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Keywords

attorneylawyersubpoenamotioncompliancelegal counselattorney-client privilege
attorneylawyersubpoenamotioncompliancelegal counselattorney-client privilege

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Board of Overseers of Bar v. Warren, 34 A.3d 1103, 2011 ME 124

Facts

The case arose from an investigation into the actions of six attorneys at Verrill Dana LLP concerning John Duncan, a former partner who misapplied client funds. After discrepancies were discovered in client accounts, the firm's managing partner, David Warren, and the executive committee delayed reporting Duncan's actions to the Board of Overseers of the Bar. Following an internal investigation and an independent audit, Duncan was ultimately terminated, and the firm reported his misconduct. However, Bar Counsel later alleged that the firm members violated bar rules by failing to report Duncan's actions in a timely manner.

The case arose from an investigation into the actions of six attorneys at Verrill Dana LLP concerning John Duncan, a former partner who misapplied client funds. After discrepancies were discovered in client accounts, the firm's managing partner, David Warren, and the executive committee delayed reporting Duncan's actions to the Board of Overseers of the Bar. Following an internal investigation and an independent audit, Duncan was ultimately terminated, and the firm reported his misconduct.

Issue

Did the members of the law firm violate the Maine Bar Rules by failing to report the misconduct of a former partner and by not having adequate measures in place to ensure compliance with ethical standards?

Did the members of the law firm violate the Maine Bar Rules by failing to report the misconduct of a former partner and by not having adequate measures in place to ensure compliance with ethical standards?

Rule

The court applied the crime-fraud exception to attorney-client privilege and evaluated the obligations under Maine Bar Rule 3.2(e)(1) regarding reporting misconduct and Rule 3.13(a) concerning the responsibilities of partners to ensure compliance with the Code of Professional Responsibility.

The court applied the crime-fraud exception to attorney-client privilege and evaluated the obligations under Maine Bar Rule 3.2(e)(1) regarding reporting misconduct and Rule 3.13(a) concerning the responsibilities of partners to ensure compliance with the Code of Professional Responsibility.

Analysis

The court determined that the crime-fraud exception did not apply because the firm was not engaged in fraudulent activity when it sought legal counsel. It also found that the six attorneys did not believe Duncan's actions raised a substantial question regarding his honesty or fitness as a lawyer, thus they did not violate Rule 3.2(e)(1). However, the court concluded that the firm failed to implement reasonable measures to ensure compliance with ethical standards, violating Rule 3.13(a)(1).

The court determined that the crime-fraud exception did not apply because the firm was not engaged in fraudulent activity when it sought legal counsel. It also found that the six attorneys did not believe Duncan's actions raised a substantial question regarding his honesty or fitness as a lawyer, thus they did not violate Rule 3.2(e)(1). However, the court concluded that the firm failed to implement reasonable measures to ensure compliance with ethical standards, violating Rule 3.13(a)(1).

Conclusion

The court affirmed the motion to quash the subpoena but vacated the judgment regarding the lack of violations of the Maine Bar Rules, remanding for appropriate sanctions.

The court affirmed the motion to quash the subpoena but vacated the judgment regarding the lack of violations of the Maine Bar Rules, remanding for appropriate sanctions.

Who won?

Verrill Dana LLP prevailed in the motion to quash the subpoena because the court found that the attorney-client privilege was not defeated by the crime-fraud exception.

Verrill Dana LLP prevailed in the motion to quash the subpoena because the court found that the attorney-client privilege was not defeated by the crime-fraud exception.

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