Thursday, May 18, 2017

Attorney Complicity and Disqualification

When should a lawyer be precluded from representing a client in a claim or complaint? WorkCompCentral reported in April that an Attorney Complicit in Comp Fraud Can't Represent Client's Estate. That is a headline likely to attract attention. Attorneys participating in fraud will draw attention. The attorney in question was suspended by the Ohio Supreme Court in April 2015, but that suspension was itself "suspended" on the condition that the attorney "commit no further misconduct." There are those who feel state bar associations are too lenient on wayward attorneys, perhaps too forgiving of first offenses. 

Essentially, the Ohio Supreme Court found that the attorney represented Tracie Lytle in a workers’ compensation matter. For a period, Lytle collected benefits because she was medically unable to work. During that time, the attorney began "improperly employing Lytle while she was collecting temporary-total disability benefits." An investigation led to the attorney entering "into a plea agreement with the Ohio Attorney General’s office, in which she agreed to plead guilty to complicity to commit workers’ compensation fraud," and to pay "$7,709.92 in restitution." WorkCompCentral reports that the lawyer's conviction was later expunged ("erase or remove completely"). 

That reminded me of a case I litigated many years ago. This case involved a paralegal that had been injured in a fall at work in the 1980s, while employed by a fairly large law firm. Thereafter, that firm had disintegrated, and spawned at least four or five new firms. I  recall the paralegal briefly worked for one of those new firms, and later went to work for a solo-practitioner personal injury attorney.

That professional move could be viewed from a variety of perspectives (new challenge, promotion, etc.). There are both benefits and burdens in the solo practice. In my personal evolution through that business form, I was struck by the many responsibility changes, from mere lawyer to lawyer, supervisor, bookkeeper, billing clerk, property manager, and so much more. Small firms are a management challenge, and in this case the paralegal similarly evolved into office manager, paralegal, and more. That is sometimes what small firm practice requires. And, perhaps that occupational change contributed to stress and fatigue at work.

So, for a number of years, this paralegal/office manager worked without significant interruption for this solo-practitioner. She continued to undergo medical care for the injury that occurred in the 1980s. At some point the solo-practitioner for whom she worked became her attorney of record in some minor benefit disputes, none of which were litigated. Ultimately, however, the attorney filed for permanent total disability (PTD) benefits. To illustrate the paralegal's unemployability, and entitlement to PTD, the attorney fired the paralegal/office manager. 

The attorney perceived no conflict of interest, even after he was listed as a witness for trial. He intertwined his personal perceptions, as the paralegal/office manager's supervisor and employer, into questions to the medical care providers. He asked their opinions regarding her ability to perform various job functions. The attorney sought testimony from doctors premised on statements like "doctor, assume that Ms. ______ pain reached such a point that her employer concluded she could no longer work and fired her;" and "her pain was so bad that her employer had to afford her modified duties and work hours;" and "her pain was outwardly obvious even to her employer." 

This appeared to me to be a patent conflict of interest. But, the assigned Judge of Compensation Claims denied my motion to disqualify the attorney and denied a motion to compel the attorney's deposition. The Florida trial judge said at the hearing that there was no conflict because the injured worker no longer worked for the attorney, problem solved. Upon my client's instructions, I drafted a complaint to The Florida Bar, but a partner in my firm talked me out of filing it. I will always wonder how that trial (and perhaps appeal) would have worked out. I will never know for sure as the case, like so many difficult and complex disputes, thereafter resolved through a settlement. 

Back to Ohio. The WorkCompCentral story described the previously disciplined attorney being "disqualified" by an appellate court from "representing the estate of a 37-year old worker in a wrongful death action." Coincidentally, that deceased worker was "the same worker" that had defrauded "the state in a workers' comp claim," while working for the attorney. The story relates that Ms. Lytle passed while the fraud and complicity was being investigated, and that this same attorney that had employed her had then filed a "wrongful death suit against various doctors and pharmacies on behalf of her estate."

As an aside, Ohio has a serious problem with pharmaceutical deaths, see PDMP and Opiods in Ohio. Ohio is not alone in that regard, but it has been in the news. People are dying there from pharmaceuticals. 

The defendant in the wrongful death case objected to this attorney's involvement. The basis of the objection was that she "had personal knowledge that was material to the case" The defendant alleged that the attorney "would need to be called as a witness." According to the Court, the wrongful death defendants argued that Lytle's heart attack and death were in part related to "stress from the Bureau of Workers' Compensation fraud investigation," in which the attorney had previously conceded complicity. Therefore the attorney was an indispensable witness to the investigation, the fraud, the stress, and perhaps more. 

The procedural machinations thereafter illustrate the complexity and challenge of such a disqualification process. According to WorkCompCentral, an initial motion was filed when the attorney refused to give deposition testimony on grounds of the attorney-client privilege. In denying that first disqualification motion, a trial judge ordered the attorney to testify. 

Following the deposition, a second disqualification motion was filed and an order was entered scheduling that motion for hearing. The day before the ordered hearing, the attorney filed an appeal of the procedural order that set the hearing. That appeal was later dismissed, the court concluding that procedural order was "not appealable." The trial court then set another hearing on the second motion to disqualify and "two days before that hearing," the attorney "dismissed the suit." It was apparently close to this time , in 2015, that the attorney was coincidentally disciplined by the state for the fraud complicity described above. 

In 2016, the attorney re-filed the previously dismissed lawsuit, and yet another motion to disqualify was filed, granted, and appealed. The Ohio District Court of Appeal affirmed that disqualification. The Court noted that the "Ohio's Rules of Professional Conduct expressly prohibit an attorney from serving as an advocate in a proceeding in which the attorney is likely to be a 'necessary witness.'" The Florida Bar Rules of Professional Conduct provide similarly, see Rule 4-3.7. The Court also reminded that the conversations between attorney and client were not privileged because "privilege does not apply to conversations that relate to an unlawful or fraudulent transaction."

It is notable that the Court also said that "disqualification of an attorney "is a drastic measure, which should not be imposed unless absolutely necessary." Where the attorney is an indispensable witness to the factual foundations of a case, that may be the only practical outcome. As I read the Ohio story, I reflected on that paralegal so many years ago, and the Florida judge's inability to see or understand the conflict. It was frustrating that the judge could not understand the patent conflict, or was at least unwilling to order such a "drastic measure." I still wonder how an appeal or that bar complaint might have resolved. 

Perhaps this will be a reminder for some of the "indispensable witness" and the disqualification rule. 


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