TRT, Inc. CLE Blog

 

A Minnesota lawyer was suspended after lying to opposing counsel and disciplinary authorities about whether he knew his client died before he settled the client's case (In re Lyons, Minn., No. A09-472, 4/8/10).  These false and misleading statements concerned a material fact, the court ruled in a per curiam opinion.  It suspended the lawyer indefinitely with no leave to apply for reinstatement for at least 12 months.  Thomas John Lyons, Jr. represented a man who had been erroneously reported to be dead by Trans Union LLC, a credit reporting agency.  Lyons filed suit against Trans Union under the Fair Credit Reporting Act in federal district court in Montana.   A Montana lawyer, Sean Frampton, served as local counsel.  On Oct. 7, 2007, while settlement negotiations were ongoing, Frampton sent Lyons an e-mail stating that the client was critically ill.  On Oct. 9, Frampton again contacted Lyons, saying that the client was going to be taken off life support that day, and that the client's wife wanted Lyons to settle the suit.  Lyons confirmed that he would do so.  He also inquired about the funeral.  The client died that day.   On Oct. 26, Trans Union offered to settle the case for $19,000.   Without mentioning the client's death, Lyons accepted the offer.  He later told Trans Union that the client was hospitalized and that the release was being signed “by his wife or power of attorney.”  When the release was ultimately signed by the client's wife as personal representative of her husband's estate, Trans Union e-mailed Lyons asking if the client had died.  Lyons responded “Yes—HOW IRONIC.”  Trans Union pressed Lyons to say when he learned of the client's death.  Lyons replied that the client had died and that he had learned of the client's death after the parties agreed to settle.  Trans Union insisted that it was not bound by the settlement.  Litigation was resolved when Lyons agreed to pay $7,500 to the client's wife.  Lyons told disciplinary authorities that he had learned of the client's death in early November, after the settlement had been negotiated, and he likewise testified at the disciplinary hearing that he did not recall receiving actual notice of the client's death until after he reached a settlement with Trans Union.  However, Frampton testified in his deposition that he told Lyons of the client's death within a short time — a day or two — after the client's death.  The referee found that Frampton had informed Lyons within a week of the client's death.  Lyons was found to have violated several provisions of the Montana Rules of Professional Conduct: Rule 3.3(a)(1) (false statement of material fact to tribunal), Rule 4.1 (false statement of material fact to third person), Rule 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation), and Rule 8.4(d) (conduct prejudicial to administration of justice).  The Minnesota Supreme Court noted that application of the Montana disciplinary rules to Lyons's conduct in connection with the litigation was appropriate under Rule 8.5(b)(1) of the Minnesota Rules of Professional Conduct, which provides that in Minnesota's exercise of disciplinary authority, the rules to be applied for conduct in connection with a matter pending before a tribunal are the rules of the jurisdiction in which the tribunal is located.  Determining what sanction was appropriate, the court characterized Lyons's misconduct as serious.  Lyons made false and misleading statements to disciplinary authorities during their investigation when he asserted that he did not learn of the client's death until after the settlement was negotiated, and he gave false and misleading testimony on the same subject at the disciplinary hearing, the court explained.  The court also said that “Lyons' false and misleading statements to opposing counsel about whether he knew of his client's death before the parties reached a settlement concerned a material fact.”  As authority, the court cited In re Forrest, 730 A.2d 340, 15 Law. Man. Prof. Conduct 320 (N.J. 1999), and Harris v. Jackson, 192 S.W.3d 297 (Ky. 2006), along with an earlier Kentucky case that quoted ABA Formal Ethics Op. 95-397 (1995).