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New Mexico Legal Ethics
March 01, 2006
Summary
The conduct of attorneys practicing law in New Mexico is governed primarily by the New Mexico Rules of Professional Conduct ("NMR"), which are set forth in Chapter 16 of the New Mexico Rules Annotated ("NMRA"), and which generally parallel the American Bar Association's Model Rules of Professional Conduct ("MR").
The New Mexico Supreme Court adopted the New Mexico Rules of Professional Conduct on January 1, 1987, by order issued on June 26, 1986. The New Mexico Rules of Professional Conduct replaced the New Mexico Code of Professional Responsibility, which was based on the American Bar Association's Model Code of Professional Responsibility.
Suggestions for improvements or corrections are welcome. Please send them to: Charles A. Armgardt at Modrall, Sperling, Roehl, Harris & Sisk, P.A., 500 Fourth Street N.W., P.O. Box 2168, Albuquerque, NM 87103-2168; phone: (505)848-1800; fax: (505)848-1891; e-mail: carmgardt@modrall.com; website: www.modrall.com
Copyright in this narrative is held by the law firm. Copyright in the full American Legal Ethics Library is held by Cornell University. Questions about redistribution of the library should be directed to: Legal Information Institute, Cornell Law School, Myron Taylor Hall, Ithaca, NY 14853, E-mail: lii@lii.law.cornell.edu
INTRODUCTION
0.1:100 Sources of Law and Guidance
0.1:101 Professional Codes
The conduct of attorneys practicing law in New Mexico is governed primarily by the New Mexico Rules of Professional Conduct ("NMR"), which are set forth in Chapter 16 of the New Mexico Rules Annotated ("NMRA"), and which generally parallel the American Bar Association's Model Rules of Professional Conduct ("MR").
The New Mexico Supreme Court adopted the New Mexico Rules of Professional Conduct on January 1, 1987, by order issued on June 26, 1986. The New Mexico Rules of Professional Conduct replaced the New Mexico Code of Professional Responsibility, which was based on the American Bar Association's Model Code of Professional Responsibility.
Other professional codes and rules adopted by the New Mexico Supreme Court and now in effect include Rules Governing Admission to the Bar, Rules Governing Discipline, Rules for Minimum Continuing Legal Education, Rules of Legal Specialization, Rules Governing Legal Assistant Services, the Code of Judicial Conduct, and Rules Governing Judicial Education.
0.1:102 "Other" Law and Moral Obligation
While many of a lawyer's professional responsibilities are prescribed in the New Mexico Rules of Professional Conduct, a lawyer is to act within a larger legal context that includes licensing rules and statutes, laws defining specific obligations of lawyers, substantive and procedural law in general, a lawyer's personal conscience, and the approbation of professional peers. See NMR "Preamble" and "Scope."
New Mexico has enacted a substantial set of statutes governing attorneys, their conduct, and the practice of law. See § 36-2-1 to -40 NMSA 1978 (1991 Repl. Pamp. & 2001 Cum. Supp.). These statutes pertain to, among other things, defining and regulating the practice of law, duties and the authority of attorneys, breaches of confidences, deserting clients, grounds for disbarment and suspension, unauthorized practice of law, solicitation, and fee splitting.
The state courts of New Mexico and certain federal courts have interpreted and applied the New Mexico Rules of Professional Conduct in numerous decisions. The New Mexico Attorney General has issued Opinions concerning lawyer ethics issues. Discussions of legal ethics appear in New Mexico Bar Association Ethics Advisory Committee Opinions. Professionalism standards are stated in A Creed of Professionalism of the New Mexico Bench and Bar. Each lawyer admitted to the Bar of the State of New Mexico takes an oath that includes standards of conduct.
NMR 16-804 includes in the definition of "professional misconduct" any actual or attempted violation of the Rules of Professional Conduct, any conduct "prejudicial to the administration of justice," and any conduct "that adversely reflects" on the lawyer's "fitness to practice law." However, the prohibition against the "appearance of impropriety" that was contained in New Mexico's version of the Model Code of Professional Responsibility, has not been found to have survived adoption of the New Mexico Rules of Professional Responsibility.
According to the Preamble to the Rules, a lawyer should strive to attain the highest level of skill possible, to improve the law and the legal profession, and to exemplify the legal profession's ideals of public service. The Preamble, Scope, and Terminology sections of the New Mexico Rules of Professional Conduct--which discuss "other" law and moral obligations--track similar introductory sections found in the ABA's Model Rules.
Compliance with the Rules, as with all law in an open society, depends primarily upon understanding and voluntary compliance, secondarily upon reinforcement by peer and public opinion, and finally, when necessary, upon enforcement through disciplinary proceedings. The rules do not exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules. The Rules simply provide a framework for the ethical practice of law.
0.1:103 Background of the New Mexico Rules of Professional Conduct
Following the adoption of the Model Rules of Professional Conduct by the House of Delegates of the American Bar Association on August 2, 1983, the Supreme Court of New Mexico, by order issued June 26, 1986, adopted the New Mexico Rules of Professional Conduct effective January 1, 1987. As adopted, the New Mexico Rules of Professional Conduct contain certain differences from the Model Rules approved by the American Bar Association. For example, some of the New Mexico Rules contain provisions not included in the ABA Model Rules, while some rules that were included by the ABA in the Model Rules were not adopted by the New Mexico Supreme Court.
0.1:104 Unusual Aspects of the New Mexico Ethics Rules
Frequently the New Mexico Rules of Professional Conduct and/or the accompanying Comment differ substantially from the Model Rules of Professional Conduct, as originally promulgated by the House of Delegates of the American Bar Association on August 2, 1983, and as amended subsequently. Some of the more prominent examples follow.
Unlike in MR1.2(c), an attorney's limitation on the scope of the representation under NMR 16-102(C) must be "reasonable."
NMR 16-102(D) forbids a lawyer from advising or assisting a client to engage in conduct which misleads the court. MR 1.2(d) does not include this prohibition.
NMR 16-106 permits a lawyer to reveal information relating to representation of a client in order to prevent the client from committing a criminal act that the lawyer believes is likely to result in substantial injury to the financial interest or property of another. MR 1.6 does not include this provision.
While MR 1.7 forbids a lawyer from representing a client if the representation "will be directly adverse" to another client unless both clients consent, NMR 16-107(A) prohibits representation of a client if the representation "will be directly or substantially adverse" to another client unless both clients consent. In addition, where MR 1.7 merely says any consent must follow "consultation," NMR 16-107(A)(2) states that "the consultation shall include explanation of the implications of the common representation and the advantages and risks involved."
NMR 16-108(E)(1) states that a lawyer may advance court costs and expenses of litigation, provided the client remains ultimately liable for such costs and expenses. MR 1.7(e)(1) differs by saying that a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter.
According to NMR 16-111, only with consent "in writing" may a lawyer represent a private client in a matter in which the lawyer participated for a governmental agency; the writing requirement is absent from MR 1.11. Also, unlike in the Model Rule, in part (F) the New Mexico rule defines "Screened," and in part (G) it specifies rules for advocacy before a governmental body which the lawyer represents.
NMR 16-112 is stricter than MR 1.12 in regulating a lawyer's representation of a client in a matter in which the lawyer formerly was a judge, arbitrator or other adjudicative officer. Under the Model Rule, the lawyer's representation is forbidden if he was involved "personally and substantially" as an adjudicative officer, while the New Mexico Rule forbids the representation merely if he was involved "personally" as an adjudicative officer.
NMR 16-114 differs from MR 1.14 by providing a lawyer may not only appoint a guardian or take other protective action with respect to a client if he reasonably believes that the client cannot adequately act in the client's own interest, he may also appoint a "conservator."
MR 1.15 governs safekeeping of property. The New Mexico version NMR 16-115 adds three sections not found in the Model Rule: (D) regarding pooled interest-bearing trust accounts, (E) regarding separate interest-bearing trust accounts, and (F) regarding determination of nominal amount.
NMR 16-116, which governs declining or terminating representation, says a lawyer may retain papers relating to the client "to the extent permitted by law, or the Rules of Professional Conduct," while MR 1.16 says papers relating to the client may be retained "to the extent permitted by other law."
New Mexico did not previously have a rule regarding sale of a law practice. However, by Order dated February 6, 2002 and numbered 02-8300, the New Mexico Supreme Court adopted MR 1.17 as NMR 16-117.
The lawyer as intermediary rule in New Mexico, which is NMR 16-202, says a lawyer may act as intermediary "if approved by each client in writing." MR 2.2 does not contain the writing requirement.
NMR 16-304 varies from MR 3.4 by adding that in trial, a lawyer shall not state a personal opinion "not supported by the evidence."
NMR 16-305(A) slightly expands on the ban in MR 3.5 against a lawyer seeking to influence a judge, juror, prospective juror or other official, while NMR 16-305(C) is somewhat more lenient than MR 3.5, because it prohibits a lawyer from engaging in conduct intended to disrupt a tribunal, "and which in fact disrupts" a tribunal.
Following the 1991 amendments, NMR 16-306 differs greatly from MR 3.6, which covers trial publicity. The New Mexico Rule pertains only to criminal proceedings, whereas the Model Rule applies to all matters. The New Mexico Rule prohibits lawyers from making extrajudicial or out-of-court statements that a reasonable person would know to be false, or that create a clear and present danger of prejudicing the proceeding. MR 3.6 makes no such provision for a knowingly false statement. The New Mexico Rule does not give guidance as to what is considered to be a statement that would prejudice the proceeding, whereas the Model Rule gives six examples. Likewise, the New Mexico Rule does not provide guidance on what sorts of statements would not be considered to prejudice the proceeding, whereas the Model Rule lists ten examples.
NMR 16-307 omits MR 3.7(a)(3), which provides that a lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where "(3) disqualification of the lawyer would work substantial hardship on the client."
MR 3.8 sets forth special responsibilities of a prosecutor, and in part (b) requires the prosecutor to facilitate retention of counsel by the accused. NMR 16-308 requires the prosecutor to facilitate retention of counsel by the accused "prior to appearing in a court proceeding where a defendant appears without counsel." Also, part (d) of MR 3.8 governs disclosure of mitigating information. The New Mexico version, NMR 16-308, only requires disclosure of "reasonably relevant" mitigating information.
With regard to communications with persons represented by counsel, NMR 16-402 adds a sentence not found in MR 4.2, namely, "except for persons having a managerial responsibility on behalf of the organization, an attorney is not prohibited from communicating directly with employees of a corporation, partnership, or other entity about the subject matter of the representation even though the corporation, partnership or entity itself is represented by counsel."
NMR 16-501, governing responsibilities of a partner or supervisory lawyer, is broader than MR 5.1. Part (a) of MR 5.1 applies only to "a partner in a law firm," while the New Mexico version applies to any lawyer "having direct supervisory authority over another." Also, while under the Model Rule the lawyer must merely ensure that the firm has in effect measures designed to require compliance with the rules by subordinate lawyers, in New Mexico the supervisory attorney "shall make reasonable efforts to ensure that the other lawyer conforms" to the Rules.
NMR 16-505 differs from MR 5.5 with regard to the unauthorized practice of law. The New Mexico Rule adds that a lawyer shall not employ or continue the employment of a disbarred or suspended lawyer as attorney, law clerk, paralegal or any other position of a quasi-legal nature if the suspended or disbarred lawyer has been specifically prohibited from accepting or continuing such employment by order of the Supreme Court or the disciplinary board.
New Mexico has not adopted MR 5.7, which addresses applicability of the ethics rules to ancillary business activities.
Article 6 of the New Mexico Rules of Professional Conduct pertains to public service. NMR 16-601 sets forth detailed guidelines regarding pro bono public service that are not present in MR 6.1, as originally adopted.
Article 7 of the New Mexico Rules of Professional Conduct, governing "information about legal services," represents a substantial revision of and expansion upon MR 7.1 to 7.5.
The New Mexico version of the rule governing reporting of professional misconduct, NMR 16-803, expands on MR 8.3 because it requires a lawyer to inform the appropriate authority when a judge has engaged in any improper conduct, whereas the Model Rules requires reporting only when the misconduct constitutes a violation of the applicable rules of judicial conduct. Further, NMR 16-803 adds two sections not found in MR 8.3: (C) regarding the cooperation and assistance of lawyers in investigatory and disciplinary proceedings, and (D) regarding an alcohol and substance abuse exception.
With regard to misconduct, NMR 16-804 adds several sections which are not included in MR 8.4. For example, NMR 16-804(E) adds that it is professional misconduct for a lawyer to willfully violate the Supreme Court Rules on Minimum Continuing Legal Education or the New Mexico Plan of Specialization, or the board regulations promulgated under the authority or the rules or the plan. Further, NMR 16-804(H) adds that it is professional misconduct for a lawyer to engage in any conduct that adversely reflects on his fitness to practice law.
0.2:200 Forms of Lawyer Regulation in New Mexico
0.2:210 Judicial Regulation
Under Article III of the New Mexico Constitution, the New Mexico Supreme Court has the exclusive authority to regulate the practice of law. See also, e.g., § 36-2-1 NMSA 1978 (1991 Repl. Pamp.) ("supreme court of the state of New Mexico shall ... define and regulate the practice of law within the state..."); U.S. v. Martínez, 101 N.M. 423, 684 P.2d 509 (1984) (Supreme Court has exclusive right to regulate practice of law); Matter of Adams, 102 N.M. 731, 700 P.2d 194 (1985) (Supreme Court has ultimate responsibility to grant or deny right to practice law in state); and State Bar v. Guardian Abstract & Title Co., Inc., 91 N.M. 434, 575 P.2d 943 (1978), appeal after remand, 92 N.M. 327, 587 P.2d 1338 (authority of Supreme Court to define and regulate the practice of law is inherently contained in the grant of judicial power to courts by the Constitution).
According to New Mexico Attorney General Opinion ("AG Opinion") 1987-61, the Supreme Court possesses exclusive authority to regulate the conduct of lawyers, whether the conduct occurs before courts of law or before governmental bodies. Therefore, it was determined that the State Racing Commission lacks authority to prohibit an attorney from representing a client in Commission hearings on the basis of alleged attorney misconduct.
The New Mexico Supreme Court has the jurisdiction to enjoin the unauthorized practice of law by individuals who are not members of the bar. It also has the duty to ensure that attorneys licensed to practice law are qualified to do so, both in terms of good morals and satisfactory education. Matter of Stafford, 106 N.M. 298, 742 P.2d 510 (1987).
The prime purpose of licensing attorneys and in making them the exclusive practitioners in their field is to protect the public from evils occasioned by unqualified persons performing legal services; close regulation of those who practice law is to protect the unwary and uninformed from injury at the hands of persons unskilled or unlearned in the law. State Bar v. Guardian Abstract & Title Co., Inc., 91 N.M. 434, 575 P.2d 943 (1978).
The New Mexico Supreme Court has created the Disciplinary Board for the purpose of handling disciplinary matters. NMRA 17-102. As an agent of the New Mexico Supreme Court, the Disciplinary Board has the power and duty to investigate the conduct of any attorney within the jurisdiction of the New Mexico Supreme Court. It may initiate an investigation on its own motion or may undertake the same upon a motion by any person. Id.
Similarly, the Board of Bar Commissioners and the Committee on the Unauthorized Practice of Law are empowered to maintain and prosecute suits to prevent the unauthorized practice of law. State Bar v. Guardian Abstract & Title Co., Inc., 91 N.M. 434, 575 P.2d 943 (1978). The Disciplinary Board has the duty to consider recommendations made by these committees and to formally reprimand attorneys in accordance with the New Mexico Rules. NMRA 17-102.
In the context of attorney discipline, any lawyer admitted to practice in New Mexico is subject to the disciplinary jurisdiction of the New Mexico Supreme Court and the Disciplinary Board. Non-members engaged in the practice of law in New Mexico, lawyers or non-lawyers specially admitted to practice for a particular proceeding, other lawyers who practice law within New Mexico as in house counsel to corporations or other entities, and those lawyers who serve as counsel to governmental agencies or otherwise, are also subject to the exclusive disciplinary jurisdiction of the New Mexico Supreme Court and its Disciplinary Board. NMRA 17-201.
It is the obligation of the organized bar and the individual lawyer to give unstinted cooperation and assistance to the Supreme Court, and its agency, the Disciplinary Board, in discharging its function and duty with respect to discipline and in purging the profession of the unworthy. NMRA 17, Preface.
The disciplinary rules do not usurp or limit the powers of courts to control proceedings before them. For a discussion of the authority for, and the nature of, sanctions that may be imposed upon attorneys in connection with judicial proceedings, see section 0.2:250, infra. See also Matter of Jade G., 130 N.M. 687, 30 P.3d 376 (Ct. App. 2001) (under its inherent authority, a court may sanction parties and attorneys to ensure compliance with the proceedings of the court).
0.2:220 Bar Organizations
The New Mexico Board of Bar Commissioners is established by NMRA 24-101. It was created by the New Mexico Supreme Court to establish and organize the State Bar of New Mexico. Id.
The State Bar of New Mexico is located at 5121 Masthead NE, Albuquerque, NM 87109; phone 505-797-6000; fax 505-828-3765; e-mail sbnm@nmbar.org; website www.nmbar.org
The New Mexico State Bar is a mandatory Bar, as all persons licensed to practice law in New Mexico must be members of it. NMRA 24-101. It was established to aid the courts in improving the administration of justice, to promote and support the needs of all members, to be cognizant of the needs of individual and minority members of the profession, including the full and equal participation of minorities and women in the state bar and the profession at large, to improve the relations between the legal profession and the public, to encourage and assist in the delivery of legal services to all in need of such services, to foster and maintain high ideals of integrity, learning, competence and public service, to provide a forum for the discussion of subjects pertaining to the practice of law and law reform, to promote and provide continuing legal education in technical fields of substantive law and practice, and to participate in the legislative, executive and judicial process by informing its membership about issues affecting the legal system. Id.
There are three sub-divisions of membership in the State Bar of New Mexico: the young lawyers division, the senior lawyers division, and the legal assistants division. NMRA 24-101. Members of the young lawyers division are all members of the State Bar of New Mexico who are under the age of thirty six (36) years, and those members who have been admitted to the practice of law in any state less than three years. NMRA 24-101(1). Members of the senior layers division are bar members in good standing who are fifty five (55) years of age or older, and who have practiced law for twenty five (25) years or more. NMRA 24-101(2). Members of the legal assistants division have graduated from an accredited program for legal studies, are ABA certified and have a minimum of three years experience as a legal assistant working under the supervision of a licensed New Mexico attorney. NMRA 24-101(3).
Each year, every member of the state bar shall pay a license fee which shall be determined and fixed by the Board of Bar Commissioners. NMRA 24-201. Any person failing to pay the license fee shall be assessed a penalty fee. Id. Upon failure to pay the penalty fee, a member of the bar has fifteen (15) days to show cause why such member should not be suspended from the right to practice in the courts of the state. Id.
The Board of Bar Commissioners is the governing board of the state bar. NMRA 24-101(B). The Board has twenty-one (21) members, consisting of nineteen (19) district bar commissioners, the elected chair of the young lawyers division, and the elected chair of the senior lawyers division. Id. Each district bar commissioner is elected to a three (3) year term and holds office until his successor is elected and qualified. NMRA 24-101(E). There are seven (7) bar commissioner districts from which the Board of Commissioners is composed. NMRA 24-101(C).
The first bar commissioner district consists of Bernalillo County and is represented by eight (8) bar commissioners. NMRA 24-101(C)(1). The second district is made up of San Juan, McKinley, Cibola, and Valencia counties and is represented by one (1) bar commissioner. NMRA 24-101(C)(2). The third district consists of Rio Arriba, Sandoval, Los Alamos and Santa Fe counties and is represented by three (3) bar commissioners. NMRA 24-101(C)(3). The fourth district is made up of Taos, Colfax, Union, Mora, Harding, San Miguel, and Guadalupe counties and is represented by one (1) bar commissioner. NMRA 24-101(C)(4). The fifth district is made up of Quay, Curry, Roosevelt, and De Baca counties and is represented by one (1) bar commissioner. NMRA 24-101(C)(5). The sixth district consists of Lea, Eddy, Chaves, Lincoln, and Otero counties and has three (3) bar commissioners. NMRA 24-101(C)(6). The seventh district consists of Catron, Socorro, Torrance, Sierra, Hidalgo, Luna, Grant and Doña Ana counties and is represented by two (2) bar commissioner. NMRA 24-101(C)(7). Nominations to the office of district bar commissioner shall be by written petition of any ten (10) or more active status members of the bar in good standing. NMRA 24-101(G). No state or federal judge is eligible to serve as a member of the Board while in office. Id.
Vacancies on the Board of Bar Commissioners are filled by appointment from the board, and district bar commissioners so appointed serve on the board until the next election, which is the 30th of November of each year. NMRA 24-101(F), NMRA 24-101(H). Each year, the Board of Commissioners elects a president, a vice president, a president-elect, and a secretary-treasurer. NMRA 24-101(I). All of the candidates must be members of the Board of Bar Commissioners, and shall be officers of the state bar and of its Board of Bar Commissioners. Id.
A commissioner's term of office may be extended by up to three (3) years if that commissioner's term of office expires while that commissioner is serving in the position of president-elect, president, or immediate past president. NMRA 24-101(J). During the extended term, there shall be elected from the district from which the commissioner resides, one less member to the Board of Commissioners than said district would have otherwise been entitled to. Id. At the regular election of commissioners, one (1) year after the year when the said president's term of office expires, an election shall be held in the district to elect a member from that district to the board who shall serve for the remainder of the term. Id.
An integrated state bar comes into being by the Supreme Court's action in admitting attorneys to practice; no separate statutory authorization is needed to create it. State Bar v. Guardian Abstract & Title Co., Inc., 91 N.M. 434, 575 P.2d 943 (1978) (also stating that as used in statute recognizing existence of a state bar, "state bar" is a generic term referring to that group of attorneys who have been admitted to practice before courts of state).
The New Mexico Board of Bar Commissioners largely survived a suit brought by New Mexico attorneys challenging the Bar's use of compulsory dues to fund specified activities, and the adequacy of the Bar's disclosure of budget items, in Popejoy v. New Mexico Board of Bar Com'rs, 831 F. Supp. 814 (D.N.M. 1993), enforcement denied 1994 WL 823551, amended on reconsideration in part, 887 F. Supp. 1422 (D.N.M. 1995). It was held that the State Bar may exact dues to support only those duties and functions of the bar which serve important and compelling governmental interests, and which are related to or germane to the Bar's purposes. Thus, the Bar Association may use mandatory dues to fund lobbying activities, including seeking support for funds for new appellate judges, for salary increases of judicial staff, for changes to compensation packages for state-employed lawyers and their staffs, for judicial information systems, and for court appointed representation in child abuse and neglect cases, because these activities are related or germane to the Bar Association's purposes. Therefore, the use of mandatory dues to support such lobbying activities did not violate attorney members' First Amendment rights.
Similarly, the Bar Association's acquisition of excess office space was not "political or ideological activity;" therefore, the use of mandatory dues to acquire excess office space was not inconsistent with attorney members' First Amendment rights. Also, the First Amendment does not preclude the state Bar Association from spending compulsory dues on pro bono activities in pursuing the goal of improving the delivery of legal services; providing specialized information to practicing attorneys is also permissible. However, the integrated Bar Association may target specific groups for pro bono legal services only if selection of such groups is based on ideologically neutral criteria. Id. (also providing that New Mexico State Bar was required to institute a time-keeping system for Bar employees to keep contemporaneous time records of their activities so that Bar members would have sufficient information to decide whether to object to any activity as non-chargeable).
0.2:230 Disciplinary Agency
The Supreme Court of New Mexico has ultimate and plenary authority with respect to the disciplining of lawyer and others who are subject to its discipline jurisdiction. The discipline process, however, involves a number of other persons and entities whose functions are prescribed in the New Mexico Rules Annotated. See NMRA 17-101 to NMRA 17-106.
The New Mexico Supreme Court has created a Disciplinary Board to review complaints, and to reprimand members of the bar for behavior that violates the Rules of Professional Conduct. The Disciplinary Board, in turn, has established hearing committees and hearing officers which make recommendations to the Disciplinary Board. The Disciplinary Board has also established reviewing officers; they are members of the Hearing Committee with the authority and duty to review, approve, modify, or disapprove dismissals of complaints docketed for formal investigation, and to offer informal admonitions proposed by Disciplinary Counsel. The Disciplinary Counsel and Deputy Disciplinary Counsel are appointed by the Disciplinary Board and serve at the pleasure of the Board and under its supervision.
Disciplinary Board
To carry out its plenary discipline powers, the Supreme Court of New Mexico has established a Disciplinary Board. According to NMRA 17-102, the Disciplinary Board has the power and duty to consider and investigate the conduct of any attorney within the jurisdiction of the Supreme Court, and may initiate an investigation on its own motion or may undertake the same upon complaint by any person. The Board also has the power and duty to review the findings of fact, conclusions and recommendations of Hearing Committees, and to take action thereupon. Furthermore, the Board can formally reprimand attorneys, and report any such reprimand to the Supreme Court, where it will be a matter of record. The Board conducts an annual meeting, sponsored by the Supreme Court, and attended by the Board, members of the Supreme Court, the Hearing Committee, and the Disciplinary Counsel. The purpose of this meeting is to review rules, discuss problems, establish performance criteria and discuss any other matters the board or court deems necessary.
The Disciplinary Board consists of twelve (12) members. NMRA 17-101. Of these twelve (12) members, ten (10) are members of the New Mexico bar, one of whom is appointed by the president of the bar, and two (2) are non-lawyer public members. A non-lawyer public member is a person who has never practiced law and has not graduated from law school. Also, the non-lawyer public member may not be directly employed by a lawyer, or have any direct financial investment in the practice of law.
The state is divided into disciplinary districts as follows: Central, Northern, Southern. NMRA 17-102. The Central district is composed of Bernalillo, Sandoval, Cibola, Valencia, and Socorro counties. The Northern District consists of San Juan, McKinley, Rio Arriba, Santa Fe, Los Alamos, Taos, Colfax, San Miguel, Harding, Union, Guadalupe, Torrence, Quay, and Mora counties. The Southern District is made up of De Baca, Curry, Roosevelt, Cháves, Eddy, Lea, Lincoln, Otero, Doña Ana, Catron, Grant, Luna, Hidalgo, and Sierra Counties. Each disciplinary district shall have at least one attorney member on the Board. The term of office for each member on the disciplinary board is three (3) years, but no member can serve more than six (6) consecutive years.
The Supreme Court designates one member of the Board to serve as chair, and one as vice-chair. The chair of the Board from time to time designates a secretary who keeps permanent records of all plenary proceedings of the Board. The chair of the Board, or the vice-chair in the chair's absence, oversees the operations of the Disciplinary Counsel's office, the several Hearing Committees and the review panels of the Board. The chair is responsible for the maintenance of a docket or other control of all formal charges instituted, the expedition of the proceedings and the assembly and preservation of the record of all proceedings. The chair also transmits or arranges for the transmission of all Board recommendations in disciplinary matters to the Supreme Court. The chair reports to the Supreme Court any formal reprimands administered by order of the Board. Also, the chair exercises the Board's authority on its behalf in certain ministerial duties involving Hearing Committees and Disciplinary Counsel pursuant to any policies or procedures as adopted by the Supreme Court or the Board.
All proceedings before the Disciplinary Board shall be brought in the disciplinary district in which the respondent-attorney's principal office is located, or if the respondent-attorney does not maintain a principal office in New Mexico, in the district in which any part of the conduct under investigation occurred.
While it is not within the jurisdiction of the Disciplinary Board or the office of Disciplinary Counsel to regulate fees charged by attorneys, it is within their jurisdiction to enforce the Rules of Professional Conduct. Matter of O'Brien, 130 N.M. 643, 29 P.3d 1044 (2001).
Hearing Officers and Committees
The Disciplinary Board provides for the organization of two or more Hearing Committees or the appointment of two or more Hearing Officers within each disciplinary district. Each committee consists of three (3) members. Hearing Officers are members of the New Mexico State Bar. Members of the Hearing Committees may be members of the New Mexico State Bar, or "non-lawyer public members." Hearing Committees act only with a concurrence of a majority of their members. Two (2) members of each committee must be members of the New Mexico State Bar, and two (2) members of a committee constitute a quorum.
Hearing Officers and Committees have the power and the duty to conduct hearings into formal charges of misconduct, upon assignment by the chair of the Disciplinary Board. They may also conduct hearings on motions for reinstatement and remission of deferred sanctions; and they may report to the Disciplinary Board their findings of fact, conclusions of law and recommendations, together with records of their proceedings.
Hearing Officers are not allowed to take part in any proceeding in which a judge or similar officer would be required to abstain. A Hearing Officer may not personally represent a lawyer in any investigation or proceeding pursuant to the disciplinary rules while actively serving on the Hearing Committee in a pending proceeding. Active service in a pending proceeding begins on the date the hearing officer receives notice of assignment to a committee and concludes on the date the committee submits its notice of findings.
Reviewing Officers
Any member of a Hearing Committee may serve as a Reviewing Officer. A Reviewing Officer, upon the request of the Disciplinary Counsel or chair of the Board, shall have the authority and duty to review, approve, modify or disapprove dismissals of complaints docketed for formal investigation and offers of informal admonitions proposed by Disciplinary Counsel. Any member of a Hearing Committee who participates as a Reviewing Officer during the investigation of an attorney shall not serve as a member of a Hearing Committee for any charges filed as a result of such investigation. The identity of the Reviewing Officer involved in a particular investigation remains confidential at all times, including after the filing of formal disciplinary charges. Upon request, the Reviewing Officer's report (without identifying information) is available to the attorney being investigated.
Disciplinary Counsel
NMRA 17-105 governs the appointment, powers, and duties of the Disciplinary Counsel. The Disciplinary Board appoints a Disciplinary Counsel, subject to the approval of the Supreme Court. The Counsel serves at the pleasure of the Board and under its supervision. Subject to the approval of the Supreme Court, the Board fixes the compensation of the Counsel, if any, and promulgates policies for the orderly and efficient conduct of his duties.
The Disciplinary Counsel has these powers: (1) to docket for formal investigation any complaint which sets forth reasonable grounds to believe that a violation of the Rules of Professional Conduct has occurred; (2) to investigate, or to refer for investigation to assistant disciplinary counsel or to an investigator, all matters involving alleged misconduct by an attorney subject to the jurisdiction of the Supreme Court, and (3) to dispose of all matters involving alleged misconduct by an attorney by: (a) dismissal of the complaint, (b) a letter of caution, (c) informal admonition, or (d) the filing of formal charges with the Disciplinary Board. The Disciplinary Counsel also has the power to prosecute all disciplinary proceedings before Hearing Committees, the Disciplinary Board, and the Supreme Court, and to seek to resolve informally allegations which on their face would not, even if true, involve violations of the Rules of Professional Conduct but which are of concern to the complainant and could easily be corrected by the attorney.
The Disciplinary Counsel has these duties: (1) to receive or initiate in the first instance all complaints, and to maintain docket control, files and records upon any matter upon which investigation is initiated; (2) to appear at hearings conducted upon motions for reinstatement by suspended or disbarred attorneys; to cross-examine witnesses testifying in support of the motions and to present any evidence in opposition to reinstatement; (3) to maintain permanent records of all matters processed and the disposition thereof, and to act as the general administrative officer for the Disciplinary Board under its direction and supervision; (4) to file quarterly status reports with the Disciplinary Board indicating the receipt, processing, and status of all complaints; and (5) to keep all complaints and other disciplinary matters confidential.
The Disciplinary Board may appoint one or more experienced investigators to assist Disciplinary Counsel in the performance of their duties. Full time salaried Disciplinary Counsel or assistant disciplinary counsel may not engage in the private practice of law. With permission from the Disciplinary Board, however, full-time salaried counsel may speak, write, lecture, teach, and participate in other activities concerning the law, the legal system, and the administration of justice.
0.2:240 Disciplinary Process
Discipline Jurisdiction of the New Mexico Supreme Court
NMRA 17-201 establishes that the New Mexico Supreme Court and the Disciplinary Board have exclusive disciplinary jurisdiction over any attorney admitted to practice law in New Mexico, any attorney specially admitted to practice by a court in New Mexico, or any individual admitted to practice as an attorney in any other jurisdiction who engages in the practice of law within this state as house counsel to corporations or other entities, or as counsel for governmental agencies. See also, e.g., § 36-2-1 NMSA 1978 (1991 Repl. Pamp.) ("supreme court of the state of New Mexico shall ... define and regulate the practice of law within the state...")
Grounds for Discipline
According to § 36-2-18 NMSA 1978 (1991 Repl. Pamp.), an attorney may be disbarred or suspended by the Supreme Court for any of the following causes arising after his admission to practice: conviction of a felony or misdemeanor involving moral turpitude, wilful disobedience or violation of a court order, appearing as attorney "corruptly ... or without authority," lending his name to be used as an attorney by a non-lawyer, failing or refusing to account for money of his client he acquires as attorney, and "any other act to which such a consequence is by law attached."
NMRA 17-205 states that an act or omission by an attorney, individually or in concert with any other person, which violates the Rules of Professional Conduct or violates the provisions of a court rule, statute, or other law shall be grounds for discipline, whether or not the act or omission occurred in the course of the attorney-client relationship.
According to NMRA 17-206, a violation of the Rules of Professional Conduct is grounds for: (1) disbarment by the Supreme Court; (2) suspension by the Supreme Court for a certain time with automatic reinstatement; (3) indefinite suspension by the Supreme Court with reinstatement upon application; (4) public censure by the Supreme Court; (5) formal reprimand by the Supreme Court; (6) informal admonition by Disciplinary Counsel without formal hearing; and/or (7) requirement by the Disciplinary Board that an attorney successfully pass the multi-state professional responsibility examination the next time it is given.
If the record suggests that the individual can still perform legal services without supervision, the Supreme Court may impose probation. By imposing probation, the court allows the lawyer to continue to practice law while requiring him to meet certain conditions that will insure the protection of the public and assist him in understanding and meeting his ethical obligations. These conditions are not mere guidelines, but are orders of the court which are to be obeyed. Matter of Rawson, 104 N.M. 387, 722 P.2d 638 (1986). Failure by an attorney on probation to comply with any such terms or conditions is subject to enforcement under the contempt powers of the Supreme Court. If the Supreme Court finds good cause to enter an order to show cause why the attorney should not be held in contemp, it may direct the attorney to appear before the court to show cause why additional discipline should not be imposed, or if factual allegations are in dispute, may remand the matter the Disciplinary Board for an expedited evidentiary hearing. If held in contempt, the attorney may be censured, fined, suspended or disbarred.
NMRA 17-207 states that in addition to probation, an attorney may be summarily suspended, upon recommendation of the Disciplinary Board. Summary suspension is proper in the following situations: (1) upon the filing with the Supreme Court of a certified copy of a judgment finding an attorney guilty of a felony or other serious crime, (2) upon the Disciplinary Board demonstrating by certificate or otherwise that an attorney has been convicted of or has pleaded guilty or no contest to a felony or serious crime, (3) upon filing with the Supreme Court of an order or judgment declaring the attorney to be incompetent or incapacitated, or unable to defend himself, (4) upon the Disciplinary Board demonstrating by certificate or otherwise that an attorney is incapacitated from continuing to practice law or to defend himself, or (5) upon the filing in the Supreme Court and service upon an attorney by Chief Disciplinary Counsel of a petition which sets forth facts demonstrating that the continued practice of law by an attorney will result in a substantial probability of harm, loss or damage to the public, and that (a) the attorney is under investigation by Disciplinary Counsel for an alleged violation or the Rules of Professional Conduct or a violation of a court rule, statute or other law, (b) formal disciplinary charges have been filed against the attorney, or (c) a criminal complaint, information or indictment has been filed against the attorney.
An attorney summarily suspended may be reinstated immediately upon a showing that if the suspension was for conviction of a crime, the underlying conviction for the felony or other serious crime has been reversed and no further proceedings have been ordered by the reviewing court. Also, the attorney may be immediately reinstated if the suspension was imposed because of incompetency or incapacity, and the Disciplinary Board certifies that the incapacity or incompetency no longer exists. An attorney may also be immediately reinstated if the suspension was imposed on a showing that the continued practice of law by the attorney would result in a substantial probability of harm, loss or other damage to the public, and the Disciplinary Board certifies that said probability no longer exists. Reinstatement after summary suspension does not terminate any formal disciplinary proceeding then pending against the attorney, the disposition of which is to be determined by the Hearing Committee and the Disciplinary Board.
NMRA 17-211 provides for discipline by consent when an attorney against whom formal charges have been made tenders to Disciplinary Counsel an agreement admitting sufficient facts exist to permit a finding that the allegations are true, or declaring his intention not to contest the allegations. The Disciplinary Board may accept or reject the agreement. However, the Board may not accept an agreement without first determining from the attorney that he understands the charges against him, he understands the proposed disposition of the proceedings, he understands that if the agreement is accepted he is waiving the right to hearing before a Hearing Committee and the Board and is waiving an appeal to the Supreme Court, and the admission or provisions of the consent decree are voluntary and not the result of force, threats, or promises.
An attorney who has been disciplined may be required to make restitution, and also to reimburse the client's security fund of the State Bar of New Mexico for any expenditure that is made arising out of the attorney's misconduct. Any order of restitution does not preclude damages being awarded by a court of competent jurisdiction. All forms of discipline, including disbarments, indefinite suspensions, and public censures are to be published in the New Mexico Reports and the Bar Bulletin, and are to be filed in the Supreme Court clerk's office. Formal reprimands by the Board are also to be published in the Bar Bulletin and to be filed in the Supreme Court clerk's office.
A disbarred attorney may file a motion for reinstatement to the Supreme Court. The motion may not be filed before three (3) years from the effective date of disbarment. An attorney who has been suspended for a specific period of time shall be automatically reinstated at the expiration of the period specified in the order of suspension.
An attorney who has been suspended for an indefinite period of time may, at any time after complying with the conditions of reinstatement, file with the clerk of the Supreme Court a petition for reinstatement attaching thereto a copy of the order of suspension and an affidavit of compliance, where appropriate, stating that the attorney has complied with previously-imposed conditions of reinstatement. An attorney who has been suspended indefinitely due to incapacity or incompetency may move for reinstatement upon clear and convincing evidence that the disability has been terminated and the attorney is once again fit to resume the practice of law; however, if such a motion is denied, another may not be made for a year, unless a different period is specified by the Supreme Court. The filing of an application for reinstatement on grounds of incompetency or incapacity, constitutes a waiver of any psychotherapist-patient privilege with respect to the treatment of the attorney during the period of the attorney's disability. In the application for reinstatement, the attorney must disclose the name and address of every treating psychiatrist, psychologist, physician, hospital or other institution. The attorney must also furnish to the Supreme Court written consent for each psychologist, psychiatrist, physician, hospital or other institution to divulge such information and records as requested by court-appointed medical experts.
Membership in the bar requires more than just the mere absence of intent to do wrong; otherwise, a high standard of conduct could not be maintained. See Matter of Nelson, 79 N.M. 779, 450 P.2d 188 (1969). However, there is a balance in that moral turpitude is not a necessary element to support discipline, nor is it synonymous with "conduct contrary to honesty, justice or good morals". See Matter of Morris,74 N.M. 679, 397 P.2d 475 (1964).
The court's primary concern in all cases involving attorney discipline is to assure that the public is protected from dishonest attorneys, whatever the explanation for the dishonesty. Matter of Stewart, 104 N.M. 337, 721 P.2d 405 (1986).
By way of example regarding grounds for discipline, an attorney's apparent failure to complete several cases, to take steps to ensure that the interests of her clients were protected upon her withdrawal from their cases, and to promptly refund any unearned portions of fees paid in advance, as well as her lack of cooperation with the disciplinary counsel, constituted conduct violative of the professional rules warranting an indefinite suspension from the practice of law. Matter of Roth, 105 N.M. 255, 731 P.2d 951 (1987).
Regarding mitigating factors in disciplinary actions, see, e.g., Matter of Martin, 127 N.M. 321, 980 P.2d 646 (1999) (neither mental nor physical infirmity provides a defense to charges of professional misconduct); Matter of Hyde, 124 N.M. 363, 950 P.2d 806 (1997) (pressures of practice of law provide neither an excuse nor a mitigating factor for deceit; dishonest conduct by lawyers will not be tolerated); Matter of Smith, 858 P.2d 857, 115 N.M. 769 (1993) (mental disability of attorney can be considered in mitigation of disciplinary action only if attorney's recovery from condition can be demonstrated by meaningful and sustained period of successful rehabilitation; attorney's chronic depression cannot be considered as mitigating factor in imposing appropriate discipline for pattern of neglecting client matters and failing to communicate with clients, where attorney admits that he still suffers from mental disability and that his counselor concludes that practicing law aggravates depression; mental disability, such as depression, can only mitigate discipline of attorney if it can be demonstrated that condition is no longer likely to result in harm to public); Matter of Tapia, 110 N.M. 693, 799 P.2d 129 (1990), reinstatement granted by 114 N.M. 37, 834 P.2d 414 (where there is some evidence that factors over which attorney had no control may have contributed to misconduct or that rehabilitation could be effected, court will hesitate to impose ultimate sanction of disbarment).
Disciplinary Process
According to NMR 16-803(C), "a lawyer shall give full cooperation and assistance to the highest court of the state and to the disciplinary board, hearing committees and disciplinary counsel in discharging their respective functions and duties with respect to discipline and disciplinary procedures." Also, attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which provides "I will willingly participate in the disciplinary process."
For purposes of a disciplinary hearing, the Disciplinary Board is to hear only such evidence as would be admissible in the trial of a civil case, although it may receive and consider any evidence it believes to be cogent and credible in the exercise of sound judicial discretion. The Hearing Committee chair presides and makes rulings upon questions of the admissibility of evidence and the conduct of proceedings.
Except in cases involving theft or misappropriation, conviction of a crime, or a knowing act of concealment, the statute of limitations is four (4) years from the time the complainant knew or should have known the facts on which the complaint is filed.
Investigations and investigatory hearings conducted by or under the direction of Disciplinary Counsel are entirely confidential, unless they are matters of public record. NMRA 17-304. Information relating to disciplinary proceedings may be released by Disciplinary Counsel prior to filing formal charges, as follows: (1) where investigation reasonably causes Disciplinary Counsel to believe in good faith that a crime may have been committed by an attorney, then the name of the subject, the general nature of the possible crime, and the relevant facts are to be made available to an appropriate prosecuting authority; (2) if the respondent-attorney has filed with the office of Disciplinary Counsel a written waiver of confidentiality, or (3) upon written request from a special Client Security Fund Committee, such information as may assist the committee in determining the validity and worthiness of a specific claim.
NMRA 17-306 states that Disciplinary Counsel may serve interrogatories on the respondent-attorney. Contemporaneously, Disciplinary Counsel may also request or invite the respondent-attorney to appear before a Reviewing Officer and to answer questions related to the allegations under investigation by Disciplinary Counsel. The respondent-attorney has the rights to counsel, to make opening and closing statements, and to introduce documentary evidence. The chair of the Disciplinary Board may issue subpoenas for the production of records and other documents of the respondent-attorney, or any other witness necessary to the investigation, as well as to require the presence and testimony of any witnesses or the respondent-attorney oath. If it appears that the respondent-attorney or a witness may alter, destroy, secrete or remove from the jurisdiction of New Mexico any evidence relevant or material to an investigation, Disciplinary Counsel, if authorized by the Disciplinary Board, may petition the Supreme Court for an order to compel the attendance of witnesses before a Hearing Committee and the production before a Hearing Committee of relevant evidence.
The Chair of a Hearing Committee may issue subpoenas requiring the presence of a witness at a formal hearing, or commanding the person to whom it is directed to produce at a formal hearing before a Hearing Committee the books, papers, documents, or tangible things designated therein.
NMRA 17-307 provides for investigation of complaints. Investigations are initiated by the chief Disciplinary Counsel, deputy disciplinary counsel, or assistant counsel designated by the chair of the Disciplinary Board. Investigations are conducted by Disciplinary Counsel staff attorneys or are referred to an appropriate assistant counsel or commissioned investigator for report and recommendation.
Investigations, examinations, and verifications are conducted so as to preserve the private and confidential nature of the lawyer's records. An investigation may be dismissed if the complaint does not set forth allegations which, if true, state reasonable cause to believe that the respondent-attorney has violated the Rules of Professional Conduct. If the complaint is not dismissed, however, the Disciplinary Counsel is to prepare an investigation report that includes a summary statement of the facts, a statement of the opposing positions, and the investigator's recommendations for further handling of the situation. Next, the Disciplinary Counsel submits this report to the Chair of the Disciplinary Board, who either approves that it be filed as formal charges, or recommends an alternate course of action.
If an informal written admonition letter has been recommended by the Disciplinary Board, the respondent-attorney may either accept or reject it. If the respondent-attorney rejects it, the Disciplinary Counsel is to file a formal specification of the charges. In the charges, counsel is to indicate that they have been filed because an offer of informal admonition was declined.
If charges have been filed, the respondent-attorney may review and answer them. The answer must contain a brief statement reflecting admissions, denials, and any other relevant and material matters that the attorney wishes to convey, any mitigating factor in connection with any admitted violations, and the names and addresses of the witnesses that the respondent plans to call in his defense. Failure by the respondent-attorney to answer within twenty (20) days constitutes an admission.
NMRA 17-313 sets out procedures for disciplinary hearings. Upon a written showing of need, either party can apply to the Chair of the Hearing Committee for permission to conduct discovery proceedings prior to the formal hearing. Within thirty (30) days after the time for filing an answer, the Chair of the Hearing Committee is to set a time and date for formal hearing on the charges. The formal hearing will be set for not longer than one hundred twenty (120) days from the time for filing an answer. The date of the hearing may be extended on a showing of good cause.
The formal hearing is adversarial in nature. Witnesses are sworn in, and the Disciplinary Counsel presents evidence to support the allegations in the formal charges. The Committee Chair presides and makes rulings on questions of the admissibility of evidence and the conduct of the proceedings. The committee members may ask questions of witnesses, including the respondent-attorney. The complaining witness(es), the respondent-attorney and Disciplinary Counsel may be present throughout the entire hearing. Other witnesses may be excluded except when testifying. At the end of the hearing, each side may present proposed findings of fact and conclusions of law, after which the Hearing Committee will consider the case and submit its recommendation within thirty (30) days to the Disciplinary Board.
Upon receipt of the findings, conclusions and recommendations of the Hearing Committee, the Chair of the Disciplinary Board is to request oral argument by or submission of briefs from each side. The Board will not consider any evidence which was not presented at the hearing before the Committee. Within thirty (30) days following the submission of briefs or oral argument or the receipt of the Hearing Committee's findings and recommendations, the Disciplinary Board is to render its decision.
Once the Disciplinary Board renders its decision, each side had three (3) methods to seek review by the Supreme Court. If the decision recommends public censure by the Supreme Court, suspension, or disbarment, a respondent-attorney may request a hearing before the Supreme Court, which may or may not be granted. If the decision is to assess costs, to impose a formal public reprimand, or to impose probation, the respondent-attorney may petition the Supreme Court for a hearing within fifteen (15) days of service of the decision. If the decision is to dismiss the complaint, petition to the Supreme Court for a hearing may be made within fifteen (15) days, and the Court may or may not grant it.
Formal proceedings are conducted before the Hearing Committee or the Disciplinary Board and are open to the public. Complainants are advised as to the status of the investigation every six (6) months and shall be immediately advised of the final disposition of their complaints.
Numerous reported cases involve the lawyer's duty to cooperate with disciplinary process. For example, in Matter of Romero, 130 N.M. 190, 22 P.3d 215 (2001), it was held that a lawyer's failure to respond to inquiries from the office of Disciplinary Counsel may warrant discipline, regardless of whether there is a finding of misconduct with respect to the underlying matter that caused the office to make its inquiries. Thus, an attorney cannot avoid formal disciplinary proceedings by failing to respond in a substantive manner to inquiries from the office of disciplinary counsel. See also, e.g., Matter of C'De Baca, 109 N.M. 151, 782 P.2d 1348 (1989) (attorney failed to act responsibly when he knowingly made a false statement to the hearing committee when he stated that a former client's judgment against him in a civil suit for debt and money due, conspiracy and fraud, did not involve a finding of fraud); Matter of Carrasco, 106 N.M. 294, 742 P.2d 506 (1987) (when an attorney failed to file an answer or appear at the proceedings before a hearing committee, he did not request a hearing before the Disciplinary Board although advised of his right to do so, and he failed to appear before the Supreme Court, such conduct violated the attorney's duties); and Matter of Martínez, 104 N.M. 152, 717 P.2d 1121 (1986) (act of ignoring the inquiries of Disciplinary Counsel concerning allegations of misconduct is a violation of the rules).
Several cases address the issue of burden of proof in the disciplinary process. For instance, in Van Orman v. Nelson, 78 N.M. 11, 427 P.2d 896 (1967), rev'd on other grounds, 80 N.M. 119, 452 P.2d 188 (1969), it was held that with respect to transactions between attorney and client involving the acquisition of property from the client, a heavy burden is imposed upon the attorney to establish the absolute fairness of the transactions. More broadly, the court held in Matter of Quintana, 130 N.M. 627, 29 P.3d 527 (2001) that the disbarred or suspended attorney who seeks to be reinstated bears a heavy burden and must demonstrate not only by words but also by deeds that he or she can undertake the practice of law without endangering the public or the reputation of the profession. See also Matter of Romero, 130 N.M. 190, 22 P.3d 215 (2001) (suspended lawyer seeking reinstatement bears the burden to prove by clear and convincing evidence that she has satisfied all procedures and criteria stated in Rules Governing Discipline and has satisfied the conditions of the order of discipline entered by the Supreme Court).
In Matter of Rawson, 113 N.M. 758, 833 P.2d 235 (1992), it was recognized that a lawyer may not refuse to disclose client trust records to the Disciplinary Board on the basis of confidentiality of client information stated in NMR 16-106.
0.2:245 Mandatory Disbarment Upon Conviction of a Crime Involving Moral Turpitude
According to § 36-2-19 NMSA 1978 (1991 Repl. Pamp.), the Supreme Court "must enter an order disbarring" an attorney who has been convicted "of a felony or of a misdemeanor involving moral turpitude." See also § 36-2-18(A) NMSA 1978 (1991 Repl. Pamp.) (stating a lawyer "may be" disbarred or suspended for his conviction of a crime "involving moral turpitude in which case the record of conviction is conclusive"); NMR 16-804; and NMRA 17-207.
Whether the misconduct with which a person is charged, is a crime involving moral turpitude or, if a crime, whether it is malum prohibitum or malum in se or, for that matter whether the act is a felony or misdemeanor, is not the issue. The true question in considering disbarment is whether the act to which respondent pleaded guilty was "contrary to honesty, justice or good morals." Matter of Morris,74 N.M. 679, 397 P.2d 475 (1964) (member of bar was guilty of crime of involuntary manslaughter resulting from driving motor vehicle under the influence of intoxicating liquor, and such offense was an act contrary to honesty, justice, or good morals sufficient to support a suspension from practice).
0.2:250 Sanctions in Judicial Proceedings
The courts of New Mexico have inherent authority to impose sanctions upon attorneys in judicial proceedings for improper conduct, including conduct detrimental to the court's ability to control its docket and proceedings before it. See generally State ex rel. N.M. State Highway & Transp. Dep't v. Baca, 120 N.M. 1, 896 P.2d 1148 (1995); and Matter of Jade G, 130 N.M. 687, 30 P.3d 376 (Ct. App. 2001). Sanctions in judicial proceedings are also discussed infra, e.g., in section 3.1:300 et seq.
While it is not the province of the district court to sanction attorneys for breaching ethical rules, it is within the court's discretion in an equitable proceeding to vindicate the public policy evidenced by those rules. U.S. v. 36.06 Acres of Land, 70 F. Supp.2d 1272 (D.N.M. 1999).
0.2:260 Criminal and Civil Liability
A lawyer may, of course, be subject to criminal liability if that lawyer's conduct violates the proscriptions of a criminal statute. In addition, NMRA 16-102 states that a lawyer shall not engage, or counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent or which misleads the court, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning, or application of law. When a lawyer knows that a client expects assistance not permitted by the Rules of Professional Conduct or other law, the lawyer should consult with the client regarding the relevant limitations on the lawyer's conduct.
An attorney's violation of a Rule of Professional Conduct should not give rise to a private cause of action, or otherwise constitute a basis for civil liability. NMR Scope.
0.2:270 Federal Courts and Agencies
The state of New Mexico comprises a single federal judicial district the District of New Mexico. Generally speaking, admission to, and continuing membership in, the bar of the United States District Court for the District of New Mexico is limited to members in good standing in the State Bar of New Mexico.
An attorney residing outside the District of New Mexico may participate in an action in the District if the attorney is a member in good standing of the bar of another state and associates with a resident member of the Federal Bar, or if the attorney applies to practice in the District. DNM LR-Civ 83.3.
0.2:280 Ethics Rules Applied in Federal Courts in New Mexico
The Rules of Professional Conduct adopted by the Supreme Court of the State of New Mexico apply to practice in the United States District Court for the District of New Mexico, except as otherwise provided by local rule or by court order. DNM LR-Civ 83.9. Lawyers appearing in the federal court in New Mexico must comply with A Creed of Professionalism of the New Mexico Bench and Bar. Id.
0.3:300 Organization of This Library and the Model Rules
This narrative utilizes the outline for state narratives prepared for the American Legal Ethics Library. That outline in turn relies heavily on the organization of the Model Rules of Professional Conduct, which is essentially as follows:
Client-Lawyer Relationship
NMR 16-101 to 16-116
Counselor
NMR 16-201 to 16-203
Advocate
NMR 16-300 to 16-309
Transactions with Persons Other than Clients
NMR 16-401 to 16-404
Law Firms and Associations
NMR 16-501 to 16-506
Public Service
NMR 16-601 to 16-604
Information About Legal Services
NMR 16-701 to 16-707
Maintaining the Integrity of the Profession
NMR 16-801 to 16-805
0.4:400 Abbreviations, References and Terminology
0.4:410 "Belief" or "Believe"
Denotes that the person involved actually supposed the fact in question to be true. A person's belief may be inferred from the circumstances. NMR Terminology.
0.4:420 "Consults" or "Consultation"
Denotes communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question. Id.
0.4:430 "Firm" or "Law Firm"
Denotes a lawyer or lawyers in a private firm, lawyers employed in the legal department of a corporation or other organization, and lawyers employed in a legal services organization. Id.
Note that whether two or more lawyers constitute a firm within this definition can depend on the specific facts. For example, two practitioners who share office space and occasionally consult or assist each other ordinarily would not be regarded as constituting a firm. However, if they present themselves to the public in a way suggesting that they are a firm or conduct themselves as a firm, they should be regarded as a firm for the purposes of the Rules. The terms of any formal agreement between associated lawyers are relevant in determining whether they are a firm, as is the fact that they have mutual access to confidential information concerning the clients they serve. Furthermore, it is relevant in doubtful cases to consider the underlying purpose of the rule that is involved. A group of lawyers could be regarded as a firm for the purposes of the rule that the same lawyer should not represent opposing parties in litigation, while it might not be so regarded for the purposes of the rule that the information acquired by one lawyer is attributed to another. NMR 16-110, Comment.
With respect to the law department of an organization, there is ordinarily no question that the members of the department constitute a firm within the meaning of the Rules of Professional Conduct. However, there can be uncertainty as to the identity of the client. For example, it may not be clear whether the law department of a corporation represents a subsidiary or an affiliated corporation, as well as the corporation by which the members of the department are directly employed. A similar question can arise concerning an unincorporated association and its local affiliates. Id.
Similar questions can also arise with respect to lawyers in legal aid. Lawyers employed in the same unit of a legal service organization constitute a firm, but not necessarily those employed in separate units. As in the case of independent practitioners, whether the lawyers should be treated as associated with each other depends on the specific facts of the situation. Id.
0.4:440 "Fraud"
Denotes conduct having a purpose to deceive and not merely negligent misrepresentation or failure to apprise another of relevant information. NMR, Terminology.
0.4:450 "Knowingly," "Known," or "Knows"
Denotes actual knowledge of the fact in question. A person's knowledge may be inferred from circumstances. Id.
0.4:460 "Partner"
Denotes a member of a partnership and a shareholder in a law firm organized as a professional corporation. Id.
0.4:470 "Reasonable" or "Reasonably"
When used in relation to conduct by a lawyer, denotes the conduct of a reasonably prudent and competent lawyer. Id.
0.4:480 "Reasonable belief" or "Reasonably believes"
When used in reference to a lawyer, denotes that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable. Id.
0.4:490 "Substantial"
When used in reference to a degree or extent, denotes a material matter of clear and weighty importance. Id.
0.4:500 Additional Definitions in New Mexico
"Reasonably should know" when used in reference to a lawyer denotes that a lawyer of reasonable prudence and competence would ascertain the matter in question. Id.
I. CLIENT-LAWYER RELATIONSHIP
1.1 Rule 1.1 Competence
1.1:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-101:
"A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."
* Background References: ABA Model Rule 1.1, Other Jurisdictions
* New Mexico Commentary:
Attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which provides "I will keep current in my practice areas, and, when necessary, will associate with or refer my client to other more knowledgeable or experienced counsel," and "I will be courteous to and considerate of my client at all times."
1.1:101 Model Rule Comparison
NMR 16-101 and its accompanying commentary are substantially the same as MR 1.1 and commentary, as adopted by the House of Delegates of the American Bar Association on August 2, 1983.
1.1:102 Model Code Comparison
DR 6-101(A)(1) provides that a lawyer shall not handle a matter "which he knows or should know that he is not competent to handle, without associating himself with a lawyer who is competent to handle it." NMR 16-101 requires an attorney to provide competent representation regardless of his association with other lawyers, but as the comment states, "competent representation can also be provided through the association of a lawyer of established competence in the field." DR 6-101(A)(2) requires "preparation adequate in the circumstances." It specifically delineates that competent representation "requires the legal knowledge, skill, thoroughness," and preparation reasonably necessary for the representation. DR 6-101(A)(3) prohibits the "neglect of a legal matter," whereas NMR 16-101 requires the lawyer to represent the client competently. See also EC 1-1, EC 1-2, EC 6-1, EC 6-2, EC 6-3, EC 6-4, and EC 6-5.
1.1:200 Disciplinary Standard of Competence
* Primary New Mexico Reference: New Mexico Rule 16-101
* Background References: ABA Model Rule 1.1, Other Jurisdictions
* Commentary: ABA/BNA § 31:201, ALI-LGL § 16, Wolfram § 5.1
* New Mexico Commentary:
NMR 16-101 requires a lawyer to provide representation of a client with the "legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation." However, a "lawyer need not necessarily have special training or prior experience to handle legal problems of a type with which the lawyer is unfamiliar. A newly admitted lawyer can be as competent as a practitioner with long experience.... A lawyer can provide adequate representation in a wholly novel field through necessary study. Competent representation can also be provided through the association of a lawyer of established competence in the field in question." NMR 16-101, Comment.
Violation of the competency requirement is one of the most common grounds for attorney discipline in New Mexico. Whether an attorney will be found to have violated the requirement necessarily depends on the particular circumstances of the representation, and the needs of the client involved. Isolated instances of incompetence and failure to work with the client will not necessarily prove unethical behavior. See Matter of Reif, 121 N.M. 758, 918 P.2d 344 (1996).
Research, analysis and timeliness are fundamental in the legal profession; no lawyer should approach any task without knowledge of the applicable statutes, court rules, and case law, especially in matters with which one is not intimately familiar. Matter of Neal, 130 N.M. 139, 20 P.3d 121 (2001).
The mere acceptance of money from an individual or an appointment from a court to provide legal representation, requires that the lawyer begin to represent the client competently. This includes providing the necessary representation, as well as doing so in a timely manner. See Matter of Barrera, 124 N.M. 220, 947 P.2d 495 (1997) (finding neglect following acceptance of payment by client); and Matter of Ordaz, 121 N.M. 779, 918 P.2d 365 (1996) (citing for incompetence attorney who cashed judgment payment and failed to remit funds to clients).
Commonly, a violation of the competency requirement in NMR 16-101 is found when an attorney has committed conduct that is or may be proscribed by another rule. For example, the Supreme Court has often found that problems involving client funds can justify a finding that an attorney has violated NMR 16-101. In Matter of Darnell, 123 N.M. 323, 940 P.2d 171 (1999), the lawyer's failure to create trust fund accounts for his client funds constituted violation of the competency rule. See also, e.g., Matter of Jones, 119 N.M. 229, 889 P.2d 837 (1995).
Violations of a lawyer's duty to communicate with the client have also led to findings of lawyer incompetence. For example, failure of an attorney to provide adequate communication to the client in order to keep the client abreast of actions in the case, was deemed to constitute incompetence in Matter of Tapia, 108 N.M. 650, 77 P.2d 378 (1989); see also, e.g., Matter of Tapia, 110 N.M. 693, 799 P.2d 129 (1990); Matter of Rivera, 112 N.M. 217, 813 P.2d 1015 (1991); Matter of Ordaz, 121 N.M. 779, 918 P.2d 365 (1996); and Matter of Barrera, 124 N.M. 220, 947 P.2d 495 (1997).
An attorney may be cited for violating the competence requirement if he fails to appear at meetings or hearings. Failure to appear may constitute incompetence even if it is limited to a small number of meetings or appointments. See Matter of Allred, 106 N.M. 227, 741 P.2d 830 (1987); Matter of Tapia, 108 N.M. 650, 77 P.2d 378 (1989); Matter of Klein, 119 N.M. 460, 891 P.2d 1214 (1995); and Matter of Privette, 110 N.M. 352, 796 P.2d 245 (1990) (citing attorney for violation of competence rule after attorney was drinking in a liquor establishment instead of appearing at a hearing).
Similarly, an attorney was cited for incompetence when he essentially stopped appearing for any appointments at all; under those circumstances, the attorney appeared to have abandoned the practice and was perpetrating fraud on his clients. Matter of Martínez, 108 N.M. 252, 771 P.2d 185 (1989). See also Matter of Romero, 130 N.M. 190, 22 P.3d 215 (2001) (abandonment of clients is clearly insufficient to protect clients' interests); Matter of Chowning, 100 N.M. 375, 671 P.2d 36 (1983) (abandonment of client warrants suspension); and Matter of Lally, 126 N.M. 566, 973 P.3d 243 (1999) (neglect of legal matter leading to its dismissal with prejudice, coupled with overt pattern of deception intended to convince client that matter was being pursued, and failure to cooperate in disciplinary investigation, was conduct warranting indefinite suspension from practice of law).
The Supreme Court has also identified violations of NMR 16-101 in a number of cases where the attorney's actions failed to meet the requirements of the particular case. While the nature of the violation in these cases was somewhat specific to the representation undertaken, the cases provide guidance regarding how the Supreme Court views the competence requirement.
In Matter of Klipstine, 108 N.M. 481, 775 P.2d 247 (1989), the attorney failed to file the statement of financial affairs and schedules of debts and assets as required by the Bankruptcy Code. He subsequently filed forgeries to overcome the deficiencies. It was concluded that the attorney himself forged the documents even though he claimed no knowledge of the forgeries. In addition, the attorney withheld from the client funds recovered on a worker's compensation claim, in order to pay costs incurred in a related federal court claim incurred because the attorney did not file documents correctly. The attorney was held to have violated NMR 16-101.
Similarly, in Matter of Sullivan, 108 N.M. 735, 779 P.2d 112 (1989), the attorney failed to correctly file papers with the bankruptcy court. Upon discovery of the problem, the attorney did not make an effort to re-file or pay the necessary fees. In Matter of Steere, 112 N.M. 205, 813 P.2d 482 (1991), the lawyer did not take the steps necessary to preserve a claim under the New Mexico Tort Claims Act. In Matter of Roberts, 119 N.M. 769, 895 P.2d 669 (1995), the attorney failed to docket the appeal, leading to the dismissal of the appeal as well as the attorney misrepresenting the status of the appeal to the client.
In Matter of Fandey, 118 N.M. 590, 884 P.2d 481 (1994), the court held that the attorney was incompetent for abandoning his practice without taking the necessary steps to ensure the interests of his clients would not be adversely affected. Even when the attorney is withdrawing from the practice of law for reasons related to the attorney's health, the attorney must take the necessary steps to protect the interests of the client. See Matter of Barrera, 124 N.M. 220, 947 P.2d 495 (1997).
The court has cited individual attorneys who have failed to pay expert witnesses, and therefore, have lost the testimony. Matter of Steere, 112 N.M. 205, 813 P.2d 482 (1991); see also Matter of Martínez, 108 N.M. 252, 771 P.2d 185 (1989) (attorney asked client for more funds to obtain testimony of a treating mental health expert, but since expert never examined the client, court found attorney violated duty to provide competent representation).
Failure to follow the procedural rules applicable for the particular case demonstrates a lack of competence. See Matter of Tapia, 108 N.M. 650, 77 P.2d 378 (1989); Matter of Reif, 121 N.M. 758, 918 P.2d 344 (1996); Matter of Dawson, 129 N.M. 252, 8 P.3d 856 (2000) (failure to comply with Rules of Appellate Procedure constituted violation of competence rule); and Matter of Neal, 130 N.M. 139, 20 P.3d 121 (2001).
Where the attorney fails to understand the needs of the client or the underlying law, the court may find the attorney to be incompetent for purposes of that representation. In Matter of Allred, 106 N.M. 227, 741 P.2d 830 (1987), the lawyer filed a complaint alleging less than the actual damages that the client could recover. When the deficiency was brought to his attention by opposing counsel, the lawyer failed to amend the complaint in order to seek the full amount of recoverable damages. In Matter of Hanratty, 110 N.M. 354, 796 P.2d 112 (1990), the attorney represented clients in a bankruptcy proceeding in which the clients' primary goal was to retain possession of their home. The attorney determined that the bankruptcy should be converted from Chapter 7 to Chapter 11, but failed to inform the clients that Chapter 11 status would create the possibility of the clients losing their home. Subsequently, the attorney failed to keep abreast of the clients' status and ultimately they lost their home. The court held this was evidence that the attorney was not competent to practice bankruptcy law, and observed the lawyer could have associated with an experienced and competent bankruptcy attorney.
In Matter of Reid, 116 N.M. 38, 859 P.2d 1065 (1993), the lawyer misread the statute of limitations as being from the date of death, instead of the date of the malpractice. He narrowly escaped the dismissal of the case by claiming that the malpractice occurred up until the very last day that the client was in the nursing home. Later, the home filed for bankruptcy, preventing or hindering recovery. The court stated that "taking no action to investigate the factual basis of the client's case, identify witnesses, or obtain relevant documents, and conducting no research into the legal basis of the claim or the applicable statute of limitations does not satisfy the requirement of providing competent representation, defined as 'the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.'" See also Matter of Markley, 101 N.M. 565, 686 P.2d 255 (1984) (attorney disciplined for failure to file client's claim within statute of limitations, subsequent frivolous appeal, and mishandling sale of former client's property).
In Matter of Cutter, 118 N.M. 152, 879 P.2d 784 (1994), the attorney failed to obtain a modified restraining order, interim child support, or the sole possession of the marital home for his client. He also agreed to and signed off on a temporary restraining order without the permission of the client. The court found this failure to achieve results for the client and acting outside the bounds of the client's permission, were evidence that the attorney was violating the competence requirement.
The court has also found that filing frivolous claims or producing witnesses with no beneficial testimony, is grounds for a citation of incompetence. In Matter of Bloomfield, 121 N.M. 605, 916 P.2d 224 (1996), the court found that it was a violation of the rule of competence for the attorney to pursue hopeless claims in an effort to "keep them alive" for possible settlement. Similarly, a lawyer was cited for incompetence for calling witnesses who did not help the client's case at all, and for offering no other evidence, in Matter of Righter, 126 N.M. 730, 975 P.2d 343 (1999) (stating indefinite suspension was warranted because of attorney's violation of competence rule, and rules pertaining to charging an excessive fee, failing to expedite litigation, making an untrue statement of material fact to a tribunal, failing to comply with a discovery request, practicing law in a jurisdiction where doing so violates regulations, and engaging in conduct involving dishonesty, deceit and misrepresentation). In Matter of Richards, 127 N.M. 716, 986 P.2d 1117 (N.M. 1999), the court found that the lawyer's filing of a frivolous counterclaim in a foreclosure action in which the client was asserted to have a lien on her own property that was superior to the mortgagee's interest, violated disciplinary rules requiring attorney competence. Further, defense counsel's failure to tender proper jury instructions amounted to ineffective assistance of counsel, in State v. Talley, 103 N.M. 33, 702 P.2d 353 (Ct. App. 1985).
In Matter of Reif, 121 N.M. 758, 918 P.2d 344 (1996), the lawyer filed a lien that could only be attached to real property, yet he filed it against personal property loaded on a railway car; he failed to advise his clients that additional documents were needed to complete the real estate transaction; he requested relief in bankruptcy that does not exist; and he filed a pleading that bore no plausible relationship to the proof of the claim. The court stated "[a]ttorneys cannot shoot from the hip and have any hope of complying with the obligation to provide competent representation."
In Matter of Elmore, 123 N.M. 79, 934 P.2d 273 (1997), the court, finding that the attorney failed to address potential secured claims against his client under the Chapter 7 proceeding even though the creditor notified the attorney of the claim's secured status before the client received discharge, stated "[r]espondent's lackadaisical approach to the protection of his client's interests did not meet the standard of competence required by the Rules of Professional Conduct."
Suspension was warranted in Matter of Arrieta, 104 N.M. 389, 722 P.2d 640 (1986), where the attorney made misrepresentations to a court, failed to return unearned fees, failed to render an accounting to a client, and otherwise acted in a manner prejudicial to the administration of justice.
Other cases include Matter of Laughlin, 104 N.M. 630, 725 P.2d 830 (1986) (attorney suspended for neglecting a legal matter, engaging in conduct involving dishonesty or misrepresentation, and for failure to give full cooperation and assistance to counsel for the Disciplinary Board); Matter of Quintana, 104 N.M. 511, 724 P.2d 220 (1986) (multiple violations of numerous rules involving misrepresentation, neglect, improper fee splitting, disrespect to various tribunals, and conduct prejudicial to the administration of justice, resulted in lawyer being suspended indefinitely from legal practice); Matter of Carlton, 128 N.M. 419, 993 P.2d 736 (2000) (indefinite suspension warranted because attorney violated competence rule, plus rules relating to abiding by a client's decisions regarding the objectives of the representation, acting with reasonable diligence and promptness, keeping a client reasonably informed about status of legal matter, surrendering papers and property to which client is entitled, engaging in conduct prejudicial to the administration of justice, responding to lawful request for information from the office of Disciplinary Counsel, and cooperating with Disciplinary Counsel in the course of an investigation); Matter of Roth, 105 N.M. 255, 731 P.2d 951 (1987) (attorney's apparent failure to complete several cases, to protect client's interest upon withdrawal, to promptly refund unearned portions of fees paid in advance, and lack of cooperation with Disciplinary Counsel, constituted unprofessional conduct warranting indefinite suspension from practice of law); Matter of Gallegos, 104 N.M. 496, 723 P.2d 967 (1986) (discussing attorney's inaction and incompetence in representing a client in a divorce action); Matter of Romero, 117 N.M. 577, 874 P.2d 785 (1994); Matter of Chávez, 129 N.M. 35, 1 P.3d 417 (2000); and Matter of Evans, 119 N.M. 305, 889 P.2d 1221 (1995) (discussing failure to act with diligence and promptness, causing injury to client).
1.1:300 Malpractice Liability
* Primary New Mexico Reference: New Mexico Rule 16-101
* Background References: ABA Model Rule 1.1, Other Jurisdictions
* Commentary: ABA/BNA § 301:101, ALI-LGL § 49-54, Wolfram § 5.6
* New Mexico Commentary:
01.1:310 Relevance of Ethics Codes in Malpractice Actions
The New Mexico courts have made it clear that the rules governing the ethical requirements of attorneys will not be applied against attorneys for malpractice standards. See, e.g., García v. Rodey, Dickason, Sloan, Akin & Robb, 106 N.M. 757, 750 P2d 118 (1988) (stating "[h]istorically, the Code was established to discipline attorneys. It was not intended to provide a foundation for civil liability.... [Likewise, the Rules] are not designed to be a basis of civil liability"). In addition, the Scope section of the Rules of Professional Conduct says "[v]iolation of a rule should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached."
However, the New Mexico courts have recognized a connection between the Rules of Professional Conduct and identifying the standard of conduct applicable in a malpractice case. In Sanders, Bruin, Coll & Worley, P.A. v. McKay Oil Corp., 123 N.M. 457, 943 P.2d 104 (1997), the New Mexico Supreme Court referred to the rule of lawyer ethics regarding withdrawal from client matters in a civil malpractice action. The court stated that the Rules of Professional Conduct "provide guidance in ascertaining the extent of lawyers' professional obligations to their clients," but are not to be used as an absolute standard of conduct in a civil action.
1.1:320 Duty to Client
To recover on a claim of malpractice, the plaintiff must first show that the attorney owed the plaintiff a duty. See Delta Automatic Sys. v. Bingham, 126 N.M. 717, 974 P.2d 1174 (1999). An attorney who enters into an attorney-client relationship is under a duty to act with reasonable care and in full consideration of the rights of the client; breach of the duty may give rise to a civil malpractice action. Sanders, Bruin, Coll & Worley, P.A. v. McKay Oil Corp., 123 N.M. 457, 943 P.2d 104 (1997); see also Leyba v. Whitley, 120 N.M. 768, 907 P.2d 172 (1995) (express or implied contract that gives rise to lawyer client relationship is foundation of any legal malpractice claim by intended beneficiary).
1.1:330 Standard of Care
In order to establish the neglect of a duty owed by an attorney sufficient to allow recovery in a legal malpractice action, a client must show, usually through expert testimony, that his or her attorney failed to use the skill, prudence, and diligence of an attorney of ordinary skill and capacity. Rancho del Villacito Condominiums, Inc. v. Weisfeld, 121 N.M. 52, 908 P.2d 745 (1995).
However, a lawyer holding himself out to the public as specializing in an area of law must exercise the same skill as other specialists of ordinary ability specializing in the same field. Rodriguez v. Horton, 95 N.M. 356, 622 P.2d 261 (1980). See also, e.g., George v. Caton, 93 N.M. 370, 600 P.2d 822 (Ct. App. 1979) (when lawyer contracts to prosecute action on behalf of client, he impliedly represents that he possesses requisite degree of learning, skill and ability necessary to practice of his profession which others similarly situated ordinarily possess, that he will exert his best judgment in prosecution of litigation entrusted to him, and that he will exercise reasonable and ordinary care and diligence in use of his skill and application of his knowledge to his client's cause; in addition, if law on subject is well and clearly defined and has existed and been published long enough to justify belief that it was known to profession, lawyer who disregards rule or is ignorant of it renders himself liable for losses caused by such negligence or want of skill).
Under New Mexico law, legal malpractice based upon negligence requires proof of the following elements: (1) the employment of the defendant attorney, (2) the defendant attorney's neglect of a reasonable duty, and (3) that the negligence resulted in and was the proximate cause of loss to the plaintiff. Richter v. Van Amberg, 97 F. Supp.2d 1255 (D.N.M. 2000) (also stating that under New Mexico law, a legal malpractice claim is not barred simply because its substance enters the realm of conduct covered under the Rules of Professional Conduct). Thus, under New Mexico law, while the Rules of Professional Conduct provide some guidance in determining the professional obligations of a lawyer, they do not furnish independent grounds for a legal malpractice claim. See also, e.g., Glenborough Corp. v. Sherman & Howard, 121 N.M. 253, 910 P.2d 329 (Ct. App. 1995) (to recover on claim of legal malpractice based on negligence, plaintiff must prove that defendant attorney represented him or her and did not exercise reasonable duty of care, and that negligence resulted in and was proximate cause of loss to plaintiff); Garcia v. Rodey, Dickason, Sloan, Akin & Robb, P.A., 106 N.M. 757, 750 P.2d 118 (1988); and Hyden v. Law Firm of McCormick, Forbes, Caraway & Tabor, 115 N.M. 159, 848 P.2d 1086 (Ct. App. 1993).
In a legal malpractice case, a client has the burden of showing not only negligence on the part of her attorney, but also that her damages were proximately caused by that negligence; when the attorney's negligence involves an alleged failure to take certain action, the client must show that if the attorney had acted then the client would not have suffered damage, or at least not to the same degree. Carrillo v. Coors, 120 N.M. 283, 901 P.2d 214 (Ct. App. 1995); see also Resolution Trust Corp. v. Barnhart, 116 N.M. 384, 862 P.2d 1243 (Ct. App. 1993).
In Collins on Behalf of Collins v. Perrine, 108 N.M. 714, 778 P.2d 912 (Ct. App. 1989), the evidence was sufficient for the jury to find that the lawyer representing a medical malpractice plaintiff settled the case without performing even a minimal level of the discovery necessary in such a complex case, and that he lacked sufficient information about the facts and law involved when he decided to recommend settlement. The evidence was also sufficient to support the jury's finding that the plaintiff was damaged by the attorney's negligence in prematurely settling the case, and that a settlement would have been greater or a larger jury verdict could have been obtained had the negligence not occurred.
Legal malpractice based on negligence concerns violations of the standard of care, whereas legal malpractice based upon breach of fiduciary duty concerns violations of a standard of conduct pertaining to the lawyer's fiduciary obligations, ordinarily involving undivided loyalty and confidentiality. The elements to be proven in a legal malpractice action based on alleged breach of fiduciary duty include (1) the existence of a fiduciary relationship between the plaintiff and the defendant attorney, (2) breach of that fiduciary relationship by the defendant attorney, and (3) the breach of fiduciary relationship as the proximate cause of loss to the plaintiff. Richter v. Van Amberg, 97 F. Supp.2d 1255 (D.N.M. 2000).
1.1:335 Requirement of Expert Testimony
In order to establish the neglect of a duty owed by an attorney sufficient to allow recovery in a legal malpractice action, a client must show, usually through expert testimony, that his or her attorney failed to use the skill, prudence, and diligence of an attorney of ordinary skill and capacity. Rancho del Villacito Condominiums, Inc. v. Weisfeld, 121 N.M. 52, 908 P.2d 745 (1995); see also, e.g., Richter v. Van Amberg, 97 F. Supp.2d 1255 (D.N.M. 2000) (expert testimony normally necessary, but expert cannot create a duty as to a standard of care or conduct based upon an assumed obligation in the law). The necessary expert testimony ordinarily consists of the testimony of one or more other lawyers. Sanders v. Smith, 83 N.M. 706, 496 P.2d 1102 (1972); see also, e.g., Resolution Trust Corp. v. Barnhart, 116 N.M. 384, 862 P.2d 1243 (Ct. App. 1993) (proof of legal malpractice usually requires testimony of another attorney to establish applicable standards of practice).
However, where the actions of the attorney are clearly below any standard of reasonable care and the issue can be determined by the jury, the court will allow the malpractice action to go to the jury without plaintiff having presented expert testimony. DeLisle v. Avallone, 117 N.M. 602, 874 P.2d 1266 (1994) (allowing jury to decide question of breach regarding attorney's untimely filing for mortgage redemption, where parties did not dispute date on which redemption period expired or that attorney failed to timely file with knowledge that time to do so was running out).
1.1:340 Causation and Damages
See section 1.1:330, infra.
In addition, legal malpractice claims in New Mexico are governed by the state's principles of tort law. "To recover on a claim of legal malpractice based on negligence, plaintiff must prove that defendant attorney represented him or her and did not exercise reasonable duty of care, and that negligence resulted in and was proximate cause of loss to plaintiff." Glenborough Corp. v. Sherman & Howard, 121 N.M. 253, 910 P.2d 329 (1995). Where the plaintiff fails to establish that the defendant was the proximate cause of the injury, a finding of liability will be precluded. Carrillo v. Coors, 120 N.M. 283, 901 P.2d 214 (1995).
The amount of damages to be awarded is the amount that would have been received, or the amount lost depending on the circumstances, but for the attorney's negligence. Hyden v. Law Firm of McCormick, Forbes, Caraway & Tabor, 115 N.M. 159, 848 P.2d 1086 (1993); see also, e.g., Collins on Behalf of Collins v. Perrine, 108 N.M. 714, 778 P.2d 912 (1989) (proper measure of damages in legal malpractice action was amount of judgment that could have been recovered but for attorney's negligence in original lawsuit); and Richardson v. Glass, 114 N.M. 119, 835 P.2d 835 (1992).
1.1:350 Waiver of Prospective Liability [see 1.8:910]
NMR 16-108(H) places limitations on an attorney's ability to prospectively limit his liability to a client for malpractice. Pursuant to the rule, an attorney cannot create limitations beyond those permitted by law. Also, for such a waiver to be valid, the client must be independently represented in making the agreement.
1.1:360 Settlement of Client's Malpractice Claim [see 1.8:920]
Pursuant to NMR 16-108(H), an attorney is not permitted to settle a claim for such liability with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate.
1.1:370 Defenses to Malpractice Claim
Malpractice claims in New Mexico are subject to the same defenses as exist in all negligence claims governed by state tort law.
In New Mexico, ordinary rules govern the application of the statute of limitations defense in the context of legal malpractice. Duncan v. Campbell, 123 N.M. 181, 936 P.2d 863 (1997). Even if the "continuous representation doctrine" were applied, if the representation is terminated, the statute of limitations would begin run. Sharts v. Natelson, 118 N.M. 721, 885 P.2d 642 (1994). It has also been held that failure to raise the issue of malpractice as a compulsory counterclaim can create res judicata, precluding such a claim in a subsequent action. Brunacini v. Kavanagh, 117 N.M. 122, 869 P.2d 821 (1993).
Public defenders are generally immune from suits for malpractice. Coyazo v. State, 120 N.M. 47, 897 P.2d 234 (Ct. App. 1995). However, an attorney who is privately retained as guardian ad litem to advocate approval of a settlement in an action by a child to recover for damages, is not entitled to quasi judicial immunity; instead, such attorney should be held to the same standard as all other attorneys in their representation of clients. Collins on Behalf of Collins v. Tabet, 111 N.M. 391, 806 P.2d 40 (1991).
A client need not exhaust claims against every potential defendant in a case, in order to show damage caused by an attorney's malpractice has deprived the client of a claim against one defendant. Collins on Behalf of Collins v. Perrine, 108 N.M. 714, 778 P.2d 912 (Ct. App. 1989). Nor does status as a professional corporation confer upon an attorney-shareholder a limitation on liability for the attorney's negligence, personal breach of duty, or malpractice, even in the context of corporate activities and decisions. Sanders, Bruin, Coll & Worley, P.A. v. McKay Oil Corp., 123 N.M. 457, 943 P.2d 104 (1997); see also Leyba v. Whitley, 120 N.M. 768, 907 P.2d 172 (1995) (limits of liability generally applicable to persons paying money to authorized fiduciary do not supersede specific professional duties arising out of contract to prosecute wrongful death action).
1.1:380 Liability to Client for Breach of Contract, Breach of Fiduciary Duty, and Other
Liabilities
Legal malpractice based on negligence concerns violations of the standard of care, whereas legal malpractice based upon breach of fiduciary duty concerns violations of a standard of conduct pertaining to the lawyer's fiduciary obligations, ordinarily involving undivided loyalty and confidentiality. The elements to be proven in a legal malpractice action based on alleged breach of fiduciary duty include (1) the existence of a fiduciary relationship between the plaintiff and the defendant attorney, (2) breach of that fiduciary relationship by the defendant attorney, and (3) the breach of fiduciary relationship as the proximate cause of loss to the plaintiff. Richter v. Van Amberg, 97 F. Supp.2d 1255 (D.N.M. 2000).
The New Mexico Supreme Court stated, in Leyba v. Whitley, 120 N.M. 768, 907 P.2d 172 (1995), that the majority of malpractice claims fall within the realm of tort law. "While no reported case has been brought to our attention in which New Mexico courts have rejected a contract claim for professional services negligently performed, the gravamen of a malpractice action arising out of the lawyer-client relationship is generally recognized to lie in tort." The court found that if the action is based on the failure of specific provisions of an agreement, then the action is contractual. If the gravamen of the action is the failure of the attorney to meet one of the duties imposed upon him by law, the action lies in tort.
1.1:390 Liability When Non-Lawyer Would Be Liable
A lawyer normally is subject to the same liabilities as a non-lawyer.
1.1:400 Liability to Certain Non-Clients
* Primary New Mexico Reference: New Mexico Rule 16-101
* Background References: ABA Model Rule 1.1, Other Jurisdictions
* Commentary: ABA/BNA § 71:1101, ALI-LGL § 51, Wolfram § 5.6
* New Mexico Commentary:
1.1:410 Duty of Care to Certain Non-Clients
In García v. Rodey, Dickason, Sloan, Akin & Robb, 106 N.M. 757, 750 P.2d 118 (1988), the New Mexico Supreme Court found that usually a duty of care is owed to a non-client only where the non-client was an intended beneficiary of the attorney's services, or where it was reasonably foreseeable that negligent service or advice to or on behalf of the client could cause harm to others. "An attorney has no duty, however, to protect the interests of a non-client adverse party for the obvious reasons that the adverse party is not the intended beneficiary of the attorney's services...." The court rejected an action for negligence against the attorney because the attorney was under no duty to the opposing party. In particular, the attorneys' in court statements that their client, the defendant school board in a discrimination suit, would not rely on sovereign immunity as a bar to plaintiff's recovery, did not give rise to liability to the civil rights plaintiff on a negligence theory, following successful assertion of the sovereign immunity defense on appeal after plaintiff had dropped its suit against individual board members in reliance on the attorneys' statements.
In Leyba v. Whitley, 120 N.M. 768, 907 P.2d 172 (1995), the Court addressed whether a non-client was an intended beneficiary of the representation. The issue was whether an attorney for a personal representative prosecuting a wrongful death claim owed a duty to the statutory beneficiaries of the claim. The court said it is necessary to determine first whether the attorney's intent was to benefit the non-client, and if so, the court will balance the extent to which the transaction was intended to benefit the non-client, the foreseeability of harm to the non-client, the degree of certainty that the non-client suffered injury, the closeness of the connection between the attorney's conduct and the injury, the policy of preventing future harm, and the extent to which the profession would be unduly burdened by a finding of liability in favor of the non-client.
Other cases include Wisdom v. Neal, 568 F. Supp. 4 (D.N.M. 1982) (no attorney client relationship was necessary in order for heirs to recover from attorneys who handled estate and improperly determined that estate should be distributed per stirpes rather than per capita, in that attorneys owed duty of due care to heirs); Mayfield Smithson Enterprises v. Quip, Inc., 120 N.M. 9, 896 P.2d 1156 (1993) (attorneys for purchaser of motel property did not owe fiduciary duty to judgment creditor of previous lessee of property, even though creditor claimed that adversarial relationship between creditor and vendors and purchaser evolved into cooperative relationship); Delta Automatic Systems, Inc. v. Bingham, 126 N.M. 717, 974 P.2d 1174, (1999) (fact that labor lawyer and law firm had prepared wills for corporation's sole shareholders and had represented them on business matters apart from the representation of corporation did not establish that lawyer and law firm had special duty to the shareholders, as required for shareholders personally to bring action against lawyer and law firm for their alleged legal malpractice in failing to obtain termination of union contract; the allegation that lawyer and law firm knew that shareholders' livelihoods depended on corporation's success did not establish that lawyer and law firm had special duty to the shareholders, as required for shareholders personally to bring action against lawyer and law firm for their alleged legal malpractice in failing to obtain termination of union contract; sole shareholders of corporation were not the real clients in labor lawyer's and law firm's representation of corporation as to termination of union contract, and thus, shareholders could not personally bring legal malpractice action against lawyer and law firm for their alleged negligence in failing to obtain termination of the contract); Holland v. Lawless, 95 N.M. 490, 623 P.2d 1004 (Ct. App. 1981) (attorney of estate was not liable to purported purchaser for alleged negligent handling of real estate transaction in which estate administrator, through the attorney, entered into oral agreement with purported purchaser to lease property to him with added proviso that part of rental payments would be applied to possible future purchase, where there was no showing that an attorney client relationship existed and any duty attorney owed as broker was only to the administrator for the estate; thus, attorney owed no duty to purchaser regarding the transaction).
1.1:420 Reliance on Lawyer's Opinion [see also 2.3:300]
See section 1.1:410, infra.
In addition, NMR 16-203 limits when an attorney may undertake an evaluation of a matter affecting a client for the use of someone other than the client. The rule states that such an evaluation may be undertaken where the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer's relationship with the client, and the client consents after consultation. As discussed in the previous section, the requirement of privity between lawyer and non-client to support a malpractice claim, is relaxed where the non-client was an intended beneficiary of the representation. Where the injured party was not an intended beneficiary of the representation, the injured party normally will not have a claim against the attorney for malpractice.
Because participants in an electronic bulletin board may have an expectation of privacy and may rely on lawyer advice, an attorney should take steps to make clear when communicating with participants in such electronic bulletin boards that an attorney-client relationship does not exist prior to the usual intake procedures, including conflict checking. In addition, generally speaking, without an attorney-client relationship an attorney should not answer specific questions concerning legal matters from chat rooms. State Bar of New Mexico Advisory Opinions Committee Advisory Opinion ("State Bar Advisory Opinion") 2001-1.
1.1:430 Assisting Unlawful Conduct [see also 1.2:600 - 1.2:630]
NMR 16-102(D) provides that "[a] lawyer shall not engage, or counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent or which misleads the court, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law." This rule also says a lawyer who knows that a client expects assistance not permitted by the Rules of Professional Conduct or other law, shall consult with the client regarding the relevant limitations on the lawyer's conduct. Therefore, the extent of an attorney's representation is limited not only by the criminal code, but also by the rules governing legal ethics.
1.1:440 Knowledge of Client's Breach of a Fiduciary Duty [see also 1.13:520]
See NMR 16-102(D). In addition, NMR 16-113 guides lawyers for organizations who know that an officer of the organization will breach a duty that harms the corporation. Subject to exceptions, the rule calls for the attorney to address the situation internally, without raising the issue with outside persons or authorities. If the officer continues to direct actions towards the breach of duty, then the lawyer has grounds for withdrawal under NMR 16-116.
1.1:450 Failing to Prevent Death or Bodily Injury
There appear to be no New Mexico reported decisions addressing the liability of a lawyer to a non-client for the lawyer's failure to prevent the death or bodily injury of a non-client. Under NMR 16-106(B), an attorney "should" reveal information relating to representation of a client to the extent the attorney reasonably believes the disclosure is necessary to prevent imminent death or substantial bodily harm. Unlike a handful of states that have adopted rules requiring the revelation of such information (see AZ-ER 1.6(b)), New Mexico adopted the language of the Model Rule which merely suggests that a lawyer reveal such information, without placing a firm duty upon the lawyer. The attorney in New Mexico is further shielded by the "Reasonably believes necessary" language, which permits the lawyer to determine what is required to prevent harm to others.
1.1:500 Defenses and Exceptions to Liability
* Primary New Mexico Reference: New Mexico Rule 16-101
* Background References: ABA Model Rule 1.1, Other Jurisdictions
* Commentary: ABA/BNA § 301:1001, ALI-LGL §§ 54, 57, Wolfram § 5.6
* New Mexico Commentary:
Generally, a lawyer has the same defenses to claims against him that are common to defendants in negligence claims.
1.1:510 Advocate's Defamation Privilege
New Mexico recognizes the advocate's defamation privilege. "If the alleged defamatory statement is made to achieve the objects of the litigation, the [attorney's] absolute privilege applies even though the statement is made outside the courtroom and no function of the court or its officers is involved." Romero v. Prince, 85 N.M. 474, 513 P.2d 717 (1973). However, where the publication or other defamatory material is immaterial to the action, the privilege may be overcome and an action for defamation may lie. Superior Const., Inc. v. Linnerooth, 103 N.M. 716, 712 P.2d 1378 (1986).
1.1:520 Wrongful Use of Civil Proceedings; Abuse of Process; False Arrest
While there do not appear to be any reported cases in New Mexico relating these legal theories to the conduct of lawyers, in DeVaney v. Thriftway Marketing Corp., 124 N.M. 512, 953 P.2d 277 (1997), the court held a "malicious abuse of process" cause of action requires the following four elements: (1) initiation of judicial proceedings against the plaintiff by the defendant, (2) an act by the defendant in the use of process other than such as would be proper in the regular prosecution of the claim, (3) a primary motive by the defendant in misusing the process to accomplish an illegitimate end, and (4) damages. See also Westar Mortgage Corp. v. Jackson, 133 N.M. 114, 61 P.3d 823 (2002).
1.1:530 Assisting Client to Break a Contract
Nothing in New Mexico case law or the Rules of Professional Conduct appears to expressly prohibit an attorney from assisting a client to break a contract. Because an attorney owes his duty only to his clients and intended beneficiaries of his counsel, the opposing party in a breach of contract case would not likely have a valid claim for malpractice against an attorney who assisted in the breach. However, it is unclear whether an attorney in such a situation may be liable to a third person for tortious interference with contract, tortious interference with prospective business advantage, or a similar claim.
1.1:600 Vicarious Liability [see 5.1:500]
* Primary New Mexico Reference: New Mexico Rule 16-101
* Background References: ABA Model Rule 1.1, Other Jurisdictions
* Commentary: ABA/BNA § 91:201, ALI-LGL § 58, Wolfram § 5.6
* New Mexico Commentary:
In the context of discipline and professional responsibility, NMR 16-501 governs the duties of partners and supervisory attorneys in a law firm. A lawyer who has direct supervision over another lawyer must make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct. A lawyer will be held responsible for another's violation of a rule if the lawyer orders or ratifies such conduct, or if the lawyer knows of the conduct at a time when its consequences could have been avoided or mitigated but failed to take reasonable remedial action.
In the context of professional malpractice, the normal rules of respondeat superior would appear to apply. See N.M. UJI Civil No. 13-401 to -409; and state statutes relating to professional organizations.
1.5 Rule 1.5 Fees
1.5:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-105:
"A. Determination of reasonableness. A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer performing the services; and
(8) whether the fee is fixed or contingent.
B. Basis or rate of fees. When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.
C. Contingency fees. A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by Paragraph D or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.
D. Prohibited fee arrangements. A lawyer shall not enter into an arrangement for, charge, or collect:
(1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or
(2) a contingent fee for representing a defendant in a criminal case.
E. Fee splitting. A division of fee between lawyers who are not in the same firm may be made only if:
(1) the division is in proportion to the services performed by each lawyer, or, by written agreement with the client, each lawyer assumes joint responsibility for the representation;
(2) the client is advised of and does not object to the participation of all the lawyers involved; and
(3) the total fee is reasonable."
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* New Mexico Commentary:
1.5:101 Model Rule Comparison
There are no material differences between NMR 16-105 and Comment, and MR 1.5 and Comment.
1.5:102 Model Code Comparison
Concerning NMR 16-105(A), DR 2-106(A) provides that a "lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee." DR 2-106(B) provides that a "fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee." DR 2-106(B) outlines numerous factors to be considered in determining the reasonableness of a fee, including ability to pay. See also EC 2-16, EC 2-17, and EC 2-18.
There is no counterpart to NMR 16 105(B) in the Disciplinary Rules of the Code. EC 2-19 states that it "is usually beneficial to reduce to writing the understanding of the parties regarding the fee, particularly when it is contingent." With regard to NMR 16 105(C), DR 2-106(C) prohibits a "contingent fee in a criminal case." See also EC 2-20, and EC 5-7.
Concerning NMR 16 105(E), DR 2-107(A) permits division of fees only if the client consents to the employment of another lawyer after disclosure that there will be division of fees, the division is in proportion to the services performed and responsibility assumed, and the total fee is not unreasonable. NMR 16 105(E) permits division without regard to the services rendered by each lawyer if they assume joint responsibility for the representation. See also EC 2-22.
1.5:200 A Lawyer's Claim to Compensation
* Primary New Mexico Reference: New Mexico Rule 16-105
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.101, ALI-LGL §§ 38-42, Wolfram §§ 9.1-9.6
* New Mexico Commentary:
Although NMR 15-105 recognizes the ability of attorneys to recover a fee for legal services, the first obligation of a lawyer is to his client, even at the expense of a fee. Pineda v. Grande Drilling Corp., 111 N.M. 536, 807 P.2d 234 (Ct. App. 1991).
1.5:210 Client-Lawyer Fee Agreements
No New Mexico authority indicates that a fee agreement made prior to commencement of the lawyer's representation of a client, is anything other than a contract which is enforceable and interpreted in accordance with the usual principles of contract law.
See Diaz v. Paul J. Kennedy Law Firm, 289 F.3d 671 (10th Cir. 2002) (under New Mexico law, attorneys' retention of their agreed-upon flat fee for representation in a criminal case after they were fired without cause did not give rise to a valid claim of unjust enrichment, absent any evidence of legal malpractice); and Rhodes v. Martinez, 122 N.M. 439, 925 P.2d 1201 (Ct. App. 1996) (pursuant to contract between attorney and client, attorney's charging lien for fees accrued in settling property damage claim arising from client's automobile accident attached to funds recovered in personal injury lawsuit arising from same accident, even though substitute counsel represented client in personal injury suit; agreement stated that client was hiring attorney to represent him for "all claims I may have arising out of the above accident," and reach of charging lien was not limited to funds created by attorney's efforts); Walters v. Hastings, 84 N.M. 101, 500 P.2d 186 (1972) (when attorney and client sign a formal fee agreement, client maintains burden of proving attorney's services were deficient; and even in situations where fee may seem excessive, arrangement will normally be upheld unless plaintiff meets this burden); and Citizens Bank v. C&H Const. & Paving Co., 93 N.M. 422, 600 P.2d 1212 (1979).
Once a client consents to a fee to her attorney in accordance with the Worker's Compensation Act, the client cannot withdraw the consent in order to frustrate the attorney's entitlement to a fee out of the award. State Bar Advisory Opinion 1988-10.
However, a modification to a fee agreement made during the course of legal representation may be viewed as a business transaction with a client, requiring the lawyer to follow the directives of NMR 16-108(A).
See section 1.5:240 infra regarding the relationship between attorney charging liens and client-lawyer fee agreements. See also State Bar Advisory Opinion 1986-7 (discussing lawyer's duties regarding lien which client granted to lawyer in client-lawyer fee agreement, under former Code of Professional Responsibility).
1.5:220 A Lawyer's Fee in Absence of Agreement
Attorneys generally may recover under a quantum meruit theory the reasonable value of their services rendered under a void contract with the client, Calderon v. Navarette, 111 N.M. 1, 800 P.2d 1058 (1990), or presumably, under a non-existent agreement. Thus, while unwritten contingency fee contracts violate the New Mexico Rules of Professional Conduct and will not be enforced, an attorney who provided services under an unwritten contingency fee contract should be entitled to a fee award that is reasonable under the circumstances. U.S. v. 36.03 Acres of Land, 70 F. Supp.2d 1272 (D.N.M. 1999) (where law firm's voluntary termination of its representation of client in condemnation action was for justifiable cause, in light of client's refusal of reasonable settlement offer, law firm was not precluded from quantum meruit recovery of reasonable value of its services). See also Garrick v. Weaver, 888 F.2d 687 (10th Cir. 1989) (magistrate did not abuse his discretion in awarding attorney a fee based on reasonable value of his legal services, rather than fee based on alleged contingency agreement; correspondence did not unambiguously indicate parties had arrived at common understanding concerning terms of contingency fee agreement).
1.5:230 Fees on Termination [see 1.16:600]
Generally, an attorney's voluntary withdrawal from representation precludes quantum meruit recovery if the attorney does not establish justifiable cause for withdrawing. U.S. v. 36.06 Acres of Land, 70 F. Supp.2d 1272 (D.N.M. 1999) (stating client's refusal to accept a reasonable settlement offer can constitute justifiable cause for withdrawal, for purposes of attorney's ability to recover fee in quantum meruit). An attorney who abandons a client cannot retain any money the client paid as a fee. Matter of Chowning, 100 N.M. 375, 671 P.2d 36; Matter of Trujillo, 110 N.M. 180, 793 P.2d 862 (1990).
1.5:240 Fee Collection Procedures
A lawyer may use a commercial collection agency, paid on a contingent basis, to collect unpaid, earned fees, after pursuing all other reasonable alternatives to collect the fee, and provided the lawyer first determines the unpaid fee is reasonable in amount and the referral to the collection agency is appropriate. The lawyer may not, however, report the client's unpaid account to a credit bureau for the sole purpose of impeding the client's ability to obtain credit. State Bar Advisory Opinion 1998-7.
Numerous New Mexico cases discuss attorney charging liens for services rendered. See, e.g., Northern Pueblos Enterprises v. Montgomery, 98 N.M. 47, 644 P.2d 1036 (1982) (stating attorney's charging lien is defined as attorney's right to recover his fee and money expended on behalf of client from fund recovered by attorney's efforts; plus right to have court interfere to prevent payment by judgment debtor to creditor in fraud of attorney's right to same, and to prevent or to set aside assignments or settlements made in fraud of his right; also stating attorney's charging lien is not created by statute but has its origin in common law, and is governed by equitable principles); Philipbar v. Philipbar, 127 N.M. 341, 980 P.2d 1075 (Ct. App. 1999) (holding attorney charging liens are governed by common law equitable principles, and are intended to protect attorneys from unscrupulous clients looking to evade their responsibility for attorney fees; also stating notice of an attorney's charging lien is untimely if it is asserted after the proceeds of the judgment have been disbursed); Sowder v. Sowder, 127 N.M. 114, 977 P.2d 1034 (Ct. App. 1999) (identifying four requirements for imposition of attorney charging lien: a valid contract, either express or implied, between attorney and client (although contract need not explicitly assert a lien against client's recovery); a fund recovered by the attorney; clear and unequivocal notice to appropriate parties of the intent to assert the lien; and timely assertion of the lien before distribution of the proceeds recovered for the client); Cherpelis v. Cherpelis, 125 N.M. 248, 959 P.2d 973 (Ct. App. 1998) (although attorney's charging lien may be asserted when there is no explicit provision for lien in attorney's agreement with client, it is better practice to contain explicit provision for attorney's charging lien provision in contract with client; and further, attorney's charging lien is solely an equitable remedy administered by court in its discretion); U.S. v. 36.06 Acres of Land, 70 F. Supp.2d 1272 (D.N.M. 1999) (a "legal charging lien" applies to funds in the attorney's possession as a result of his efforts in a particular case, while an "equitable charging lien" gives the attorney the right to be paid out of a fund in court which resulted from his skill and labor in a particular case).
In addition, as held in Thompson v. Montgomery & Andrews, P.A., 112 N.M. 463, 816 P.2d 532 (Ct. App. 1991), a "general lien" or "retaining lien" gives an attorney the right to retain papers or other property that comes into his possession, or money that he has collected in course of his professional employment, until all his costs and charges against his client have been paid.
According to Matter of Grand Jury Proceedings, 727 F.2d 941 (10th Cir. 1984) (New Mexico law), client files belong to the client, and the court may order them surrendered to the client or the attorney on the request of the client, subject only to the attorney's right to be protected in receiving compensation from the client for work done; the attorney's interest is only that of a retaining lien and his interest at best is a pecuniary one, not an interest of ownership or property.
1.5:250 Fee Arbitration
1.5:260 Forfeiture of Lawyer's Compensation
A discharged attorney may not recover an attorney's fee based on quantum meruit for his representation in a malpractice action that was ultimately settled while the client was represented by new attorneys, where the request was for an equitable division of attorney's fees under a claimed attorney charging lien that had been held invalid. Moffat v. Branch, 132 N.M. 412, 49 P.3d 673 (Ct. App. 2002).
However, the court declined to find the lawyer forfeited a fee where he represented two plaintiffs with adverse claims in connection with an automobile accident, he may have acted improperly in failing to adequately inform the plaintiffs of the conflict of interest, but where there was no actual or substantial prejudice to the clients' interests. Garrick v. Weaver, 888 F.2d 687 (10th Cir. 1989) (New Mexico law) (also stating magistrate did not abuse his discretion in setting aside attorney contingency fee agreement and awarding fees on quantum meruit basis on the ground that attorney had failed to adequately outline ramifications of conflict of interest to plaintiffs).
1.5:270 Remedies and Burden of Persuasion in Fee Disputes
The attorney has the burden of proving the value of the services rendered by him and for which he claims payment or credit. Van O. Nelson, 78 N.M. 11, 427 P.2d 896 (1967), reversed on other grounds 80 N.M. 119, 452 P.2d 188 (1969). See also Matter of Dawson, 129 N.M. 369, 8 P.3d 856 (2000) (attorney has burden to prove value of legal services rendered); Matter of O'Brien, 130 N.M. 643, 29 P.3d 1044 (2001) (same); Calderon v. Navarette, 111 N.M. 1, 800 P.2d 1058 (1990) (court erred by placing burden on client to disprove reasonableness of attorney's fees, rather than on attorney to prove it, because attorney bears burden of proving value of legal services rendered); and Hinkle, Cox, Eaton, Coffield & Hensley v. Cadle Co. of Ohio, Inc., 115 N.M. 152, 848 P.2d 1079 (1993) (where attorney and client agreed to hourly rate but did not agree to the number of hours expended, attorney had burden of establishing reasonableness of terms not expressly agreed to and of showing that time expended was reasonable and was fairly and properly used).
1.5:300 Attorney-Fee Awards (Fee Shifting)
* Primary New Mexico Reference: New Mexico Rule 16-105
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.301, Wolfram § 16.6
* New Mexico Commentary:
1.5:310 Paying for Litigation: The American Rule
The equitable exception for an award of attorney fees without authorization from statute, rule, or contract, recognized in the common fund cases, is consistent with the American rule because a losing litigant does not pay attorney's fees in addition to the amount of recovery; thus, a losing litigant is no better or worse off as a result of the common fund doctrine's application. Gonzales v. Lopez, 132 N.M. 558, 52 P.3d 418 (Ct. App. 2002). See section 1.5:400 infra.
1.5:320 Common-Law Fee Shifting
Attorney's fees may be awarded to the prevailing party in litigation only with authorization from statute, rule, or contract. Thus, a successful plaintiff in an attorney malpractice action is not entitled to attorney's fees incurred for preparation and prosecution of that action. First Nat. Bank of Clovis v. Diane, Inc., 102 N.M. 548, 698 P.2d 5 (Ct. App. 1985). However, legal fees incurred by the client to defend a prior action proximately resulting from the attorney's negligence, as well as fees incurred on appeal from an unfavorable summary judgment, could be awarded to the client in the malpractice action against the lawyer, not as costs, but as an item of special damages. Further, for purposes of ascertaining the amount of those fees, the fact that the client agreed to pay a fixed amount rather than an hourly rate was not necessarily determinative. Id.
1.5:330 Statutory Fee Shifting
A number of New Mexico statutes provide that a plaintiff who is successful in litigation may recover the value of his attorney's fees. See, e.g., § 57-12-10 (unfair trade practices), § 35-12-16 (garnishment actions), § 52-1-54 (worker's compensation actions), § 48-2-14 (liens), § 39-2-2.1 (collection of open accounts), and § 38-1-10 (actions against unauthorized insurers).
1.5:340 Financing Litigation [see 1.8:600]
1.5:400 Reasonableness of a Fee Agreement
* Primary New Mexico Reference: New Mexico Rule 16-105
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.301, ALI-LGL § 34, Wolfram § 9.3.1
* New Mexico Commentary:
Under New Mexico law, merely noting that work was done and submitting a corresponding billing statement stating only "billable time," ordinarily will not suffice to justify the fee charged. Also, client files must contain work to justify the fee, and whether the evidence of work is in notations of research, time sheets, copies of depositions, or indications of time spent in hearings or meetings, such evidence is essential. Matter of O'Brien, 130 N.M. 643. 29 P.3d 1044 (2000) (stating attorney's deceit as to time spent on estate matter B and resulting failure to provide competent representation, failure to act with reasonable diligence, charge of unreasonable fee, conduct involving dishonesty or misrepresentation, and conduct that adversely reflected on fitness to practice law B violated attorney disciplinary rules; attorney charged for time that was greater than reasonably necessary to complete form based pleadings and review files, and did not reasonably expedite administration of estate).
Under the "common fund doctrine," an attorney who creates a pool of funds for a group has the right to seek payment from the pool, or to seek proportional contribution from those who accept the benefits of the attorney's efforts. Wright v. First Nat. Bank in Albuquerque, 123 N.M. 417, 941 P.2d 498 (1997).
The "common fund doctrine" extends to insurance cases in which the insured incurs attorney's fees in recovering a judgment or settlement that benefits a subrogated insurer. Further, under the "active participation" exception to application of the common fund doctrine to insurance cases, the trial court may reduce or waive the insurer's proportionate contribution to the insured's attorney's fees and costs if the insurer demonstrates that it actively participated in or substantially contributed to the recovery. Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834, 120 N.M. 523 (1995).
The "common fund doctrine" should not be applied to an amount remaining in the court registry from policy limits deposited by a personal injury defendant's insurer, nor should the court give the patient's attorney a proportionate share of his attorney's fee from the amount due to a public hospital under its lien. Schroeder v. Memorial Medical Center, 123 N.M. 719, 945 P.2d 449 (1997).
Regarding attorney's fees in "common fund" and class action cases, New Mexico recognizes that there are two generally-accepted means for awarding attorney's fees in such suits: the so-called lodestar method, determining fees based on the hours worked and a reasonable hourly fee, and the percentage-of-the-fund method, awarding fees based on a reasonable percentage of the overall award. Ramah Navajo Chapter v. Babbitt, 50 F. Supp.2d 1091 (D.N.M. 1999).
For purposes of the percentage of the fund method, courts should review the following factors: (1) the time and labor involved; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) any prearranged fee; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Under the percentage of the fund method of awarding attorney's fees in common fund cases, an appropriate starting point is a 25% benchmark, with adjustments to be made up or down based on the applicable factors. Id.
A lawyer may not recover expert and miscellaneous expenses out of the common fund created by securities fraud litigation, where the lawyer fails to show that the expenses benefitted the class. Further, once a petition to divide the common fund created in a securities fraud class action is filed, the court must assume the role of fiduciary and protect the beneficiaries against the claims of their counsel which are now, in a strict sense, adverse to those of the clients. Matter of Horizon/CMS Healthcare Corp. Securities Litigation, 3 F. Supp.2d 1208 (D.N.M. 1998).
1.5:410 Excessive Fees
Attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which says "I will charge only a reasonable attorney's fee for services rendered."
It is within the jurisdiction of the Disciplinary Board and the Disciplinary Counsel to enforce the Rules of Professional Conduct, which provide that where the Board finds that an attorney has charged illegal or grossly excessive fees, disciplinary action is appropriate. Matter of Jones, 119 N.M. 229, 889 P.2d 837 (1995). Likewise, it is within the equitable power of the court to consider and reduce excessive attorney fees. Robison v. Katz, 94 N.M. 314, 610 P.2d 201 (Ct. App. 1980).
Numerous cases recognize that a fee is excessive when it is disproportionate to the amount of work performed. See, e.g., Matter of O'Brien, 130 N.M. 643. 29 P.3d 1044 (2001) (any fee is excessive when absolutely no services are provided, and it is equally true that exaggerating time spent on a task to increase a fee is dishonest and makes that fee excessive); Matter of Cherryhomes, 115 N.M. 734, 858 P.2d 401 (1993) (illegal charges include keeping a fee for a criminal matter where the charges are dismissed without any action by the lawyer); Matter of Roberts-Hohl, 116 N.M. 700, 866 P.2d 1167 (1994) (by accepting a $5,000 retainer and taking no discernable action apart from filing a complaint, the attorney charged a clearly excessive fee in violation of this rule; while client-attorney fee agreement provided for a reasonable fee for the services to be performed, even a minimal fee becomes excessive when no service is provided); and Matter of Jones, 119 N.M. 229, 889 P.2d 837 (1995) ("any fee is excessive when absolutely no services are provided," so while disciplinary authorities do not have jurisdiction to regulate fees charged by attorneys, they are to enforce the Rules of Professional Conduct, such that when a fee charged is illegal or grossly excessive, it is appropriate for the Disciplinary Board to take action).
Other similar cases include Matter of Bloomfield, 121 N.M. 605, 916 P.2d 224 (1996) (charging $500 for writing a one-page demand letter, or charging $700 plus a roof re-shingling for filing one motion and appearing at one hearing, but then failing to follow through with subsequent required legal services, both qualify as excessive charges for little work); Matter of Rivera, 112 N.M. 217, 813 P.2d 1015 (1991) (collecting $300 for a promise to file an answer on behalf of a client and then failing to fulfill the promise constitutes an excessive charge); Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989) (charging an unreasonable fee, "churning" to generate legal fees, and other misconduct justify censure and suspension); Matter of Righter, 126 N.M. 730, 975 P.2d 343 (1999) (where attorney files lawsuit on behalf of client, and charges over $21,000 in fees and costs but does not include on billings any detail of legal work performed, and subsequently cannot provide documentary evidence to justify the fees, an excessive fee has been charged); Matter of Atencio, 106 N.M. 334, 742 P.2d 1039 (1987) (fees awarded to lawyer by federal judge in civil rights action were far in excess of what he could have collected from client under terms of a contingency agreement, and represented complete payment for his services; thus, attorney's subsequent efforts to collect amounted to a clearly excessive double fee and violated NMR 16-105); Matter of Hyde, 124 N.M. 363, 950 P.2d 806 (1997) (lawyer's conduct in falsifying billing entries and charging unreasonable fees warranted severe discipline); and Matter of Hamar, 123 N.M. 795, 945 P.2d 1013 (1997) (lawyer's conduct in mingling client trust funds violated rule regarding charging excessive fees).
The excessiveness of a fee is relative to the circumstances. It has been found that a large fee, such as a 33 1/3 % contingency fee, which may seem excessive, is not extreme in a risky appeal situation where the parties, dealing at arm's length, have clearly and unambiguously agreed on the fee and expert testimony supports the amount. Citizens Bank v. C&H Const. & Paving Co., 93 N.M. 422, 600 P.2d 1212 (1979). Also, when an attorney and the client sign a formal fee agreement, the arrangement will normally be upheld, even if it seems excessive, unless the plaintiff meets his burden of proving that the attorney's services were deficient. Walters v. Hastings, 84 N.M. 101, 500 P.2d 186 (1972).
Charging legal fees for non-legal services, such as driving a client to the doctor or pharmacy or talking to a client's care-providers, constitutes a violation of NMR 16-105; such fees must be reasonably calculated to reflect the non-legal nature of the services rendered. Matter of Sheehan, 130 N.M. 485, 27 P.3d 972 (2001).
1.5:420 "Retainer Fees:" Advance Payment, Engagement Fee, or Lump-Sum Fee
Lawyers must refund any advance payment of fee that has not been earned, upon termination of the representation. Matter of Dawson, 129 N.M. 369, 8 P.3d 856 (2000). An attorney may not use one client's funds to benefit another client, and must at all times keep unearned or settlement funds untouched in a trust account until the monies are properly disbursed in accordance with the Rules. Matter of Hamar, 123 N.M. 795, 799, 945 P.2d 1013, 1017 (1997). A casual approach to bookkeeping" is not permitted. Matter of Rawson, 106 N.M. 172, 173, 740 P.2d 1156, 1157 (1987).
Because retainer fees must be kept in a separate trust account until the fees have been earned, stating to a client that the retainer fee is non-refundable does not absolve an attorney of his procedural duties to maintain separate accounts for client funds and to refund unearned portions of fees paid. Matter of Dawson, 129 N.M. 369, 8 P.3d 856 (2000); see also Matter of Norton, 113 N.M. 56, 823 P.2d 298 (1991); Matter of Sparks, 108 N.M. 249, 771 P.2d 182 (1989); Matter of Benavidez, 107 N.M. 520, 760 P.2d 1286 (1988). However, there does not appear to be New Mexico authority which expressly prohibits attorneys and clients from contracting for a lump sum fee which qualifies as "reasonable" under NMR 16-105(A).
1.5:430 Nonrefundable Fees
The New Mexico rules do not permit attorneys to charge unearned non-refundable fees, regardless of the forewarning an attorney may give a client. Matter of Dawson, 129 N.M. 369, 8 P.3d 856 (2000) (also stating that claim by lawyer that flat fee or retainer was non-refundable, will not suffice to justify a failure to deposit unearned client funds in a trust account, a withdrawal of client funds from a trust account to pay fees that have not yet been earned, or a failure to promptly return unearned funds to a client upon termination of the representation); see also Matter of Silverberg, 108 N.M. 249, 771 P.2d 182 (1989); and section 1.5:420 supra.
1.5:500 Communication Regarding Fees
* Primary New Mexico Reference: New Mexico Rule 16-105
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.101, ALI-LGL § 38, Wolfram § 9.2.1
* New Mexico Commentary:
NMR 16-105(B) requires the lawyer to communicate the basis or rate of a fee to a client whom the lawyer does not regularly represent before commencing the representation, or shortly thereafter. In addition, attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which provides that "I will keep my client informed about the progress of the work for which I have been engaged or retained, including the costs and fees." See also State Bar Advisory Opinion 1990-4 (lawyer must advise client of hourly rates to be charged by non-lawyer employees of lawyer, and may not include such services within the time billed by the lawyer without full disclosure to client).
New Mexico attorneys must keep clients informed about the calculus involved in fee-computation by clearly documenting the services for which fees are being collected. Matter of Dawson, 129 N.M. 369, 8 P.3d 856 (2000). Mere submission of billing statements, which read that work was done under the heading "billable time," is insufficient. Matter of O'Brien, 130 N.M. 643, 29 P.3d 1044 (2001). Further, "client files must contain work to justify the fee. Whether the evidence of work is in notations of research, time sheets, copies of depositions, evidence of time spent in hearings or meetings, such evidence is essential." Id.
1.5:600 Contingent Fees
* Primary New Mexico Reference: New Mexico Rule 16-105
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.901, ALI-LGL §§ 34, 35, Wolfram § 9.4
* New Mexico Commentary:
Contingency fee arrangements generally are permitted under New Mexico law. NMR 16-105(C).
1.5:610 Special Requirements Concerning Contingent Fees
While contingency fee arrangements generally are permissible, they must be in writing and they must clearly express the method by which the fee is to be determined. Also, at the conclusion of a contingency fee matter the lawyer must provide specific financial information to the client. NMR 16-105(C).
Several cases discuss these requirements for contingency fee arrangements. In U.S. v. 36.03 Acres of Land, 70 F. Supp.2d 1272 (D.N.M. 1999), the court stated that an unwritten contingency fee contract violates this rule and will not be enforced; the attorney's fee award will then be fixed based on what is reasonable under the circumstances. In Matter of Hamar, 123 N.M. 795, 945 P.2d 1013 (1997), the court stated that "An attorney's failure to provide a client with a written statement regarding the distribution of funds in a contingency fee case [at its conclusion] violates Rule 16-105(C) of the Rules of Professional Conduct;" it further found the attorney failed to provide the client with a written statement regarding distribution of funds, thus committing violation of the rule requiring written fee agreements in contingency fee cases. See also Matter of Greenfield, 121 N.M. 633, 916 P.2d 833 (1996) (violation of any mandatory rule such as requirement to put contingency fee agreements in writing should never be considered minor offense, no matter how deplorable the other surrounding circumstances).
A contingency fee agreement may not contain a provision that rewards the lawyer for failing or refusing to carry a matter to conclusion. State Bar Advisory Opinion 1995-2 (discussing entitlement to fees when contingency fee agreement is terminated).
1.5:620 Quantum Meruit in Contingent Fees Cases
A contingency fee agreement may state that the lawyer has a quantum meruit claim if the attorney has "cause" to withdraw based on the behavior of the client. However, recovery in quantum meruit can be no more than what the lawyer would have received under the contingency fee agreement. State Bar Advisory Opinion 1995-2 (discussing entitlement to fees when contingency fee agreement is terminated, and stating a contingency fee agreement may not contain provision that reward the lawyer for failing or refusing to carry a matter to conclusion).
An attorney bears the burden of proving the value of the services he rendered. Van Orman v. Nelson, 78 N.M. 11, 427 P.2d 896 (1967), rev'd on other grounds 80 N.M. 119, 452 P.2d 188 (1969).
1.5:700 Unlawful Fees
* Primary New Mexico Reference: New Mexico Rule 16-105
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.901, ALI-LGL § 36, Wolfram §§ 9.3.2, 9.4
* New Mexico Commentary:
1.5:710 Contingent Fees in Criminal Cases
A contingent fee for representing a defendant in a criminal case qualifies as a "prohibited fee arrangement" and is not allowed. NMR 16-105(D). An attorney will not be permitted to keep illegal charges, an example of which is a fee for a criminal matter where the charges are dismissed without any action by the lawyer. Matter of Cherryhomes, 115 N.M. 734, 858 P.2d 401 (1993).
1.5:720 Contingent Fees in Domestic Relations Matters
A fee in a domestic relations matter, "the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof," qualifies as a "prohibited fee arrangement" and is not allowed. NMR 16-105(D).
The prohibition against contingency fees in domestic relations matters does not apply to post-decree proceedings to enforce a judgment and to collect arrears. Thus, a lawyer may represent an ex-wife on a contingency fee basis in trying to obtain part of the husband's military retirement at the time of divorce. However, a contingency fee basis is not proper if the representation would involve an attack on the underlying divorce decree. State Bar Advisory Opinion 1988-4R.
1.5:730 Other Illegal Fees in New Mexico
1.5:800 Fee Splitting (Referral Fees)
* Primary New Mexico References New Mexico Rule 16-105;
* Background References: ABA Model Rule 1.5, Other Jurisdictions
* Commentary: ABA/BNA § 41.701, ALI-LGL § 47, Wolfram § 9.2.4
* New Mexico Commentary:
NCR 16-105(E) permits a division of fee among lawyers who are not in the same firm, but only under certain specified circumstances. Section 36-2-31 NMSA 1978 (1991 Repl. Pamp.) makes it unlawful for a person to divide with a lawyer the lawyer's fee "as an inducement for placing or in consideration of being placed" the lawyer's employment in "a claim or demand of any kind." See also State Bar Advisory Opinion 1985-12 (discussing fee splitting with former partner who will no longer be licensed to practice).
1.6 Rule 1.6 Confidentiality of Information
1.6:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-106:
"A. Disclosure of information generally. A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in Paragraphs B, C and D.
B. Disclosure to prevent harm to others. To prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm, a lawyer should reveal such information to the extent the lawyer reasonably believes necessary.
C. Disclosure to prevent financial or property-related harm. To prevent the client from committing a criminal act that the lawyer believes is likely to result in substantial injury to the financial interest or property of another, a lawyer may reveal such information to the extent the lawyer reasonably believes necessary.
D. Disclosure in lawyer-client controversy. To establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client, a lawyer may reveal such information to the extent the lawyer reasonably believes necessary."
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* New Mexico Commentary:
1.6:101 Model Rule Comparison
While NMR 16-106 and MR 1.6 are very similar, NMR 16-106(C) permits a lawyer to reveal information relating to representation of a client in order to prevent the client from committing a criminal act that the lawyer believes is likely to result in substantial injury to the financial interest or property of another. MR 1.6 does not include this provision.
1.6:102 Model Code Comparison
The principle of confidentiality is enlarged in several respects and narrowed in a few respects, compared with the corresponding provisions of the Code. One enlargement is that NMR 16-106(A) applies the confidentiality requirement to all information about a client "relating to the representation," while under the Code the confidentiality requirement applies only to information "gained in" the professional relationship that the client asks to be kept confidential or that would harm the client if disclosed. See EC 4-1, EC 4-2, EC 4-3, EC 4-4, DR 4-101(A), (B) & (C), and DR 7-102(B).
1.6:200 Professional Duty of Confidentiality
* Primary New Mexico Reference: New Mexico Rule 16-106
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* Commentary: ABA/BNA § 55.101, ALI-LGL §§ 59-66, Wolfram §§ 5.1, 6.7
* New Mexico Commentary:
New Mexico has statutorily codified the duty of a lawyer to maintain the confidences of his or her client, in § 36-2-10(E) NMSA 1978 (1991 Repl. Pamp.) (stating it is the duty of lawyers in New Mexico "To maintain inviolate the confidence and preserve the secrets of his client"). See also § 36-2-16 NMSA 1978 (1991 Repl. Pamp.) (providing that any attorneys "who maliciously reveal the secrets of their client to the opposite party" or who desert or unduly jeopardize the interests of their clients, shall be punished by fine and disbarment).
The professional duty of confidentiality may even prohibit a lawyer from revealing information regarding a representation to a person who has a connection with the representation. In State Bar Advisory Opinion 2000-2, for example, the Committee determined that because lawyer bills are normally protected as confidential information under NMR 16-106, an attorney may not disclose his or her statements for services rendered in connection with representation of insureds, to third party auditors hired by insurers. However, according to the Rules of Professional Conduct Committee Comment to NMR 16-106, billing statements may be disclosed to third party auditors if the statements do not contain information that is protected by the attorney-client privilege or the work product doctrine; further, such statements may be disclosed to third party auditors even when they contain information protected by the attorney-client privilege or the work product doctrine, if the insured first gives informed consent.
1.6:210 Definition of Protected Information
Information that is intended to be disclosed to third persons is not protected as confidential. State v. Deutsch, 103 N.M. 752, 713 P.2d 1008 (Ct. App. 1985) (finding defendant's attorney did not violate client's confidentiality by testifying as to contents of letter written to judge). Further, it has been held that "inquiries into the general nature of legal services provided do not violate the attorney-client privilege because they involve no confidential information." Schein v. Northern Rio Arriba Elec. Coop., 122 N.M. 800, 932 P.2d 490 (1997).
In Matter of Rawson, 113 N.M. 758, 833 P.2d 235 (1992), it was recognized that a lawyer may not refuse to disclose client trust records to the Disciplinary Board on grounds of NMR 16-106.
1.6:220 Lawyer's Duty to Safeguard Confidential Client Information
A lawyer must do whatever may be required under the circumstances to maintain the confidentiality of client information. In Matter of Moore, 129 N.M. 217, 221, 4 P.3d 664, 668 (2000), the court instructed that a lawyer may not rely on a financial institution to maintain proper client trust fund records, and to the extent office security is a concern in connection with the lawyer maintaining the necessary records, "the attorney must take whatever steps are necessary to protect confidential information, whether it concerns clients' legal matters or trust account records."
Prospective clients may also be owed a duty to safeguard information, even if safeguarding the information is contrary to the interests of a client. In Matter of Lichtenberg, 117 N.M. 325, 871 P.2d 981 (1994), the lawyer was notified by defense counsel in a civil rights case he filed, that a certain prison guard may be a witness in the case. The lawyer then interviewed the prison guard regarding possible representation of the prison guard in a landlord-tenant dispute. During the interview the guard divulged details of his personal life that were relevant to the alleged civil rights violation. The court determined that it was not acceptable for the lawyer to use in the civil rights case the confidential information imparted by the prison guard. Accordingly, the duty of confidentiality under NMR 16-106 may attach when the lawyer agrees to consider whether a client-lawyer relationship shall be established.
See also State Bar Advisory Opinion 1992-2 (discussing client confidences after death of client).
1.6:230 Lawyer's Self-Dealing in Confidential Client Information [see also 1.8:300]
Improper self-dealing in confidential client information may arise when the lawyer attempts to use client information for personal gratification or preservation. In Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989), for example, the attorney retaliated against the client for the client's complaint against the attorney to the Disciplinary Board, by accusing the client of an event of perjury that would be known to the attorney only through a confidential conversation with the client, resulting in attorney discipline. See also Matter of Schmidt, 118 N.M. 213, 880 P.2d 310 (1994) (lawyer deeded client property to lawyer's son and when client demanded the property be deeded back, lawyer threatened to reveal confidential information he learned in course of representing client; lawyer disciplined).
1.6:240 Use or Disclosure of Confidential Information of Co-Clients
1.6:250 Information Imparted in Lawyer Counseling Programs
1.6:260 Information Learned Prior to Becoming a Lawyer
1.6:300 Exceptions to Duty of Confidentiality B In General
* Primary New Mexico Reference: New Mexico Rule 16-106
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* Commentary: ABA/BNA § 55.101, ALI-LGL §§ 59-66, Wolfram §§ 6.4, 6.7
* New Mexico Commentary:
1.6:310 Disclosure to Advance Client Interests or with Client Consent
The lawyer's duty to safeguard confidential client information is overcome where the client or former client consents to disclosure, after consultation. State v. Barnett, 125 N.M. 739, 965 P.2d 323 (1998) (former client may consent to attorney disclosing information regarding representation).
However, there is no implied authority for an attorney to disclose his or her statements for services rendered to persons outside of the normal tripartite relationship consisting of attorney, insurer and insured. An insured would have to consent to disclosure of the lawyer's bills, but it may be an impermissible conflict for the lawyer to seek and obtain the consent. State Bar Advisory Opinion 2000-2.
1.6:320 Disclosure When Required by Law or Court Order
There are some instances when an attorney must provide information that might be regarded as protected by the lawyer-client confidentiality requirement. One example exists where an attorney may not invoke the confidentiality rule to prevent a court from obtaining trust account information for purposes of investigation. Matter of Rawson, 113 N.M. 758, 833 P.2d 235 (1992). Further, an attorney cannot assert confidentiality as a defense to improper trust account recording. An attorney must keep these records within arm's reach for reporting purposes. Matter of Moore, 129 N.M. 217, 4 P.3d 664 (2000). Another example arose in a medical malpractice case, in which a statute protecting the credentialing file of a doctor was superceded by the court's constitutional right to regulate the discovery process. Southwest Community Health Servs v. Smith, 107 N.M. 196, 755 P.2d 40 (1988).
See also State Bar Advisory Opinion 1989-2 (discussing conflict between lawyer's duties of confidentiality owed to client, and a federal statute that requires the lawyer who receives $10,000 or more in cash from a client to report the receipt and the client's identity to the Internal Revenue Service; stating attorney's advice to client should attempt to lead to scenario in which neither duty is violated).
1.6:330 Disclosure in Lawyer's Self-Defense
An attorney may reveal privileged information in litigation if, and only if, the disclosure is "necessary to establish a claim or defense in a controversy between the attorney and client." Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989). In a dispute about the distribution of personal injury settlement funds, an attorney's revelation of his client's prior perjurious activity was not necessary. Id.
1.6:340 Disclosure in Fee Dispute
A lawyer may appear pro se in a suit against his former client for fees, and may testify in the suit. State Bar Advisory Opinion 1986-11. Also, when a lawyer hires a commercial collection agency, he must disclose only the minimum background information regarding the client necessary to establish or collect the fee. State Bar Advisory Opinion 1998-7.
1.6:350 Disclosure to Prevent Crime
NMR 16-106(B) & (C) state exceptions to the confidentiality requirement to prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death, substantial bodily harm, or substantial injury to the financial interest or property of another.
According to State Bar Advisory Opinion 1987-1, an attorney who takes assignments from the Lawyer Referral for the Elderly Project, who learns that a client is suicidal, and who arranges the client's affairs and drafts the client's will, has no duty to communicate to anyone the client's possible intent to commit suicide, as suicide is not a crime in New Mexico.
In State Bar Advisory Opinion 1985-6, the Committee stated that a lawyer has no obligation to report the attempted fraud of a former client to the district attorney when the intended victim of the fraud has learned of the attempted fraud. The lawyer may not cooperate with the intended victim in prosecuting the former client, however, since doing so would entail disclosing secrets of the former client.
1.6:360 Disclosure to Prevent Death or Serious Bodily Injury
When the lawyer believes the client is likely to commit a criminal act that will cause death or serious bodily injury, the lawyer "should" disclose confidential information to prevent it. NMR 16-106(B).
1.6:370 Disclosure to Prevent Financial Loss
When the lawyer believes the client is likely to commit a criminal act that will cause substantial injury to the financial interest or property of another, the lawyer "may" disclose confidential information to prevent it, "To the extent the lawyer reasonably believes necessary." NMR 16-106(C).
A lawyer is required to disclose a client's confidential information where the client has invested her father's assets for her own use, where her father's intent is for the assets to support him, where the lawyer has advised the client's father that a mortgage would be executed to protect the father, but where the client has refused to execute the mortgage and has ordered the lawyer not to have contact with the father. State Bar Advisory Opinion 1988-9.
1.6:380 Physical Evidence of Client Crime [see 3.4:210]
1.6:390 Confidentiality and Conflict of Interest
A conflict of interest will be found to exist when a lawyer is acting adversely to the interests of a former client in a matter that is the same or substantially related to the prior matter; such "substantial relationship" is found to exist generally where the attorney is in position to exploit confidential information previously learned during representation of the former client. See section 1.9:210 infra; State v. Chambers, 86 N.M. 383, 524 P.2d 999 (Ct. App. 1974) (attorney who defended person in criminal case that ended in mistrial, was precluded from prosecuting defendant on retrial); and Leon, Ltd. v. Carver, 104 N.M. 29, 715 P.2d 1080 (1986) (while a "superficial resemblance between the current and prior representations will not, without more, create a violation" of NMR 16-109, and "even if the relationship between the past and present representations is not clear at the outset so as to justify disqualification, the court may later disqualify if, during trial, it appears that an attorney may be using confidential information against a former client").
Similarly, counsel may not represent a party to a lawsuit, while concurrently representing the opposing party in activities involving the subject of the lawsuit. United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 629 P.2d 231 (1980) (decided under former rules). Moreover, an attorney may not use a pre-representation interview as a means to gather information about a witness in separate pending litigation. Matter of Lichtenberg, 117 N.M. 325, 871 P.2d 981 (1994).
In the criminal context, a prosecutor may not use information against a defendant, where the information was learned during the prosecutor's prior representation of defendant as defense counsel. State v. Barnett, 125 N.M. 739, 965 P.2d 323 (1998). Also, an attorney may not represent two persons where the testimony of one to exonerate the other, will, in fact, incriminate the one testifying. State v. Santillanes, 109 N.M. 781, 790 P.2d 1062 (1990). Where, however, one attorney represents several defendants, each of whose testimony does not compromise his or her own case, client confidentiality is not compromised and there is no conflict of interest. Churchman v. Dorsey, 122 N.M. 11, 919 P.2d 1076 (1996).
1.6:395 Relationship with Other Rules
Confidentiality concerns may arise at the intersection of the Rules of Professional Conduct, and the New Mexico Children's Code. The Children's Code requires that an attorney-guardian ad litem be appointed to represent the best interests of the child in all civil abuse and neglect cases. State ex rel. Children, Youth & Families Dep't v. George F., 125 N.M. 597, 964 P.2d 158 (1998), citing § 32A-1-4(J) NMSA 1978. The process further requires the attorney to communicate with a social worker, who is represented by Department attorneys, but this communication may violate NMR 16-402, which prohibits ex parte communication with someone who is represented by another attorney. Id. The court has found that these communications are not ex parte because both parties are working on behalf of the child's interests. Id.
Because NMR 17-204(A) requires attorneys to maintain detailed records of trust account activity, an attorney may not assert "confidentiality" as an excuse for not keeping these records up-to-date and at hand in his or her office. Matter of Moore, 129 N.M. 217, 4 P.3d 664 (2000).
While confidentiality can be waived under some circumstances, § 41-9-5 NMSA 1978 prohibits any party in a civil litigation action from even voluntarily disclosing information from a physician's credentialing records. In fact, there are criminal penalties for such a violation. Although the statute does not create an evidentiary privilege, for public policy reasons it does establish immunity because of the confidential nature of this information. Southwest Community Health Servs. v. Smith, 107 N.M. 196, 755 P.2d 40 (1988).
An attorney was held not to have committed the tort of breach of confidence by sending to the New Mexico Secretary of State a letter by the Disciplinary Board admonishing adversary counsel for an ethical violation, in Fernandez-Wells v. Beauvais, 127 N.M. 487, 983 P.2d 1006 (1999). Any duty of confidentiality created by NMR 17-304 is not of the sort protected by the tort of breach of confidence. Id.
1.6:400 Attorney-Client Privilege
* Primary New Mexico Reference: New Mexico Rule 16-106
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* Commentary: ABA/BNA § 55.301, ALI-LGL §§ 68-78, Wolfram §§ 6.3-6.5
* New Mexico Commentary:
1.6:410 Privileged Communications
The attorney-client privilege should only be applied to protect communications, and not facts. An individual who has knowledge of material facts cannot, merely by reporting to the attorney, prevent the other party from questioning him as to those facts. Accordingly, there is no blanket protection under the attorney-client privilege for the observations and conclusions of an expert witness, whether or not contained in the expert's report. Similarly, an expert witness cannot prevent the adverse party from questioning him as to his conclusions or expert opinions by communicating them to the attorney for the party that retained the expert. State v. Steinkraus, 76 N.M. 617, 417 P.2d 431 (1966).
The attorney-client privilege has been held not to apply to a guardian ad litem's communications with a child when the guardian ad litem is not functioning in the customary role of a lawyer. State ex. rel. Children Youth and Families Dept. v. George F., 125 N.M. 597, 964 P.2d 158 (Ct. App. 1998). See also Diversified Development & Inv. v. Heil, 119 N.M. 290, 889 P.2d 1212 (1995) (the attorney-client privilege did not prohibit disclosure of what a vendor authorized its agent, an attorney, to agree upon with, or communicate to purchase option holder in relation to extension of option, in holder's action against vendor for alleged breach of option; trial court should have examined clientattorney communications and allowed holder to discover portions detailing instructions to agent and scope of agent's authority regarding option).
A statement to an attorney for a former client that the attorney may be a witness in a matter, is not subject to the attorney-client privilege. State Bar Advisory Opinion 1987-4. Also, the practice of lawyers sharing depositions of expert medical witnesses with other lawyers does not violate the attorney-client privilege. State Bar Advisory Opinion 1986-6.
Because documentation regarding representation of indigent defendants under the Criminal Justice Act is privileged, it may not be unsealed by a motion of a newspaper to gain access. United States v. Gonzales, 1997 U.S. Dist. LEXIS 4099 (D.N.M. 1997).
An attorney must provide detailed information about legal billing to a client when the client desires to analyze the nature and quality of the attorney's provided legal services. This information falls outside of the protection of the attorney-client privilege. Schein v. Northern Rio Arriba Elec. Coop., 122 N.M. 800, 932 P.2d 490 (1997). In Schien, while lawyer billing information was claimed to be "sensitive" and "intended to be confidential," it was found to be "ministerial" and therefore to fall outside of the attorney-client privilege. Information about the purpose for which an attorney is retained or the steps an attorney took in fulfilling his obligations are not protected. Also, inquiries into the general nature of legal services provided do not violate the attorney-client privilege because they involve no confidential information, and the attorney-client privilege does not necessarily preclude discovery of instructions given to attorney by client. Nor does the privilege bar discovery of the nature and scope of attorney's authority. However, in the event corporate documents are subject to the attorney-client privilege, they may be withheld from shareholders.
The burden of establishing the elements of the attorney-client privilege rests with the party asserting it. Sanchez v. KPMG Peat Marwick, 1994 U.S.Dist. LEXIS 11208 (D.N.M. 1994). See also, e.g., Krahling v. Executive Life Ins. Co., 125 N.M. 228, 959 P.2d 562 (Ct. App. 1998) (burden of proving an assertion of privilege in discovery rests upon party asserting it).
In Sanchez, it was determined that an index of documents not disclosed in discovery due to a claim of privilege must contain information sufficient for the court to evaluate the claim of privilege, namely: (1) the place, approximate date, and the manner of preparing the document; (2) the name of the person at whose request the document was prepared; (3) the name of each person or persons participating in preparation of the writing; (4) the name and position, if any, of each person to whom the contents of the writings have been communicated by copy, exhibition, reading or substantial summarization; (5) the names of the person or persons presently in custody of the original or true copy of the writings; and (6) a precise statement of the grounds for work-product or attorney-client protection for each document. In addition, the attorney-client privilege does not protect all communications between the attorney and the client. Mixed business-legal communications are not privileged unless they are predominately legal. 1994 U.S.Dist. LEXIS 11208. See also Pina v. Espinoza, 130 N.M. 661, 29 P.3d 1062 (Ct. App. 2001) (discussing proof necessary to establish a privilege).
1.6:420 Privileged Persons
In State v. Valdez, 95 N.M. 70, 618 P.2d 1234 (1980), the court determined that the presence of another attorney when a person charged with a crime confessed to one attorney, did not destroy the confidential nature of communication, where both attorneys were considered to be representing the person charged; thus, the privilege would apply to both attorneys and would extend to any conversation between them.
1.6:430 Communications "Made in Confidence"
Communications between a lawyer and a client are protected by the Sixth Amendment only if there is an expectation of privacy for such. An inmate who discusses his case with his lawyer via the prison phone where a posted sign says conversations may be monitored and recorded, may be deemed to have waived the attorney-client privilege. State v. Coyazo, 123 N.M. 200, 936 P.2d 882 (1997). Communications between a lawyer and potential client, however, may be considered confidential if the lawyer subsequently uses the communications against the potential client. Matter of Lichtenberg, 117 N.M. 325, 871 P.2d 981 (1994).
1.6:440 Communications from Lawyer to Client
1.6:450 Client Identity, Whereabouts, and Fee Arrangements
1.6:460 Legal Assistance as Object of Communication
The rule is violated when an attorney does not inform a potential client that a conflict of interest precludes the formation of an attorney-client relationship, and uses the interview as a means for gathering information which the attorney subsequently uses against the potential client in a legal proceeding. Matter of Lichtenberg, 117 N.M. 325, 871 P.2d 981 (1994). The duty of confidentiality attaches in this situation, and the Disciplinary Board will reprimand attorneys who violate it. Id.
1.6:470 Privilege for Organizational Clients
1.6:475 Privilege for Governmental Clients
Governmental entities may discuss actual or potential litigation with their attorneys in closed sessions, notwithstanding the Open Meetings Act. Board of County Comm'rs v. Ogden, 117 N.M. 181, 870 P.2d 143 (Ct. App. 1994) (finding such communications are privileged).
1.6:480 Privilege of Co-Clients
1.6:490 Common-Interest Arrangements
According to New Mexico's rule of evidence regarding the attorney-client privilege, a client "has a privilege to refuse to disclose . . . confidential communications made for the purpose of facilitating the rendition of professional legal services to the client . . . (3) by the client or client's lawyer to a lawyer representing another in a matter of common interest." NMR 11-503. See State v. Valdez, 95 N.M. 70, 618 P.2d 1234 (1980).
1.6:495 Duration of Attorney-Client Privilege
Where, prior to becoming an assistant district attorney, a staff member at the District Attorney's office had worked on behalf of a defendant charged with child abuse and where the DA's office prosecuted and obtained a conviction for the same charges after the assistant district attorney was hired, the District Attorney's office sufficiently protected confidentiality between the new assistant and the defendant by precluding the lawyer from either directly or indirectly participating in the case, and from discussing the case with colleagues. State v. Pennington, 115 N.M. 372, 851 P.2d 494 (Ct. App. 1993).
See State Bar Advisory Opinion 1992-2 (discussing client confidences after death of client).
1.6:500 Waiver of Attorney-Client Privilege
* Primary New Mexico Reference: New Mexico Rule 16-106
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* Commentary: ABA/BNA § 55.401, ALI-LGL §§ 78-80, Wolfram § 6.4
* New Mexico Commentary:
Once the attorney-client privilege has been asserted, an attorney may not disclose protected information until the client subsequently waives the privilege. Hunter v. Kenney, 77 N.M. 336, 422 P.2d 623 (1967) (attorney-client privilege belongs to client, and attorney has no option to waive the privilege, but he has affirmative duty to assert the privilege until his client has waived it).
1.6:510 Waiver by Agreement, Disclaimer, or Failure to Object
In DeMatteo v. Simon, 112 N.M. 112, 812 P.2d 361 (Ct. App. 1991), the defendants were held to have waived the right to assert the attorney-client privilege when the plaintiff cross-examined one defendant concerning privileged conversations where, prior to the defendants' first objection to the line of questioning, one defendant volunteered privileged information about the attorney's instructions and defendants failed to object to several questions that implicated the privilege; and further, defendants failed to object to several subsequent questions that implicated the privilege after counsel's one and only objection was overruled.
1.6:520 Waiver by Subsequent Disclosure
While inadvertent disclosure of documents may not waive their subsequent privileged status in some jurisdictions, the New Mexico courts may find the opposite after considering the following factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production; (2) the number of inadvertent disclosures; (3) the extent of the disclosure; (4) any delay and measures taken to rectify the disclosures; (5) whether the overriding interests of justice would be served by relieving a party of its error. Hartman v. El Paso Natural Gas Co., 107 N.M. 679, 763 P.2d 1144 (1988) (finding waiver, stating waiver is a function of the prior disclosure, and quoting court in Parkway Gallery Furniture, Inc. v. Kittinger/Pennsylvania House Group, Inc., 116 F.R.D. 46, 50 (M.D. N.C. 1987)).
See also, e.g., State v. Ballinger, 99 N.M. 707, 663 P.2d 366 (Ct. App. 1983) (finding waiver where state's accusing witness testified he and his former attorney discussed "turning State's evidence"); State v. Earnest, 103 N.M. 95, 703 P.2d 872 (1985) (stating criminal defendant waived the attorney-client privilege when he testified regarding what he did not tell his attorney, and further, defendant may not assert another's privilege); and State v. Hogervorst, 90 N.M. 580, 566 P.2d 828 (Ct. App. 1977) (finding a waiver).
It was held in McDowell v. Napolitano, 119 N.M. 696, 895 P.2d 218 (1995), that the review by a witness of a document to refresh recollection of a document covered by the attorney-client privilege, was acceptable and did not constitute waiver where the contents of the document were never admitted into evidence, and the jury never saw the memorandum or learned of the controversy surrounding its use.
Privileged communications that are intentionally imparted to third parties cannot, however, again become privileged. Their intended disclosure renders the protection inapplicable, even if the attorney, on behalf of the client, makes the disclosure. State v. Deutsch, 103 N.M. 752, 713 P.2d 1008 (Ct. App. 1985).
Of course, the confidentiality privilege belongs to the client; therefore, once the client has waived the privilege, the lawyer is no longer required to maintain the privilege. Hunter v. Kenney, 77 N.M. 336, 422 P.2d 623 (1967).
1.6:530 Waiver by Putting Assistance or Communication in Issue
In Public Service Co. of New Mexico v. Lyons, 129 N.M. 487, 10 P.3d 166 (Ct. App. 2000), New Mexico sided with the minority of jurisdictions that require offensive or direct use of privileged of materials before the party will be deemed to have waived its attorney-client privileges. The court determined that application of the majority test would undermine the "full and frank" communications at the heart of the attorney-client privilege and would be contrary to the certainty that the rules themselves are intended to provide. The court also concluded that the more restrictive minority approach is consistent with the long held view that the attorney-client privilege should act as a shield and not a sword.
See also Skaggs v. Conoco, Inc., 125 N.M. 97, 957 P.2d 528 (Ct. App. 1998) (rejecting contention that pleading the defense of laches waived attorney-client privilege relative to title opinions sought by plaintiffs, since defendants were not shown to have relied upon those opinions to prove their defense of laches); Sanchez v. KPMG Peat Marwick, 1994 U.S.Dist. LEXIS 11208 (D.N.M. 1994) (any privilege as to communications between corporate directors and their in-house counsel was waived by the filing of a lawsuit alleging fraud and misrepresentation, because the information contained in the communications could be relevant to the defendant's defense); and National Excess Ins. v. Civerolo, Hansen & Wolf, 139 F.R.D. 398 (D.N.M. 1991) (stating that to be discoverable in legal malpractice action, communications between client and second attorney had to have occurred during the course of the underlying litigation).
1.6:600 Exceptions to Attorney-Client Privilege
* Primary New Mexico Reference: New Mexico Rule 16-106
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* Commentary: ABA/BNA § 55.901 et seq., ALI-LGL §§ 81-86, Wolfram § 6.4
* New Mexico Commentary:
1.6:610 Exception for Disputes Concerning Decedent's Disposition of Property
1.6:620 Exception for Client Crime or Fraud
1.6:630 Exception for Lawyer Self-Protection
When a client sues his attorney for malpractice, documents that would ordinarily be privileged may lose that status if they are relevant to a claim or defense. National Excess Ins. v. Civerolo, Hansen & Wolf, 139 F.R.D. 398 (D.N.M. 1991).
1.6:640 Exception for Fiduciary-Lawyer Communications
1.6:650 Exception for Organizational Fiduciaries
1.6:660 Invoking the Privilege and Its Exceptions
1.6:700 Lawyer Work-Product Immunity
* Primary New Mexico Reference: New Mexico Rule 16-106
* Background References: ABA Model Rule 1.6, Other Jurisdictions
* Commentary: ABA/BNA § 91:2201, ALI-LGL §§ 87-93, Wolfram § 6.6
* New Mexico Commentary:
1.6:710 Work-Product Immunity
The test under New Mexico Rule of Civil Procedure 26 is whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation. Hartman v. Texaco, Inc., 123 N.M. 220, 937 P.2d 979 (Ct. App. 1997) (also stating that even though litigation is already in prospect, there is no work product immunity for documents prepared in the regular course of business rather than for purposes of the litigation).
The data or results of a survey are no more the work product of counsel than are the opinions of an expert. State ex rel. New Mexico State Highway Comm'n v. Taira, 78 N.M. 276, 430 P.2d 773 (1967) (stating surveys have for their purpose the ascertainment of facts which are in no sense privileged). See also State ex rel. New Mexico State Highway Comm'n v. Steinkraus, 76 N.M. 716, 417 P.2d 431 (1966) (stating that expert opinions are not protected as attorney work product, and that the opinions and conclusions of experts constitute evidence in themselves); and Furniture World, Inc. v. D.A.V. Thrift Stores, Inc., 168 F.R.D. 61 (D.N.M. 1996) (holding that a person initially selected to testify as an expert at trial cannot be shielded from questioning by later being also designated as a consultant expert and invoking the work product doctrine; counsel must choose to designate an expert as either one who will testify at trial or will consult with counsel).
In Knight v. Presbyterian Hospital Center, 98 N.M. 523, 650 P.2d 45 (Ct. App. 1982), the court reversed the trial court's order compelling discovery of statements of hospital staff obtained by the hospital's attorney in anticipation of medial malpractice litigation; the court ordered that only those statements that were made spontaneously after the decedent's death were discoverable by the personal representative. In addition, in United States v. Spivey, 1997 U.S. Dist. LEXIS 3903 (D.N.M. 1997), the court granted a motion filed by a criminal defense attorney to compel disclosure of the government attorney's form regarding authorization to seek death penalty, over the government attorney's claim of work product protection.
In Lewis v. Bloom, 96 N.M. 63, 628 P.2d 308 (1981) (decided under former rules), the court considered whether it was proper for a lawyer to destroy a tape recording of a witness's recollection of an accident. The court declined to find that the destruction constituted improper conduct, because the tape recording was the attorney's work product which may be discovered only upon a showing of good cause, and because the evidence was insufficient to support that the tape contained any discoverable information.
See also Fine v. U.S. Dep't of Energy, 830 F. Supp. 570 (D.N.M. 1993) (finding factual material in government attorney's work product cannot be withheld from disclosure, in response to request under Freedom of Information Act).
1.6:720 Ordinary Work Product
The work product rule in New Mexico provides a qualified immunity for ordinary work product. Hartman v. Texaco, Inc., 123 N.M. 220, 937 P.2d 979 (Ct. App. 1997).
1.6:730 Opinion Work Product
The work product rule is not a privilege but an immunity protecting from discovery documents and tangible things prepared by a party or its representatives in anticipation of litigation. Rule 26 of the New Mexico Rules of Civil Procedure provides nearly absolute immunity for "opinion" work product, that is, documents which reflect an attorney's mental impressions, conclusions, opinions or legal theories. Hartman v. Texaco, Inc., 123 N.M. 220, 937 P.2d 979 (Ct. App. 1997).
1.6:740 Invoking Work-Product Immunity and Its Exceptions
The party asserting work product protection bears the burden of establishing that it applies. Sufficient information must be provided so that the party's adversary and the court may assess the claim of protection as to each withheld document. Pina v. Espinoza, 130 N.M. 661, 29 P.3d 1062 (Ct. App. 2001) (also stating that a privilege log and any supplemental affidavits must affirmatively demonstrate objectively reasonable basis for assertion of protection; and disapproving of practice of permitting proponent of a privilege to rely on an initial conclusory assertion and to gradually unveil basis for claims of privilege).
See also Hartman v. Texaco, Inc., 123 N.M. 220, 937 P.2d 979 (Ct. App. 1997) (stating party asserting work product bears burden of establishing that rule applies, and that burden may be met by submitting detailed affidavits sufficient to show that precise facts exist to support the immunity claim; and finding trial court did not abuse discretion in finding party failed to sustain burden and therefore had to produce documents); Knight v. Presbyterian Hospital Center, 98 N.M. 523, 650 P.2d 45 (Ct. App. 1982) (discussing "substantial need" and "undue hardship" under Rule 26, for purposes of overcoming a claim of work product immunity); and Sanchez v. Everyday Discount Drug, Inc., 1994 U.S. Dist. LEXIS 11208 (D.N.M. 1994) (rejecting claim of work product protection due to failure to adequately substantiate same, and stating that to substantiate a work product claim, the following should be provided for each communication claimed to be protected from discovery: (1) the place, approximate date, and manner of preparing the document, (2) the name of the person at whose request the document was prepared, (3) the name of each person or persons participating in preparation of the writing, (4) the name and position, if any, of each person to whom the contents of the writings have been communicated by copy, exhibition, reading or substantial summarization, (5) the names of the person or persons presently in custody of the original or true copy of the writing, and (6) a precise statement of the grounds for protection for each document).
The results of a polygraph test may, if the trustworthiness of the test meets legal standards, be used for impeachment purposes to attack the credibility of the defendant's trial testimony, notwithstanding the contention of defendant's counsel that a defendant should have control over the use of results of polygraph examinations under an attorney work product theory. State v. Harrison, 90 N.M. 439, 564 P.2d 1321 (1977).
1.6:750 Waiver of Work-Product Immunity by Voluntary Act
In a breach of contract case, the buyer's accidental disclosure of privileged documents to the seller effectively waived the asserted work product immunity, as well as the attorney-client privilege. Hartman v. El Paso Natural Gas Co., 107 N.M. 679, 763 P.2d 1144 (1988). It was determined that while inadvertent disclosure of documents may not waive their subsequent protected status in some jurisdictions, the New Mexico courts may find the opposite after considering the following factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production; (2) the number of inadvertent disclosures; (3) the extent of the disclosure; (4) any delay and measures taken to rectify the disclosures; (5) whether the overriding interests of justice would be served by relieving a party of its error.
See also Citizens Progressive Alliance v. U.S. Bureau of Indian Affairs, 2002 U.S. Dist. LEXIS 25330 (D.N.M. 2002) (finding that inter-agency and intra-agency communications were work product and therefore were not required to be disclosed pursuant to Freedom of Information Act request, and further, that disclosure of the documents to counsel for one of the intervening Native American tribes did not waive work product protection inasmuch as disclosure was done so confidentially and with expectation that confidentiality of documents would be maintained).
1.6:760 Waiver of Work-Product Immunity by Use in Litigation
See State v. Turner, 97 N.M. 575, 642 P.2d 178 (Ct. App. 1981) (stating that while notes detailing substance of conversation between counsel and potential witness were work product, they had to be produced at trial after defendant used them in cross-examination).
1.6:770 Exception for Crime or Fraud
1.7 Rule 1.7 Conflict of Interest: General Rule
1.7:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-107:
"A. Representation adverse to other client considered. A lawyer shall not represent a client if the representation of that client will be directly or substantially adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation. The consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
B. Lawyer's other responsibilities considered. Unless otherwise required by these rules, 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 interests, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved."
* Background References: ABA Model Rule 1.7, Other Jurisdictions
* New Mexico Commentary:
1.7:101 Model Rule Comparison
NMR 16 107 generally tracks MR 1.7, as adopted by the ABA in 1983. However, the New Mexico version of the rule adds Aor substantially" in the second sentence of paragraph (A), making that sentence read: "A lawyer shall not represent a client if the representation of that client will be directly or substantially adverse to another client . . . ."
NMR 16 107 also adds a second section to paragraph (A)(2), requiring that the consultation required before a client may consent to a conflict "shall include explanation of the implications of the common representation and the advantages and risks involved."
Finally, New Mexico's rule inserts "unless otherwise required by these rules" at the beginning of paragraph (B), making the second sentence of that paragraph read: "UNLESS otherwise required by these rules, 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 interests . . . ."
New Mexico adopted the original ABA commentary on MR 1.7 in its entirety.
In August 2002, the ABA adopted substantial changes to MR 1.7 and its accompanying commentary. This new language has created additional differences between NMR 16 107 and the ABA model rule, primarily concerning how representation may continue even in the face of a concurrent conflict. The new MR 1.7 retains the requirement that the lawyer must have reasonable belief that his or her representation will not be affected by the conflict. It differs from the old model rule, and NMR 16 107, in three areas. First, the new rule, in paragraph (b)(4), requires that the consent of the client required before representation commences, to be "confirmed in writing." The new rule also expressly states that the representation may not be undertaken, even with the lawyer's reasonable belief that no adverse effect will result and client consent, if it is prohibited by law. Additionally, the new rule provides that a conflicted representation may not be undertaken, even if all other requirements are met, if it "involve[s] the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal." Finally, the new rule's commentary is substantially altered from the previous version adopted by New Mexico.
1.7:102 Model Code Comparison
Like DR 5 105, NMR 16 107 prohibits a lawyer from representing a client in situations where a conflict of interest is present which will adversely affect the representation, unless the client consents and the lawyer reasonably believes that no adverse effect will result. As described above, MR 16 107 requires any client consultation to include "explanation of the implications of the common representation and the advantages and risks involved," which goes beyond NMR 1.7 in some respects. DR 5 105(C), in comparison, required "full disclosure of the possible effect of such representation on the exercise of [the lawyer's] independent professional judgment on behalf of each" client.
Regarding NMR 16-107(A), see also EC 5-1, EC 5-14, EC 5-15, EC 5-17, EC 5-21, EC 5-22, DR 5-101(A), and DR 5-107(B). Regarding NMR 16-107(B), see also EC 2-21, EC 5-2, EC 5-2, EC 5-3, EC 5-9, EC 5-11, EC 5-13, EC 5-14, EC 5-15, EC 5-16, EC 5-17, EC 5-18, EC 5-21, EC 5-22, EC 5-23, DR 5-101, DR 5-102, DR 5-104, DR 5-107, DR 5-106, and DR 7-106.
1.7:200 Conflicts of Interest in General
* Primary New Mexico Reference: New Mexico Rule 16-107
* Background References: ABA Model Rule 1.7, Other Jurisdictions
* Commentary: ABA/BNA § 55:101, ALI-LGL §§ 121-124, Wolfram §§ 7.1-7.6
* New Mexico Commentary:
Paragraph (A) of NMR 16-107 prohibits a lawyer from representing a client if such representation "will be directly or substantially adverse to another client." The lawyer may still represent a client in the face of direct or substantial adversity, however, if (1) the lawyer "reasonably believes" that the representation will not "adversely affect" his or her relationship with the other client, and (2) each of the clients consents to the representation after consultation. Id. With regard to the consultation before consent, New Mexico, in contrast to the Model Rules, requires that the consultation "include explanation of the implications of the common representation and the advantages and risks involved." Id.
Paragraph (B) of NMR 16 107 prohibits a lawyer from representing a client if that representation will be "materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests." Again, the rule provides an avenue for lawyers to continue representation even in the face of a conflict under the provision. Under this paragraph, a lawyer may still undertake the representation if "(1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation." Id. With regard to consent and consultation, the rule states that "when representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved." Id.
NMR 16 107 is based primarily on the lawyer's professional duty of loyalty to a client, which "prohibits undertaking representation directly adverse to that client," or undertaking representation when the lawyer's other responsibilities or own interests may impair the lawyer in carrying out an appropriate course of action. See NMR 16 107, Comment. "The crux of [this rule] . . . is that a lawyer should not represent a client whose interests are adverse to those of a present client." United States v. Gallegos, 39 F.3d 276, 279 (10th Cir. 1994).
1.7:210 Basic Prohibition of Conflict of Interest
In New Mexico, "it is well established . . . that counsel has a duty to avoid a conflict of interest." State v. Tammy S. and Jerald F., 126 N.M. 664, 668, 974 P.2d 158, 162 (Ct. App. 1999). NMR 16-107 concerns "concurrent conflicts" between two clients of the lawyer, or between the client and the lawyer. The New Mexico Supreme Court has stated: "Rule 16 107(A) prohibits a lawyer from representing a client with interests adverse to those of another client unless two criteria are met. The first criterion is that the lawyer must reasonably believe that the representation will not adversely affect the lawyer's relationship with the other client. Only if the first criterion is met is the second criterion - client consent - a factor." Matter of Houston, 127 N.M. 582, 584, 985 P.2d 752, 754 (1999). The consultation preceding consent required by NMR 16 107 must "include explanation of the implications of the common representation and the advantages and risks involved."
Under NMR 16 107(B), "a lawyer is prohibited from representing a client if the representation may be materially limited by the lawyer's own interests or responsibilities to another client or person, unless the same two conditions are met." Matter of Sheehan, 130 N.M. 485, 487, 27 P.3d 972, 974 (2001). If these two conditions are met, the lawyer may continue representation even if there appears to be a conflict under the rule. Sanders v. Rosenberg, 119 N.M. 811, 813, 896 P.2d 491, 493 (Ct. App. 1995).
The first criterion to be met by a lawyer wishing to continue representation in the face of an apparent conflict - reasonable belief of the lawyer that the continued representation of either client will not be adversely affected - depends on a determination of what "reasonable" means when applied to the conduct of a specific attorney. In one case, Matter of Houston, the New Mexico Supreme Court looked to the definition of "reasonable belief" found in the Terminology section of the Preamble to the New Mexico Rules of Professional Responsibility. 127 N.M. at 584 85, 985 P.2d at 754 55. That definition provides that "reasonable belief", or "reasonably believes", "when used in reference to a lawyer denotes that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable." See NMR Preamble, Terminology. In the case, the lawyer was found to be unreasonable in his belief that he could represent the wife in a consent proceeding for divorce, and the husband in a child abuse charge regarding the couple's daughter. Matter of Houston, 127 N.M. at 584 85, 985 P.2d at 754 55. The court noted, importantly, that the fact that the client was consulted and did give consent was not even a factor in the case, because the lawyer could not reasonably believe that continued representation in the case was appropriate. Id.
In considering the conflict of interest issues presented when an insurer, who has retained a lawyer to represent its insured, requires the lawyer to submit his bills to a third party auditor without the consent of the insured, the State Bar of New Mexico Advisory Opinions Committee determined there is a conflict between the interest of the insurer in having the bills submitted to a third party auditor, the interest of the lawyer in getting paid, and the interest of the insured in confidentiality. State Bar Advisory Opinion 2000 2. In the face of this conflict, and the potential waiver of the insured's confidentiality protections by disclosing the legal bills, the Committee stated that a lawyer could "rarely, if ever" reasonably believe that his or her representation of the insured would not be adversely affected by the disclosure requirement. Id. (also stating that an attorney's primary duty of loyalty is owed to the insured, even though the attorney is paid by the insurer).
The second criteria - client consent - has an added layer in New Mexico because NMR 16 107, in contrast to the 1983 ABA Model Rule, adds a sentence requiring that "the consultation shall include explanation of the implications of the common representation and the advantages and risks involved." The courts have indicated that this additional requirement in the New Mexico rule is to be taken seriously. See Matter of Houston, 127 N.M. at 583, 985 P.2d at 753 (in requesting consent of wife in divorce proceeding to represent husband in criminal sexual abuse charges for alleged abuse of the couple's daughter, lawyer gave inadequate consultation by failing to tell wife that both she and her daughter could be called to testify on the charges, and failing to discuss other risks of the common representation); Sanders v. Rosenberg, 119 N.M. at 813, 896 P.2d at 493 (client considered lawyer's responsibilities as step father to client's children prior to manifesting consent); Garrick v. Weaver, 888 F.2d 687, 691 (10th Cir. 1989) (noting district court's finding of a violation of NMR 16 107 where attorney discussed conflict with client, but "failed to outline adequately the ramifications of the conflict of interest") (district court opinion unpublished.)
As discussed more fully in section 1.7:320 infra, criminal cases in which a conflict is alleged implicate somewhat separate factors, because the constitutional guarantee of effective assistance of counsel includes the right to "effective assistance of counsel free from conflicts of interest." State v. Sosa, 123 N.M. 564, 571, 943 P.2d 1017, 1024 (1997). While the general rules regarding reasonable belief and consent outlined above still apply, ineffective assistance of counsel based on a conflict of interest "requires a showing of an actual conflict of interest rather than the possibility of conflict." 123 N.M. at 571 72, 943 P.2d at 1024 25; see also State v. Santillanes, 109 N.M. 781, 790 P.2d 1062 (Ct. App. 1990); and State v. Martínez, 130 N.M. 744, 31 P.3d 1018 (Ct. App. 2001). The right to effective assistance of counsel, and thus the requirement that an actual conflict be shown, also applies to parental termination cases in New Mexico. State v. Tammy S. and Jerald F., 126 N.M. at 668, 974 P.2d at 162.
See also State Bar Advisory Opinion 1986-4 (multiple representation; funds of decedent's estate); State Bar Advisory Opinion 1985-8 (representing wife in divorce against husband, and representing another party in case against husband); and State Bar Advisory Opinion 1985-7 (representing state agency and also contracting with agency to serve as hearing officer, decided under former Code of Professional Responsibility).
1.7:220 Material Adverse Effect on Representation
In a NMR 16-107(A) conflict of interest situation, the lawyer may not undertake the representation unless he or she reasonably believes it "will not adversely affect the relationship with the other client." In a NMR 16-107(B) conflict of interest situation, the lawyer may not undertake the representation unless he or she reasonably believes it "will not be adversely affected" by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests." In addition, under both NMR 16-107(A) and NMR 16-107(B), consent of the clients is required.
The test for determining the existence of an actual conflict is whether counsel actively represented conflicting interests that adversely affected his performance. State ex rel. Children, Youth & Families Dept. v. Tammy S., 126 N.M. 664, 974 P.2d 158 (1999).
The appellate case law seems to follow the suggestion in the ABA comments that a lawyer is materially limited in his or her representation of a client when that lawyer cannot recommend a proper course of action because of the lawyer's other responsibilities or interests. In those cases, it is lawyers who are limited by their own interests who have most often been found to have violated the prohibition in NMR 16 107(B) against undertaking representation that is materially limited by other responsibilities. For example, in Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989), a lawyer who was in financial distress received a $5000 advance from a client's father, to be applied to the lawyer's hourly fees at a rate of $75 per hour. Contrary to the advice of criminal lawyers associated for purposes of the matter, the lawyer advised his client to fight an extradition. The Supreme Court ruled that the lawyer violated the rule because he "unnecessarily 'churned' [an] extradition matter to generate legal fees." Id. at 769, 779 P.2d at 547.
The lawyer in Matter of Chávez, 129 N.M. 35, 1 P.2d 417 (2000), was also held to be materially limited by his own interests, in violation of NMR 16-107(B). In that case, the lawyer in question committed several acts of misappropriation with regard to his trust account, applying client funds in the account to cover his firm's expenses. He also accepted retainers from clients and then failed to represent them on certain matters. The court found these acts violated NMR 16-107(B), because they amounted to "representing clients when that representation was materially limited" by the lawyer's own interests.
Similarly, Matter of Sheehan, 130 N.M. 485, 27 P.3d 972 (2001), held that a lawyer's obligation as fiduciary to a trust was materially limited by his own interest in being paid for legal work he had performed for the daughter of the client who established the trust. In that case, the lawyer, at the client's direction, paid his own bills out of the funds of the trust. Under New Mexico law, such an action is prohibited by statute. 130 N.M. at 487, 27 P.3d at 974. Additionally, as the court held, his interest in being paid for the legal work he performed limited his ability to discharge his duties as trustee, which prohibited him from making the transaction to pay his bill from the fund.
Other cases consider the material limitations caused by a lawyer's responsibilities to two somewhat conflicted clients. In one case, Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), the lawyer represented a wife in a divorce proceeding, and the husband of the wife on a charge of sexual molestation of the couple's daughter. Even though the lawyer knew that the husband had both beaten the wife and sexually assaulted the daughter, he entered a divorce decree on behalf of the wife which included joint custody and unsupervised visitation. 127 N.M. at 584, 985 P.2d at 754. That decree also provided that all of the dependent tax deductions for the couple's children would be awarded to the husband, even though the lawyer knew that the wife would be the sole support for the children while the husband was in jail. Id. The court ruled that both of these facts established that the lawyer's representation of the wife was materially limited by his obligations to the husband as his client. Id.
In a similar case, State v. Tammy S. and Jerald F., 126 N.M. 664, 974 P.2d 158 (Ct. App. 1999), the lawyer represented both the mother and the father in a proceeding by the state to terminate their parental rights. The basis for the state's case for termination rested on the domestic violence relationship between the mother and father, and the father's alcoholism and abuse of the children. 126 N.M. at 669, 974 P.2d at 163. While the attorney did explain the options available to the mother, there was no evidence that the attorney ever counseled her that she could receive visitation, or perhaps even regain her parental rights, if she terminated her relationship with the father. 126 N.M. at 667, 974 P.2d at 161. The court held that this advice was not given by the attorney because of the material limitations caused by his representation of the father. Specifically, the court noted that if the lawyer had counseled the mother on the ramifications of her relationship with the father, it would have damaged the father's case for gaining access to the child. 126 N.M. at 669, 974 P.2d at 163. Thus, the lawyer was materially limited in his representation of the mother by his concurrent representation of the father.
See also State Bar Advisory Opinions 1995-1 (a conflict may arise where the client directs the attorney to accomplish representation through means that conflict with the lawyer's duties to the court or under the Rules of Professional Conduct).
Generally speaking, Paragraph (B) of NMR 16 107 governs situations in which there is no direct adversity between two clients of the lawyer, but instead only the possibility that the lawyer's judgment and actions in representing either or both of the clients will be impaired because of conflicting interests. According to the Comment, this paragraph is intended to address those situations in which a lawyer "cannot consider, recommend or carry out an appropriate course of action for the client because of the lawyer's other responsibilities or interests." The Comment notes that in these situations, "loyalty to a client is . . . impaired." While a possible conflict does not foreclose representation under this paragraph, the Comment states that the critical question in assessing whether representation is possible is "whether [the representation] will materially interfere with the lawyer's independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client."
1.7:230 Perspective for Determining Conflict of Interest
In general, New Mexico cases have determined conflicts of interest according to an objective standard. For example, the New Mexico Supreme Court has stated that "the determination of whether a conflict exists requiring that the Rule 16-107(A) conditions be met prior to proceeding with the representation is an objective standard." Matter of Sheehan, 130 N.M. 485, 487, 27 P.2d 972, 974 (2001). That same court noted that "the fact that an attorney failed to consult with the clients and obtain consent because he or she did not believe the interests were directly or substantially adverse is not a defense to a conflict of interest charge." Id. (emphasis added).
As noted above, and discussed further in section 1.7:320 infra, a charge of conflict of interest as the basis for an ineffective assistance of counsel claim in criminal cases is subject to the higher standard of whether an actual conflict of interest was present, instead of just a potential conflict. See State v. Santillanes, 109 N.M. at 783, 790 P.2d at 792. "Counsel has a duty to avoid a conflict of interest," and in determining whether an actual conflict occurred, the court views "the proceedings as a whole." Id. "The standard [applied] generally is whether counsel exercised the skill of a reasonably competent attorney" in exercising the duty to avoid a conflict of interest. Id.
Special consideration is given to situations where the allegation of a conflict of interest is raised by the opposing party. The Comment to NMR 16-107 notes that "such an objection should be viewed with caution . . .because it can be misused as a technique of harassment." In Sanders v. Rosenberg, 119 N.M. 811, 813, 896 P.2d 491, 493 (Ct. App. 1995), it was stated that "New Mexico courts should look upon allegations of conflict with skepticism, especially when they are not raised at the onset of litigation or at the time when the lawyer being objected to first enters an appearance in the case."
A lawyer must be satisfied he can undertake concurrent representation of multiple clients without compromising either representation. If the lawyer has any doubts he can accomplish this or about whether a disinterested lawyer would believe this can be done, the lawyer should resolve doubts against the dual representation. State Bar Advisory Opinion 1990-3.
As stated in U.S. v. Gallegos, 39 F.3d 276 (10th Cir. 1994), under New Mexico law, the crux of the disciplinary rules concerning conflicts of interest for attorneys is that a lawyer should not represent a client whose interests are adverse to those of a present client, or whose interests are adverse to those of a former client on a matter that is the same as or substantially related to the previous matter.
1.7:240 Client Consent to a Conflict of Interest; Non Consentable Conflicts
As noted above, New Mexico's version of MR 1.7 differs from the 1983 version of the Model Rule in its treatment of the consultation required before a client consents to a conflict. Both Paragraph (A) and Paragraph (B) of NMR 16-107 require that the consultation given to a client when seeking consent to a conflict must "include explanation of the implications of the common representation and the advantages and risks involved."
The additional consultation requirements in New Mexico's rule require "a lawyer seeking a client's consent . . . to explain both the advantages and risks of the common representation." Matter of Houston, 127 N.M. 582, 583, 985 P.2d 752, 753 (1999). Rather than simply discussing the conflict with the client, the lawyer must "outline adequately the ramifications of the conflict of interest." See Garrick v. Weaver, 888 F.2d 687, 691 (10th Cir. 1989). Attorneys are not relieved of the enhanced consultation requirements in situations where they do not believe that there is direct and substantial adversity; in any situation where a possible conflict exists, New Mexico courts have indicated that an objective standard applies to whether a lawyer must consult with the client and seek consent. See Matter of Sheehan, 130 N.M. 485, 487, 27 P.2d 972, 974 (2001).
Advice regarding consultation and consent is found in State Bar Advisory Opinion 1990-3 (stating consents to conflicts must be based on full and fair disclosure to the client, including advice on all advantages and especially regarding the disadvantages of the proposed course of action). That opinion considered whether an attorney on contract to defend the state Risk Management Division in civil tort litigation is precluded from representation of private clients in other litigation matters in which the state is a party. In the opinion, the advisory committee concluded that such representation would not be barred per se by the conflict of interest rules, and that in certain situations the representation would be permissible. The committee specifically noted, however, that the informed consent of both the state and the private client must be obtained. With regard to the requirement of consultation, the opinion provided advice for an example case:
the lawyer with the Risk Management contract who wishes to represent the respondent in a neglect matter would have to advise the respondent that the lawyer has a contract with the state in an unrelated matter due to which the respondent might think the lawyer would not give best efforts on behalf of the respondent. The lawyer may assure respondent that this is not the case and that the lawyer reasonably believes that he can undertake the representation without adverse affect on either client. However, the lawyer should advise the respondent that it is respondent's decision whether to consent.
A client's explicit manifestation of consent should suffice to permit the representation. See Sanders v. Rosenberg, 119 N.M. 811, 813, 896 P.2d 491, 493 (Ct. App. 1995) ("Mother explicitly manifested her consent to Sanders' representation after consideration of Sanders' responsibilities to Mother's children. Therefore, it does not appear that any violation . . . occurred.")
Regarding non-consentable conflicts, the Comment to NMR 16-107 states that while "a client may consent to representation notwithstanding a conflict . . . when a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances, the lawyer involved cannot properly ask for such agreement or provide representation on the basis of the client's consent." Certainly, a conflict should be viewed as non-consentable when it would involve representation of opposing parties in the same litigation matter.
The Comment also states that conflict questions must be resolved as to each client, but that "there may be circumstances where it is impossible to make the disclosure necessary to permit the other client to make an informed decision," in which case "the lawyer cannot properly ask [the client] to consent."
In Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), the lawyer represented a wife in a divorce proceeding, and the husband of the wife on a charge of sexual molestation of the couple's daughter. The court held that the lawyer was not reasonable in his belief that he could represent both the husband and the wife in any of the proceedings at issue without adverse effects. 127 N.M. at 584, 985 P.2d at 754. Significantly, the court noted in reaching this holding that "the conflicts could not be waived by the consent of the clients in these circumstances." Id. See also State Bar Advisory Opinion 1990-3 (stating a lawyer should not undertake representation even with consent, if he believes he cannot be totally objective, in context of lawyer representation of financial institution in litigation where lawyer's partner is a director of institution).
1.7:250 Imputation of Conflict of Interest to Affiliated Lawyers [see 1.10:200]
New Mexico courts have considered the imputation of conflicts of interest under NMR 16 110. See section 1.10:200 infra.
1.7:260 Sanctions and Remedies for Conflicts of Interest
As discussed in greater detail above, the principal remedy for a conflict of interest is to seek the client's consent, after a consultation that includes an "explanation of the implications of the common representation and the advantages and risks involved." However, consent may not be sought "when a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances." NMR 16-107, Comment.
The New Mexico Supreme Court has imposed a variety of sanctions against lawyers who represent clients amid conflicts of interest, or fail to adequately consult with clients and obtain their consents to conflicts. Such sanctions have ranged from suspensions, imposition of costs and a requirement to retake the multi-state ethics examination, to complete disbarment. See, e.g., Matter of Houston, 985 P.2d 752, 127 N.M. 582 (1999) (suspension for 18 months, with the suspension deferred and the attorney placed on supervised probation, was appropriate for attorney who had conflicts of interest in representing husband and wife in a divorce that appeared uncontested, while also representing husband on charges of criminal sexual penetration of the couple's child and domestic violence against the wife).
The appellate courts have also indicated that they will consider both mitigating and aggravating circumstances. For example, the court in Matter of Houston, 127 N.M. 582, 586, 985 P.2d 752, 756 (1999), citing ABA Standards for Imposing Lawyer Sanctions, § 9.22(a) (1991), recognized the existence of a prior disciplinary record as an aggravating factor, "especially for offenses of the same nature." The court also noted that "repeated instances of the same conduct for which a lawyer previously has been disciplined generally will result in more severe discipline." By the same token, the cooperation of the lawyer during the disciplinary process, the length of time the lawyer has been in practice, and the lack of prior discipline are all "appropriate factors to consider in mitigation." Matter of Sheehan, 130 N.M. 485, 489, 27 P.3d 972, 976 (2001).
In litigation, the remedy for a conflict of interest normally is disqualification of the attorney. Thus, although a party has the right to be represented by an attorney of his or her own choosing, that right is not absolute; if a compelling reason exists that supports disqualification of counsel, the court may reject the party's chosen counsel. Sanders v. Rosenberg, 122 N.M. 692, 930 P.2d 1144 (1996). See also United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 629 P.2d 231 (1980) (a violation of professional ethics does not automatically result in disqualification of counsel).
Several cases discuss the skepticism with which courts should consider allegations of a conflict of interest in the litigation context. See, e.g., Sanders v. Rosenberg, 122 N.M. 692, 930 P.2d 1144 (1996) (because motions for disqualification of opposing counsel carry with them potential for abuse and harassment, moving party must provide strong showing of necessity of disqualification; thus, while trial court has wide latitude in determining whether to disqualify counsel from participating in given case, discretion is not unlimited, and there must be some identifiable conduct that is improper before motion to disqualify will be sustained); and Matter of Conservatorship and Guardianship of Pulver, 117 N.M. 329, 871 P.2d 985 (Ct. App. 1994) (motion to disqualify opposing counsel should be filed at onset of litigation or with promptness and reasonable diligence once facts upon which motion is based have become known; and stating trial court had discretion, in guardianship proceeding, to deny ward's motion to disqualify attorney from representing proposed guardian based on fact that attorney represented both ward and proposed guardian in prior guardianship and conservatorship proceeding, where ward did not seek to disqualify attorney until more than a year after he filed initial document on proposed guardian's behalf).
1.7:270 Positional Conflicts
The courts of New Mexico do not appear to have considered this issue in a published opinion. The Comment to NMR 16-107 states that "[a] lawyer may represent parties having antagonistic positions on a legal question that has arisen in different cases, unless representation of either client would be adversely affected" (emphasis added). As a result, the Comment suggests that "it is ordinarily not improper to assert [adverse] positions in cases pending in different trial courts, but it may be improper to do so in cases pending at the same time in an appellate court."
According to State Bar Advisory Opinion 1990-3, some members of a firm may not represent respondents in neglect cases while others in the firm are guardians ad litem for children in other neglect cases, where they appear in the same trial or appellate court and they take different positions on what constitutes neglect sufficient to remove the children from the home. However, if the representations occur in different courts or if the issues are not related, the concurrent representations would be acceptable with the consent of the clients.
1.7:280 Relationship to Other Rules
1.7:300 Conflict of Interest Among Current Clients (Concurrent Conflicts)
* Primary New Mexico Reference: New Mexico Rule 16-107
* Background References: ABA Model Rule 1.7, Other Jurisdictions
* Commentary: ABA/BNA §§ 55:101, 51:301, ALI-LGL §§ 128-131, Wolfram §§ 7.1-7.6
* New Mexico Commentary:
See sections 1.7:200 to 1.7:270 infra.
In addition, the State Bar of New Mexico Advisory Opinions Committee has determined that a lawyer may defend the State of New Mexico in civil tort claims and concurrently represent private clients in unrelated matters against another agency of the state, if all clients consent following consultation. During the consultation, the lawyer should indicate the client might think the lawyer would not give his best effort, but the lawyer can assure the client this is not the case and the concurrent representation can occur without adverse effect on either client. State Bar Advisory Opinion 1990-3. In addition, a lawyer may represent the Navajo Nation on a business enterprise matter and concurrently accept appointments to represent criminal defendants in tribal court. Id.
It is not a conflict for a lawyer for a municipality to advise the management of the city regarding a personnel matter, and also to represent management at a hearing before the municipality personnel board; however, it may be wise for the lawyer to advise the municipality to have outside counsel representing the municipality at the hearing. State Bar Advisory Opinion 1990-1.
Where a lawyer represents a second client in litigation, and also represents a first client in unrelated matters, difficulties may arise between the two clients, and the lawyer should continue representation of the client who was first to hire the lawyer, and should withdraw from representing the other client. State Bar Advisory Opinion 1986-9. See also State Bar Advisory Opinion 1986-4 (discussing multiple representation relating to funds of decedent's estate).
1.7:310 Representing Parties with Conflicting Interests in Civil Litigation
See sections 1.7:200 to 1.7:300 infra.
As noted above, NMR 16-107 establishes the general prohibition against the representation of concurrent clients with conflicting interests, unless certain conditions are met. This rule provides the general framework for assessing the possibility for conflict between contemporaneous clients, and the means by which those conflicts can be remedied. Paragraph (A) prohibits the representation of opposing parties in litigation, while paragraph (B) deals with the possibilities of conflict arising from representing co plaintiffs or co defendants.
The Comment to NMR 16-107 states that "[a]n impermissible conflict may exist by reason of substantial discrepancy in the parties' testimony, incompatibility in positions in relation to an opposing party or the fact that there are substantially different possibilities of settlement of the claims or liabilities in question."
In Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), the lawyer was retained by a wife to represent her in a divorce proceeding wherein the interests of the spouses were adverse. While the wife believed that the lawyer was representing her alone, the lawyer himself testified at the hearing that he was representing both parties. After the divorce hearing, the wife filed domestic violence charges against the husband upon the advice of the lawyer. The lawyer then proceeded to represent the husband in the criminal case, with the consent of the wife. In finding multiple conflicts of interest, the court first noted that the lawyer failed to satisfy the consent requirement of NMR 16-107(A) because he did not inform the wife that she and her daughter would be called to testify in the criminal proceeding, and because he failed to inform them of any of the other risks associated with the common representation. Also, by filing a divorce decree providing the husband with joint custody and unsupervised visitation, the lawyer "clearly protected husband's interests to the disadvantage of . . . the wife, by entering [the] decree . . . . knowing husband had beaten wife and sexually abused his daughter." 127 N.M. at 584, 985 P.2d at 754. This fact, plus his failure to provide dependent tax deductions to the wife for supporting the children during the husband's jail sentence, and instead providing the dependent tax deductions to the husband, were both evidence of the material limitations effected by the multiple representation. As a result, the lawyer was held to have violated NMR 16-107.
See also State Bar Advisory Opinion 1985-11 (discussing representation of employer in worker's compensation claim, and in tort action by third party hurt in incident out of which worker's compensation claim arises).
1.7:315 Insured Insurer Conflicts [see also 1.8:720]
The Comment to NMR 16-107 suggests that the main source of conflict in this context arises from the fact that the client (the insured) is having his or her legal bills paid by the insurer, who is technically a third party to the relationship. Citing NMR 16-108(F), the Comment notes that "[a] lawyer may be paid from a source other than the client, if the client is informed of that fact and consents and the arrangement does not compromise the lawyer's duty of loyalty to the client." The Comment to NMR 16-107 further states, "For example, when an insurer and its insured have conflicting interests in a matter arising from a liability insurance agreement, and the insurer is required to have special counsel for the insured, the arrangement should assure the special counsel's professional independence."
In State Bar Advisory Opinion 2000-2, the rule that an attorney's primary duty of loyalty is owed to the insured, even though the attorney is paid by the insurer, was confirmed. The Committee considered whether a lawyer who is retained by an insurer to defend an insured may submit legal bills for such representation to a third party auditor, without the informed consent of the insured. This requirement is often part of insurers' billing guidelines. The Committee answered that "[a]bsent informed consent of the insured client," the bills may not be disclosed to the third party auditor. In addition, the Committee determined that it may be an impermissible conflict for defense counsel to seek and obtain the consent of the insured to disclose the lawyer's bills to third party auditors, because this could be viewed as favoring the interests of the insurer over those of the insured. As stated by the Committee, "the insurer's interest in having the defense bills submitted to a third party auditor, and the lawyer's interest in getting paid, are facially in conflict with the insured's interests in maintaining confidentiality and a strong legal defense." As a result of this conflict, the representation could only continue if the two conditions of NMR 16-107(B) (reasonable belief of the lawyer that no adverse effects will result, and informed consent of the client) were met. The Committee noted that informed consent can almost never be sought by the lawyer under this rule, because "the first condition rarely, if ever, can be satisfied in this context."
1.7:320 Conflicts of Interest in Criminal Litigation
The Comment to NMR 16-107 states that "the potential for conflict of interest in representing multiple defendants in a criminal case is so grave that ordinarily a lawyer should decline to represent more than one codefendant." However, the Comment suggests that where the "risk of adverse effect is minimal" and the requirements in NMR 16-107(B) (reasonable belief of no adverse effect on representation, and client consent after consultation) are met, representation of co-defendants having similar interests may be permissible.
New Mexico appellate courts have considered conflicts of interest in the criminal context on several occasions. For the most part, conflict of interest issues in this area focus on the right of an accused to counsel, derived from the Sixth Amendment. The New Mexico Supreme Court has consistently recognized that this guarantee includes a right to representation in which counsel's professional judgment is not impaired by a conflict of interest. See, e.g., State v. Sosa, 123 N.M. 564, 943 P.2d 1017 (1997); Churchman v. Dorsey, 122 N.M. 11, 919 P.2d 1076 (1996); State v. Santillanes, 109 N.M. 781, 790 P.2d 1062 (1990).
A claim of ineffective assistance of counsel under the Sixth Amendment due to a conflict of interest requires that the client show an actual conflict of interest, and not simply the possibility of a conflict. State v. Sosa, 123 N.M. at 571 72, 943 P.2d at 1024 25; Churchman v. Dorsey, 122 N.M. at 13, 919 P.2d at 1078. The court, when evaluating whether an actual conflict was present, will "assess whether the defense counsel actively represented conflicting interests." State v. Sosa, 123 N.M. at 57, 943 P.2d at 1025; Churchman v. Dorsey, 122 N.M. at 14, 919 P.2d at 1079. The active representation of those conflicting interests, in turn, must adversely affect the attorney's performance. State v. Santillanes, 109 N.M. at 783, 790 P.2d at 1064. The adverse effect is often analyzed in terms of whether the lawyer was precluded by the conflicting representations (and not for another strategic reason) from pursuing a defense that might have been helpful to the defendant. Id.; Churchman v. Dorsey, 122 N.M. at 14, 919 P.2d at 1079. Once an actual conflict is determined to exist, prejudice to the defendant is presumed, and "Counsel's representation becomes unconstitutional in a manner that 'is never harmless error.'" State v. Martínez, 130 N.M. 744, 749, 31 P.3d 1018, 1023 (Ct. App. 2001).
In State v. Sosa, 123 N.M. at 571, 943 P.2d at 1074, the lawyer was appointed to represent two co defendants in a criminal matter. One of the co defendants pled guilty to a lesser charge, while the other co defendant was convicted. On appeal, the convicted co defendant argued that the lawyer provided ineffective assistance because he failed to investigate, or seek testimony, regarding the other co defendant's role in the convicted co defendant's life. He argued that such testimony would have helped establish a defense, because it would have shown that the other co defendant had pressured him into getting involved in gang activity, and that the lawyer did not seek the testimony because it would have adversely impacted the other co defendant's chances for obtaining a plea agreement. The court held that no actual conflict resulting in ineffective assistance of counsel existed in the case, because the convicted co defendant did not establish that the lawyer was forced to abandon any defenses in obtaining a plea agreement for the other co defendant. The court concluded that no "clear" conflict of interest was presented, and that the alleged conflict was insufficient to establish the required actual conflict of interest. 123 N.M. at 572, 943 P.2d at 1074.
In Churchman v. Dorsey, 122 N.M. 11, 919 P.2d 1076 (1999), the Supreme Court of New Mexico stated that while "representation of two defendants by the same attorney is not per se a violation of constitutional guarantees of effective counsel[,]" where the two co defendants' interests are in actual conflict, effective assistance of counsel is denied. 122 N.M. at 14, 919 P.2d at 1079, citing State v. Hernandez, 100 N.M. 501, 503, 672 P.2d 1132, 1134 (1983). The court concluded that there was no denial of the right to effective assistance of counsel because the attorneys at issue were able to pursue both defendants' defenses "diligently and without any actual conflict."
Conflicts in criminal representation may also occur when the attorney's own interest in avoiding implication in a crime, interferes with his representation of a client regarding the same crime. In State v. Martínez, 130 N.M. 744, 31 P.3d 1018 (Ct. App. 2001), the evidence "strongly suggested that someone associated with defense counsel's firm may have been present during the killing," and the defense counsel's own automobile was at the crime scene. The court concluded that because this evidence could lead a juror to reasonably make a connection between the defense counsel and the crime, the defense counsel had an actual conflict of interest. The court reasoned that the attorney was not in a position to give unbiased advice to the client regarding whether he should testify, plead guilty, or cooperate with authorities, because any of those courses of action "could unearth evidence against the attorney." Thus, the lawyer had a conflict of interest concerning which he had not sought consent from the client. 130 N.M. at 750 51, 31 P.3d at 1024 25.
1.7:330 Multiple Representation in Non Litigated Matters
The Comment to NMR 16-107 notes that "[c]onflicts of interest in contexts other than litigation sometimes may be difficult to assess." It identifies several factors in determining whether there is a potential for conflict in a non litigated matter: the duration and intimacy of the relationship between the lawyer and the clients, the functions the lawyer is performing, and the likelihood for actual conflict and the prejudicial effect that conflict might have on the client or clients. As an example, the Comment notes that a lawyer is prohibited from representing multiple parties in a negotiation when their interests are "fundamentally antagonistic" to one another. Common representation is allowed, however, if the clients interests are "generally aligned" even though there may be some differences between them.
The Comment also points out two other important examples. First, conflicts may arise in estate planning and administration, especially when preparing wills for several family members. With regard to acting as the administrator of the estate, the Comment notes that the identity of the client is often unclear B the client may either be the fiduciary or the estate or trust itself, including its beneficiaries. The Comment wisely suggests that the lawyer should clarify his or her relationship to the parties involved.
Second, conflicts can arise when the lawyer for a corporation or similar organization is also a member of that organization's board of directors, because the lawyer may be called upon to advise the corporation as to actions of its directors. In assessing such a relationship, the lawyer should consider several factors: "the frequency with which such situations may arise, the potential intensity of the conflict, the effect of the lawyer's resignation from the board and the possibility of the corporation's obtaining legal advice from another lawyer in such situations." Thus, according to the Comment, if there is a "material risk" that serving in both roles will "compromise the lawyer's independence of professional judgment," the lawyer should refrain from serving on the board of directors.
In one example case, the New Mexico Supreme Court considered conflicts of interest between contemporaneous clients in non litigated matters. In Matter of Sheehan, 130 N.M. 485, 27 P.2d 972 (2001), the lawyer served a client in many capacities as her health declined, including managing her finances and establishing an irrevocable trust for the benefit of her grandchildren. While acting as trustee, the lawyer also undertook the representation of the client's daughters, including the extensive representation of one daughter in the formation of a cattle company. Such representation was undertaken at the insistence of the client. When the daughters' cattle company could not pay its legal fees, the lawyer withdrew funds from the trust established for the grandchildren, including one of the daughter's son, in order to pay the fees. According to the Supreme Court, not only did these actions violate NMR 16-115(A), but they also represented a concurrent conflict of interest under NMR 16-107(B), because "the discharge of [the lawyer's] fiduciary duties to the trust was limited by his own interest in being paid for the substantial legal work he had done for the daughter's cattle company, as well as by his loyalty and obedience to his client's directives." 130 N.M. at 487 88, 27 P.2d at 974 75.
In another case, Matter of Benavidez, 107 N.M. 520, 760 P.2d 1286 (1988), the lawyer in question was retained by the client to defend her against a debt collection suit. Before the litigation commenced, however, the lawyer introduced the client to a potential purchaser of a portion of the property at issue in the debt collection matter, to help satisfy some of that debt. The lawyer and the potential purchaser had an ongoing attorney client relationship, and the lawyer never informed the client of this relationship. The lawyer arranged a purchase between the two clients, but did not account for all of the money he received from the purchaser. This conduct was found to be in violation of several rules, including NMR 16-107(A).
1.7:340 Conflicts of Interest in Representing Organizations
The Comment to NMR 16-107 discusses the potential conflicts that may arise when a lawyer represents a corporation. Specifically, conflicts can arise when the lawyer for a corporation or similar organization is also a member of that organization's board of directors, because the lawyer may be called upon to advise the corporation as to actions of its directors. In assessing such a relationship, the lawyer should consider several factors: "the frequency with which such situations may arise, the potential intensity of the conflict, the effect of the lawyer's resignation from the board and the possibility of the corporation's obtaining legal advice from another lawyer in such situations." According to the Comment, if there is a "material risk" that serving in both roles will "compromise the lawyer's independence of professional judgment," the lawyer should refrain from serving on the board of directors.
The danger in representing organizations is that the larger the organization is, the more potential there is that the lawyer for that organization will represent another client adverse to the organization. Regarding this danger, the Comment to NMR 16-107 notes that such representation may be allowable in some circumstances. As an example, "a lawyer representing an enterprise with diverse operations may accept employment as an advocate against the enterprise in an unrelated matter if doing so will not adversely affect the lawyer's relationship with the enterprise or conduct of the suit and if both clients consent upon consultation."
In State Bar Advisory Opinion 1990 3, the Committee considered whether an attorney on contract to defend the state Risk Management Division in civil tort litigation is precluded from representing private clients in other litigation matters in which the state is a party. The Committee concluded that such representation would not be barred per se by the conflict of interest rules, and that in certain situations the representation would be permissible. Citing the example from the Comment noted above, the Committee said Ain the situations where the lawyer is on contract to a governmental entity as to a particular matter, that lawyer could represent clients in suits against the entity on totally unrelated matters." Thus, a lawyer generally should be permitted to represent a client in a matter that is adverse to a state agency, provided the agency is distinct from the agency he is representing.
1.7:400 Conflict of Interest Between Current Client and Third Party Payor
* Primary New Mexico Reference: New Mexico Rule 16-107
* Background References: ABA Model Rule 1.7, Other Jurisdictions
* Commentary: ABA/BNA § 51:901, ALI-LGL §§ 134, 135, Wolfram § 8.8
* New Mexico Commentary:
According to the Comment to NMR 16-107, a "lawyer may be paid from a source other than the client, if the client is informed of that fact and consents and the arrangement does not compromise the lawyer's duty of loyalty to the client." One example discussed in the Comment is the insurer insured arrangement; see section 1.7:315 supra.
Another example noted in the Comment is the situation where a corporation and its individual directors or employees are involved in a controversy that requires them to have separate counsel. The corporation may pay for such counsel, according to the Comment, if each client consents and the arrangement preserves the lawyer's professional independence.
1.7:410 Insured Insurer Conflicts [see 1.7:315 and 1.8:720]
1.7:420 Lawyer with Fiduciary Obligation to Third Person
Matter of Sheehan, 130 N.M. 485, 27 P.3d 972 (2001), is one example of the New Mexico Supreme Court's approach. In the case, the lawyer served a client in many capacities as her health declined, including managing her finances and establishing an irrevocable trust for the benefit of her grandchildren. While acting as trustee, the lawyer also undertook the representation of the client's daughters, including the extensive representation of one daughter in the formation of a cattle company. Such representation was undertaken at the insistence of the client. When the daughter's cattle company could not pay its legal fees, the lawyer withdrew funds from the trust (established for the grandchildren, including the daughter's son) to pay the fees. According to the Supreme Court, not only did these actions violate NMR 16-115(A), but they also represented a concurrent conflict of interest under NMR 16-107(B), because "the discharge of [the lawyer's] fiduciary duties to the trust was limited by his own interest in being paid for the substantial legal work he had done for the daughter's cattle company, as well as by his loyalty and obedience to his client's directives." Matter of Sheehan, 130 N.M. at 488, 27 P.3d at 975.
1.7:500 Conflict of Interest Between Current Client and Lawyer's Interest [see also
1.8:200]
* Primary New Mexico Reference: New Mexico Rule 16-107
* Background References: ABA Model Rule 1.7, Other Jurisdictions
* Commentary: ABA/BNA § 55:101, ALI-LGL §§ 125-127, Wolfram § 8.11
* New Mexico Commentary:
A "lawyer's own interests should not be permitted to have an adverse effect on representation of a client." NMR 16-107, Comment. As examples of a lawyer's own interests implicating representation of a client, the Comment mentions the lawyer's need for income, and the lawyer's personal business transactions. The lawyer should not take matters which cannot be performed competently, or lead a client into a business endeavor, because of these personal interests.
Several New Mexico sources concern the relationship between the lawyer's own financial interest and representation of a client. For example, in Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989), a lawyer who was in financial distress received a $5000 advance from a client's father, to be applied to the lawyer's hourly fees at a rate of $75 per hour. Contrary to the advice of criminal lawyers associated for purposes of the matter, the lawyer advised his client to fight extradition. The Supreme Court ruled that the lawyer violated the rule because he "unnecessarily 'churned' [an] extradition matter to generate legal fees." 108 N.M. at 769, 779 P.2d at 547. Similarly, in State Bar Advisory Opinion 2000-2, the Committee addressed the conflicts presented to a lawyer when an insurer who retains the lawyer to represent an insured, requires the lawyer to submit his bills to a third party auditor without the consent of the insured. The Committee determined there is a conflict between the interests of the insurer in having the bills submitted to a third party auditor, the interests of the lawyer in getting paid, and the interest of the insured in confidentiality.
See also Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989) (charging an unreasonable fee, "churning" to generate legal fees, representing a client in a matter materially limited by one's own financial interest, using information gathered by representation of client to the disadvantage of client, failing to keep client funds in separate account, failing to deliver client's funds, and failing to render a full accounting, justify a public censure and 30 day suspension); State Bar Advisory Opinion 1988-10 (it is not a conflict for a lawyer to seek a fee from a worker's compensation award obtained for a client, even where the client does not consent to the fee, provided the representation to obtain the award is completed); and State Bar Advisory Opinion 1990-3 (whether a lawyer may represent a financial institution in litigation while his partner sits on the board of the institution, depends on whether the responsibilities of the two roles may conflict, as they will if board decisions affect the amount of business with the lawyer's firm).
The lawyer's own interest can also be to avoid criminal charges. For example, in State v. Martínez, 130 N.M. 744, 31 P.3d 1018 (Ct. App. 2001), the evidence "strongly suggested that someone associated with the defense counsel's firm may have been present during the killing," and the defense counsel's own automobile was at the crime scene. 130 N.M. at 750, 31 P.3d at 1024. The court concluded that because this evidence could lead a juror to reasonably make a connection between the defense counsel and the crime, the defense counsel had an actual conflict of interest. The court reasoned that the attorney was not in a position to give unbiased advice to the client regarding whether he should testify, plead guilty, or cooperate with authorities, because any of those courses of action "could unearth evidence against the attorney."
The personal familial interests of a lawyer can also create conflict of interest problems. In Sanders v. Rosenberg, 119 N.M. 811, 896 P.2d 491 (Ct. App. 1995), the mother in a divorce and child custody proceeding married Sanders, the lawyer representing her. The father argued that Sanders' responsibilities to the children, as stepfather, created a conflict of interest. The court implicitly noted a possible conflict, but held that no conflict was present because Sanders reasonably believed that his responsibilities to the children would not affect his representation of the mother; further, the mother explicitly consented to the representation after considering Sanders' responsibilities.
1.8 Rule 1.8 Conflict of Interest: Prohibited Transactions
1.8:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-108:
"A. Business transactions with or adverse to client. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client;
(2) the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and
(3) the client consents in writing thereto.
B. Use of information limited. Unless otherwise required by these rules, a lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client consents after consultation.
C. Client gifts. A lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee.
D. Literary or media rights. Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation.
E. Financial Assistance. A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
(1) A lawyer may advance court costs and expenses of litigation, provided the client remain ultimately liable for such costs and expenses.
(2) A lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
F. Compensation from third party. 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 Rule 16-106.
G. Representation of two or more clients. A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client consents after consultation, including disclosure of the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.
H. Prospective malpractice liability limitation. A lawyer shall not make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement, or settle a claim for such liability with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith.
I. Representation adverse to representation by related lawyer. A lawyer related to another lawyer as parent, child, sibling, or spouse shall not represent a client in a representation directly adverse to a person who the lawyer knows is represented by the other lawyer except upon consent by the client after consultation regarding the relationship.
J. Proprietary interesting cause of action. A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) Acquire a lien granted by law to secure the lawyer's fee or expenses; and
(2) Contract with a client for a reasonable contingent fee in a civil case."
* Background References: ABA Model Rule 1.8, Other Jurisdictions
* New Mexico Commentary:
1.8:101 Model Rule Comparison
New Mexico's version of MR 1.8, NMR 16-108, contains a few slight differences from the ABA Model Rule adopted in 1983. First, New Mexico's rule inserts "UNLESS otherwise provided by these rules" at the beginning of paragraph (B). Additionally, in paragraph (E)(1), the language "provided the client remains ultimately liable for such costs and expenses" is substituted for the language "the repayment of which may be contingent on the outcome of the matter." New Mexico adopted the ABA commentary on the 1983 version of MR 1.8 in its entirety.
New Mexico has not adopted the addition to MR 1.8(b), adopted by the ABA in 1987. Also, in August 2002, the ABA adopted several additional changes in the language and commentary to MR 1.8. Those changes have created further differences between the model rule and NMR 16-108. In paragraph (a), for example, the model rule now requires that a client be advised in writing regarding the desirability of seeking independent counsel for the business transaction contemplated. Also in that paragraph, the model rule now requires that certain details of the business transaction between the lawyer and the client, and the lawyer's role (i.e. as lawyer for the client, or as party to the transaction) in the transaction, be documented in writing. In paragraph (c), regarding gifts, the new model rule adds a prohibition on the lawyer soliciting substantial gifts from the client, including testamentary gifts. That paragraph also now contains a more definitive definition of related persons, to include spouses, children, grandchildren, parent, grandparent, or other relative with which the lawyer maintains a close relationship. New paragraph (g) requires certain communications or agreements with regard to aggregate settlements to be documented in writing. Finally, the new rule deletes previous paragraph (i), regarding family relationships between lawyers, and adds a new paragraph making most sexual relationships between clients and lawyers per se prohibited conduct. These new items are not reflected in the current New Mexico rule. Additionally, the official ABA commentary has been altered to reflect the 2002 changes in the model rule.
1.8:102 Model Code Comparison
Where the Model Code contains a counterpart to NMR 16-108, the requirements are substantially similar. However, the Model Code contains no direct counterparts to NMR 16 108(C), (E)(2), and (I), as the official comments to ABA MR 1.8 indicate. It should be noted that NMR 16-108(E)(1) retains the requirement in DR 5-103(B) that "the client remains ultimately liable for such expenses." MR 1.8 dropped this language.
Regarding NMR 16-108(A), see EC 5-3, EC 5-5, and DR 5-104(A). Regarding NMR 16-108(B), see EC 4-5 and DR 4-101(B). Regarding NMR 16-108(C), see EC 5-1, EC 5-2, EC 5-5, and EC 5-6. Regarding NMR 16-108(D), see EC 5-1, EC 5-3, EC 5-4, and DR 5-104(B). Regarding NMR 16-108(E), see EC 5-1, EC 5-3, EC 5-7, EC 5-8, and DR 5-103(B). Regarding NMR 16-108(F), see EC 2-21, EC 5-1, and DR 5-107(A)&(B). Regarding NMR 16-108(G), see EC 5-1 and DR 5-106(A). Regarding NMR 16-108(H), see EC 6-6 and DR 6-102(A). There is no counterpart to NMR 16-108(I) in the Code. Regarding NMR 16-108(J), see EC 5-1, EC 5-7, DR 5-101(A), and DR 5-103(A).
1.8:200 Lawyer's Personal Interest Affecting Relationship
* Primary New Mexico Reference: New Mexico Rule 16-108
* Background References: ABA Model Rule 1.8, Other Jurisdictions
* Commentary: ABA/BNA § 51.501 et seq., ALI-LGL § 126, Wolfram §§ 7.6, 8.11
* New Mexico Commentary:
1.8:210 Sexual Relations with Clients
The New Mexico authorities provide no direct guidance on this issue. As noted in section 1.8:101 supra, new MR 1.8, adopted by the ABA in August 2002, provides an express per se prohibition against most sexual relationships between lawyers and clients.
1.8:220 Business Transactions with Clients
Business transactions with clients are regulated by NMR 16-108(A). Many of the reported cases dealing with this section of NMR 16-108 concern loan transactions between lawyers and clients. The New Mexico Supreme Court has looked unfavorably upon lawyers borrowing money from clients. See Matter of Moore, 129 N.M. 217, 220, 4 P.3d 664, 667 (2000) ("borrowing money from clients is not condoned by this Court"). The court has noted that "the relationship between a debtor and a lender is inherently adversarial in nature." Matter of Evans, 119 N.M. 305, 307, 889 P.2d 1227, 1229 (1995). "Attorneys should, therefore, avoid such adversarial relationships with their clients." Matter of Darnell, 123 N.M. 323, 327, 940 P.2d 171, 175 (1997) (attorney violated professional responsibility rules where he entered into loan transaction with client, the terms of which were not fair and reasonable, and he failed to fully disclose or transmit terms of transaction to client, failed to give client reasonable opportunity to seek advice of independent counsel in transaction, commingled loan money borrowed from his client into his trust account, and issued trust account check to client knowing that there were nonexistent funds in trust account to cover check).
As a result of the inherently adversarial nature of loan transactions, any lawyer who seeks to enter into a loan relationship with a client must fully advise the client of their differing interests as debtor and lender, and comply with the three requirements articulated in NMR 16-108(A) for business transactions with clients.
One excellent example case is Matter of Evans, 119 N.M. 305, 889 P.2d 1227 (1995). In that case, the lawyer entered into three separate agreements to obtain loans from a client, during the course of their attorney client relationship. Each of the loans was secured by properties which the lawyer represented were free and clear of all liens, even though the properties were actually both mortgaged. The lawyer then failed to advise the client of the necessity that her mortgages on the property, resulting from the loan in question, be recorded promptly. The court held that these loan agreements violated NMR 16-108(A), because the terms of the loans were not fair and reasonable to the client, the terms and conditions of the loans were not fully disclosed to the client in writing, the client was not given a reasonable opportunity to seek independent counsel, and the client did not consent in writing to the loans. In addition, it was determined that these violations were "further aggravated" by the lawyer's knowing deception of the client with regard to the mortgages already attached to the properties, the necessity that the new mortgages be recorded, and the client's relative lack of sophistication in loan matters. As a result of this and other conduct, the lawyer was disbarred and ordered to repay the loans.
A lawyer's engagement in other types of business transactions with a client can also violate NMR 16-108(A), unless the dictates of the rule are followed closely. The Comment to the rule notes that as a general rule, "all transactions between client and lawyer should be fair and reasonable to the client[,]" and "review by independent counsel on behalf of the client is often advisable." It is specifically noted by the Comment that the restrictions of paragraph (A) do not apply to services the client "generally markets to others," such as banking, medical services or utility service, because in those cases "the lawyer has no advantage in dealing with the client."
In Matter of Schmidt, 118 N.M. 213, 880 P.2d 310 (1994), the lawyer in question claimed that he was promised an ownership stake in a corporation as payment for legal services he rendered for the corporation. The lawyer also claimed to be an officer of the corporation. Acting in this alleged capacity, the lawyer deeded the property of the corporation to a third person, and transferred the property pursuant to the deed, all without the knowledge of the two principals of the corporation. The court held that the lawyer's conduct violated NMR 16-108(A). Specifically, the court reasoned that even if the lawyer had an ownership stake in the corporation, he still failed to comply with the requirements in NMR 16-108(A), because he failed to obtain the client's written consent to the alleged transaction making him an owner in the corporation.
See also Matter of Young, 91 F.3d 1367 (10th Cir. 1996) (New Mexico professional conduct rule governing business transactions between lawyer and his or her client, requires attorney, before entering into business transaction with client, to disclose terms of transaction in writing to client; further, Chapter 7 debtor attorney's "exchange of services agreement" with judgment creditor client was not "standard commercial transaction" under exception to New Mexico professional conduct rule requiring disclosure of terms of business transaction in writing; unlike other clients of creditor's, debtor received creditor's construction work at a reduced rate, and debtor's payments were often deferred); Matter of Moore, 129 N.M. 217, 4 P.3d 664 (2000) (if an attorney determines to borrow money from a client, he or she is well advised to do so on an arm's length basis, and this would include execution of customary loan documents, and the payment of a reasonable amount of interest; further, once money has been loaned to the attorney by the client, it should be removed from the client trust fund, to avoid commingling trust funds with the attorney's funds); Matter of Benavidez, 107 N.M. 520, 760 P.2d 1286 (1988) (discussing violation of NMR 16-108(A)); Matter of Archuleta, 122 N.M. 52, 920 P.2d 517 (1996) (attorney's failure to report to bankruptcy court he was creditor of client amounted to violation of rules requiring candor toward tribunal, prohibiting conduct prejudicial to administration of justice, and conflicts of interest); and State Bar Advisory Opinion 1986-2 (regarding guaranteeing loan for client).
1.8:300 Lawyer's Use of Client Information
* Primary New Mexico Reference: New Mexico Rule 16-108(B)
* Background References: ABA Model Rule 1.8(b), Other Jurisdictions
* Commentary: ABA/BNA § 51.501-55:2001, ALI-LGL §§ 61-66, Wolfram § 6.7
* New Mexico Commentary:
NMR 16-108(B) limits a lawyer's use of information relating to representation of a client. Specifically, the rule prohibits a lawyer from using "information relating to representation of a client to the disadvantage of the client unless the client consents after consultation." The Comment provides, as a possible example, that "a lawyer who has learned that the client is investing in specific real estate may not, without the client's consent, seek to acquire nearby property where doing so would adversely affect the client's plan for investment."
1.8:400 Client Gifts to Lawyer
* Primary New Mexico Reference: New Mexico Rule 16-108(C)
* Background References: ABA Model Rule 1.8(c), Other Jurisdictions
* Commentary: ABA/BNA § 51.601, ALI-LGL § 127, Wolfram § 8.12
* New Mexico Commentary:
NMR 16-108(C) prohibits a lawyer from "prepar[ing] an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee." The Comment to NMR 16-108(C) states that a lawyer may accept a gift from a client if the general standards of fairness are met.
1.8:500 Literary or Media Rights Relating to Representation
* Primary New Mexico Reference: New Mexico Rule 16-108(D)
* Background References: ABA Model Rule 1.8(d), Other Jurisdictions
* Commentary: ABA/BNA § 51.701, ALI-LGL § 36, Wolfram § 9.3.3
* New Mexico Commentary:
NMR 16-108(D) expressly prohibits a lawyer from either negotiating or entering into an agreement "giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation." The Comment to NMR 16-108(C) points out that "[a]n agreement by which a lawyer acquires literary or media rights concerning the conduct of the representation creates a conflict between the interests of the client and the personal interests of the lawyer." According to the Comment, this conflict arises because conduct that is "suitable in the representation of the client" may in fact "detract from the publication value" of any account written about the representation. It is explicitly provided, however, that the rule does not prevent a lawyer, when representing a client in a literary property matter, "from agreeing that the lawyer's fee shall consist of a share in ownership in the property, if the arrangement conforms" to the requirements of NMR 16-105 and NMR 16-108(J).
1.8:600 Financing Litigation
* Primary New Mexico Reference: New Mexico Rule 16-108(E)
* Background References: ABA Model Rule 1.8(e), Other Jurisdictions
* Commentary: ABA/BNA § 51.801, ALI-LGL § 36, Wolfram § 9.2.3
* New Mexico Commentary:
NMR 16-108(E) provides, as a general rule, that a "lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation." The rule sets forth two exceptions, however. First, a lawyer is permitted to advance court costs and litigation expenses, "provided the client remain[s] ultimately liable for such costs and expenses." (Emphasis added.) This emphasized language is not found in the ABA Model Rule. Second, a lawyer who is representing an indigent client is allowed to pay for court costs and litigation expenses on the client's behalf.
1.8:610 Litigation Expenses
As noted above, NMR 16-108(E) departs from the MR 1.8(e) in that under subsection (1), it expressly requires clients to be ultimately liable for advanced court costs and litigation expenses, unless the client is considered indigent. The ABA Model Rule, on the other hand, allows the repayment of such advanced expenses to be "contingent on the outcome of the matter." As a result of this change in the New Mexico rule, it is reasonable to assume that New Mexico's rule does not allow a lawyer to agree to bear the burden of paying litigation and court costs in the event the client's suit is unsuccessful as part of a contingent fee arrangement.
In Matter of Cannain, 122 N.M. 710, 930 P.2d 1162 (1997), the New Mexico Supreme Court considered a lawyer's commingling of personal funds with client funds in a trust account. The lawyer also advanced costs to clients from his trust account when those clients did not have funds in the account. The court noted that under NMR 16-108, any costs that are advanced must come from the lawyer's own funds. While the lawyer in the case had enough of his own money commingled in the trust account to cover the costs which he advanced, the court stated that "the fact that respondent's commingling saved him from disbursing funds that did not belong to him does not mean it was proper for him to make cost advances from trust." The court specifically held that "the cost advances should have been made from his business or personal account."
In another case, Trambley v. Wyman, 125 N.M. 13, 956 P.2d 144 (Ct. App. 1998), the New Mexico Court of Appeals considered whether a statute making attorneys and their clients jointly liable for the costs of court reporting services engaged by the attorney, was an unconstitutional regulation of the practice of law. The defendant argued that the statute conflicted with NMR 16-108(E)(1), which makes the client ultimately responsible for the costs and expenses of litigation. The court initially noted that "Rule 16-108(E)(1) by its terms operates to ensure against conflicts of interest between lawyers and their clients in connection with pending or contemplated litigation." The court ultimately held that the statute was not in conflict with the rule, because the statute "create[d] no economic incentive to subordinate a client's interest in the related litigation," and because the rule "makes no attempt to govern later disputes between lawyers and their clients and does not ethically require counsel to protect a client's interest in any subsequent litigation between them."
1.8:620 Living and Medical Expenses
No New Mexico authorities have specifically considered this issue.
1.8:700 Payment of Lawyer's Fee by Third Person
* Primary New Mexico Reference: New Mexico Rule 16-108(F)
* Background References: ABA Model Rule 1.8(f), Other Jurisdictions
* Commentary: ABA/BNA § 51.901, ALI-LGL §§ 134, 135, Wolfram § 8.8
* New Mexico Commentary:
Under NMR 16-108(F), a lawyer is prohibited from accepting payment for the representation of a client from someone other than the client unless three conditions are met. First, the client must consent to the payment arrangement after consultation. Second, there must be no interference with the attorney's independence of professional judgment or with the client lawyer relationship. Third, information relating to the representation of the client must be protected according to the requirements of NMR 16-106. The Comment to NMR 16-108 notes that not only must confidentiality be protected under NMR 16-106, but the conflict of interest requirements in NMR 16-107 must also be met. With regard to clients who comprise a class, the Comment notes that consent may be obtained from the class via "court supervised procedure."
1.8:710 Compensation and Direction by Third Person
See discussion in 1.8:700 supra. See also State Bar Advisory Opinion 1998-7 (when a lawyer hires a commercial collection agency to collect unpaid and earned fees, there must be no division of fees with the collection agency for any legal services rendered to collect fee, and the agency may not exercise any control over the litigation to collect the fee); and State Bar Advisory Opinion 1988-10 (it does not violate NMR 16-108 for an attorney to seek a fee out of his client's recovery from the employer in a worker's compensation matter, even where the client indicates she does not consent; the prior written agreement between the client and the attorney, providing a fee will be based on the Worker's Compensation Act, constitutes consent).
1.8:720 Insured Insurer Conflicts [see also 1.7:315]
The New Mexico authorities have considered this issue under NMR 16-107, but not NMR 16-108. See section 1.7.315 supra.
1.8:730 Lawyer with Fiduciary Obligation to Third Persons [see 1.13:520]
No New Mexico cases or advisory opinions have considered this under NMR 16-108. See section 1.7:420 supra for a discussion of the New Mexico approach to this problem under NMR 16-107.
1.8:800 Aggregate Settlements
* Primary New Mexico Reference: New Mexico Rule 16-108(G)
* Background References: ABA Model Rule 1.8(g), Other Jurisdictions
* Commentary: ABA/BNA § 51.375, ALI-LGL § 128, Wolfram § 8.15
* New Mexico Commentary:
Under NMR 16-108(G), a lawyer may not, in the course of representing two or more clients, participate in making an aggregate settlement, or an aggregated agreement as to pleas in a criminal matter, without the consent of each client after consultation. The rule also requires that the lawyer provide a disclosure to each client "of the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement." The New Mexico authorities have not elaborated on these basic rules.
1.8:900 Agreements Involving Lawyer's Malpractice Liability
* Primary New Mexico Reference: New Mexico Rule 16-108(H)
* Background References: ABA Model Rule 1.8(h), Other Jurisdictions
* Commentary: ABA/BNA § 51.1101, ALI-LGL § 54, Wolfram § 5.6.7
* New Mexico Commentary:
NMR 16-108(H) prohibits a lawyer from making an agreement which prospectively limits his or her malpractice liability to a client, unless such an agreement is permitted by law, and the client obtains independent counsel in making the agreement. The rule also prohibits a lawyer from settling a claim for malpractice liability "with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith."
1.8:910 Prospective Limitation of Malpractice Liability
As noted above, NMR 16-108(H) prohibits a lawyer from making an agreement that prospectively limits his or her malpractice liability to a client, unless such an agreement is permitted by law, and the client obtains independent counsel in making the agreement. The New Mexico authorities have not elaborated on this general rule.
1.8:920 Settlement of Legal Malpractice Claim
1.8:1000 Opposing a Lawyer Relative
* Primary New Mexico Reference: New Mexico Rule 16-108(I)
* Background References: ABA Model Rule 1.8(i), Other Jurisdictions
* Commentary: ABA/BNA § 51.1301, ALI-LGL § 123, Wolfram § 7.6.6
* New Mexico Commentary:
NMR 16-108(I) governs representation of clients that is adverse to the representation of a related lawyer. The rule specifically provides that a "lawyer related to another lawyer as parent, child, sibling or spouse shall not represent a client in a representation directly adverse to a person who the lawyer knows is represented by the other lawyer." The rule does provide an exception in cases where the client consents after a "consultation regarding the relationship."
The Comment notes that the rule applies only to related lawyers who are in different law firms, while the situation of related lawyers in the same firm is governed by NMR 16-107, 16-109, and 16-110. Additionally, the Comment provides that disqualification under the rule is not imputed to other members of the lawyer's firm.
1.8:1100 Lawyer's Proprietary Interest in Subject Matter of Representation
* Primary New Mexico Reference: New Mexico Rule 16-108(J)
* Background References: ABA Model Rule 1.8(j), Other Jurisdictions
* Commentary: ALI-LGL §§ 35, 41, 43, Wolfram § 8.13, 9.6.3
* New Mexico Commentary:
Under NMR 16-108(J), a lawyer is generally prohibited from "acquir[ing] a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client." There are two exceptions to this general rule. A lawyer may "(1) acquire a lien granted by law to secure the lawyer's fee or expenses; and (2) contract with a client for a reasonable contingent fee in a civil case." The Comment to the rule notes that these exceptions were "developed in decision law and continued in these rules." The Comment also notes that the rule "is not intended to apply to customary qualification and limitations in legal opinions and memoranda." Further regarding attorney charging liens, see section 1.5:240 infra.
1.8:1110 Acquiring an Interest in Subject Matter of Representation
No New Mexico authorities have elaborated on the general rules described above
1.8:1120 Contingent Fees [see also 1.5:600]
No New Mexico authorities have further elaborated on the general rules described above. For further information concerning contingent fees, see sections 1.5:600 et seq. and 1.5:600 et seq., infra.
1.8:1130 Lawyer Liens
Regarding attorney charging liens, see section 1.5:240 infra.
1.8:1140 Retention of Files to Collect Fees
As held in Thompson v. Montgomery & Andrews, P.A., 112 N.M. 463, 816 P.2d 532 (Ct. App. 1991), a "general lien" or "retaining lien" gives an attorney the right to retain papers or other property that comes into his possession, or money that he has collected in course of his professional employment, until all his costs and charges against his client have been paid.
According to Matter of Grand Jury Proceedings, 727 F.2d 941 (10th Cir. 1984) (New Mexico law), client files belong to the client, and the court may order them surrendered to the client or the attorney on the request of the client, subject only to the attorney's right to be protected in receiving compensation from the client for work done; the attorney's interest is only that of a retaining lien and his interest at best is a pecuniary one, not an interest of ownership or property.
1.9 Rule 1.9 Conflict of Interest: Former Client
1.9:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-109:
"A lawyer who has formerly represented a client in a matter shall not thereafter:
A. Represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interest of the former client unless the former client consents after consultation; or
B. Use information relating to the representation to the disadvantage of the former client except as Rule 16-106 would permit with respect to a client or when the information has become generally known."
* Background References: ABA Model Rule 1.9, Other Jurisdictions
* New Mexico Commentary:
1.9:101 Model Rule Comparison
NMR 16-109 and Comment are identical to MR 1.9 and Comment, as adopted in 1983.
New Mexico has not adopted the changes the ABA made to MR 1.9 in 1987 and 1989. In addition, in August 2002, the ABA adopted additional, albeit minor, changes to the language of MR 1.9 and Comment. The only significant change, creating a difference between the new model rule and the New Mexico rule, is that the consent of a former client is now required to be in writing before a representation otherwise conflicted under the rule may be undertaken. Broader changes were made in the language of the Comment.
1.9:102 Model Code Comparison
Paragraphs (A) and (B) of NMR 16-109 have no direct counterpart in the Disciplinary Rules of the Model Code, as the official ABA commentary to MR 1.9 notes. The issues addressed in paragraph (A) were sometimes considered under the "appearance of impropriety" standard found in Canon 9 of the Model Code.
Regarding NMR 16-109(A), see DR 5-105(C). Regarding NMR 16-109(B), see EC 4-5 and EC 4-6.
1.9:200 Representation Adverse to Interest of Former Client In General
* Primary New Mexico Reference: New Mexico Rule 16-109(A)
* Background References: ABA Model Rule 1.9(a), Other Jurisdictions
* Commentary: ABA/BNA § 51:201, ALI-LGL § 132, Wolfram § 7.4
* New Mexico Commentary:
NMR 16-109 establishes the general rules regarding representation adverse to a former client. The rule imposes two prohibitions on attorneys. First, NMR 16-109(A) prohibits a lawyer from "representing another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client." A former client may waive this prohibition if he or she consents after consultation. Second, NMR 16-109(B) prohibits an attorney from using information gained during the representation of a former client to that former client's disadvantage. Two exceptions to this second prohibition exist. The lawyer may use such information as NMR 16-106 (regarding confidentiality of information) would allow, and the lawyer may use any information about the former client that "has become generally known."
The Comment to NMR 16-109 states that the "materially adverse to the interests of the former client" element is determined by the principles of NMR 16-107. Two examples of material adversity are provided in the Comment. First, a lawyer may not seek to rescind a contract on behalf of a new client when he or she drafted that same contract on behalf of a former client. Second, a lawyer who prosecuted an accused may not later represent that accused in a civil action against the government concerning the prosecution.
The Comment also speaks to the meaning and scope of "matter" in the rule. According to the Comment, "matter" can be a question of degree, and hinges on the particular situation at hand. If a lawyer was directly involved in a specific transaction, subsequent representation of different clients in that transaction, with materially adverse interests, is prohibited. On the other hand, a lawyer is not prohibited from handling a matter in adversity to a former client when that matter is wholly distinct from the previous matter handled for the former client.
1.9:210 "Substantial Relationship" Test
NMR 16-109(A) prohibits a lawyer from representing "another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client."
This substantial relationship test "is the keystone of the law on conflicts of interest involving former clients," according to State v. Barnett, 125 N.M. 739, 744, 965 P.2d 323, 328 (Ct. App. 1998), citing ABA/BNA Lawyers Manual on Professional Conduct 51:214 (1992). The test "turns on the possibility, or appearance thereof, that confidential information might have been given to the attorney in relation to the subsequent matter in which disqualification is sought." Id., citing State Bar Advisory Opinion 1984-8. Because the test functions in this way, any inquiry focuses on "the possibility of disclosure and not whether actual confidences were disclosed," which results in a "presumption that confidential information was disclosed in cases that are substantially related."
In State v. Barnett, the criminal prosecutor had previously represented the defendant in a defense capacity. The defendant sought the disqualification of the prosecutor, contending there was a substantial relationship between the two matters inasmuch as the prosecutor was using the first matter to charge him as a habitual offender in the second matter. The court held the matters were substantially related, and that a conflict of interest was present. The court noted the possibility that information gained by the prosecutor when she was the defendant's defense lawyer could be used to his disadvantage. "A defendant could be seriously prejudiced by the prosecutor's knowledge regarding the defendant's character and conduct acquired in prior representation." 125 N.M. at 745, 965 P.2d at 329.
In a case decided under New Mexico's version of the Code of Professional Responsibility, which has now been supplanted by the Rules of Professional Conduct, the New Mexico Supreme Court held that attorney disqualification from a case in which the opposing party is the attorney's former client is mandatory only when relationship between the prior representation and present litigation is "patently clear." Further, even if the relationship between the past and present representations is not clear at the outset so as to justify disqualification, the court may later disqualify if, during trial, it appears that the attorney may be using confidential information against the former client. Leon, Ltd. v. Carver, 104 N.M. 29, 32, 715 P.2d 1080, 1083 (1986), citing Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751, 754 (2d Cir. 1975). In addition, whether the relationship between the two matters is "substantial" or "patently clear" requires a three-tiered analysis: "(1) a factual reconstruction of the scope of the prior legal representation, (2) a determination of whether it is reasonable to presume that the lawyer would have received confidential information of the type alleged by his former client; and (3) a determination of whether the alleged confidential information is relevant to the issues raised in the litigation pending against the former client." 104 N.M. at 31, 715 P.2d at 1082, citing United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 629 P.2d 231 (1980); and Westinghouse Electric Corp. v. Gulf Oil Corp., 588 F.2d 221 (7th Cir. 1978). Disqualification "is mandatory only when the relationship between the prior representation and present litigation was patently clear." Id., 104 N.M. at 32, 715 P.2d at 1083.
Where, however, there is a substantial relationship between the former representation and subsequent litigation, counsel's disqualification is required. United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 629 P.2d 231 (1980) cert. denied 451 U.S. 901 (1981)(decided under former rules). In that case, counsel in question represented the plaintiff in a lawsuit against the defendant regarding a particular piece of property, while at the same time represented the defendant in its ownership of the property. The court found a lawsuit against one's current client violated the ethical duty of confidentiality, particularly when counsel was involved in activities regarding the subject of the lawsuit.
The court in Leon, Ltd. v. Carver, 104 N.M. 29, 32, 715 P.2d 1080, 1083 (1986), further stated that a trial court, in determining whether an attorney who had formerly represented one party should be disqualified from representing another party in the present litigation, may not inquire whether actual confidences had been disclosed during the prior representation.
In Richter v. Van Amberg, 97 F. Supp. 2d 1255 (D.N.M. 2000), the court found that substantially related matters were not present for purposes of NMR 16-109(A). In the case, which included claims of legal malpractice and deceit, the defendant lawyer had represented the plaintiff in 1987 in a real estate and partnership transaction. Later, the defendant represented another party in a real estate transaction that turned sour for the plaintiff. The court held that no violation of NMR 16-109(A) occurred in the case. The court reasoned that "merely because both representations involved Santa Fe real estate does not establish a substantial relationship." Additionally, no information from the 1987 representation was used by the lawyer in the subsequent representation which turned adverse for the plaintiff. Thus, the consent of the plaintiff to the subsequent representation was unnecessary, because no substantial relationship or use of confidential information obtained during a previous representation was present.
Further, in a case arising from New Mexico, the United States Court of Appeals for the Tenth Circuit determined that the party seeking to disqualify opposing counsel on grounds of a former representation must establish that an actual attorney-client relationship existed between the movant and opposing counsel, that the present litigation involves a matter that is substantially related to the subject of the movant's prior representation, and that the interests of the opposing counsel's present client are materially adverse to the movant. Cole v. Ruidoso Mun. Schools, 43 F.3d 1373 (10th Cir. 1994) (also stating that to protect client confidentiality, party moving for disqualification of opposing counsel on ground of a former representation need not reveal substance of its communication to counsel, for this would defeat purpose of disqualification; usually, showing of circumstances and subject of consultation will be enough to demonstrate whether information was confidential).
See also State Bar Advisory Opinion 1988-5 (a lawyer who drafted an antenuptial agreement on behalf of husband may not represent wife in the subsequent divorce, absent the husband's consent; in addition, the lawyer may not use the husband's confidences against husband in any representation of wife in the divorce); State Bar Advisory Opinion 1986-3; and State Bar Advisory Opinion 1986-1 (former City Attorney).
1.9:220 Material Adversity of Interest
NMR 16-109(A) prohibits a lawyer from representing "another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client." As noted above, the Comment to the rule states that "[t]he principles in Rule 1.7 [16 107] determine whether the interests of the present and former client are adverse."
Once a client becomes a former client, a lawyer is not barred forevermore from taking positions adverse to that client. State v. Martínez, 100 N.M. 532, 673 P.2d 509 (Ct. App. 1996).
1.9:230 Relevance of "Appearance of Impropriety" Standard [see also 1.7:230]
While no New Mexico case decided after the New Mexico Supreme Court adopted New Mexico's version of the Rules of Professional Conduct uses the phrase "appearance of impropriety" or makes reference to Canon 9 of the Code of Professional Responsibility, in State v. Barnett, 125 N.M. 739, 965 P.2d 323 (Ct. App. 1998), the court quoted the following language from the ABA/BNA Lawyers Manual on Professional Conduct 51:214 (1992): "[t]he determination of whether there is a substantial relationship turns on the possibility, or appearance thereof, that confidential information might have been given to the attorney in the subsequent matter."
1.9:300 Client of Lawyer's Former Firm
* Primary New Mexico Reference: New Mexico Rule 16-109(B)
* Background References: ABA Model Rule 1.9(b), Other Jurisdictions
* Commentary: ABA/BNA § 51:2001, ALI-LGL §§ 123, 124, 133, Wolfram § 7.6
* New Mexico Commentary:
The Comment to NMR 16-109 notes that "[w]ith regard to a disqualification of a firm with which the lawyer is associated, see Rule 1.10 [16-110]."
1.9:310 Removing Imputed Conflict of Migratory Lawyer
1.9:320 Former Government Lawyer or Officer [see 1.11:200]
1.9:400 Use or Disclosure of Former Client's Confidences
* Primary New Mexico Reference: New Mexico Rule 16-109(C)
* Background References: ABA Model Rule 1.9(c), Other Jurisdictions
* Commentary: ABA/BNA § 55:501-55:2001, ALI-LGL § 132, Wolfram §§ 6.7, 7.4
* New Mexico Commentary:
NMR 16-109(B) prohibits a lawyer, who previously represented a client, from "us[ing] information relating to the representation to the disadvantage of the former client." As noted previously, the rule provides two exceptions: a lawyer may use the information to the extent permitted by NMR 16-106, or when the information has become "generally known."
In Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989), a client filed a complaint with the state Disciplinary Board after the lawyer made questionable use of an advance of the client's legal fees, and allegedly "churned" work in order to earn fees. In an effort to "get even" with the client, the lawyer used a deposition taken of the client in a civil matter in which he represented the client for the purpose of charging the client with perjury. The lawyer was only aware that the deposition amounted to perjury because of information he had gained during his representation. The court held that the lawyer's open accusations and descriptions of his former client's perjury in court "constituted disclosure of the confidential communication he had with [the client]" during his previous representation." 108 N.M. at 769 70, 779 P.2d at 547 48.
In another case, Matter of C'De Baca, 109 N.M. 151, 782 P.2d 1348 (1989), a lawyer agreed to prepare a will for a client, and during the course of preparing the will, he learned that the client had a substantial sum of money in bank certificates of deposit. A few months after completion of the will, the lawyer approached the former client about investing in the lawyer's personal business ventures. Based on the lawyer's advice (even though he was not her attorney at the time), the former client used the money in her certificates of deposit as collateral to make loans for the lawyer's business ventures. The lawyer never made any payments to the former client, and as a result, the former client lost her home in a foreclosure proceeding. The court held that such conduct violated NMR 16-109(B), because the lawyer used his knowledge of the fact that the former client had a substantial sum of money "To her disadvantage and financial ruin." 109 N.M. at 152, 782 P.2d at 1349.
See also State Bar Advisory Opinion 1987-4 (while a lawyer must maintain the confidences of his former client, the lawyer is not required to cooperate with new counsel for his former client for the purpose of being a witness in a matter for the former client).
1.10 Rule 1.10 Imputed Disqualification: General Rule
1.10:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-110:
"A. Firm association. While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rule 16-107, Paragraph C of Rule 16-108, Rule 16-109 or 16-202.
B. Previous representation. When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rule 16-106 and Paragraph B of Rule 16-109 that is material to the matter.
C. Terminated associations. When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer unless:
(1) The matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and
(2) Any lawyer remaining in the firm has information protected by Rule 16-106 and Paragraph B of Rule 16-109 that is material to the matter.
D. Waiver of disqualification. A disqualification prescribed by this rule may be waived by the affected client under the conditions stated in Rule 16-107."
* Background References: ABA Model Rule 1.10, Other Jurisdictions
* New Mexico Commentary:
1.10:101 Model Rule Comparison
NMR 16-110 is identical to MR 1.10, as adopted in 1983.
New Mexico has not adopted the changes made to MR 1.10 in 1989. Further, in August 2002 the ABA adopted additional amendments to MR 1.10 and the official Comment, which changes New Mexico also has not adopted. The most significant of the 2002 amendments to the rule is the new language in paragraph (a), which now makes its prohibitions inapplicable when the conflict of another lawyer in the firm is based on that lawyer's personal interest, and the conflict "does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm."
1.10:102 Model Code Comparison
DR 5-105(D) applies to imputed conflict situations, and says "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." See also EC 4-5, EC 5-16, and DR 5-105(A).
1.10:103 Definition of "Firm"
The primary authority in New Mexico concerning the definition of "Firm" comes from the Comment to NMR 16-110, which mirrors the official ABA Comment to MR 1.10. That Comment provides that a firm "includes lawyers in a private firm, and lawyers employed in legal departments of a corporation or other organization, or in a legal services organization." The Comment also notes, however, that whether two or more lawyers will constitute a firm in other circumstances can depend on the particular facts. As an example, "two practitioners who share office space and occasionally consult or assist each other ordinarily would not be regarded as constituting a firm." Presentation to the public as being associated in a firm may result in two lawyers being treated as such under this rule. Additionally, the "terms of any formal agreement between associated lawyers" are relevant.
The Comment also expands on the notion of a law department or organization as a firm. Although "there is ordinarily no question that the members of the department constitute a firm" for purposes of NMR 16-110, there may be some question as to who is the department's client. This question frequently arises, according to the Comment, with regard to whether a corporate law department also represents a subsidiary of that corporation.
Additionally, the Comment addresses legal aid and legal service organizations as a firm for purposes of the rule, and says "[l]awyers employed in the same unit of a legal service organization constitute a firm, but not necessarily those employed in separate units." When lawyers are in separate units, the Comment suggests that the same analysis applied to independent practitioners who share office space and occasionally consult with one another (noted above) should govern.
1.10:200 Imputed Disqualification Among Current Affiliated Lawyers
* Primary New Mexico Reference: New Mexico Rule 16-110(A)
* Background References: ABA Model Rule 1.10(a), Other Jurisdictions
* Commentary: ABA/BNA § 51:2001, ALI-LGL § 123, Wolfram § 7.6
* New Mexico Commentary:
NMR 16-110(A) concerns imputed disqualification among currently affiliated lawyers on the basis of concurrent representations, and states that "[w]hile lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by" NMR 16-107, 16-108(C), 16-109 or 16-202. This "rule of imputed disqualification," according to the Comment to the rule, "gives effect to the principle of loyalty to the client as it applies to lawyers who practice in a law firm." The Comment specifically provides that "a firm of lawyers is essentially one lawyer for purposes of the rules governing loyalty to the client."
NMR 16-110(B), in turn, governs imputed disqualification among currently affiliated lawyers on the basis of previous representations. This paragraph of the rule provides:
When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rule 16-106 and Paragraph B of Rule 16-109 that is material to the matter.
This indicates that a conflict of interest presumptively exists if the lawyer obtained confidential information from the former client during the former representation that is material to the present matter. The Comment to the rule notes that "[p]reserving confidentiality is a question of access to information," and that "[a]ccess to information . . . is . . . a question of fact in particular circumstances."
A reported New Mexico case applying NMR 16-110 is State v. Almanza, 121 N.M. 300, 910 P.2d 934 (N.M. Ct. App. 1995). In that case, the lawyer was appointed to represent the defendant under a contract with the public defender's office. Shortly before the trial was to begin, the lawyer discovered that his firm was prosecuting the defendant for traffic offenses in a different court. The court noted that "[i]t would be intolerable for the same attorney to be concurrently defending a client in one criminal proceeding while prosecuting the client in another." 121 N.M. at 300, 910 P.2d at 934. Applying NMR 16-110, the court stated that "[o]rdinarily, if one lawyer in a firm is prohibited from representing a client in such a circumstance, then so are the other lawyers in the firm." 121 N.M. at 301, 910 P.2d at 935. Based on this analysis, the court overturned the conviction of the defendant. See also State Bar Advisory Opinion 1986-3.
1.10:300 Removing Imputation by Screening
* Primary New Mexico Reference: New Mexico Rule 16-110
* Background References: ABA Model Rule 1.10, Other Jurisdictions
* Commentary: ABA/BNA § 51:2001, ALI-LGL § 124, Wolfram § 7.6
* New Mexico Commentary:
Screening can be described generally as the process by which a lawyer within a firm, who has a conflict regarding a specific representation that the firm is engaged in, is excluded from participating in the representation or obtaining knowledge of any materials related to that representation. NMR 16-110 does not expressly permit screening in imputed conflict situations. In addition, no New Mexico court has indicated that screening measures or "ethical walls" may be employed to cure imputed conflicts. However, it would appear that a screening device may be implemented by a law firm in connection with obtaining current or former client consent to a conflict of interest, as a measure to assure the current or former client that his confidential information will not be used to his disadvantage.
1.10:400 Disqualification of Firm After Disqualified Lawyer Departs
When lawyers move from one firm to another, NMR 16-110(B) & (C) will both apply. Paragraph (B) governs the previous representation of a client by a lawyer who joins a firm. Under this rule, the firm may not represent another client in the "same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired" confidential information material to the matter. Paragraph (C), on the other hand, governs the conduct of the lawyer's former firm when he or she leaves that firm. Under this portion of the rule, the firm "is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has" protected information that is material to the matter at issue.
The Comment warns that in this situation, the "fiction that the law firm is the same as a single lawyer is no longer wholly realistic." The Comment also notes that imputed disqualification should not Abe defined with unqualified rigor," because "the result would be radical curtailment of the opportunity of lawyers to move from one practice setting to another and of the opportunity of clients to change counsel."
1.10:500 Client Consent
* Primary New Mexico Reference: New Mexico Rule 16-110(C)
* Background References: ABA Model Rule 1.10(c), Other Jurisdictions
* Commentary: ABA/BNA § 51:2001, ALI-LGL § 122, Wolfram §§ 7.2, 7.3
* New Mexico Commentary:
NMR 16-110(D) allows a client affected by an imputed disqualification to waive the disqualification, under the conditions stated in NMR 16-107.
1.13 Rule 1.13 Organization as Client
1.13:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico References: New Mexico Rule 16-113:
"A. Generally. A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.
B. Acting in best interest of organization. If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engage in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law which reasonably might be imputed to the organization, and is likely to result in substantial injury to the organization, the lawyer shall proceed as is reasonably necessary in the best interest of the organization. In determining how to proceed, the lawyer shall give due consideration to the seriousness of the violation and its consequences, the scope and nature of the lawyer's representation, the responsibility in the organization and the apparent motivation of the person involved, the policies of the organization concerning such matters and any other relevant consideration. Any measures taken shall be designed to minimize disruption of the organization and the risk of revealing information relating to the representation to persons outside the organization. Such measures may include among others:
(1) Asking reconsideration of the matter;
(2) Advising that a separate legal opinion on the matter be sought for presentation to appropriate authority in the organization; and
(3) Referring the matter to higher authority in the organization, including, if warranted by the seriousness of the matter, referral to the highest authority that can act in behalf of the organization as determined by applicable law.
C. Terminating representation. If, despite the lawyer's efforts in according with Paragraph B, the highest authority that can act on behalf of the organization insists upon action, or a refusal to act, that is clearly a violation of law and is likely to result in substantial injury to the organization, the lawyer may resign in accordance with Rule 16-116.
D. Identity of client. In dealing with an organization's directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when it is apparent that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing.
E. Personal representation of officer or employee. A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 16-107. If the organization's consent to the dual representation is required by Rule 16-107, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders."
* Background References: ABA Model Rule 1.13, Other Jurisdictions
* New Mexico Commentary:
1.13:101 Model Rule Comparison
NMR 16-113 and the original version of MR 1.13 as adopted in 1983, are exactly the same. Likewise, the New Mexico rule incorporates the original ABA comment on the Model Rule in its comment section. New Mexico has not adopted the changes to MR 1.13 made by the ABA August 1993.
1.13:102 Model Code Comparison
While there is no direct counterpart to NMR 16-113 in the Disciplinary Rules of the Code, EC 5-18 is similar to NMR 16-113 by requiring a lawyer employed or retained by a corporation to serve the entity and not show allegiance specifically to any particular stockholder, director, officer, employee, representative, or other person connected with the corporation. EC 5-18 further says a lawyer asked to represent an individual member of a corporation may do so only if the interests of the individual do not conflict with the interests of the corporation. See also EC 5-24, DR 5-107(B), EC 5-16, EC 4-4, and DR 5-105(B), (C) & (D).
1.13:200 Entity as Client
* Primary New Mexico Reference: New Mexico Rule 16-113
* Background References: ABA Model Rule 1.13, Other Jurisdictions
* Commentary: ABA/BNA § 91:2001, ALI-LGL §§ 96, 97, Wolfram § 8.3
* New Mexico Commentary:
NMR 16-113(A) states the general rule that a lawyer retained by an organization represents the organization, while recognizing that an organization by necessity must act "through its duly authorized constituents." Several cases address this principle. See, e.g., Richter v. Van Amberg, 97 F. Sup.2d 1255 (D.N.M. 2000) (attorney's representation of a partnership does not, in and of itself, constitute representation of the individual partners); Cole v. Ruidoso Mun. Schools, 43 F.3d 1373 (10th Cir. 1994) (although lawyer is obligated not to disclose information revealed by client's constituents or employees, this does not mean that constituents of organizational client are clients of lawyer); and Delta Automatic Systems, Inc. v. Bingaman, 126 N.M. 717, 974 P.2d 1174 (1998) (sole shareholders of corporation were not the real clients in labor lawyer's and law firm's representation of corporation as to termination of union contract, and thus, shareholders could not personally bring legal malpractice action against them for alleged negligence in failing to obtain termination of union contract).
NMR 16-113(B) makes clear that the interest of the organization as a whole are a lawyer's primary concern; likewise, a lawyer should follow whatever course of action would not interfere with the organization's policies. Accordingly, where a lawyer represents an organizational client, it is the organization to which the lawyer owes the duties of due care, competence, diligence and confidentiality, and not the individual constituents through which the organization necessarily acts.
A school principal's belief that the school district's law firm represented her individually when she consulted with its attorneys on personnel issues, and her actions on their advice, was not reasonable so as to establish an attorney client relationship. Accordingly, the principal was not a former client of the law firm, meaning the law firm was not disqualified from representing the school district in the principal's employment discrimination action brought against the school district. Cole v. Ruidoso Mun. Schools, 43 F.3d 1373 (10th Cir. 1994) (observing principal consulted firm only for purpose of carrying out her duties, information principal communicated to firm on behalf of district was not principal's protectable confidential information, and it was district which, as the client, held right to have those communications protected and to decide whether and to whom that information could be disclosed).
1.13:210 Lawyer with Fiduciary Obligation to Third Person
There appear to be no cases or advisory opinions related to fiduciary obligations owed to third parties under NMR 16-113.
1.13:220 Lawyer Serving as Officer or Director of an Organization
Under NMRA 16-113(B), if a lawyer representing an organization knows that an officer, employee or other person associated with the organization is acting illegally or intends to do so, and the likely result is "substantial injury to the organization," the lawyer has an obligation to "proceed as is reasonably necessary in the best interest of the organization," including reporting the conduct to a higher authority within the organization. If the lawyer has also represented, or is currently representing, the officer, employee or other person in question, on personal matters, discharge of the lawyer's obligations are required under NMR 16-113(B), but may conflict with the lawyer's obligations to the officer or employee involved and who is also the lawyer's client.
There appear to be no cases or advisory opinions related specifically to a lawyer serving as officer or director of an organization in the context of NMR 16-113. See sections 1.7:240, 1.7:330, 1.7:340, and 1.7:400 supra.
1.13:230 Diverse Kinds of Entities as Organizations
While both NMR 16-113 and MR 1.13 speak in terms of representation of an "organization," the Comment makes clear that the rule applies to lawyer conduct in the context of governmental and other organizational entities.
1.13:300 Preventing Injury to an Entity Client
* Primary New Mexico Reference: New Mexico Rule 16-113
* Background References: ABA Model Rule 1.13, Other Jurisdictions
* Commentary: ABA/BNA § 91:2001, ALI-LGL § 96, Wolfram § 13.7
* New Mexico Commentary:
Under NMR 16-113(B), if a lawyer representing an organization knows that an officer, employee, or other person associated with the organization which the lawyer represents is acting illegally, or intends to do so, and the likely result is "substantial injury to the organization," the lawyer has an obligation to "proceed as is reasonably necessary in the best interest of the organization." The rule specifies that the lawyer for the entity, in determining how to proceed in such a situation, must give "due consideration to the seriousness of the violation and its consequences, the scope and nature of the lawyer's representation, the responsibility in the organization and the apparent motivation of the person involved, the policies of the organization concerning such matters and any other relevant considerations."
The rule lists several measures that a lawyer can consider and/or undertake, namely: (1) asking reconsideration of the matter; (2) advising that a separate legal opinion on the matter be sought for presentation to appropriate authority in the organization; and (3) referring the matter to higher authority in the organization, including, if warranted by the seriousness of the matter, referral to the highest authority that can act in behalf of the organization as determined by applicable law.
1.13:310 Resignation Versus Disclosure Outside the Organization
NMR 16-113(C) provides that "If despite the lawyer's efforts in accordance with Paragraph B, the highest authority that can act on behalf of the organization insists upon action, or a refusal to act, that is clearly a violation of law and is likely to result in substantial injury to the organization, the lawyer may resign in accordance with" NMR 16-116. While under NMR 16-113(B) the lawyer should "minimize the risk of revealing information relating to the representation to persons outside the organization," NMR 16-106 permits the disclosure of normally confidential information in order to prevent a client from committing a criminal act which the lawyer believes will result in imminent death or substantial bodily harm, or substantial injury to the financial interest or property of another.
1.13:400 Fairness To Non-Client Constituents Within An Entity Client
* Primary New Mexico Reference: New Mexico Rule 16-113
* Background References: ABA Model Rule 1.13, Other Jurisdictions
* Commentary: ABA/BNA § 91:2001, ALI-LGL § 103, Wolfram § 13.7.5
* New Mexico Commentary:
NMR 16-113(D) states "in dealing with an organization's directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when it is apparent that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing." The Comment states similarly that when the interests of the organization and one or more of its constituents becomes adverse, the lawyer should advise the constituents of the conflict or potential for conflict of interest. Furthermore, the lawyer must ensure that the constituents understand that the lawyer cannot represent them.
In Richter v. Van Amberg, 97 F. Supp. 2d 1255 (D.N.M. 2000), an attorney who represented a real estate development partnership was not required to disclose to one partner the statements of the managing partner that he felt deceived by the first partner's taking of an undisclosed real estate commission, and that he wanted to dissolve the partnership in order to be relieved of paying the first partner any percentage of profits. It was determined that the managing partner made such statements in seeking the attorney's representation in a personal capacity, and thus had to consent to any disclosure; further, the attorney's responsibility was to the partnership itself, acting through its managing partner.
1.13:500 Joint Representation of Entity and Individual Constituents
* Primary New Mexico Reference: New Mexico Rule 16-113
* Background References: ABA Model Rule 1.13, Other Jurisdictions
* Commentary: ABA/BNA § 91:2601, ALI-LGL §§ 97, 131, Wolfram § 13.7
* New Mexico Commentary:
NMR 16-113(E) permits a lawyer to represent any of the constituents of an organization he or she is already representing, provided the representation conforms with the requirements regarding conflicts of interest stated in NMR 16-107. Furthermore, to the extent the dual representation requires the organization's consent, the consent must be given by an appropriate official or by the shareholders of the organization. It may not be given by the individual who is proposed to be individually represented by the lawyer.
In Richter v. Van Amberg, 97 F. Supp. 2d 1255 (D.N.M. 2000), the court considered whether an attorney for a partnership also owed a duty to one of the partners, based on the partner's allegation that the attorney represented him. The court determined there was no evidence to suggest that the attorney ever accepted representation of the partner that was separate and distinct from his representation of the partnership. Further, the court continued, representation of an individual constituent of an organization cannot be inferred from representation of the organization. See also Delta Automatic Systems, Inc. v. Bingaman, 126 N.M. 717, 974 P.2d 1174 (1998) (fact that labor lawyer and law firm had prepared wills for corporation's sole shareholders and had represented them on business matters apart from the representation of corporation, did not establish that lawyer and law firm had special duty to the shareholders, as required for shareholders personally to bring action against lawyer and law firm for their alleged legal malpractice n failing to obtain termination of union contract).
1.13:510 Corporate Counsel's Role in Shareholder Derivative Actions
The Comment to NMR 16-113 states that the shareholders or members of a corporation can compel directors to "perform their legal obligations in the supervision of the organization." The Comment adds that corporate counsel may face a conflict of interest in defending the organization, due to the lawyer's responsibility to the organization and his relationship with the board which directs the organization. In those situations lawyers are referred to NMR 16-107 regarding who should represent the directors and the organization. There are no other New Mexico authorities on this subject.
1.13:520 Representing Client with Fiduciary Duties
1.13:530 Representing Government Client
While both NMR 16-113 and MR 1.13 speak in terms of representation of an "organization," the Comment makes clear that the rule applies to lawyer conduct in the context of governmental and other organizational entities.
The Comment to NMR 16-113 also indicates that a different balance may be needed in dealing with governmental organization clients, specifically regarding the maintenance of confidentiality and assuring that wrongful official acts are prevented or rectified. There may be specific statutes and regulations that clarify what duties exist for lawyers employed by the government or in military service. In some circumstances the client may be a specific agency, but it is generally the government as a whole. Furthermore, a government lawyer may have more authority to question the conduct of his client than if the client was a private entity.
1.15 Rule 1.15 Safekeeping Property
1.15:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-115:
"A. Holding another's property separately. A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account maintained in the state where the lawyer's office is situated, or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer in a manner that conforms to the requirements of Rule 17-204 of the Rules Governing Discipline and shall be preserved for a period of five (5) years after termination of the representation of the client in the matter or the termination of the fiduciary or trust relationship.
B. Notification of receipt of funds or property. Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.
C. Severance of interest. When in the course of representation a lawyer is in possession of property in which both the lawyer and another person claim interests, the property shall be kept separate by the lawyer until there is an accounting and severance of their interests. If a dispute arises concerning their respective interest, the portion in dispute shall be kept separate by the lawyer until the dispute is resolved.
D. Pooled interest-bearing trust accounts. Except as provided in Subparagraph (8) of this paragraph, a lawyer or law firm shall create and maintain a pooled interest-bearing trust account for clients' funds which are nominal in amount or to be held for a short period of time in compliance with the following provisions. This account may be referred to as an IOLTA account.
(1) No interest income from an IOLTA account shall be made available to a lawyer or law firm.
(2) The IOLTA account shall include all clients' funds which are nominal in amount or to be held for a short period of time.
(3) An IOLTA interest-bearing trust account may be established with any bank, savings and loan association or credit union authorized by federal or state law to do business in New Mexico and insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation or the National Credit Union Administration. Funds in each interest-bearing trust account shall be subject to withdrawal upon request and without delay.
(4) The rate of interest payable on any IOLTA account shall not be less than the rate paid by the depository institution to regular, nonlawyer depositors. Higher rates offered by the institution to customers whose deposits exceed certain time or quantity minima, such as those offered in the form of certificates of deposit, may be obtained by a lawyer or law firm on some or all of deposited funds so long as there is no impairment of the right to withdraw or transfer principal immediately.
(5) Lawyers or law firms depositing client funds in an IOLTA trust account established pursuant to this paragraph shall direct the depository institution:
(a) to remit interest or dividends, net of any service charges or fees, on the average monthly balance in the account, or as otherwise computed in accordance with the institution's standard accounting practice, at least quarterly, to the Center for Civic Values ("center") which shall hold such funds as trustee for the benefit of the programs set forth below;
(b) to transmit with each remittance to the center a statement showing the name of the lawyer or law firm for whom the remittance is sent and the rate of interest applied; and
(c) to transmit to the depositing lawyer or law firm at the same time a report showing the amount paid to the center, the rate of interest applied, and the average account balance of the period for which the report is made.
(6) All interest transmitted to the Center for Civic Values ("center") shall be distributed periodically in accordance with a plan of distribution which shall be prepared at least annually and approved by the Supreme Court of New Mexico for the following purposes:
(a) to provide legal assistance to the poor;
(b) to provide legal education;
(c) to improve the administration of justice; and
(d) for such other programs for the benefit of the public as are specifically approved by the Supreme Court of New Mexico from time to time.
(7) Every lawyer subject to these rules shall include in the annual certificate of compliance required by Rule 17-204 of the Rules Governing Discipline that all a clients' funds which are nominal in amount or are to be held for a short period of time are deposited in an IOLTA account unless the lawyer or law firm with which the lawyer is associated declines by January 10 of the calendar year to maintain an IOLTA account for the calendar year.
(8) A lawyer or law firm may decline to maintain an IOLTA account by submitting in writing a letter to the clerk of the Supreme Court on or before January 10 of each calendar year the lawyer wishes to decline participation in the IOLTA program.
E. Separate interest-bearing trust accounts. A lawyer or law firm may establish a separate interest-bearing trust account for clients' funds which are neither nominal in amount nor to be held for a short period of time for a particular client or client's matter on which the interest, net of any transaction costs, will be paid to the client.
F. Determination of nominal amount. In the exercise of a lawyer's good faith judgment in determining whether funds of a client are of such nominal amounts or are expected to be held for such a short period of time that the funds should not be placed in a separate interest-bearing trust account for the benefit of the client, a lawyer shall take into consideration the following factors:
(1) the amount of interest which the funds would earn during the period they are expected to be deposited;
(2) the cost of establishing and administering the account, including the cost of the lawyer's services, accounting fees and tax reporting procedures; and
(3) the nature of the transaction(s) involved."
* Background References: ABA Model Rule 1.15, Other Jurisdictions
* New Mexico Commentary:
1.15: 101 Model Rule Comparison
MR 1.15 governs safekeeping of property. The New Mexico version NMR 16-115 (as amended in 1988, 1990, 1999, and 2000) adds three sections not found in the Model Rule: (D) regarding pooled interest-bearing trust accounts, (E) regarding separate interest-bearing trust accounts, and (F) regarding determination of nominal amount.
1.15:102 Model Code Comparison
DR 9-102 covers preserving the identity of funds and property of a client. NMR 16-115 establishes requirements for safekeeping "property of clients or third persons," while DR 9-102 only pertains to "funds" or "other properties" of "clients." Unlike the Code provision, NMR 16-115 permits the separately-maintained client funds or properties to be kept in another state, upon client consent. See also EC 5-7, EC 9-5, EC 9-7, and DR 5-103(A)(1).
1.15:110 New Mexico IOLTA Plan
Lawyers in New Mexico may "elect to create and maintain a pooled interest-bearing trust account for clients' funds which are nominal in amount or to be held for a short period of time," provided certain conditions are met, including that the lawyer does not retain any earnings from the fund, and instead remits the earnings to the "center for civic values." See NMR 16-115(D). NMR 16-115(E) outlines the relevant factors regarding whether funds of a client are of such nominal amounts or are expected to be held for a sufficiently short period of time, such that they may be placed into a pooled interest-bearing trust account.
In one case, a lawyer's pooled trust account generated dividends, even though he was not a participant in the IOLTA program. Matter of Cannain, 122 N.M. 710, 930 P.2d 1162 (1997) (attorney disciplined).
1.15:120 New Mexico Client Security Fund
The Comment to NMR 16-115 states that a "client's security fund" provides a means through the efforts of the bar to reimburse persons who have lost money or property as a result of dishonest conduct of a lawyer. In New Mexico there exists a client security fund, which is supervised by the Client Security Fund Committee. See NMRA 17-304(B)(3). A lawyer who is disciplined may be required to make restitution and, also, to reimburse the client security fund for any expenditure the fund has made as a result of the lawyer's misconduct. See NMRA 17-206(C).
1.15:200 Safeguarding and Safekeeping Property
* Primary New Mexico Reference: New Mexico Rule 16-115
* Background References: ABA Model Rule 1.15, Other Jurisdictions
* Commentary: ABA/BNA § 45:101, ALI-LGL §§ 44-46, Wolfram § 4.8
* New Mexico Commentary:
A lawyer is expected to hold the property of others with the care required of a professional fiduciary. Therefore, property of clients or third persons must be kept separate from the lawyer's business and personal property. In addition, the funds of different clients must be kept separate and accounted for in one or more trust accounts, unless they are permitted to be "pooled" under NMR 16-115(D). Thus, a payment to one client from another client's fund is considered a violation of the rule. See, e.g., Matter of Hamar, 123 N.M. 795, 945 P.2d 1013 (1997).
The New Mexico courts generally distinguish between conversion of client funds, and the lesser offense of misuse of client funds. In Matter of Kelly, 119 N.M. 807, 896 P.2d 487 (1995), the court stated that "[s]tealing client funds is perhaps the most egregious violation of a lawyer's ethical responsibilities; it is a violation of the trust placed in lawyers by their clients. A lawyer's trust account should be held sacred; wilfully taking funds from a trust account cannot and will not be tolerated by this Court. In such cases, disbarment is the appropriate sanction."
In contrast, "misuse" of trust funds occurs "when a lawyer withdraws client funds for an improper purpose, but does so in error, without an intent to deprive the client of the funds. While this is a serious breach of the attorney's fiduciary duties, it is not as egregious as misappropriation of client funds. The latter necessarily involves a dishonest motive and an intent to deprive the client of his or her funds and will almost inevitably result in disbarment." Matter of Cannain, 122 N.M. 710, 930 P.2d 1162 (1997) (also stating that "even misuse is a serious offense" and that "a significant sanction is warranted" in misuse cases; and finding attorney commingled personal funds with client funds, made personal disbursements and cash withdrawals from trust, failed to maintain separate ledgers for clients whose funds he held in trust, failed to maintain proper records of deposits and withdrawals, and failed to perform account reconciliations).
The following additional cases, generally involving lawyer conversion of client funds, demonstrate the seriousness with which the New Mexico authorities treat the lawyer's duty to safeguard property of others. See, e.g., Matter of O'Brien, 130 N.M. 643, 29 P.3d 1044 (2002) (stating mis-management of client funds is one of the most serious violations of an attorney's ethical obligations; and finding disbarment was warranted as disciplinary sanction for attorney's misconduct in misappropriating funds belonging to clients or to law firm, and in employing elaborate scheme of deception to conceal that misappropriation, which included establishing a secret trust account and intercepting law firm's bills to a client and reissuing the bills on attorney's own letterhead); Matter of Gallegos, 104 N.M. 496, 723 P.2d 967 (1986) (attorney's conversion to his own use of money received from a client to have a liquor license transferred to her name, violated numerous rules, including NMR 16-115); Matter of Greenfield, 121 N.M. 633, 916 P.2d 833 (1986) (conversion of client funds is one of the most serious offenses that an attorney can commit and one generally resulting in loss of right to practice law); Matter of Schmidt, 121 N.M. 640, 916 P.2d 840 (1996) (disbarment warranted for attorney who failed to hold client funds separate from his own, failed to remit to client funds she was entitled to receive, failed to provide an accounting to client of funds in his possession that belonged to her, improperly maintained an interest bearing trust account, made cash disbursements from his trust account, and failed to cooperate with disciplinary counsel); and Matter of Chávez, 129 N.M. 35, 1 P.3d 417 (2000) (disbarment was appropriate sanction for attorney who participated in misappropriation of client funds from law firm trust account while attorney was under indefinite suspension for making misrepresentations regarding status of funds and failing to property maintain trust account records).
See also Matter of Wilson, 108 N.M. 378, 772 P.2d 1301 (1989) (attorney disbarred for stealing client funds by forging clients' names on settlement checks and withdrawal slips on accounts maintained by clients); Matter of Arrieta, 105 N.M. 418, 733 P.2d 866 (1987) (removal of escrowed funds to own use constituted conversion of clients' funds in violation of NMR 16-115); Matter of Rawson, 113 N.M. 758, 833 P.2d 235 (1992) (mishandling of client trust funds, commingling of personal funds with client trust funds, converting client funds for personal use, refusing to honor letters of protection issued on behalf of client to client's treating doctors, failing to honor assignment of settlement proceeds to client's creditors, and asserting interpleader action seeking award of monies deposited for distribution to former clients pursuant to condition of earlier disciplinary probation warranted disbarment and order to make restitution; a review of the records showed that in order for client to have been paid in full lawyer would have had to use other client's funds; in addition, when defending against claims of mishandling of client funds, lawyers may not rely on the attorney-client privilege to prevent scrutiny of their records); Matter of Krob, 123 N.M. 652, 944 P.2d 881 (1997) (lawyer disbarred for accepting "Retainer" payments from clients on behalf of law firm, and subsequently converting to own use); Matter of Duffy, 102 N.M. 524, 697 P.2d 943 (1985) (disbarment is appropriate sanction for attorney's conversion of his clients' funds to his own use); Matter of Wilson, 108 N.M. 378, 772 P.2d 1301 (1989) (theft from carious clients by forging clients' names on settlement checks and withdrawal slips on accounts maintained by clients warrants disbarment); and Matter of Gallegos, 104 N.M. 496, 723 P.2d 967 (1986) (disbarment ordered where attorney accepted money from client for purpose of investing it, informed client that money had been invested in real estate contract assigned to client, falsely informed client that his money was lost, and failed to repay client).
Other cases, generally involving misuse of client funds, also illustrate the importance of lawyers following NMR 16-115. See, e.g., Matter of Sheehan, 130 N.M. 485, 27 P.2d 972 (2001) (sanctioning attorney who improperly paid own legal fees from client's trust account; finding that though attorney's commingling of funds was in accordance with client's wishes, attorney nonetheless violated NMR 16-115; and stating that scope of NMR 16-115 is not limited to attorney trust account issues, and is broad enough to cover any circumstances in which a lawyer is in possession of client or third party funds in a fiduciary capacity); Matter of Martínez, 107 N.M. 171, 754 P.2d 842 (1988) (to allow one's assistant to simply cash a check made payable to a client with no documentation of the transaction is a violation of NMR 16-115); Matter of Archuleta, 122 N.M. 52, 920 P.2d 517 (1996) (attorney deposited client monies in his operating account instead of his trust account, failed to produce required records for his trust account, and made false statements of material fact to a bankruptcy court, resulting in a one-year suspension); Matter of Turpen, 119 N.M. 227, 889 P.2d 835 (1995) (commingling earned fees with client funds, issuing trust account checks for personal disbursements, and failing to maintain required records for trust account, warranted two year deferred suspension with probation throughout deferral period); Matter of Moore, 129 N.M. 217, 4 P.3d 664 (2000) (deferred suspension for 18 months was appropriate sanction for attorney who failed to abide by promise to treating physician to pay for physician's services from proceeds of client's personal injury settlement and who violated record keeping and substantive requirements for maintaining client trust fund); and Matter of Privette, 92 N.M. 32, 582 P.2d 804 (1978) (suspension from practice was proper remedy for gross mishandling of trust funds).
See also Matter of Thompson, 105 N.M. 257, 731 P.2d 953 (1987) (attorney indefinitely suspended since he used a client's funds as collateral for a personal loan and had invested client's funds in a corporation in which he had an ownership interest, even though he made full restitution and fully acknowledge his misconduct); Matter of Ruybalid, 118 N.M. 587, 884 P.2d 478 (1994) (case involved virtually every conceivable type of misuse of trust account, except conversion B attorney commingled client funds with his personal funds and funds from an unrelated business he operated, wrote checks for personal expenses such as groceries on trust account, maintained trust account as interest-bearing account even though he was not an IOLTA participant, had an automatic cash withdrawal card available on his trust account, and failed to maintain and preserve trust account records); Matter of Reid, 122 N.M. 517, 927 P.2d 1055 (1996) (attorney failed to properly segregate his own funds from client funds, repeatedly wrote checks on his trust account for personal purposes, failed to maintain records reflecting the identity of the client whose funds were being deposited in or withdrawn from trust, failed to maintain a separate ledger for each client whose funds he held in trust, failed to prepare statements to clients reflecting trust account transactions, and failed to perform reconciliations of his trust account records); and Matter of Dawson, 129 N.M. 369 8 P.3d (2000) (lawyer's claim that a flat fee or retainer was charged that is non-refundable, will not suffice to justify a failure to deposit unearned client funds in a trust account, a withdrawal of client funds from a trust account to pay fees that have not yet been earned, or a failure to promptly return unearned funds to a client upon termination of the representation).
See also Matter of Gabriel, 110 N.M. 691, 799 P.2d 127 (1990) (attorney suspended where she delayed remitting settlement proceeds to client, and where attorney's trust account check to client was dishonored for lack of sufficient funds); Matter of Martin, 127 N.M. 321, 323, 980 P.2d 646, 648 (1999) (lawyer suspended for misuse of client trust account; stating that health issues generally are not considered in mitigation in disciplinary proceedings, and are only considered if the attorney can show a meaningful and sustained period of rehabilitation); Matter of Hartley, 107 N.M. 376, 758 P.2d 790 (1988) (suspension ordered by attorney's appropriating a portion of funds collected for Western States Treasurers Conference to his own use, after attorney had solicited and received funds in his capacity as host-state treasurer); Matter of Darnell, 123 N.M. 323, 940 P.2d 171 (1997) (finding misuse of trust funds and attempt to mislead Disciplinary Board regarding lawyer's actions); Matter of Harrison, 103 N.M. 537, 710 P.2d 731 (1985) (attorney suspended indefinitely for failing to preserve identity of client funds); and Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989) (suspension ordered for failing to keep client funds in separate accounts, failing to deliver clients' funds, and failing to render a full accounting).
Lawyers may not retain any interest generated by the trust accounts that lawyers maintain for funds from clients. Interest must be provided to the client or to a non-profit fund to be used for certain public purposes. N.M. Attorney General Opinion 1987-30.
1.15:210 Status of Fee Advances [see also 1.5.420]
NMR 16-115(A) requires lawyers to deposit client funds, including fee advances, into a separate account. Lawyers are not permitted to charge non-refundable advanced fees or retainers. Matter of Dawson, 129 N.M. 369, 8 P.3d 856 (2000). Because retainer fees must be kept in a separate trust account until the fees have been earned, stating to a client that the retainer fee is non-refundable does not absolve an attorney of his procedural duties to maintain separate accounts for client funds and to refund unearned portions of fees paid. Id. See also section 1.15:200 supra. However, there does not appear to be New Mexico authority which expressly prohibits attorneys and clients from contracting for a lump sum fee which qualifies as "reasonable" under NMR 16-105(A).
Though attorneys may hold client funds for expenses, they cannot transfer those funds to their personal accounts until fees and expenditures have been incurred. Matter of Archuleta, 122 N.M. 52, 54, 920 P.2d 517, 519 (1996) (stating that "when the attorney receives funds from a client for future attorneys' fees, those funds are still considered property of the client until actually earned by the attorney and should be placed in the attorney's trust account"). See also Matter of Cannain, 122 N.M. 710, 930 P.2d 1162 (1997) (lawyer found to have misused client trust funds when he deposited a check from a client and withdrew a portion of it for fees, where lawyer had not yet earned the fee, even though the day after withdrawal he performed services sufficient to earn the sum he had withdrawn).
A lawyer generally should not accept credit card payments for retainer deposits to be held in trust, because the processing fee raises concerns regarding inadequate separation of lawyer funds from client funds. State Bar Advisory Opinion 2000-1.
1.15:220 Surrendering Possession of Property
NMR 16-115(B) states that a lawyer has a duty to promptly notify clients and interested third parties upon the lawyer's receipt of property belonging to a client or third party. Likewise, such property is to be promptly delivered to the client or third person. A lawyer's failure to promptly remit funds to a client can constitute violation of NMR 16-115. Matter of Cannain, 122 N.M. 710, 930 P.2d 1162 (1997). See also Matter of C'De Baca, 109 N.M. 151, 782 P.2d 1348 (1989) (finding failure to surrender possession of property).
1.15:230 Documents Relating to Representation
Among the documents relating to representation are records indicating, in a full accounting, how funds maintained in client trust accounts, have been spent. Matter of Silverberg, 108 N.M. 768, 779 P.2d 546 (1989) (suspension ordered; and stating attorney violated NMR 16-115(B) "in that he failed to deliver to his client, or his client's father, funds to which they were entitled and failed upon a request properly to render a full accounting regarding such funds").
Detailed guidelines setting forth lawyer responsibilities regarding retention and return of client files and other documents relating to representation, are found in State Bar Advisory Opinion 1988-1. According to the opinion, court pleadings and recorded documents can be reconstructed from other records and so generally need not be kept by the lawyer. Original documents should be returned to clients, and clients should be sent a conformed set of formal documents, such as contracts and settlements. Documents that are the client's property and are of intrinsic value, such as will and deeds, should be retained indefinitely or deposited with the court. Documents that are the client's property and are of the type the client would not expect to be returned to them, should be retained for a reasonable period. All other documents in a "closed file" may be destroyed. In doing so, a lawyer should prepare an index of destroyed files, and of course, should retain an accurate and complete record of receipts and disbursements of trust funds. Lastly, a lawyer may wish to retain certain kinds of client file records in the event an inquiry is raised regarding what the lawyer did, and why.
1.15:300 Holding Money as a Fiduciary for the Benefit of Clients or Third Parties
* Primary New Mexico Reference: New Mexico Rule 16-115
* Background References: ABA Model Rule 1.15, Other Jurisdictions
* Commentary: ABA/BNA § 45:101, ALI-LGL § 44, Wolfram § 4.8
* New Mexico Commentary:
See section 1.15:200 supra.
1.15:400 Dispute over Lawyer's Entitlement to Funds Held in Trust
* Primary New Mexico Reference: New Mexico Rule 16-115
* Background References: ABA Model Rule 1.15, Other Jurisdictions
* Commentary: ABA/BNA § 45:101, ALI-LGL §§ 44-45, Wolfram § 4.8
* New Mexico Commentary:
NMR 16-115(C) states that when a lawyer and a client have funds that are held together, the money should remain in the name of the client until a severance report can be made stipulating ownership of the shares. When disputes arise regarding funds, the undisputed amount should be immediately dispersed while those funds under dispute must be held in trust until the lawyer can resolve the dispute.
In Matter of C'De Baca, 109 N.M. 151, 782 P.2d 1348 (1989), the attorney failed to pay his clients' treating physician, and later informed the physician that he had spent the clients' funds but would pay the physician as soon as he received money in another settlement; the attorney then never paid the physician. The attorney thus violated NMR 16-115, because he failed to hold client funds separately from his own and failed to appropriately safeguard client funds; he failed to promptly notify a third person, the physician, of his receipt of the funds in which physician had an interest; he failed to promptly deliver the funds the physician was entitled to receive; and he failed to keep the funds belonging to another separately, when both he and another person claimed an interest in those funds, until there was a proper resolution or severance of those interests.
Similarly, in Lozano v. GTE Lenkurt, Inc., 122 N.M. 103, 920 P.2d 1057 (Ct. App. 1996), the court required the attorney to provide a full accounting to his client regarding a medical trust fund and a settlement fund obtained from third party defendants, before it would award additional fees to the lawyer in connection with a settlement with a different third party defendant.
1.16 Rule 1.16 Declining or Terminating Representation
1.16:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-116:
"A. Mandatory disqualification. Except as stated in Paragraph C, a lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if:
(1) The representation will result in violation of the Rules of Professional Conduct or other law;
(2) The lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or
(3) The lawyer is discharged.
B. Permissive withdrawal. Except as stated in Paragraph C, a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client, or if:
(1) The client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent;
(2) The client has used the lawyer's services to perpetrate a crime or fraud;
(3) A client insists upon pursuing an objective that the lawyer considers repugnant or imprudent;
(4) The client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;
(5) The representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or
(6) Other good cause for withdrawal exists.
C. Representation required. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation.
D. Orderly termination. Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interest, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by law, or the Rules of Professional Conduct."
* Background References: ABA Model Rule 1.16, Other Jurisdictions
* New Mexico Commentary:
1.16:101 Model Rule Comparison
NMR 16-116, which governs declining or terminating representation, says a lawyer may retain papers relating to the client "To the extent permitted by law, or the Rules of Professional Conduct," while MR 1.16 differs only by saying such papers may be retained "To the extent permitted by other law."
1.16:102 Model Code Comparison
A close equivalent to NMR 16-116 is in the Code at DR 2-110. This provision generally contains the same requirements and objectives as NMR 16-116, and similarly contains subsections governing permissive withdrawal and mandatory withdrawal. Variances from NMR 16-115 include DR 2-110(B)(1)(a), which states that a lawyer must withdraw if "he knows or it is obvious that his client is bringing the legal action, conducting the defense, or asserting a position in the litigation, or is otherwise having steps taken for him, merely for the purpose of harassing or maliciously injuring any person;" and DR 2-110(C)(1)(a), which states that a lawyer may withdraw if his client "insists upon presenting a claim or defense that is not warranted under existing law and cannot be supported by good faith argument for an extension, modification, or reversal of existing law." See also EC 2-30, EC 2-31, EC 2-32, DR 2-103(E), DR 2-104(A), DR 2-109(A), and EC 1-6.
1.16:200 Mandatory Withdrawal
* Primary New Mexico Reference: New Mexico Rule 16-116
* Background References: ABA Model Rule 1.16, Other Jurisdictions
* Commentary: ABA/BNA § 31:1001, ALI-LGL § 32, Wolfram § 9.54
* New Mexico Commentary:
In addition to the text of NMR 16-116, see State Bar Advisory Opinion 1995-1 (withdrawal may be necessary where the client so greatly limits the representation that the lawyer cannot exercise professional judgment).
1.16.210 Discharge by Client
The client has the inherent right to terminate the lawyer; the lawyer should always counsel the client regarding the consequences of termination. State Bar Advisory Opinion 1995-1.
1.16:220 Incapacity of Lawyer
NMR 16-116 places a duty on each lawyer to withdraw from the representation of clients if the lawyer's physical or mental health materially impair the lawyer's ability to represent clients. Matter of Martin, 127 N.M. 321, 980 P.2d 646 (1999) (stating that if a physical condition is chronic and materially impairs the lawyer's ability to represent a client, the attorney is obligated by NMR 16-116(A) to decline to represent a potentially new client, or where representation has commenced, to withdraw from representation, and if the lawyer fails to act appropriately, not only will the physical condition not be a defense to the charges or a mitigating factor, it may be part of the proof that ethical violations occurred); see also Matter of O'Brien, 130 N.M. 643, 29 P.3d 1044 (2001) (NMR 16-116(A) "compels lawyers not to undertake representation, or, if undertaken, to withdraw from the representation, if the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client. Clients cannot be left floundering with no direction and no communication").
1.16:230 Withdrawal to Avoid Unlawful Conduct
In addition to the text of NMR 16-116, see State Bar Advisory Advisory Opinion 1995-1 (lawyer may need to withdraw where a conflict arises from the client directing the lawyer to accomplish the representation through means that conflict with the lawyer's duties to the court or under the Rules of Professional Conduct); State Bar Advisory Opinion 1989-2 (a lawyer should withdraw if a client insists upon paying the lawyer with $10,000 or more in cash and not disclosing the transaction to the Internal Revenue Service, as required by a federal statute); and State Bar Advisory Opinion 1986-10 (a lawyer must withdraw where he acquires information indicating that his client's claim would require the use of perjured testimony or false evidence).
1.16:240 Legal Action for the Purpose of Harassing or Maliciously Injuring any Person
1.16:300 Permissive Withdrawal
* Primary New Mexico Reference: New Mexico Rule 16-116
* Background References: ABA Model Rule 1.16, Other Jurisdictions
* Commentary: ABA/BNA § 31:1001, ALI-LGL § 32, Wolfram § 9.5.3
* New Mexico Commentary:
1.16:310 Withdrawal to Undertake Adverse Representation
1.16:320 Circumstances Justifying Discretionary Withdrawal
Pursuant to NMR 16-116(B), a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of a client, and a lawyer shall take steps in terminating to the extent reasonably practicable to protect the client's interests. Sanders, Bruin, Coll & Worley v. McKay Oil Corp., 123 N.M. 457, 943 P.2d 104 (1997).
NMR 16-116 contemplates allowing attorneys to withdraw if they are not being paid for their services. Corn v. New Mexico Educators Fed. Credit Union, 119 N.M. 199, 889 P.2d 234 (Ct. App. 1994) (observing counsel may withdraw from representation when it will result in unreasonable financial burden on lawyer). See also State Bar Advisory Opinion 1987-9 (a lawyer may withdraw if the client's failure to pay is substantial, and the client is warned the lawyer will withdraw unless the obligations to the lawyer are fulfilled). However, after accepting the advance payment of a flat fee, a lawyer may not threaten to prejudice a client's interests by terminating the representation at a critical stage of the proceedings to coerce payment of additional fees. Matter of Dawson, 8 P.3d 856, 129 N.M. 369 (2000).
1.16:400 Order by Tribunal to Continue Representation
* Primary New Mexico Reference: New Mexico Rule 16-116
* Background References: ABA Model Rule 1.16, Other Jurisdictions
* Commentary: ABA/BNA § 31:1001, ALI-LGL § 32, Wolfram § 9.5.1
* New Mexico Commentary:
In litigation, the lawyer must continue representation of the client until permission to withdraw is received from the court, and if permission is denied, the lawyer must continue the representation. State Bar Advisory Opinion 1995-1.
1.16:500 Mitigating Harm to Client Upon Withdrawal
* Primary New Mexico Reference: New Mexico Rule 16-116
* Background References: ABA Model Rule 1.16, Other Jurisdictions
* Commentary: ABA/BNA § 31:1201, ALI-LGL §§ 32, 33, Wolfram § 9.5.1
* New Mexico Commentary:
Numerous New Mexico cases illustrate the principle that a lawyer must mitigate the harm to a client upon withdrawal; many of these cases refer to NMR 16-116 in the context of an attorney discipline proceeding. See, e.g., Matter of Roth, 105 N.M. 255, 731 P.2d 951 (1987) (attorney neglected matters and abandoned clients; found that attorney failed to take steps to insure that interests of client were protected upon withdrawal); Matter of Fandey, 118 N.M. 590, 884 P.2d 481 (1994) (attorney failed to notify client of closing of his office or termination of representation); Matter of Lally, 126 N.M. 566, 973 P.2d 243 (1999) (attorney neglected matter, then engaged in deceptive conduct intended to convince client matter was being pursued); Matter of Quintana, 130 N.M. 627, 29 P.3d 527 (2001) (if an attorney is suspended or disbarred, the obligations of NMR 17-212 regarding notice to clients, courts and opposing counsel are activated; failure to comply with these requirements may constitute a violation of NMR 16-116(D)); and Matter of Romero, 130 N.M. 190, 22 P.2d 215 (2001) (in taking steps necessary to protect client's interests upon withdrawal, lawyer must undertake "reasonable" measures, which means "the conduct of a reasonably prudent and competent lawyer" based on an objective standard).
See also Matter of Carlton, 128 N.M. 419, 993 P.2d 736 (2000) (noting failure to timely surrender papers and property to which a client was entitled upon termination); Matter of Lally, 126 N.M. 566, 973 P.2d 243 (1999) (same); Matter of Hamar, 123 N.M. 795, 945 P.2d 1013 (1997) (same); and Matter of Darnell, 123 N.M. 323, 940 P.2d 171 (1997) (same).
In addition, suspension from the practice of law involuntarily terminates the representation, but it does not extinguish the lawyer's responsibility to protect client interests. Matter of Quintana, 29 P.3d 527, 130 N.M. 627 (2001).
1.16:600 Fees on Termination
* Primary New Mexico Reference: New Mexico Rule 16-116
* Background References: ABA Model Rule 1.16, Other Jurisdictions
* Commentary: ABA/BNA §§ 31:701, 31:1001, 31:1101, ALI-LGL §§ 31, 40, Wolfram § 9.5
* New Mexico Commentary:
NMR 16-116(D) requires a lawyer to refund any advance payment of fee that has not been earned upon termination of representation. Matter of Dawson, 8 P.3d 856, 129 N.M. 369 (2000) (also stating that failure to refund the unearned portion of the fee may interfere with the client's right to discharge the lawyer under NMR 16-116(A)(3)).
A lawyer may be entitled to fees on a quantum meruit basis where she continues the representation following refusal to grant permission to withdraw by the court. State Bar Advisory Opinion 1995-1.
1.16:610 Termination of Lawyer's Authority [see 1.2.270]
2.3 Rule 2.3 Evaluation for Use by Third Persons
2.3:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-203:
"A. Limitations. A lawyer may undertake an evaluation of a matter affecting a client for the use of someone other than the client if:
(1) The lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer's relationship with the client; and
(2) The client consents after consultation.
B. Protected information. Except as disclosure is required in connection with a report of an evaluation, information relating to the evaluation is otherwise protected by Rule 16-106."
* Background References: ABA Model Rule 2.3, Other Jurisdictions
* New Mexico Commentary:
2.3:101 Model Rule Comparison
NMR 16-203 and Comment are identical to MR 2.3 and Comment, except the New Mexico rule adds headings to sections (A) and (B).
2.3:102 Model Code Comparison
There are no counterparts to NMR 16-203 in the Model Code of Professional Responsibility.
2.3:200 Undertaking an Evaluation for a Client
* Primary New Mexico Reference: New Mexico Rule 16-203
* Background References: ABA Model Rule 2.3, Other Jurisdictions
* Commentary: ABA/BNA § 71:701, ALI-LGL § 95, Wolfram § 13.4
* New Mexico Commentary:
NMR 16-203 allows a lawyer to undertake an evaluation of a matter affecting the lawyer's client for the use by a third party, provided two requirements are met: (1) the lawyer must reasonably believe that making the evaluation will not jeopardize other aspects of the lawyer's relationship with the client; and (2) the client consents following a consultation. In addition, the lawyer must maintain the confidentiality of the information in the evaluation under the terms of NMR 16-106.
According to the Comment, examples of when an evaluation might be undertaken for the use by a third party are title opinions done for prospective buyers and lenders, and opinions concerning sales of securities. The Comment also points out that simply because a lawyer is asked to undertake an evaluation for a third party does not necessarily mean that the lawyer should do so. This is important because once a lawyer undertakes an evaluation for a third party, the lawyer may owe a duty to the third party.
2.3:300 Duty to Third Persons Who Rely on Lawyer's Opinion [see also 1.1:420]
* Primary New Mexico Reference: New Mexico Rule 16-203
* Background References: ABA Model Rule 2.3, Other Jurisdictions
* Commentary: ABA/BNA § 71:701, ALI-LGL § 95, Wolfram § 13.4.3
* New Mexico Commentary:
See section 1.1:420 supra.
2.3:400 Confidentiality of an Evaluation
* Primary New Mexico Reference: New Mexico Rule 16-203
* Background References: ABA Model Rule 2.3, Other Jurisdictions
* Commentary: ABA/BNA § 71:701, ALI-LGL § 95, Wolfram § 13.4.3
* New Mexico Commentary:
NMR 16-203 states that the client's information gathered for an evaluation by a third party should be protected in accordance with NMR 16-106, and that no one but the third party should have access to the information contained in the evaluation. The Comment does not elaborate, but NMR 16-106 cites to NMR-16-203 as setting forth an example of when a lawyer is allowed to divulge confidential information to third parties.
3.3 Rule 3.3 Candor Toward the Tribunal
3.3:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico References: New Mexico Rule 16-303:
"A. Duties. A lawyer shall not knowingly:
(1) Make a false statement of material factor or law to a tribunal;
(2) Fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client;
(3) Fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or
(4) Offer evidence that the lawyer knows to be false. If a lawyer has offered material evidence and comes to know of its falsity, the lawyer shall take reasonable remedial measures.
B. Compliance with rule. The duties stated in Paragraph A continue to the conclusion of the proceeding, and apply even if compliance requires disclosure of information otherwise protected by Rule 16-106.
C. Refusal to offer evidence. A lawyer may refuse to offer evidence that the lawyer reasonably believes is false.
D. Ex parte proceedings; lawyer's duty. In an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to the lawyer which will enable the tribunal to make an in informed decision, whether or not the facts are adverse.
E. Limited entry of appearance; lawyer's duty. In all proceedings where a lawyer appears for a client in a limited manner, that lawyer shall disclose to the court the scope of representation."
* Background References: ABA Model Rule 3.3, Other Jurisdictions
* New Mexico Commentary:
3.3:101 Model Rule Comparison
NMR 16-303 and its accompanying Comment are the same as MR 3.3 and comment, save for the addition of paragraph (E) by New Mexico in 2001. It states that Ain all proceedings where a lawyer appears for a client in a limited manner, that lawyer shall disclose to the court the scope of representation." The purpose of paragraph (E) of NMR 16-303 is to permit lawyers to appear for clients in a limited manner and to alert the court and opposing counsel of that limited role.
3.3:102 Model Code Comparison
NMR 16-303(A)(1) is essentially the same as DR 7-102(A)(5). See also EC 7-4, EC 7-32, and EC 8. DR 7-102(A)(3), which states "a lawyer shall not ... knowingly fail to disclose that which he is required by law to reveal," would include the requirement in NMR 16-303(A)(2). NMR 16-303(A)(3) is substantially identical to DR 7-106(B)(1).
The analog to NMR 16-303(A)(4) is DR 7-102(A)(4), which says a lawyer shall not "knowingly use" perjured testimony or false evidence. The second sentence of NMR 16-303(A)(4) resolves a potential ambiguity in the Model Code concerning the action required of a lawyer who discovers that the lawyer has offered perjured testimony or false evidence. DR 7-102(B)(1) provides that a lawyer "who receives information clearly establishing that ... [h]is client has ... perpetrated a fraud upon ... a tribunal shall [if the client does not rectify the situation] ... reveal the fraud to the ... tribunal...."
NMR 16-303(C) confers discretion on the lawyer to refuse to offer evidence that the lawyer "Reasonably believes" is false, while DR 7-102(A)(4) prohibits the lawyer from offering evidence he "knows" is false. There is no counterpart in the Model Code to NMR 16-303(D) or (E).
3.3:200 False Statement to a Tribunal
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3.3(a)(1) & (2), Other Jurisdictions
* Commentary: ABA/BNA § 61:201, ALI-LGL § 106, Wolfram § 11.2.5
* New Mexico Commentary:
As officers of the court, lawyers are obligated to be truthful to the court. Woodson v. Phillips Petroleum Co. 102 N.M. 333, 695 P.2d 483 (1985). Public defenders are of course held to these standards. State v. Martínez, 97 N.M. 540, 641 P.2d 1087 (Ct.App. 1982).
Section 36-2-10(D) NMSA 1978 (1991 Repl. Pamp.) states that it is the duty of lawyers in New Mexico "never to seek to mislead the judges by any artifice or false statement of fact or law." Moreover, attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which says "I will be respectful toward and candid with the court," and "my word is my bond" when dealing with the courts.
Where a lawyer for plaintiff is seeking default or summary judgment, a pro se defendant files an affidavit that the plaintiff's lawyer believes controverts plaintiff's allegations and precludes summary judgment, and the judge nevertheless signs the judgment, plaintiff's attorney has no duty to call the situation to the court's attention. State Bar Advisory Opinion 1987-12.
According to State Bar Advisory Opinion 1990-2, a lawyer is not required to notify the court that no action has been taken in a criminal action against his client, and it may be malpractice if he does. An exception exists if the client desires a speedy resolution, but there is no general duty to the court or opposing party to give notice.
In Campos v. Brooksbank, 120 F. Supp.2d 1271 (D.N.M. 2000), the court determined that a licensed attorney, although authorized by regulations to file affidavit and notice of deposition, was not authorized to mislead court or abuse discovery process, and thus was not exempt from claim that his filing of false affidavit and his seeking of deposition in order to intimidate violated New Mexico's Unfair Practices Act (UPA).
An attorney's intentional failure to report to the bankruptcy court that he received proceeds from a sale of assets of his client's bankruptcy estate, amounted to violation of the rules of professional conduct requiring candor towards the tribunal, and prohibiting conduct prejudicial to the administration of justice. Matter of Archuleta, 122 N.M. 52, 920 P.2d 517 (1996).
In Matter of Lindsey, 810 P.2d 1237, 112 N.M (1991), the prosecuting attorney misrepresented to defense counsel and the magistrate judge that the police officer present at court was the arresting officer, when in fact the arresting officer had moved out of state and would not return for the case. This abuse of a position of public trust, as well as the inducement of the other law enforcement officer to perpetrate a fraud upon the court and the accused, warranted a six month suspension and a subsequent 12 month period of probation subject to various terms and conditions. The greater sanction of disbarment was rejected in light of steps taken to rectify the consequences of the misconduct, the lack of a prior record of professional misconduct, the relative inexperience of the attorney, and the potential for rehabilitation.
Another case discussing NMR 16-303 is In re Neal, 134 N.M. 594, 81 P.3d 47 (2003). There, an attorney, while suspended for earlier violations, appeared at a pretrial hearing and stated that he was not entering an appearance but failed to tell the prosecutor or judge that he was suspended and could not represent the defendant. The court reasoned that Aby telling the court that he was not entering a appearance, he falsely represented that he was a licensed attorney who could enter an appearance." This false statement of material fact to a tribunal was a violation of Rule 16-303(A)(1). Given a history of various violations, the hearing committee recommended that the attorney be disbarred and precluded from working for any other attorney until his reinstatement. The supreme court declined to restrict the attorney's law-related employment but ordered him disbarred from the practice of law for a minimum of three years with strict requirements for reinstatement. The court also assessed costs of the proceedings against the attorney, set out criteria for ordering additional sanctions and restrictions, and ordered that its opinion be furnished to the Albuquerque Journal and Albuquerque Tribune newspapers without comment.
In In re Righter, 126 N.M. 730, 975 P.2d 343 (1999), an attorney failed to appear at a scheduling conference before a federal magistrate judge and offered no excuse for not appearing. After several weeks of unsuccessful attempts to communicate, the judge issued an order to show cause why the case should not be dismissed for failure to prosecute, but the attorney again failed to appear. On that same date, however, the attorney filed an answer to the show-cause order claiming he had not received notice of the scheduling conference. Moreover, a copy of that same pleading had been mailed to opposing counsel nearly a week before the date of show-cause hearing. At a subsequent hearings, despite being confronted with factual evidence to the contrary, the attorney continued to insist that the reason for his failure to appear was that he received no notice. The Supreme Court found that the attorney violated NMR 16-303(A)(1) by knowingly making a false statement of material fact to a tribunal. The attorney was indefinitely suspended from the practice of law for a minimum of three years with strict conditions for any applications for reinstatement.
The attorney in In re Richards, 123 N.M. 579, 943 P.2d 1032 (1997), in his appeal from the district court, argued that opposing counsel's motion for attorney's fees and sanctions should not have been presented because he had not received notice and was therefore deprived of his right to procedural due process. The Court of Appeals found that the attorney had objected to the motion based on his erroneous claim that opposing counsel represented adverse interests of two parties but had failed to make a timely objection based on notice. In support of his motion for rehearing, the attorney argued that he was interrupted by the trial court before he could fully articulate his second basis for objection the lack of proper notice. He included a portion of dialogue excerpted from the transcript of the proceedings. In denying the motion, the Court of Appeals found that, in an attempt to create an appearance of facts favorable to his own position, the attorney omitted portions of the discussion and failed to indicate those omissions. The Supreme Court found that "respondent engaged in a form of advocacy that was deceitful and dishonest" both by omitting material language and by making an affirmative statement that the trial court understood both bases for his objection. The Supreme Court adopted the recommendation of the disciplinary board and found that the attorney violated NMR 16-303(A)(1), by knowingly making a false statement of fact to the Court of Appeals. He was publicly censured for violation of his duty of candor to the court and was assessed all costs of the disciplinary proceedings.
In In re Archuleta, 122 N.M. 52, 920 P.2d 517 (1996), a lawyer, who was also a certified public accountant, had prepared income tax returns for a married couple for several years. When the wife sought his assistance in a criminal matter, he recommended that the couple file bankruptcy to protect their assets from possible court-ordered restitution. Just prior to filing a Chapter 7 bankruptcy for the couple, the attorney received $3,000.71 from the wife's sister as payment for his attorney's fees. The attorney admitted that he knew of the requirement to report the fees to the bankruptcy court and/or trustee, and he testified that he intentionally failed to do so. In addition, the attorney was owed money by the couple, and he intentionally failed to report his status as creditor and failed to list this pre-petition debt on the bankruptcy schedules. Finally, the lawyer received payment of $6,000 to cover both past and future legal fees. He knew that the funds were generated from the sale of property in the bankruptcy estate and were therefore an asset of the estate, but he failed to report his receipt of the money. The Supreme Court found that the attorney, among other things, violated NMR 16-303 by making knowing and purposeful false statements of material fact to the bankruptcy court, and the court adopted the recommendations of the disciplinary board. The attorney was suspended from the practice of law for one year and ordered to pay all costs of the disciplinary proceedings. The court also ordered that its opinion be published in the Bar Bulletin and the New Mexico Reports.
In Cordova v. Taos Ski Valley, Inc., 121 N.M. 258, 910 P.2d 334 (Ct. App. 1996), in an appeal of a decision requiring an employer to pay attorney's fees in a workers compensation case, the court found that the attorney's failure to submit a supporting affidavit along with his petition for fees is not reversible error. The court determined that as the worker's counsel and as an officer of the court, the attorney was already under an obligation to be truthful under NMR 16-303. Finding no abuse of discretion, the court affirmed the award of attorney's fees.
The lawyer in In re Klein, 119 N.M. 460, 891 P.2d 1214 (1995), already on probation for violations of the Rules of Professional Conduct, was charged with additional violations by the disciplinary board and ordered by the Supreme Court to show cause why his probation should not be revoked and further discipline imposed. In a domestic relations case in which the attorney represented his brother, the Second Judicial District judge entered an order establishing interim guardianship and custody of the parties' minor child. The attorney, however, petitioned the Seventh Judicial District Court for appointment of himself as a guardian for the child without informing the court about the matter pending in the Second District and that judge's standing orders. He also failed to file a mandatory affidavit or give notice to the guardian ad litem. The disciplinary complaint alleged that the attorney misled the judge in violation of NMR 16-303 and 16-304, and the attorney agreed not to contest the charges. The Supreme Court ordered suspension from the practice of law for six months, with the suspension deferred, and ordered probation for 12 months on strict terms and conditions.
In In re Allred, 106 N.M. 227, 741 P.2d 830 (1987), after having been advised by his client of an error in the amount of damages pled in a complaint, an attorney failed to file an amended complaint. He prepared and had entered a judgment for an amount less than the client's actual amount of damages. The disciplinary board found that he violated NMR 16-303 by making a false statement of material fact to a tribunal. The Supreme Court adopted the findings and recommendations of the disciplinary board and ordered the attorney suspended from the practice of law for 60 days, assessed costs against him, set strict conditions for his readmission, and ordered that its opinion be published in the Bar Bulletin and the New Mexico Reports.
In In re Quintana, 104 N.M. 511, 724 P.2d 220 (1986), after his motion for a rehearing was denied by the Court of Appeals, an attorney failed to file a petition for certiorari until more than two weeks past the mandatory filing date. In his writ for extraordinary equitable relief, he claimed that, due to the inefficiency of the Postal Service, he did not receive notice of the order denying his motion until one day prior to the deadline. The attorney attached a copy of that order to his writ, but a stamp on the document showed it was received by his office roughly two weeks before the filing date. The attorney's misrepresentation violated NMR 16-303(A)(1), whereby he knowingly made a false statement of material fact to a tribunal. (The opinion cites to the pre-1987 Rules, 1-102(A)(4), whereby a lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation, and 7-102(A)(5), whereby in representing a client, a lawyer shall not knowingly make a false statement of law or fact.) The Supreme Court noted a long history of sixteen violations of nine of the Code of Professional Responsibility Rules along with a previous suspension. The court adopted the recommendations of the disciplinary board and ordered the attorney suspended indefinitely from the practice of law, with strict conditions for application for readmission. The court also ordered that its opinion be published in the News and Views and the New Mexico Reports.
The attorney in In re Chakeres, 101 N.M. 684, 687 P.2d 741 (1984), in a brief to the Court of Appeals, stated that trial testimony of causality had been "uncontroverted," "undisputed" and "uncontradicted." At his trial before a hearing committee, however, he acknowledged that the testimony of one of the two witnesses had been inconsistent and that his statements in the brief were inaccurate. The attorney admitted that he had not reviewed the testimony prior to writing his brief, and the committee found that the attorney had "knowingly and intentionally made the misstatements." The disciplinary board affirmed the findings and, noting similar types of overstatements in the attorney's brief to the board, recommended a 30-day suspension. The Supreme Court adopted the board's factual findings and agreed that the attorney violated NMR 16-303(A)(1) by knowingly making false statements of material fact to the tribunal. (The court cited to the pre-1987 Rules, 1-102(A)(4), whereby a lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation, and 7-102(A)(5), whereby in representing a client, a lawyer shall not knowingly make a false statement of law or fact.) The court declined to order the 30-day suspension but did impose a public censure and $1000 fine as well as costs on the attorney. The court also ordered that its opinion be published in the News and Views and the New Mexico Reports.
3.3:300 Disclosure to Avoid Assisting Client Crime or Fraud
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3-3(a)(2), Other Jurisdictions
* New Mexico Commentary:
According to the Comment to NMR 16-303, "the general rule that an advocate must disclose the existence of perjury with respect to a material fact, even that of a client applies to defense counsel in criminal cases, as well as in other instances." However, application of the general rule in criminal cases may be "qualified by constitutional provisions for due process and the right to counsel."
A lawyer in a client's probation revocation hearing did not have a duty to volunteer to the court that the client had pled guilty to a charge of driving while intoxicated, and does not have a duty to investigate whether the client was in fact driving the vehicle. State Bar Advisory Opinion 1990-2. See also State Bar Advisory Opinion 1985-6.
3.3:310 Prohibition on Counseling or Assisting Fraud on a Tribunal [see also 1.6:350]
An attorney violated the professional conduct rules governing dishonest conduct and conduct reflecting adversely on fitness to practice law, when he counseled his client to engage in overt misrepresentation in order to increase the settlement value of a potential claim. Matter of Elmore, 123 N.M. 79, 934 P.2d 273 (1997).
3.3:400 Disclosing Adverse Legal Authority
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3.3(a)(3), Other Jurisdictions
* Commentary: ABA/BNA § 4:301, ALI-LGL § 111, Wolfram § 12.8
* New Mexico Commentary:
The Comment to NMR 16-303 expands on subsection (A)(3) of the rule by stating that a lawyer is not required to make a disinterested exposition of the law, but must recognize the existence of pertinent legal authorities. The underlying concept is that legal argument is a discussion seeking to determine the legal premises properly applicable to the case.
In Lozoya v. Sanchez, 2003-NMSC-009, 133 N.M. 579, 66 P.3d 948 (2003), the plaintiffs' appellate brief in a negligence action related to an automobile accident, cited to a California case and urged the Supreme Court to adopt that case's reasoning. Plaintiffs failed to mention, however, that the case had been expressly overruled by the California Supreme Court, and, in a footnote, the New Mexico Supreme Court cautioned counsel for the plaintiffs that "the knowing failure to mention that authority would violate NMR 16-303(A)(3)."
Furthermore, in State v. Alingog, 117 N.M. 756, 877 P.2d 562 (1994), the Court held that a failure on the part of the defense counsel to call the judge's attention to law that would favor the state if this were to be deemed a single, as opposed to a successive, prosecution, did not breach the defense counsel's professional duty of candor.
Counsel should be aware of the professional responsibility to disclose controlling legal authority, even if contrary to one's position. Sanchez v. Homestake Min. Co., 102 N.M. 473, 697 P.2d 156 (Ct. App. 1985).
In Matter of Archuleta, 122 N.M. 52, 920 P.2d 517 (1996), an attorney's failure to report to the bankruptcy court that he was a creditor of the client, amounted to violation of rules requiring candor toward the tribunal, prohibiting conduct prejudicial to the administration of justice, and conflicts of interest.
3.3:500 Offering False Evidence
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3.3(a)(4), Other Jurisdictions
* Commentary: ABA/BNA § 16:301, ALI-LGL §§ 115-120, Wolfram §§ 12.3, 12.43, 12.5
* New Mexico Commentary:
According to the Comment to NMR 16-303, "when evidence that a lawyer knows to be false is provided by a person who is not the client, the lawyer must refuse to offer it regardless of the client's wishes." The issue is more difficult when false evidence is offered by the client. In that situation, "a conflict may arise between the lawyer's duty to keep the client's revelations confidential and the duty of candor to the court. Upon ascertaining that material evidence is false, the lawyer should seek to persuade the client that the evidence should not be offered or, if it has been offered, that its false character should immediately be disclosed. If the persuasion is ineffective, the lawyer must take reasonable remedial measures."
New Mexico case law has found a violation of NMR 16-303 in several cases, including Matter of Gabell, 115 N.M. 737, 858 P.2d 404 (1993). In Gabell, the Court found disbarment warranted where the attorney intentionally lied under oath and manufactured documents in order to gain an advantage in litigation. Similarly, in Matter of Chakeres, 101 N.M. 684, 687 P.2d 741 (1984), an attorney was publicly censured and fined $1,000 for knowingly making false, misleading and inaccurate statements in a brief to the court of appeals. Public censure was also warranted in Matter of Richards, 123 N.M. 52, 920 P.2d 517 (1997), where the attorney knowingly made false statements of material fact in a brief with the intention of deceiving the court. In Matter of Archuleta, 122 N.M. 52, 920 P.2d 517 (1996), an attorney was sanctioned with a one year suspension when he made false statements of material fact to a bankruptcy court. Those actions included the representation of a client in bankruptcy when owed money by the client, deposit of monies in his operating account instead of his trust account, failure to produce required records for his trust account, and misrepresentations to the Internal Revenue Service when acting in his capacity as a CPA.
3.3:510 False Evidence in Civil Proceedings
In Matter of Gabbell, 115 N.M. 737, 858 P.2d 404 (1993), an attorney hired by another lawyer to assist in a class action lawsuit was paid over $173,000, but he later filed suit claiming that a partnership or joint venture had existed between them and that he was owed a formal accounting and a division of the profits. The district court found that the attorney fraudulently manufactured documents for use in the litigation and "lied under oath about facts of the underlying controversy and matters bearing on his credibility." The Supreme Court agreed that, among other things, the attorney had violated NMR 16-303(A)(4) by offering evidence that he knew to be false. The Court adopted the recommendation of the disciplinary board, and the attorney was disbarred and assessed all costs of the disciplinary proceedings. The court also ordered that its opinion be published in the Bar Bulletin and the New Mexico Reports. Thus, when an attorney intentionally lies under oath and manufactures documents designed to achieve an advantage in litigation, he demonstrates a complete lack of fitness to practice law.
In Weststar Mortgage Corp. v. Jackson, 2003-NMSC-002, 133 N.M. 114, 61 P. 3d 823 (2003), the Supreme Court reminded an attorney of his duty of candor to the court under Rule 16-303, after noting that his arguments contained misattributions inconsistent with witness testimony.
In another case, an attorney was publically censured and fined $1,000 for knowingly making false, misleading and inaccurate statements in a brief to the Court of Appeals, in violation of former Rule 7-102. Matter of Chakeres, 101 N.M. 684, 687 P.2d 741 (1984). See also Matter of Richards, 123 N.M. 579, 943 P.2d 1032 (1997) (attorney knowingly making a false statement of material fact in a brief filed in the Court of Appeals for the purpose of deceiving the court, warranted public censure); and Matter of Archuleta, 122 N.M. 52, 920 P.2d 517 (1999) (involving false statements of material fact to a bankruptcy court).
3.3:520 False Evidence in Criminal Proceedings
According to the Comment to NMR 16-303, when the lawyer's criminal defendant client seeks to offer false evidence, the lawyer should attempt to persuade the client otherwise. If that effort fails, the lawyer should withdraw, if possible. The Comment also discusses other possible solutions for the problem presented by the client insisting on testifying in a perjurious way.
In In re Lindsey, 112 .N.M. 17, 810 P.2d 1237 (1991), on the morning of a criminal trial (DWI), the prosecuting attorney knew that the arresting officer had moved out of state and would not be appearing as a witness. Just before trial, he contacted the local police claiming to need help with a possibly violent defendant. When an officer arrived in the courtroom before the trial, the attorney instructed him to remove his name tag, began calling him by the name of the absent witness, and indicated to the judge that his witness had arrived. He next informed the defense counsel that he was too ill to try the case and suggested a plea agreement. Despite the defense counsel's suspicions, the plea offer was accepted and the judge accepted the terms. Defense counsel later learned of the deception and moved to withdraw his client's plea. The magistrate judge granted the motion and the case was dismissed with prejudice. The attorney reported his own conduct, admitted all factual allegations, and admitted to committing some but not all of the rule violations. The hearing committee found that the attorney violated, among others, NMR 16-303(A)(2) by failing to disclose a material fact to a tribunal. The disciplinary panel recommended an 18-month suspension deferred upon specific terms of probation. The Supreme Court ordered a 6-month suspension followed by 12 months of probation under the terms recommended by the disciplinary panel. The Court assessed costs against the attorney and ordered that its opinion be published in the Bar Bulletin and the New Mexico Reports.
The Comment to NMR 16-303 clarifies the requirements for perjury in the case of criminal defendants. If the attorney is unable to convince their client not to perjure themselves prior to trial, the attorney may withdraw their representation. If the trial is imminent, is not confronted with the issue until the trial has begun, or another attorney is not willing to represent the client, withdrawal may not be an option.
For guidelines for conduct of trial by a prosecutor, see State v. Diaz, 100 N.M. 210, 668 P.2d 326 (Ct. App. 1983).
3.3:530 Offering a Witness an Improper Inducement
An attempt to influence testimony by an offer of money is an ethical violation which raises a substantial question as to the lawyer's honesty, trustworthiness or fitness as a lawyer. State Bar Advisory Opinion 1998-8.
In In re C'de Baca, 108 N.M. 622, 776 P.2d 551 (1989), an attorney filed a Chapter 13 bankruptcy on his own behalf and then failed to attend a required creditors' meeting or to seek a continuance. During a deposition, the attorney knowingly gave false statements under oath regarding the reasons why he failed to attend the meeting. The judge dismissed the bankruptcy proceedings for "willful failure of the Debtor to abide by Order of the Court or to appear before the Court in proper prosecution of the case." In response to the disciplinary board's charges, the attorney admitted to the Supreme Court that he had violated NMR 16-303(A)(4) by knowingly offering into evidence his own sworn statements that he knew to be false. The Court agreed with the disciplinary board's recommendation that the attorney be suspended from the practice of law, but reduced the time of suspension from 1 year to 6 months with automatic reinstatement.
Misconduct, including offering payments to witnesses in a criminal case in exchange for sworn statement of nonprosecution against attorney's client, warrants public censure and payment of costs. Matter of Steere, 796 P.2d 1101, 110 N.M. 405 (1990).
3.3:540 Interviewing and Preparing Witness
An attorney is entitled to meet with and prepare his or her own witnesses for a hearing. Chavarria v. Basin Moving & Storage, 127 N.M. 67, 976 P.2d 1019 (Ct. App. 1999).
3.3:600 Remedial Measures Necessary to Correct False Evidence
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3.3(a)(4), Other Jurisdictions
* Commentary: ABA/BNA § 61:401, et seq., ALI-LGL § 66-65, Wolfram § 12.5, 12.6, 13.3.6
* New Mexico Commentary:
The Comment to NMR 16-303 explains that if perjured testimony or false evidence has been offered, the advocate should attempt to persuade the client to disclose the situation to the court, and if the persuasion fails, the advocate should withdraw and "make disclosure to the court" if the withdrawal will not remedy the situation.
If a lawyer knows his client has, in the course of the representation, perpetrated a fraud on the tribunal, the lawyer must promptly call on the client to rectify the fraud and if the client refuses to rectify, the lawyer should make appropriate disclosures. State Bar Advisory Opinion 1986-10.
3.3:610 Duty to Reveal Fraud to the Tribunal
3.3:700 Discretion to Withhold Evidence Believed to be False
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3.3(c), Other Jurisdictions
* Commentary: ABA/BNA § 61:301, ALI-LGL § 120, Wolfram § 12.5,
* New Mexico Commentary:
The Comment to NMR 16-303 states that a lawyer may refuse to offer testimony or other evidence which is believed to be untrustworthy, but an exception may exist in criminal cases.
3.3:800 Duty of Disclosure in Ex Parte Proceedings
* Primary New Mexico References: New Mexico Rule 16-303
* Background References: ABA Model Rule 3.3(d), Other Jurisdictions
* Commentary: ABA/BNA § 61:301, ALI-LGL § 112, Wolfram § 12.7
* New Mexico Commentary:
The Comment to NMR 16-303 states that in an ex parte proceeding, "the lawyer for the represented party has the correlative duty to make disclosures of material facts known to the lawyer and that the lawyer reasonably believes are necessary to make an informed decision."
3.4 Rule 3.4 Fairness to Opposing Party and Counsel
3.4:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico References: New Mexico Rule 16-304:
"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;
B. falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law;
C. knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists;
D. in pretrial procedures, make a frivolous discovery request or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party;
E. in trial, allude to any matter that the lawyer does not reasonably believe is relevant, or that will not be supported by admissible evidence, assert personal knowledge of facts in issue except when testifying as a witness or state a personal opinion, not supported by the evidence as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused; or
F. request a person other than a client to refrain from voluntarily giving relevant information to another party unless:
(1) the person is a relative or an employee or other agent of a client; and
(2) the lawyer reasonably believes that the person's interest will not be adversely affected by refraining from giving such information."
* Background References: ABA Model Rule 3.4, Other Jurisdictions
* New Mexico Commentary:
3.4:101 Model Rule Comparison
The New Mexico rule differs from MR 3.4 only in that according to NMR 16-304(E), a lawyer in trial shall not state a personal opinion that is "not supported by the evidence."
3.4:102 Model Code Comparison
DR 7-109(A) of the Model Code says a lawyer "shall not suppress any evidence that he or his client has a legal obligation to reveal," and is largely like NMR 16-304(A). Other parallels to NMR 16-304(A) in the Code are DR 7-109(B), which provides that a lawyer "shall not advise or cause a person to secrete himself ... for the purpose of making him unavailable as a witness. . . ," and DR 7-106(C)(7), under which a lawyer shall not "[i]ntentionally or habitually violate any established rule of procedure or of evidence." See also EC 7-6, EC 7-27, DR 1-102(A)(4) &(5), and DR 7-106(C)(7).
NMR 16-304(B) is much like DR 7-102(A)(6). DR 7-109(C) provides that a lawyer "shall not pay, offer to pay, or acquiesce in the payment of compensation to a witness contingent upon the content of his testimony or the outcome of the case," except the lawyer may cover certain expenses. EC 7-28 states that witnesses "should always testify truthfully and should be free from any financial inducements that might tempt them to do otherwise." See also EC 7-6, EC 7-28, and DR 1-102(A)(4), (5) & (6).
NMR 16-303(C) parallels DR 7-106(A), which says "A lawyer shall not disregard ... a standing rule of a tribunal or a ruling of a tribunal made in the course of a proceeding, but he may take appropriate steps in good faith to test the validity of such rule or ruling." See also EC 7-22, EC 7-25, EC 7-38, DR 1-102(A)(5), and DR 7-106(C)(5) & (7).
While NMR 16-303(D) has no direct counterpart in the Model Code, see DR 1-102(A)(5), DR 7-106(A), and DR 7-106(C)(7).
NMR 16-303(E) largely incorporates DR 7-106(C)(1), (2), (3) and (4). NMR 16-303(E) does not include a provision similar to DR 7-106(C)(5), which says a lawyer shall not "fail to comply with known local customs of courtesy or practice." See also EC 7-24, EC 7-25, and DR 1-102(A)(5).
Finally, the analog to NMR 16-303(F) is DR 7-104(A)(2), which provides that a lawyer shall not "give advice to a person who is not represented ... other than the advice to secure counsel, if the interests of such person are or have a reasonable possibility of being in conflict with the interests of his client." See also EC 7-27, DR 1-102(A)(5), and DR 7-109(B).
3.4:103 Overview
When dealing with an attorney, another person, whether an attorney or a lay person, has the right to expect that the attorney will be honest and straightforward. Matter of Moore, 129 N.M. 217, 4 P.3d 664 (2000). Also, lawyers are officers of the court, and are always under an obligation to be truthful. Woodson v. Phillips Petroleum Co., 102 N.M. 333. 695 P.2d 483 (1985).
Attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which provides that when dealing with opposing parties and their counsel, "my word is my bond," and that with respect to opposing parties and their counsel, "I will be courteous and civil, both in oral and in written communications; [and] I will communicate with opposing counsel in an effort to avoid litigation or to resolve litigation; [and] I will refrain from filing frivolous motions."
Numerous New Mexico cases pertinent to NMR 16-304 are discussed in the context of NMR 16-303, above.
3.4:200 Unlawful Destruction and Concealment of Evidence
* Primary New Mexico References: New Mexico Rule 16-304
* Background References: ABA Model Rule 3.4(a), Other Jurisdictions
* New Mexico Commentary:
A lawyer's duties are no different from the duties of any other citizen, where the lawyer, in representing a civil claim for a client, learns the adverse party in the case may have committed crimes. Any citizen may have a duty to report the crime to the appropriate authorities. A lawyer should be careful about signing a confidentiality agreement in connection with a settlement containing a provision requiring the lawyer to not make report to the appropriate authorities, and where the law requires notification. State Bar Advisory Opinion 1989-1.
The attorney in In re Klein, 119 N.M. 460, 891 P.2d 1214 (1995), already on probation for violations of the Rules of Professional Conduct, was charged with additional violations by the disciplinary board and ordered by the Supreme Court to show cause why his probation should not be revoked and further discipline imposed. In a domestic relations case in which the attorney represented his brother, the Second Judicial District judge entered an order establishing interim guardianship and custody of the parties' minor child. The attorney, however, petitioned the Seventh Judicial District Court for appointment of himself as a guardian for the child without informing the court about the matter pending in the Second District case and that judge's standing orders. He also failed to file a mandatory affidavit or give notice to the guardian ad litem. The disciplinary complaint alleged that the attorney misled the judge in violation of Rules 16-303 and 16-304, and the attorney agreed not to contest the charges. The Supreme Court ordered suspension from the practice of law for six months, with the suspension deferred, and ordered probation for 12 months under strict terms and conditions.
In In re Lindsey, 112 .N.M. 17, 810 P.2d 1237 (1991), on the morning of a criminal trial, the prosecuting attorney knew that the arresting officer had moved out of state and would not be appearing as a witness. Just before trial, he contacted the local police claiming to need help with a possibly violent defendant. When an officer arrived in the courtroom before the trial, the attorney instructed him to remove his name tag, began calling him by the name of the absent witness, and indicated to the judge that his witness had arrived. He next informed the defense counsel that he was too ill to try the case and suggested a plea agreement. Despite the defense counsel's suspicions, the plea offer was accepted and the judge accepted the terms. Defense counsel later learned of the deception and moved to withdraw his client's plea. The magistrate judge granted the motion and the case was dismissed with prejudice. The attorney reported his own conduct, admitted all factual allegations, and admitted to committing some but not all of the rule violations. The hearing committee found that the attorney violated, among others, NMR 16-304(A), 304(C), and 304(F)(1). The Supreme Court ordered a 6-month suspension followed by 12 months of probation under the terms recommended by the disciplinary panel.
Courts in New Mexico have emphasized that lawyers are under an obligation to be truthful to the court. Woodson v. Phillips Petroleum Co. 102 N.M. 333, 695 P.2d 483 (1985); and State v. Martínez, 97 N.M. 540, 641 P.2d 1087 (Ct.App. 1982).
3.4:210 Physical Evidence of Client Crime
3.4:300 Falsifying Evidence
* Primary New Mexico References: New Mexico Rule 16-304
* Background References: ABA Model Rule 3.4(b), Other Jurisdictions
* Commentary: ABA/BNA §§ 61:601, 61:701, ALI-LGL § 118, Wolfram § 12.3
* New Mexico Commentary:
The court in Matter of Chakeres, 101 N.M. 684, 687 P.2d 741 (1984), publicly censured and fined an attorney in the amount of $1,000 for knowingly making false, misleading and inaccurate statements in a brief to the Court of Appeals. Also, in Matter of Righter, 1999-NMSC-009, 126 N.M. 730, 975 P.2d 343 (1999), the court upheld an indefinite suspension for an attorney who, among other things, made untrue statements to the tribunal.
In Matter of Gabell, 115 N.M. 737, 858 P.2d 404 (1993), the court disbarred the lawyer for violations including manufacturing documents. A lawyer hired by another attorney to assist in a class action lawsuit was paid over $173,000, but he later filed suit claiming that a partnership or joint venture had existed between them and that he was owed a formal accounting and a division of the profits. The district court found that the attorney fraudulently manufactured documents for use in the litigation and "lied under oath about facts of the underlying controversy and matters bearing on his credibility." The Supreme Court agreed that, among other things, the attorney had violated Rule 16-304(B) by falsifying evidence. The court adopted the recommendation of the disciplinary board, and the attorney was disbarred and assessed all costs of the disciplinary proceedings. The court also ordered that its opinion be published in the Bar Bulletin and the New Mexico Reports.
A similar result occurred in In re C'de Baca, 108 N.M. 622, 776 P.2d 551 (1989). There, an attorney filed a Chapter 13 bankruptcy on his own behalf, and then failed to attend a required creditors' meeting or to seek a continuance. During a deposition, the attorney knowingly gave false statements under oath regarding the reasons why he failed to attend the meeting. The judge dismissed the bankruptcy proceedings for "willful failure of the Debtor to abide by Order of the Court or to appear before the Court in proper prosecution of the case." In response to the disciplinary board's charges, the attorney admitted to the Supreme Court that he had violated NMR 16-304(C) by knowingly disobeying an obligation under the rules of a tribunal. The court agreed with the disciplinary board's recommendation that the attorney be suspended from the practice of law, but it reduced the time of suspension from 1 year to 6 months with automatic reinstatement.
See also Matter of Righter, 126 N.M. 730, 975 P.2d 343 (1999).
3.4:310 Prohibited Inducements
According to the Comment for NMR 16-304, a lawyer may pay a witness's expenses or compensate an expert witness, on terms permitted by law. The common law rule is it is improper to pay an occurrence witness a fee for testifying, or to pay an expert witness a contingency fee.
In the course of his representation of two clients and during an investigation into his own misconduct, an attorney acted improperly when he intimidated witnesses and suborned false statements from a client and from a fellow attorney. In re Ayala, 102 N.M.214, 693 P.2d 580 (1984). The Supreme Court found the attorney's conduct to be in violation of the rule whereby a lawyer shall not falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law. The court ordered disbarment and payment of costs.
3.4:400 Knowing Disobedience to Rules of Tribunal
* Primary New Mexico References: New Mexico Rule 16-304
* Background References: ABA Model Rule 3.4(c), Other Jurisdictions
* Commentary: ABA/BNA §§ 61:1231, 61:701, ALI-LGL § 105, Wolfram § 12.1
* New Mexico Commentary:
All lawyers licensed by the Supreme Court are obligated to obey the orders of the Supreme Court, as well as orders entered by the lower courts. Matter of Allred, 27 P.3d 977, 130 N.M. 490 (2001). Willful violation of a court's order without testing its validity through established process directly affects a court's ability to discharge its duties. No New Mexico attorney should indulge in the notion that doing what a professional should do will relieve him or her of ethical responsibilities they do not want to discharge.
The attorney in In re Dawson, 2000-NMSC-024, 129 N.M. 369, 8 P.3d 856 (2000), representing a client in a criminal matter, failed to file an appropriate docketing statement providing the Court of Appeals with additional facts or law to support his position. The court issued a calendar notice rejecting the docketing statement and ordering the attorney to file an amended statement. The attorney failed to file an amended statement as ordered and did not request additional time. In addition, the attorney was suspended from the practice of law for nonpayment of his bar dues. The Supreme Court found that the attorney violated, among others, NMR 16-304(C), by knowingly disobeying an obligation under the rules of a tribunal. The court adopted the disciplinary board's recommendation and approved the attorney's conditional agreement not to contest and consent to discipline, and the attorney was suspended from the practice of law for a period of two years. The court also ordered that, if the attorney resolved the issues surrounding his nonpayment of bar dues and was recommended for reinstatement, the suspension would be deferred and the attorney placed on probationary status for two years under strict conditions, including restitution to two clients.
An attorney failed to file a docketing statement for his client's appeal, despite the court clerk's having sent a letter of warning and granting an extension. In re Roberts, 119 N.M. 769, 895 P.2d 669 (1995). The case was ultimately dismissed for lack of prosecution. Over the course of seven years, the attorney repeatedly told his client that the matter was still pending. The Supreme Court found the attorney violated, among others, NMR 16-304(C), by knowingly disobeying an obligation under the rules of a tribunal.
The lawyer in In re Roberts-Hohl, 116 N.M. 700, 866 P.2d 1167 (1994), repeatedly failed to respond to interrogatories and requests for production of documents, failed to provide his clients with status updates, failed to respond to telephone calls from his clients, and failed to file responses to court orders and other communications sent via certified mail, including show cause orders. The case was ultimately dismissed for failure to prosecute. The Supreme Court found that the attorney violated NMR 16-304(C), by knowingly disobeying an obligation under the rules of the court, and NMR 16-304(D), by failing to make reasonably diligent effort to comply with a proper discovery request.
An attorney committed knowing disobedience to the rules of the tribunal where he attempted to falsify the identify of a witness, in In re Lindsey, 112 .N.M. 17, 810 P.2d 1237 (1991).
Similarly, the knowingly disobeyed an obligation under the rules of a tribunal in In re C'de Baca, 108 N.M. 622, 776 P.2d 551 (1989), where he knowingly gave false statements under oath regarding the reasons why he failed to attend a court meeting.
3.4:500 Fairness in Pretrial Practice
* Primary New Mexico References: New Mexico Rule 16-304
* Background References: ABA Model Rule 3.4(d), Other Jurisdictions
* Commentary: ABA/BNA §§ 61:701, ALI-LGL § 106, Wolfram § 12.1
* New Mexico Commentary:
Section 36-2-10(F) NMSA 1978 (1991 Repl. Pamp.) states that it is the duty of lawyers in New Mexico to abstain from advancing facts "prejudicial to the honor or reputation of a party or witness unless required by the justice of the cause with which he is charged."
Attorneys in New Mexico are guided by A Creed of Professionalism of the New Mexico Bench and Bar, which says that with respect to opposing parties and their counsel, "I will not make improper statements of fact or of law; I will agree to reasonable request for extensions of time or waivers of formalities when legitimate interests of my client will not be adversely affected; I will consult with opposing counsel before scheduling depositions and meetings or before rescheduling hearings; I will cooperate with opposing counsel's request for scheduling changes; I will not use litigation, delay tactics, or other courses of conduct to harass the opposing party or their counsel; I will refrain from excessive and abusive discovery, and I will comply with reasonable discovery requests; in depositions, negotiations and other proceedings, I will conduct myself with dignity, avoiding groundless objections and other actions that are disrupting and disrespectful; I will not serve motions and pleadings that will unfairly limit the other parties opportunity to respond; in the preparation of documents and in negotiations, I will concentrate on substance and content; I will clearly identify, for other counsel or parties, all changes that I have made in all documents;" and with respect to the courts and other tribunals, "I will voluntarily exchange information and work on a plan for discovery as early as possible; I will attempt to resolve, by agreement, my objections to matters contained in my opponents pleadings and discovery requests; when hearings or depositions are cancelled, I will notify opposing counsel, necessary parties, and the court (or other tribunal) as early as possible; before dates for hearings or trials are set, or immediately after dates have been set, I will verify the availability of participants and witnesses, and I will notify the court (or other tribunal) and opposing counsel of any problems; [and] I will punctual for court hearings, conferences and depositions."
An attorney's off the record statements to opposing counsel during the early stages of litigation cannot bind the client throughout the course of litigation; after such statements are made, an attorney may become aware of new law or facts that require him, in zealous, good faith representation of client, to change positions. Maya v. General Motors Corp., 953 F. Supp. 1245 (D.N.M. 1996).
A licensed attorney, although authorized by regulations to file affidavits and notices of deposition, was not authorized to mislead the court or to abuse the discovery process, and thus was not exempt from the claim that his filing of a false affidavit and his seeking of a deposition in order to intimidate, violated New Mexico's Unfair Practices Act (UPA). Campos v. Brooksbank, 120 F. Supp.2d 1271 (D.N.M. 2000). See also State v. Eder, 103 N.M. 211, 704 P.2d 465 (Ct. App. 1985) (compelling witnesses to produce documents with unauthorized subpoenas amounts to perpetrating a "deceit" on the witness, under the Code of Professional Responsibility rule prohibiting an attorney from engaging in deceit).
According to State Bar Advisory Opinion 1990-2, a lawyer is not required to notify the court that no action has been taken in a criminal action against his client, and it may be malpractice if he does. An exception exists if the client desires a speedy resolution, but there is no general duty to the court or opposing party to give notice. See also State Bar Advisory Opinion 1990-5 (lawyer may not mail subpoenas to witnesses to compel their attendance in lieu of having the subpoenas issued by the court and served). Under the former Code of Professional Responsibility, the lawyer was under no duty to tell opposing counsel of a statute of limitations that could defeat the claim of the lawyer's client. State Bar Advisory Opinion 1987-2.
In In re Righter, 126 N.M. 730, 975 P.2d 343 (1999), an attorney failed to appear at a scheduling conference before a federal magistrate judge and offered no excuse for not appearing. After several weeks of unsuccessful attempts to communicate, the judge issued an order to show cause why the case should not be dismissed for failure to prosecute, but the attorney again failed to appear. On that same date, however, the attorney filed an answer to the show-cause order claiming he had not received notice of the scheduling conference. Moreover, a copy of that same pleading had been mailed to opposing counsel nearly a week before the date of show-cause hearing. At subsequent hearings, despite being confronted with factual evidence to the contrary, the attorney continued to insist that the reason for his failure to appear was that he received no notice. The Supreme Court found that the attorney violated NMR 16-304(D) by failing to make reasonably diligent efforts to comply with a legally proper discovery request.
The attorney in In re Herkenhoff, 116 N.M. 622, 866 P.2d 350 (1993), without seeking a protective order and without taking any steps to stay a deposition, failed to appear and failed to have his client appear. The deposition was rescheduled, and the attorney advised his clients to refuse to answer all questions, claiming the information was confidential, and to refuse to produce any of the subpoenaed documents. The hearing committee and the disciplinary board found that the attorney violated numerous provisions of the Rules of Professional Conduct, including NMR 16-304(A) & (C), through "unorthodox conduct" that served only to inconvenience the opposing party and disrupt the legal proceeding. The Supreme Court adopted the board's recommendation and ordered that the attorney be suspended indefinitely from the practice of law for a period not to exceed two years. That sanction was deferred in favor of a one-year, supervised probationary period prior to application for reinstatement, and the costs of the proceedings were assessed against the attorney.
3.4:600 Improper Trial Tactics
* Primary New Mexico References: New Mexico Rule 16-304
* Background References: ABA Model Rule 3.4(e), Other Jurisdictions
* Commentary: ABA/BNA § 61:1361, ALI-LGL § 107, Wolfram § 12.1
* New Mexico Commentary:
In McDowell v. Napolitano, 119 N.M. 696, 895 P.2d 218 (1995), the court did not find a reversible error where the attorney injected himself into questions by using "I" or "we" in his direct and cross-examination of witnesses. Likewise, in State v. Pennington, 115 N.M. 372, 851 P.2d 494 (Ct. App. 1993), a criminal defendant claimed on appeal that the prosecutor improperly vouched for a state's witness during her closing argument, a violation of NMR 16-304(E). The court stated that although prosecutors have considerable latitude in their closing arguments, that latitude does not extend to vouching for the credibility of a witness. Although the court rejected the application of the "invited-response" doctrine as a justification for the prosecutor's statements, the impropriety was not found to have undermined the fundamental fairness of the trial.
A prosecuting attorney used the phrase "I think" when recommending to the jury that they return a guilty verdict. State v. Ferguson, 111 N.M. 191, 803 P.2d 676 (Ct. App. 1990). Based on this and other improprieties, the trial court granted the murder defendant's motion for a new trial. In affirming the trial court's granting of the defendant's motion, the Court of Appeals recognized that NMR 16-304(E) prohibits a prosecutor from expressing personal views about the defendant's guilt, and found that the lower court did not abuse its discretion in granting the motion for a new trial.
3.4:700 Advising Witness Not to Speak to Opposing Parties
* Primary New Mexico References: New Mexico Rule 16-304
* Background References: ABA Model Rule 3.4(f), Other Jurisdictions
* Commentary: ALI-LGL § 116, Wolfram § 12.4.2
* New Mexico Commentary:
According to the Comment for NMR 16-304, a lawyer may advise employees of a client to refrain from giving information to another party, as the interests of the employees and the client may align.
Among the attorney's many violations in In re Lindsey, 112 .N.M. 17, 810 P.2d 1237 (1991), was violation of NMR 16-304(F)(1).
An attorney was properly disbarred for having engaged in several acts of misconduct, including subornation of false statements, intimidation of witnesses, and making dishonest and intentional misrepresentations to the disciplinary board. Matter of Ayala, 102 N.M. 214, 693 P.2d 580 (1984).
3.6 Rule 3.6 Trial Publicity
3.6:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico References: New Mexico Rule 16-306:
"A. Extrajudicial statements. A lawyer shall not make any extrajudicial or out-of-forum statement in a criminal proceeding that may be tried to a jury that the lawyer knows or reasonably should know:
(1) is false; or
(2) creates a clear and present danger of prejudicing the proceeding.
B. Attorney's obligations with respect to other persons. A lawyer shall make reasonable efforts to insure compliance with this rule by associated attorneys, employees and members of law enforcement and investigative agencies."
* Background References: ABA Model Rule 3.6, Other Jurisdictions
* New Mexico Commentary:
3.6:101 Model Rule Comparison
Following the 1991 amendments, NMR 16-306 differs greatly from the original 1983 version of MR 3.6, which covers trial publicity. The New Mexico rule only applies to criminal proceedings, whereas the Model Rule pertains to all matters. The New Mexico rule prohibits lawyers from making extrajudicial or out-of-court statements that a reasonable person would know to be false, or create a clear and present danger of prejudicing the proceeding. MR 3.6 makes no such provision for a knowingly false statement. The New Mexico rule does not give guidance as to what is considered to be a statement that would prejudice the proceeding, whereas the Model rule gives six examples. Likewise, the New Mexico Rule does not provide guidance on what sorts of statements would not be considered to prejudice the proceeding, whereas the Model Rule lists ten examples.
Furthermore, the State Bar of New Mexico in its Comment to NMR 16-306 states that "[t]he merits of every adjudicative proceeding should be decided on the basis of the evidence presented in the proceeding, and not on the basis of out of court publicity, influence or pressure. On the other hand, the well-being of the judicial, administrative and legislative systems, and of the larger society of which they are parts, requires a public informed of matters arising in law practice and of matters pertaining to proceedings of public interest. Where the public interest is served, out of court statements in civil proceedings are not forbidden by this rule."
3.6:102 Model Code Comparison
NMR 16-306 is substantially different from DR 7-107. As NMR 16-306 is limited to "a criminal proceeding that may be tried to a jury," DR 7-107(G) regarding civil proceedings has no counterpart in the New Mexico rules. The provisions of DR 7-107 pertaining to criminal proceedings are in parts (A), (B), (C), (D), & (E). NMR 16-306 does not include DR 7-107(C)(7), which says a lawyer may reveal "[a]t the time of seizure, a description of the physical evidence seized, other than a confession, admission or statement." See also EC 7-25, and EC 7-33.
3.6:200 Improper Extrajudicial Statements
* Primary New Mexico References: New Mexico Rule 16-306
* Background References: ABA Model Rule 3.6(a), Other Jurisdictions
* Commentary: ABA/BNA § 61:1001, ALI-LGL § 109, Wolfram § 12.2
* New Mexico Commentary:
NMR 16-306 prohibits a lawyer from making out-of-court statements in a criminal proceeding that may be tried to a jury that the lawyer knows or reasonably should know are false, or create a clear and present danger of prejudicing the proceeding. Application of the rule requires an appropriate balance between rights of free speech and the interest in fair and impartial adjudication. Hence, any prior restraint on public comment by trial participants must be accompanied by specific factual findings supporting the conclusion that further extrajudicial statements would pose a clear and present danger to the administration of justice. Twohig v. Blackmer, 121 N.M. 746, 918 P.2d 332 (1996). Special responsibilities to supervise assisting personnel regarding trial publicity are stated in NMR 16-308(E).
3.6:300 Permissible Statements
* Primary New Mexico References: New Mexico Rule 16-306
* Background References: ABA Model Rule 3.6(b), Other Jurisdictions
* Commentary: ABA/BNA § 69:1001, ALI-LGL § 109, Wolfram § 12.2
* New Mexico Commentary:
Out-of-court statements regarding a criminal proceeding that are not shown by specific facts to pose a clear and present danger to the administration of justice are permissible. Twohig v. Blackmer, 121 N.M. 746, 918 P.2d 332 (1996). Thus, a U.S. attorney's brief press statement that was a general comment on the complexity of cases involving charges against public officials, was not a specific comment on the strengths of the present case or defendant's guilt or innocence, and did not violate DR 7-107(B)(6) (now see NMR 16-306). United States v. Troutman, 814 F.2d 1428 (10th Cir. 1987).
3.6:400 Responding to Adverse Publicity
* Primary New Mexico References: New Mexico Rule 16-306
* Background References: ABA Model Rule 3.6(c) Other Jurisdictions
* Commentary: ABA/BNA § 61:1001, ALI-LGL § 109, Wolfram 12.2
* New Mexico Commentary:
The Comment to NMR 16-306 and New Mexico case law are silent on this point.
3.7 Rule 3.7 Lawyer as Witness
3.7:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico References: New Mexico Rule 16-307:
"A. Necessary witness. A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where:
(1) the testimony relates to an uncontested issue; or
(2) the testimony relates to the nature and value of legal services rendered in the case.
B. Associate lawyer. A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by Rule 16-107 or 16-109."
* Background References: ABA Model Rule 3.7, Other Jurisdictions
* New Mexico Commentary:
3.7:101 Model Rule Comparison
NMR 16-307 omits MR 3.7(a)(3), which provides that a lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where A(3) disqualification of the lawyer would work substantial hardship on the client." Otherwise, the New Mexico rule and Comment are identical to MR 3.7 and Comment.
3.7:102 Model Code Comparison
DR 5-102(A) disallows a lawyer or his firm from serving as an advocate if the lawyer "learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client." DR 5-102(B) says a lawyer or his firm could continue the representation "If the lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client . . . until it is apparent that his testimony is or may be prejudicial to his client." NMR 16-307 does not distinguish on the basis of whether or not the testimony is on behalf of the client.
Under DR 5-101(B), a lawyer may testify while representing a client: "(1) If the testimony will relate solely to an uncontested matter; (2) If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony; (3) If the testimony will relate solely to the nature and value of services rendered in the case by the lawyer or his firm to the client; (4) As to any matter if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case." This delineation of the circumstances under which a lawyer who is a witness may also serve as an advocate generally tracks NMR 16-307(A)(1) & (2), save for New Mexico's omission of the permission granted in (4). See also EC 5-9, and EC 5-10.
The Model Code does not contain a provision that directly corresponds with NMR 16-307(B), which under certain circumstances allows a lawyer to act as advocate even if another lawyer in his firm may not due to his status as witness. See EC 5-9, DR 5-101(B), and DR 5-102, which provide that disqualification of a lawyer from serving as an advocate because that lawyer will be a material witness on a contested matter is not infectious, and does not preclude another lawyer in the disqualified lawyer's firm from serving as advocate, provided that doing so would not constitute a conflict of interest under either ABA Model Rule 1.7 or ABA Model Rule 1.9.
3.7:200 Prohibition of Advocate as Witness
* Primary New Mexico References: New Mexico Rule 16-307
* Background References: ABA Model Rule 3.7(a) Other Jurisdictions
* Commentary: ABA/BNA § 61:501, ALI-LGL § 108, Wolfram § 7.5
* New Mexico Commentary:
In Chappell v. Cosgrove, 121 N.M. 636, 916 P.2d 836 (1996), the New Mexico Supreme Court held that materiality, necessity and potential prejudice is the standard for disqualification under NMR 16-307. This means that an attorney may not disqualified under NMR 16-307 absent a showing by the party seeking disqualification that the attorney's testimony is material to an issue in the case, that the evidence to be elicited from the attorney's testimony is not available from another source, and that the attorney's testimony is potentially prejudicial to his client's case. Threshold discovery ordinarily will be necessary to establish these elements. The court went on to find the lawyer was not a necessary witness in that breach of contract case, in which the lawyer was present for disputed negotiations, because four others attended the key events.
An attorney met disqualification in Sanders v. Rosenberg, 122 N.M. 695, 930 P.2d 1144 (1996), because the "best interests of the children" rule constituted a compelling reason to deny a mother he counsel of choice. There, the mother chose her new husband to represent her in a contested divorce and child custody proceeding against her former husband and the children's father.
In State v. Martínez, 2001 NMCA 059, 31 P.3d 1018, issues existed whether defense counsel or his staff were present during the crime. The court determined that if the lawyer was not present at the crime, he would almost certainly have to testify to address suspicions, but this would have precluded counsel from continuing as advocate in the case. The court also said if the lawyer was present at the crime he could not provide effective representation, with the combination of the circumstances meaning an actual conflict of interest existed.
It is usually impermissible for a lawyer to serve a juvenile client as both defense attorney and guardian ad litem because the GAL, who may be in a unique position to advocate for the child in a delinquency proceeding, may not be able to serve in that capacity in the role of an attorney. State v. Joanna V., 2004 NMSC 24, 94 P.3d 783.
Testimony by an attorney on matters collateral to a determination of the merits may be given. Mitchell-Carr v. McLendon, 1999-NMSC-025, 127 N.M. 282, 980 P.2d 65.
A lawyer may appear pro se in a suit against his former client for fees, and may testify in the suit. State Bar Advisory Opinion 1986-11.
A prosecutor who did not have reason to know he or his staff would be called as a witness did not the former New Mexico rule governing attorney as witness, in United States v. Troutman, 814 F.2d 1428 (10th Cir. 1987).
3.7:300 An Affiliated Lawyer as Advocate (Imputed Disqualification)
* Primary New Mexico References: New Mexico Rule 16-307
* Background References: ABA Model Rule 3.7, Other Jurisdictions
* Commentary: ABA/BNA § 61:501, ALI-LGL § 108, Wolfram § 7.5, 7.6
* New Mexico Commentary:
In Johnstone v. Dairyland Ins. Co., 1991 U.S.App.LEXIS 29489 (10th Cir. 1991), different attorneys within the same firm served as both counsel and witness in related actions, but this was permissible because the conduct was consistent with the conflict of interest rules in NMR 16-107.
Where the lawyer's former client at the lawyer's former firm is suing a client of the lawyer's current firm, and where the lawyer has been advised he may be a witness, the lawyer should advise his current firm. Also, the current firm may have to withdraw from representation of the adversary of the lawyer's former client, if the two matters are substantially related. State Bar Advisory Opinion 1987-4.
4.2 Rule 4.2 Communication with Person Represented by Counsel
4.2:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico Reference: New Mexico Rule 16-402:
"In representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so. Except for persons having a managerial responsibility on behalf of the organization, an attorney is not prohibited from communicating directly with employees of a corporation, partnership or other entity about the subject matter of the representation even though the corporation, partnership or entity itself is represented by counsel."
* Background References: ABA Model Rule 4.1, Other Jurisdictions
* New Mexico Commentary:
4.2:101 Model Rule Comparison
With regard to communications with persons represented by counsel, NMR 16-402 adds a sentence not found in the original 1983 version of MR 4.2, namely, "except for persons having a managerial responsibility on behalf of the organization, an attorney is not prohibited from communicating directly with employees of a corporation, partnership, or other entity about the subject matter of the representation even though the corporation, partnership or entity itself is represented by counsel." New Mexico has not enacted the amendments to MR 4.2 adopted by the ABA in August 1995.
4.2:102 Model Code Comparison
NMR 16-402 is substantially identical to DR 7-104(A)(1). See also EC 2-30, and EC 7-18.
4.2:200 Communication with a Represented Person
* Primary New Mexico Reference: New Mexico Rule 16-402
* Background References: ABA Model Rule 4.2, Other Jurisdictions
* Commentary: ABA/BNA § 71:301, ALI-LGL § 99-102, Wolfram § 11.62
* New Mexico Commentary:
The purpose of NMR 16-402 is to protect lay persons from the possibility of an attorney using his legal training and expertise to gain an advantage, where the lay person has an acknowledged unfamiliarity with legal complexities by having retained counsel. Matter of Herkenhoff, 116 N.M. 622, 866 P.2d 350 (1993).
In Matter of Chavez, 1996 NMSC 59, 122 N.M. 504, 927 P.2d 1042, the attorney violated NMR 16-402 by contacting a party represented by counsel. Although this contact was initiated by the opposing party, the attorney should have declined to discuss the case until he verified with the opposing party's attorney that the party was no longer represented.
4.2:210 "Represented Person" (Contact with an Agent or Employee of a Represented Entity)
Counsel for plaintiff in a disabilities case was held to have improperly obtained an affidavit from an emeritus professor who had responsibility for decisions regarding the New Mexico plaintiff's student status, in McGuinness v. University of New Mexico School of Medicine, 170 F.3d 974 (10th Cir. 1998) (upholding sanctions for violation of a protective order barring ex parte contacts with the individual, and rejecting plaintiff's contention that by lodging complaint with magistrate judge, defense counsel chilled flow of information necessary for plaintiff's case and thus improperly wielded Rules of Professional Conduct as a tactical weapon).
In Matter of Herkenhoff, 116 N.M. 622, 866 P.2d 350 (1993), the president and CEO of a bank clearly had managerial responsibility for the bank and was a person protected by the prohibitions of NMR 16-402. The lawyer in that case committed "blatant violation" of the rule, undermining his opponent's attorney-client relationship, and resulting in serious consequences including suspension.
4.2:220 Communications "Authorized by Law" - Law Enforcement Activities
The Supremacy Clause of the United States Constitution did not preclude enforcement of this rule against an Assistant United States Attorney, since it appears to be the intent of Congress that the attorney and others in his position should adhere to the ethical standards prescribed by their licensing states. Matter of Howes, 123 N.M. 311, 940 P.2d 159 (1997). In that case, "listening" to a represented criminal defendant by an Assistant United States Attorney constituted "communication," and by not contacting the defendant's attorney and by encouraging the defendant to talk to him and a detective, the attorney violated this rule and the principles behind it. Further, the Assistant United States Attorney's communications with a represented criminal defendant were not authorized by law within the meaning of this rule. NMR 16 502 did not excuse the Assistant United States Attorney's violation of this rule.
A similar situation arose in United States v. Thomas, 474 F.2d 110 (10th Cir. 1973), where the prosecuting attorney obtained a statement from the defendant without informing his attorney of the impending interview, and the court held the conduct unethical.
4.2:230 Communications "Authorized by Law" - Other
If the represented party initiates contact, the proscriptions of this rule apply equally. Matter of Herkenhoff, 116 N.M. 622, 866 P.2d 350 (1993). The New Mexico Disciplinary Board, and not the United States District Court, was the appropriate forum for adjudicating a claim against an assistant United States attorney permitted to practice solely by virtue of his New Mexico license. Matter of Doe, 801 F. Supp. 478 (D.N.M. 1992). Additionally, an assistant United States attorney could not properly remove disciplinary proceeding under this rule to federal court under 28 U.S.C. § 1442, and case was remanded accordingly to the New Mexico disciplinary board. Matter of Gorence, 810 F. Supp. 1234 (D.N.M. 1992).
The status of the Risk Management Division as a public entity does not mean that communications by a plaintiff's lawyer with the Risk Management Division without the consent of the lawyer hired by the Risk Management Division is "Authorized by law." State Bar Advisory Opinion 1988-2.
4.2:240 Communication with a Represented Government Agency or Officer
An attorney serving as guardian ad litem occupies a unique position that justifies contacts with state child welfare personnel without the presence of state counsel. State ex rel. Children, Youth & Families Dep't v. George F, 1998 NMCA 119, 125 N.M. 597, 964 P.2d 158 (explaining that a guardian ad litem (GAL) when investigating the facts affecting a child in order to report to the court as required by statute is acting to assist the court in carrying out its duty, and is not functioning solely as an attorney advocating the child's wishes, nor in the traditional manner of an attorney who represents a client with a single minded duty solely to that client, and thus, the GAL is not prohibited by the Rules of Professional Conduct from ex parte contact with social workers, outside the presence of attorneys from the Youth and Families Department).
A plaintiff's lawyer may not communicate directly with the Risk Management Division of the State of New Mexico in order to explain or negotiate settlement of a case, without the consent of the lawyer for the Risk Management Division. The role of the Risk Management Division is similar to that of a private insurance company. State Bar Advisory Opinion 1988-2.
4.2:250 Communication with a Confidential Agent of Non-Client
5.5 Rule 5.5 Unauthorized Practice of Law
5.5:100 Comparative Analysis of New Mexico Rule
* Primary New Mexico References: New Mexico Rule 16-505:
"A lawyer shall not:
A. practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction;
B. assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law;
C. employ or continue the employment of a disbarred or suspended lawyer as an attorney; or
D. employ or continue the employment of a disbarred or suspended lawyer as a law clerk, a paralegal or in any other position of a quasi-legal nature if the suspended or disbarred lawyer has been specifically prohibited from accepting or continuing such employment by order of the Supreme Court or the disciplinary board."
* Background References: ABA Model Rule 5.5, Other Jurisdictions
* New Mexico Commentary:
5.5:101 Model Rule Comparison
NMR 16-505(A) & (B) set forth the same prohibitions as are found in MR 5.5(a) & (b). However, the New Mexico rule (as amended effective September 1987) adds two more restrictions concerning the unauthorized practice of law. They are: (C) a lawyer may not "employ or continue the employment of a disbarred or suspended lawyer as an attorney;" and (D) a lawyer may not "employ or continue the employment of a disbarred or suspended lawyer as a law clerk, a paralegal or in any other position of a quasi-legal nature if the suspended or disbarred lawyer has been specifically prohibited from accepting or continuing such employment by order of the Supreme Court or the disciplinary board."
5.5:102 Model Code Comparison
The Model Code section DR 3-101(B) is substantially identical to NMR 16-505(A). DR 3-101(A) is substantially the same as NMR 16-505(B).
5.5:200 Engaging in Unauthorized Practice
* Primary New Mexico References: New Mexico Rule 16-505
* Background References: ABA Model Rule 5.5(a), Other Jurisdictions
* Commentary: ABA/BNA § 21:8001, ALI-LGL § 3, 4, Wolfram § 15.1
* New Mexico Commentary:
The practice of law in almost all courts of this state without admission to the bar is prohibited, under penalty of a contempt citation. Section 36-2-27 NMSA 1978 (2001 Cum. Supp.) (stating "No person shall practice law in a court of this state, except a magistrate court, nor shall a person commence, conduct or defend an action or proceeding unless he has been granted a certificate of admission to the bar under the provisions of Chapter 36 NMSA 1978"). New Mexico law also prohibits the practice of law without maintaining a valid license, under penalty of imprisonment and fine. Section 36-2-28 NMSA 1978 (1991 Repl. Pamp.) (stating any person who violates Chapter 36 "shall be deemed guilty of contempt of the court in which the violation occurred, as well as of the supreme court of the state, provided, however that nothing in this section shall be construed to prohibit persons residing beyond the limits of this state, otherwise qualified, from assisting resident counsel in participating in an action or proceeding").
According to NMR 15-101, a rule adopted and promulgated by the New Mexico Supreme Court, the "'practice of law' means being actively and continuously engaged in full-time gainful employment in the performance of legal services." "LEGAL Services" means "advising, advocating or counseling to or for others as to a matter involving law which may not be lawfully performed by a nonlawyer." The Supreme Court determines what constitutes the practice of law on a case-by-case basis. Matter of Chávez, 129 N.M. 35, 1 P.3d 417 (2000) (also explaining that "one of the purposes of our rules governing resigned, disbarred, or suspended attorneys permits this Court to assure the public that an attorney will not continue to practice law after becoming unlicenced").
Exercising legal judgment as to which competing real estate form to use or giving advice about the legal effect of executing a joint-tenancy deed constitutes the "practice of law." State Bar v. Guardian Abstract & Title Co., Inc., 91 N.M. 434, 575 P.2d 943 (1978), appeal after remand 92 N.M. 327, 587 P.2d 1338 (also stating that filling in blanks in real estate legal instruments, where forms have been drafted by attorney and where filling in blanks requires only use of common knowledge regarding information to be inserted, does not constitute "practice of law"; but, when filling in blanks affects substantial legal rights and if reasonable protection of such rights requires legal skill and knowledge greater than that possessed by average citizen, then such practice is restricted to members of the legal profession).
The attorney in Matter of Chávez, 129 N.M. 35, 1 P.3d 417 (2000), was previously suspended from the practice of law. He then worked at his firm as a legal assistant, and complaints were made that he withheld client funds and concealed his suspension. The court held that only two types of legal representation are recognized litigants appearing pro se or those appearing through licensed counsel of record. One is not authorized to undertake legal representation in any other capacity, regardless of whether one calls oneself a legal assistant, an intermediary, a scrivener, or just a friend. It follows that a disclaimer that the non-lawyer is only providing "scrivener" or "paralegal" services is irrelevant if the non-lawyer in fact engages in unauthorized practice of law. See also Matter of Schmidt, 931 P.2d 1386, 122 N.M. 770 (1997).
In Matter of Chávez, in which the attorney revised a settlement agreement for a client while not properly licensed, the court declined to adopt a definition of the practice of law that is limited to signing pleadings or appearing in court on another's behalf. Instead, it also encompasses giving legal advice and counsel, as well as interviewing clients, analyzing their issues and explaining their legal rights. Thus, unauthorized practice of law may occur even though the unlicensed person has not entered an appearance or otherwise disclosed his participation to the court or opposing counsel. An unlicensed person may not use a licensed attorney simply as a facade to cover up the fact that he or she is engaging in the unauthorized practice of law.
An attorney must refuse to provide ghostwriting assistance unless the purported pro se client specifically commits herself to disclosing the attorney's assistance to the court upon filing. Duran v. Carris, 238 F.3d 1268 (10th Cir. 2001) (also stating, under New Mexico rules, that participation by an attorney in drafting otherwise pro se appellate brief is per se substantial legal assistance, and must be acknowledged by signature).
The Supreme Court disbarred and severely chastised a lawyer for appearing in court for a client while suspended from the practice of law, among other things, in Matter of Neal, 2003 NMSC 32, 134 N.M. 594, 81 P.3d 47. The court said the lawyer showed "disdain for the legal system," and "[t]he duty to represent his clients' interests fails to justify one's failure to obtain a continuance" or to make adequate alternate arrangements for the client.
State Bar Advisory Opinion 2001-1 advises lawyers against answering questions on a listserv or bulletin board service because of the possibility that the lawyer could be engaging in the unauthorized practice of law, depending on the location and jurisdiction of the inquiring party. If the lawyer determines that the inquirer is in a jurisdiction within which the lawyer may practice, the committee still recommends that the lawyer include a disclaimer saying that the answer does not constitute legal advice and that the inquirer should seek the services of a lawyer.
According to NM Attorney General Opinion 98-02, self-representation does not constitute the unauthorized practice of law. Therefore, organizations such as corporations and acequias may represent themselves at State Engineer administrative hearings.
5.5:210 Practice of Law by Nonlawyers
In State Bar v. Guardian Abstract & Title Co., 91 N.M. 434, 575 P.2d 943 (1978), the court explained that "the close regulation of those who practice law is to protect the unwary and the uninformed from injury at the hands of persons unskilled or unlearned in the law."
Licensed attorneys must therefore maintain meaningful communication with their clients, notwithstanding the support that legal assistants may provide. The court explained in Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999), that the "utilization of legal assistants if firmly established in our legal system. It is a practice that can provide cost savings to clients by allowing certain tasks to be performed by non-lawyers that otherwise would be performed by the lawyer. A lawyer cannot, however, abdicate all responsibilities to legal assistants. The lawyer has the primary responsibility for interacting with clients. In this instance, respondent had the responsibility to consult with the clients, .... Having a legal assistant conduct all meetings with the clients, during which the clients' objectives and the means for pursuing them are discussed and decided, raises serious questions about whether respondent aided in the unauthorized practice of law in violation of Rule 16-505(B)." See also Matter of Martinez, 107 N.M. 171, 754 P.2d 842 (1988) (an attorney violates this rule by hiring a legal assistant, but failing to make reasonable efforts to ensure that the assistant's conduct is consistent with his own professional obligations, but not finding a violation in that case because the attorney "was not privy" to the disputed proceedings).
In Matter of Martinez, 108 N.M. 252, 771 P.2d 185 (1989), the attorney was disciplined for not withdrawing from representation in litigation following suspension of his license in a way that made sure his client was not prejudiced by the withdrawal.
If any attorney aids a person not authorized to practice law in this state to engage in practice and holds that person out as his partner in advertising, such conduct constitutes a violation of the former disciplinary rule and warrants public censure. Matter of Bailey, 97 N.M. 88, 637 P.2d 38 (1981).
A New Mexico statute authorizing debt collection agencies to take assignments of claims in their own names as real parties in interest and to bring suit thereon, would not validate a collection agency's "unauthorized practice of law" in bringing suit on nominally assigned claims in New Mexico district court; the regulation of the practice of law is within the exclusive constitutional prerogative of New Mexico Supreme Court. Martínez v. Albuquerque Collection Services, Inc., 867 F. Supp. 1495 (D.N.M. 1994). See also Kolker v. Duke City Collection Agency, 750 F.Supp. 468 (D.N.M. 1990).
5.5:220 Admission and Residency Requirements for Out-of-State Lawyers
See NMR 15-101 et seq. for rules governing admission to the New Mexico Bar. Applicants must be 21 years of age, have a suitably qualifying law degree, be of good moral character and physically and mentally fit to practice, be in good standing if ever admitted in another state, and be "professionally qualified for admission to the bar of New Mexico." NMR 15-103(B).
5.5:230 Pro Hac Vice Admission [see also 8.1:240]
Section 36-2-27 of the New Mexico statutes says "nothing in this section shall be construed to prohibit persons residing beyond the limits of this state, otherwise qualified, from assisting resident counsel in participating in an action or proceeding."
In the United States District Court for the District of New Mexico, pursuant to D.N.M. LR-Civ. 83.3, an attorney residing outside New Mexico may participate in an action if the attorney is a member in good standing of the bar of any other state and associates with a resident member of the New Mexico bar who has gained admission to practice before the court as set out in D.N.M. LR-Civ. 83.2. The resident attorney must sign the first pleading, accept service and continue in the action unless another resident member of the Federal Bar is substituted. Otherwise, the attorney must gain admission by being a licensed member of the New Mexico bar and by gaining admission through D.N.M. LR-Civ. 83.2.
5.5:240 Performing Legal Services in Another Jurisdiction
NMR 16-505(A) prohibits lawyers from practicing law in another jurisdiction if doing so would be a violation of the regulations of the legal profession in that jurisdiction. If a lawyer is properly licensed in another state, New Mexico does not impose any restrictions upon that lawyer's practice of law in such state.
State Bar Advisory Opinion 2001-1 advises lawyers against answering questions on a listserv or bulletin board service because of the possibility that the lawyer could be engaging unauthorized practice of law, depending on how the inquiring party used the information the lawyer provides.
The attorney in Matter of Righter, 1999 NMSC 009,126 N.M. 730, 975 P.2d 343, was held to have violated NMR 16-505 by practicing law in the United States District Court for the District of New Mexico without proper admission to practice before that court pursuant to D.N.M. LR-Civ. 83.3.
5.5:300 Assisting in the Unauthorized Practice of Law
* Primary New Mexico References: New Mexico Rule 16-505
* Background References: ABA Model Rule 5.5(b), Other Jurisdictions
* Commentary: ABA/BNA § 21:8201, ALI-LGL § 4, Wolfram § 15.1
* New Mexico Commentary:
See Matter of Houston, 127 N.M. 582, 985 P.2d 752 (1999) (discussing attorney's required supervisory responsibilities over legal assistants).
1. The cutoff date for this edition is approximately year end 2003.
2. Contact Information: Charles A. Armgardt, (505) 848-1831; Fax: (505) 848-1891; Internet: carmgardt@modrall.com. Mr. Armgardt expresses gratitude to the summer associates at Modrall Sperling who provided assistance for this narrative.
