14) If the ethical violation here came to the attention of the inquiring attorney during his representation of the Commission, it may not be disclosed without his client's consent.
In conclusion, we are of the opinion that the inquiring attorney should decline to sign the proposed contract because signing it would constitute a violation of ER 5.4(c) and ER 1.8(f). He should make an independent determination whether the tender of such a contract by the deputy county attorney constitutes a violation of ER 8.4(a) and, if so, whether the violation rises to the level of conduct sufficient to trigger the reporting requirements of ER 8.3(a).
NOTE: This formal ethics opinion was issued by the Committee on the Rules of Professional Conduct. The Committee is not part of the Discipline Department of the State Bar of Arizona, and asserts no disciplinary function. This opinion is advisory in nature only, and is not binding in disciplinary proceedings or any other legal proceeding.
Formal Opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings.
©State Bar of Arizona 1994
 The proposed contract was not included by the inquiring attorney with his request for an ethics opinion. However, a copy of the proposed contract was subsequently provided to this committee by the deputy county attorney involved. The contract specifically provides in Section 2. (2): "Any and all other services requested from the contractor, in addition to [filing answers and certifying the records] shall require prior approval . . . from the Board of Supervisors ...." The parties, in correspondence to the committee, dispute whether the Commission, in cases where the decision of the Commission is correct, has standing to take any other legal steps in the case. Obviously, whether the Commission has such standing is solely a legal question and, as such, is beyond the jurisdiction of this Committee. The inquiring attorney and the County do agree that, in instances where a policy of the Commission is at issue, the Commission may properly present its position in litigation brought pursuant to A.R.S. Sections 12-901 et seq. See Hurles v. Superior Court, 174 Ariz. 331, 849 P.2d 1 (App. 1993).