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Michigan Legal Ethics

I. = CLIENT-LAWYER=20 RELATIONSHIP

1.1 Rule 1.1 = Competence

1.1:= 100 Comparative=20 Analysis of MI Rule

=EF=BF=BD Primary Michigan = References: M= I Rule=20 1.1
=EF=BF=BD Background References: ABA = Model Rule=20 1.1, = Other=20 Jurisdictions
=EF=BF=BD Commentary:=20

1.1:101 Model Rule = Comparison

The first sentence of M= RPC=20 1.1 is identical to the first sentence of the MR = 1.1. The=20 second sentence of the Model Rule is omitted. It provides = =EF=BF=BDcompetent=20 representation requires legal knowledge, skill, thoroughness and = preparation=20 reasonably necessary for the representation.=EF=BF=BD MRPC 1.1 provides = as its second=20 sentence, instead, prohibitions against three kinds of incompetent = professional=20 service, which are detailed in Subparts (a)-(c) of the Rule. These = prohibitions=20 are similar to provisions in ABA Model Code DR=20 6-101.

1.1:102 Model Code = Comparison

[The discussion of this = topic has not=20 yet been written.]

1.1:= 200 Disciplinary=20 Standard of Competence

=EF=BF=BD Primary Michigan = References: M= I Rule=20 1.1
=EF=BF=BD Background References: ABA = Model Rule=20 1.1, = Other=20 Jurisdictions
=EF=BF=BD Commentary: = ABA/BNA =EF=BF=BD 31:201,=20 ALI-LGL =EF=BF=BD 16, Wolfram =EF=BF=BD 5.1
=EF=BF=BD MI Commentary: Dubin=20 and Schwartz, Michigan Rules of Professional = Conduct and=20 Disciplinary Procedure (The Institute of Continuing Legal = Education, 1997=20 Supp) (=EF=BF=BDDubin and Schwartz=EF=BF=BD) MRPC 1.1=20

The Michigan rule speaks in terms of prohibited = activity in=20 delineating the standard for competence. It prohibits lawyers from = undertaking=20 matters which they should know they are not competent to handle, from = handling=20 legal matters without adequate preparation and from neglecting legal = matters. In=20 People v Johnson, 451 = Mich 115; 545=20 NW2d 637 (1996), the Michigan Supreme Court granted the defendant = a new=20 trial based on the denial of effective assistance of counsel. The = attorney=20 failed to call four potential eye witnesses who would have testified = that the=20 defendant did not commit the crime in question. Additionally, trial = counsel had=20 no file entries, no recollection and not even a routine practice that = might=20 indicate what he did on defendant=EF=BF=BDs behalf. The court held that = this sort of=20 performance fell far below the standard of acceptable conduct and could = subject=20 the lawyer to disciplinary proceedings. In People v Travis, 182 Mich App 389; 451 NW2d=20 641(1989), the court held that defense counsel violated the rule = when he=20 abandoned his client=EF=BF=BDs case following the trial court=EF=BF=BDs = adverse ruling. In Holt v Whelan, 388 Mich 50; = 199 NW2d 195=20 (1972), the court held that a lawyer=EF=BF=BDs duty to his client = in a criminal=20 case is judged by the same standard regardless of the fact that the = client may=20 be indigent or in an impoverished condition. If an attorney is = incompetent to=20 handle a particular case, he is guilty of professional misconduct if he=20 nevertheless undertakes to represent a client in that case. Id. Even if competent = to undertake=20 the representation, an attorney who is inattentive and neglectful in the = representation is guilty of misconduct. Thus, where a lawyer accepted a = retainer=20 fee agreement and assured the client that she was being competently and=20 professionally served when in fact nothing was being done by him about = her=20 personal injury claim so that the claim was eventually barred by the = statute of=20 limitations, the lawyer was guilty of professional misconduct. State Bar Grievance Adm=EF=BF=BDr v = Crane, 400=20 Mich 484; 255 NW2d 624 (1977); State=20 Bar Grievance Adm=EF=BF=BDr v Giltner, 406 Mich 511; 280 NW2d 445 = (1979).=20 Once a lawyer accepts a retainer to represent a client, he is obliged to = exert=20 his best efforts wholeheartedly to advance the client=EF=BF=BDs = legitimate interests=20 with fidelity and diligence until he is relieved of that obligation = either by=20 his client or the court. In re=20 Daggs, 384 Mich 729; 187 NW2d 227 (1971). The failure of = an=20 attorney to appear and represent a client at sentencing after accepting = a=20 retainer violates the code of professional responsibility and warrants=20 suspension from the practice of law for sixty days. State Bar Grievance Adm=EF=BF=BDr v Grubbs, 396 = Mich 275; 240 NW2d=20 233 (1976).

Several informal opinions have been issued by the = State Bar=20 relating to the competence rule. RI-128 holds = that a=20 lawyer may not avoid all direct client contact by employing a legal = assistant=20 and still exercise the professional judgment expected of a lawyer. RI-223 permits participation of the lawyer in a = for-profit=20 prepaid legal services plan provided that the plan allows the lawyer to = exercise=20 independent professional judgment on behalf of the client and to = practice=20 competently. Lawyers must monitor their workloads and decline new = clients if=20 taking them on would create overloads that make competent representation = impossible. RI-252. In representing a client, = the=20 lawyer=EF=BF=BDs goal must be to accomplish the client=EF=BF=BDs = objective in a way that would=20 be constitutional and enforceable. RI-254. =

1.1:= 300 Malpractice=20 Liability

1.1:310 Relevance = of Ethics=20 Codes in Malpractice Actions

Prior to the adoption of the MRPC in 1988, the = general rule=20 in Michigan was that a violation of the ethics rules established a = rebuttable=20 presumption of malpractice. Lipton v=20 Boesky, 110 Mich App 589; 313 NW2d 163 (1981). However, = the Comment=20 to MRPC, adopted after the Lipton v=20 Boesky case, provides that no such presumption arises from = a=20 violation of the MRPC. The Comment also provides that the Michigan Rules = of=20 Evidence and other law govern the admissibility of the MRPC in criminal = or civil=20 actions. The Comment suggests that provisions of the MRPC may be = relevant in a=20 malpractice action, and a federal district court construing Michigan law = has=20 held that courts should look to the MRPC for the general standards of=20 professional conduct expected of lawyers in their relationship with the = public,=20 the legal system and the legal profession. Hart v Comerica Bank, 957 F2d 958 (ED Mich=20 1997).

1.1:320 Duty to = Client

An attorney in Michigan has the duty to use = reasonable=20 skill, discretion and judgment in representing a client. Lipton v Boesky, 110 Mich App 589; 313 NW2d 163 = (1981);=20 Simco v Blake, 448 Mich 648; 532 NW2d 842=20 (1995). An attorney appointed by a court to defend an indigent = criminal=20 defendant is not immune from malpractice liability. Donigan v Finn, 95 Mich App 28; 290 NW2d 80=20 (1980).

1.1:330 Standard = of=20 Care

In order to avoid liability for legal = malpractice, all=20 attorneys have a duty to behave as would an attorney of ordinary = learning,=20 judgment and skill under the same or similar circumstances. Simco v Blake, 448 Mich 648; = 532 NW2d 842=20 (1995).

1.1:335 Requirement= of=20 Expert Testimony

In general, it is necessary for a plaintiff in a = legal=20 malpractice action to present expert testimony to establish a violation = of the=20 standard of care. Beattie v=20 Firnschild, 152 Mich App 785; 394 NW2d 107 (1986). = However, expert=20 testimony is not required to support a judgment for malpractice where an = attorney fails to meet a standard of care that is within the knowledge = and=20 experience of a lay jury to recognize. Joos=20 v Auto-Owners Ins Co, 94 Mich App 419; 288 NW2d 443 = (1979).

1.1:340 Causation = and=20 Damages

In a legal malpractice action, a = plaintiff=EF=BF=BDs damages may=20 not be based on speculation. Coleman v=20 Gurwin, 443 Mich 59; 503 NW2d 435 (1993). A plaintiff must = prove=20 that the attorney=EF=BF=BDs negligence was both the cause in fact and a = legal=20 (proximate) cause of an injury. Skinner v=20 Square D Co, 445 Mich 153; 516 NW2d 475 (1994); Charles Reinhart Co v Winiemko, 444 Mich 579; 513 = NW2d 773=20 (1994). To establish cause in fact, a plaintiff must show that = but for a=20 defendant=EF=BF=BDs actions, the injury would not have occurred. Skinner, supra at=20 163.

In some cases, the court will apply the concept = of the=20 =EF=BF=BDsuit within a suit=EF=BF=BD principle to determine causation. = In Charles Reinhart Co, supra,=20 plaintiff filed a legal malpractice claim and alleged that the = attorney=20 was negligent in pursuing an appeal. The court stated that a plaintiff = must=20 prove two aspects of causation in fact: =EF=BF=BDwhether the = attorney=EF=BF=BDs negligence=20 caused the loss or unfavorable result of the appeal, and whether the = loss or=20 unfavorable result of the appeal in turn caused a loss or unfavorable = result in=20 the underlying litigation.=EF=BF=BD Id. at = 588. In Michigan,=20 the =EF=BF=BDsuit within a suit=EF=BF=BD concept has vitality only in a = limited number of=20 situations, such as where an attorney=EF=BF=BDs negligence prevents the = client from=20 bringing a cause of action, where the attorney=EF=BF=BDs failure to = appear causes=20 judgment to be entered against his client or where the = attorney=EF=BF=BDs negligence=20 prevents an appeal from being perfected. Basic Food Industries v Grant, 107 Mich App 685, = 693; 310=20 NW2d 26 (1981).

A client cannot base a malpractice action on his = or her own=20 immoral or illegal act. Thus, a client who committed perjury to obtain a = divorce=20 cannot sue for malpractice the lawyer who counseled her in the = testimony. Pantely v Garris, Garris & = Garris, PC,=20 180 Mich App 768; 447 NW2d 864 (1989).

1.1:350 Waiver of=20 Prospective Liability [see 1.8:910]

It is unethical to make an agreement = prospectively limiting=20 the lawyer=EF=BF=BDs liability to a client for malpractice unless it is = permitted by law=20 and the client is independently represented in making the agreement. It = is also=20 improper to settle a claim for malpractice liability with a former = client=20 without first advising that person in writing that independent = representation is=20 appropriate. MRPC=20 1.8(h).

1.1:360 Settlement = of=20 Client's Malpractice Claim [see 1.8:920]

See Discussion under = 1.1:350=20 above.

1.1:370 Defenses = to=20 Malpractice Claim

The elements of a legal malpractice action are: = (l)=20 existence of an attorney/client relationship; (2) negligence in legal=20 representation of the plaintiff; (3) negligence as a proximate cause of = the=20 injury; and (4) fact and extent of the injury alleged. Charles Reinhart Co v Winiemko, 444 Mich 579; 513 = NW2d 773=20 (1994). The failure of proof of any of these elements defeats the = claim=20 for malpractice. Additional defenses include the statute of limitations, = Gebhardt v O=EF=BF=BDRourke, = 444 Mich 535; 510=20 NW2d 900 (1994); contributory negligence, Pontiac School District v Miller, Canfield, Paddock = &=20 Stone, 221 Mich App 602; 563 NW2d 693 (1997); and = collateral=20 estoppel, Knoblauch v = Kenyon, 163=20 Mich App 712; 415 NW2d 286 (1987). =

1.1:380 Liability = to Client=20 for Breach of Contract, Breach of Fiduciary Duty, and Other = Liabilities

Courts have allowed clients to pursue more than = one theory=20 in an action against their former attorneys. In Schlumm v Terrence J O=EF=BF=BDHagan PC, 173 Mich = App 345; 433 NW2d=20 839 (1989), an inmate and his family sued his former attorney for = malpractice alleging negligence, breach of contract, breach of fiduciary = duty=20 and fraudulent misrepresentation. In Brownell v Garber, 199 Mich App 519; 503 NW2d=20 81(1993), a client alleged a fraud claim against his former = attorney by=20 contending that the attorney knew that a property settlement in = connection with=20 a divorce action would have adverse consequences at the time the = attorney=20 recommended it while representing otherwise. Defendant sought summary = judgment=20 on the basis of the statute of limitations for malpractice. The court = stated=20 that =EF=BF=BD[F]raud is distinct from malpractice=EF=BF=BD and held = that when a complaint=20 alleged not only malpractice but also all the necessary elements of = fraud, the=20 statute of limitations governing fraud actions would apply to the fraud = count.=20 Id. at = 532-533.

However, if a client brings an action under = theories other=20 than legal malpractice simply to defeat the statute of limitations, the = court=20 may determine that the other theories are merely a restatement of = plaintiff=EF=BF=BDs=20 malpractice claim or that the allegation is grounded in malpractice and=20 therefore the two-year statute of limitations applies. See Barnard v=20 Dilley, 134 Mich App 375; 350 NW2d 887(1984), where the = court=20 applied the malpractice statute of limitations instead of the negligence = statute; and Aldred v = O=EF=BF=BDHara-Bruce,=20 184 Mich App 488; 458 NW2d 671 (1990), where the client contended = the=20 six-year contract statute applied, but the court ruled that the action = was in=20 essence one for legal malpractice and subject to the two-year = statute.

1.1:390 Liability = When=20 Non-Lawyer Would Be Liable

See Discussion under = 1.1:380=20 above.

1.1:= 400 Liability=20 to Certain Non-Clients

1.1:410 Duty of = Care to=20 Certain Non-Clients

Generally, a legal malpractice action may be = brought only=20 by a client who feels he has been damaged by retained counsel=EF=BF=BDs = negligence.=20 Friedman v Dozorc, 412 = Mich 1; 312=20 NW2d 585 (1981). There has been a reluctance to permit an = attorney=EF=BF=BDs=20 actions affecting a non-client to be a predicate to liability because of = the=20 potential for conflicts of interest that could seriously undermine = counsel=EF=BF=BDs=20 duty of loyalty to the client. Friedman,=20 supra; Atlanta = Int=EF=BF=BDl Ins Co v=20 Bell, 438 Mich 512; 475 NW2d 294 (1991).

The Michigan Supreme Court has, however, = recognized that an=20 attorney=EF=BF=BDs negligence may expose him to liability to third = parties under certain=20 circumstances. One vehicle for affording relief has been the doctrine of = equitable subrogation, allowing a wronged party to stand in the place of = the=20 client assuming specific conditions are met. Those conditions are: (1) a = special=20 relationship must exist between the client and the third party in which = the=20 potential for conflicts of interest is eliminated because the interests = of the=20 two are merged with regard to the particular issue or negligence of = counsel as=20 alleged; (2) the third party must lack any other available legal remedy; = and (3)=20 the third party must not be a mere volunteer, i.e.,=20 the damage must have been incurred as a consequence of the third = party=EF=BF=BDs=20 fulfillment of a legal or equitable duty the third party owed to the = client.=20 Atlanta Int=EF=BF=BDl, = supra; Beaty v Hertzberg & Golden, = PC, 456=20 Mich 247; 571 NW2d 716 (1997).

An attorney may also be liable to a third party = on a=20 third-party beneficiary theory where the initial attorney/client = contract was so=20 unquestionably for the benefit of a non-client that the non- client can = maintain=20 a suit for the attorney=EF=BF=BDs negligence. Mieras v DeBona, 452 Mich 278; 550 NW2d 202 = (1996).=20 However, in Ginther v = Zimmerman, 195=20 Mich App 647; 491 NW2d 282 (1992), the Michigan Court of Appeals = held=20 that where the intent of a testator as expressed in a will was not = frustrated,=20 an attorney owes no duty to a person not named in the instrument who = claimed=20 that the lawyers committed malpractice when they failed to carry out the = estate=20 plan of the deceased and that they were third-party beneficiaries of the = contract between the deceased and counsel.

Finally, a non-client may be able to show that an = attorney=20 owed him or her an independent fiduciary duty. To claim breach of = fiduciary=20 duty, there must be a situation in which the non- client reasonably = reposed=20 faith, confidence and trust in the attorney=EF=BF=BDs advice. Fassihi v Sommers, Schwartz, Silver, Schwartz & = Tyler=20 PC, 107 Mich App 509; 309 NW2d 645 (1981). However, = Michigan=20 courts have repeatedly declined to recognize a fiduciary obligation = running to a=20 potentially adverse party because such a duty would necessarily permeate = all=20 facets of the litigation and have a significantly deleterious effect on = the=20 attorney=EF=BF=BDs ability to make decisions for the benefit of the = client. Friedman, supra.

1.1:420 Reliance = on Lawyer's=20 Opinion [see also = 2.3:300]

See Discussion under = 1.1:410=20 above.

1.1:430 Assisting = Unlawful=20 Conduct [see also 1.2:600-1.2:630]

See Discussion under = 1.1:410=20 above.

1.1:440 Knowledge = of=20 Client's Breach of a Fiduciary Duty [see also 1.13:520]

See Discussion under = 1.1:410=20 above.

1.1:450 Failing to = Prevent=20 Death or Bodily Injury

See Discussion under = 1.1:410=20 above; see also Discussion under 1.6:350=20 below.

1.1:= 500 Defenses=20 and Exceptions to Liability

1.1:510 Advocate's = Defamation Privilege

Statements made during the course of judicial = proceedings=20 are absolutely privileged. Timmis v=20 Bennett, 352 Mich 355; 89 NW2d 748 (1958). = =EF=BF=BDJudicial proceedings=EF=BF=BD=20 may include any hearing before a tribunal or administrative board = performing a=20 judicial function. Timmis, = supra;=20 Couch v Schultz; 193 Mich App 292; 483 NW2d = 684 (1991).=20 This immunity extends to every step in the proceeding and covers = anything=20 that may be said in relation to the matters at issue. Couch, supra.

However, an attorney may not claim this absolute = privilege=20 for statements published other than as part of judicial proceedings. In = Timmis, supra, a lawyer representing a client who = had=20 allegedly been mistreated by a police officer sent a letter to a number = of=20 individuals commenting on the actions of the police officer. The officer = sued=20 the lawyer for defamation. The lawyer claimed an absolute privilege = because the=20 letters were sent in the course of his representation of the client. = However,=20 the court held there was no absolute privilege because the statements = which=20 plaintiff claimed to have been false and libelous were not made in the = course of=20 any judicial proceedings. The court stated that =EF=BF=BDthe mere fact = that defendant=20 contemplated starting an action for damages on behalf of Mrs. Roblyer = involving=20 the acts of plaintiff and other police officers of the City of Kalamazoo = does=20 not bring the situation within the generally recognized rule. While an = attorney=20 may not be held liable for statements, even though false and malicious, = made=20 during the course of a trial, or as a part of a judicial proceeding, he = may not=20 claim absolute immunity with respect to slanderous and libelous = statements=20 otherwise published.=EF=BF=BD The court went on to hold that the = statements may have=20 been qualifiedly privileged, but in such event the plaintiff seeking = damages for=20 defamation was entitled to a jury trial on the issue of malice.

1.1:520 Wrongful = Use of=20 Civil Proceedings; Abuse of Process; False Arrest

In Friedman v=20 Dozorc, 412 Mich 1; 312 NW2d 585 = (1981),=20 the Michigan Supreme Court held that to recover upon a theory of abuse = of=20 process, a plaintiff must plead and prove (1) an ulterior purpose and = (2) an act=20 in the use of process which is improper in the regular prosecution of = the=20 proceeding. It then went on to hold that an attorney who had = unsuccessfully=20 prosecuted a malpractice action against a physician could not be held = liable for=20 abuse of process because plaintiff failed to allege that the attorney = committed=20 some irregular act in the use of process. The only act alleged was the = issuance=20 of a summons and complaint in the former malpractice action, but the = court held=20 that an action for abuse of process =EF=BF=BDlies for the improper use = of process after=20 it has been issued, not for maliciously causing it to = issue.=EF=BF=BD

The court in Friedman=20 v Dozorc also stated the elements of a tort action for = malicious=20 prosecution of civil proceedings: (1) the prior proceedings must have = terminated=20 in favor of the present plaintiff, (2) there was absence of probable = cause for=20 those proceedings, (3) there must be =EF=BF=BDmalice=EF=BF=BD described = as =EF=BF=BDa purpose other than=20 that of securing the proper adjudication of the claim in which the = proceedings=20 are based,=EF=BF=BD and (4) plaintiff must have sustained a special = injury in the nature=20 of an interference with person or property. Since the plaintiff failed = to plead=20 special injury, the court ordered that his claim for malicious = prosecution=20 against the attorney be dismissed.

1.1:530 Assisting = Client to=20 Break a Contract

When a lawyer counsels his or her client to act = in a way=20 which affects a contract that the client has with a third party, the = lawyer may=20 be accused of tortious interference with the contract or with = advantageous=20 business relations. To prevail on a theory of tortious interference with = an=20 existing contract, plaintiff must show that a contract existed, that it = was=20 breached, that defendant instigated the breach and that defendant did so = without=20 justification. Northern = Plumbing &=20 Heating, Inc. v Henderson Bros., 83 Mich App 84; 268 NW2d 296=20 (1978), lv den 405 Mich 845 (1979). The = typical=20 defense to such an action is that the lawyer was acting in good faith on = behalf=20 of the client and therefore his or her action could not be = =EF=BF=BDimproper.=EF=BF=BD

However, in Trepel v=20 Pontiac Osteopathic Hospital, 135 Mich App 361; 354 NW2d 341=20 (1984), the court held that attorneys are not immune from = allegations=20 that they were personally involved in wrongful and intentional conduct = forming=20 the basis for a cause of action. In that case, the court found that two=20 attorneys had personal knowledge of a hospital=EF=BF=BDs business = expectancy and that=20 they personally and intentionally interfered with that expectancy with = illegal,=20 unethical or fraudulent intent in assisting their client in sending = letters with=20 known false allegations for the purpose of interfering with the = hospital=EF=BF=BDs=20 application for a bond issue approval from the Michigan State Hospital = Finance=20 Authority. While this cause of action was founded upon interference with = an=20 advantageous business relationship, the same principles would arguably = apply to=20 an attorney improperly assisting a client to break a contract.

1.1:= 600 Vicarious=20 Liability [see = 5.1:500]

In American Casualty=20 Co. v Costello, 174 Mich App 1; 435 NW2d 760 (1989) an = insurance=20 company filed suit against three lawyers seeking reimbursement for = $100,000 it=20 expended pursuant to its surety obligations on a probate executor bond.=20 Costello, one of the lawyers, had misappropriated estate funds and used = them for=20 his own purpose. Plaintiff asserted that the remaining defendants were = liable=20 for its loss under the theory that they were all partners in a = partnership in=20 fact or a partnership by estoppel.

The court upheld a jury verdict that there was no = partnership, and therefore the two other partners were not liable for = the bond=20 proceeds. The clear implication, however, is that if there were a = partnership=20 under Michigan law, the other two partners would have been responsible = for=20 Costello=EF=BF=BDs wrongful conduct by reason of their relationship to=20 him.