Ethics Opinon 1978-6
May the lawyer for a defendant to a suit brought in the Small Claims Division of Municipal Court contact the plaintiff and inform him that he will be sued in "regular" court if he does not drop his claim?
An attorney for a defendant to a small claims action may properly contact the plaintiff in said action and advise him that if the suit is not dropped, his client will file a counter-claim in Municipal or Superior Court provided that the following criteria are met:
1. The plaintiff is unrepresented by counsel and defendant's attorney has verified that fact. (Note that even a plaintiff in a small claim's action can be "represented" by counsel even though counsel may not appear for plaintiff in court.)
2. The defendant has a legitimate cross-complaint, under rules of pleading and practice, in excess of the jurisdictional limit of the Small Claims Division.
3. The attorney does not threaten or otherwise offer to carry out any action which he cannot properly bring as a cross-complaint to the initial suit and further that the attorney refrains from any harassment of the plaintiff or uses any harassing, coercive, or misleading language.
4. The attorney refrains from giving any advice on the law to the opposing party.
To the extent that any of the above criteria are not met, the conduct is, at best, lacking in the sensitivity that members of the Bar should show in dealing with laymen. If the plaintiff has, in fact, engaged counsel, then any communication with the opposing party will subject the attorney to disciplinary action under the California Rules of Professional Conduct. To the extent that the lawyer offers any advice as to the law, he violates the disciplinary rules of the A.B.A. Code of Professional Responsibility, but not the California Rules.
STATUTES, CANONS, OPINIONS, CASE AUTHORITY AND ANALYSIS
There are no canons or rules of professional conduct precisely on point. Neither do there appear to be any prior ethics opinions or cases dealing precisely with the question involved. Given, however, the precise circumstance where a defendant has a cross-complaint in excess of the jurisdictional limit of the Small Claims Division, then at the defendant's urging, it must be and is proper for the attorney for such a defendant to file such cross-complaint in the court of competent jurisdiction, as contemplated by Cal. Civ. Proc. § 116.8(b) and the rules requiring an attorney to zealously further his client's interests. Since it would be proper under those circumstances for an attorney to file such action, it follows that it must also be proper for the attorney to so notify the unrepresented plaintiff and, if authorized, to settle the claim. Within this narrow confine, however, two ethical problems arise: (1) the extent to which it is proper for an attorney to communicate with any opposing party other than counsel and (2) the nature of such a communication where permissible.
The A.B.A. Code of Professional Responsibility, in Canon 7 and in Disciplinary Rule 7-104, deals with the subject of communications with one of adverse interest. It provides that during the course of his representation of a client, a lawyer shall not communicate or cause another to communicate with a party he knows to be represented by a lawyer in the matter unless he has the prior consent of the lawyer representing such other party, or is authorized by law to do so. Also, a lawyer may not give advice to a person who is not represented by a lawyer other than the advice to secure counsel. Oddly, the parallel rule of the California Rules of Professional Conduct, Rule 7-103, prohibits a member of the State Bar from communicating directly or indirectly with a party whom he knows to be represented by counsel, but does not prohibit giving advice to a person who is not represented by counsel. Therefore, it would appear that under the California rules, so long as the plaintiff is not represented by counsel, defendant's attorney, acting as described above, does not subject himself to disciplinary action, even where his actions, as discussed later, violate ethical considerations.
If an attorney speaks with an opposing party on a matter in controversy, however, his first duty is to ascertain whether or not said party is represented by or has retained counsel (and in keeping with the provisions of the A.B.A. Code, he should advise such party to secure counsel.) If the opposing party does have counsel, any further communication without counsel's approval may subject the attorney to disciplinary action.
Upon verification that the opposing party is not in fact represented, the attorney may then communicate further, but he must walk a narrow path between avoiding the appearance of impropriety and performing his duty to his client. For example, Ethical Consideration 7-18 of the A.B.A. Code states, in part: "If one is not represented by counsel, a lawyer representing another may have to deal directly with the unrepresented person; in such an instance, a lawyer should not undertake to give advice to the person who is attempting to represent himself except that he may advise him to obtain a lawyer." Conversely, it is the lawyer's duty to pursue with zeal his client's cause and to give to the client his entitlement of the benefit of any and every remedy and defense that is authorized by law. The attorney must pursue any meritorious cause of action or defense. It is also significant to note that Rule 7-104 of the California Rules of Professional Conduct provides: "A member of the State Bar shall not threaten to present criminal, administrative, or disciplinary charges to obtain any advantage in a civil action, nor shall he present or participate in presenting criminal, administrative, or disciplinary charges solely to obtain an advantage in a civil matter." Since this rule proscribes only threats of administrative or criminal or disciplinary proceedings, it follows that a threat of a proper civil proceeding or defense, e.g., a suit in a "regular" court per Cal. Code Civ. Proc. § 116.8(b), must not violate the accepted rules of conduct nor result in discipline of said attorney.
If the cross-complaint or threatened suit is frivolous or intended to harass the plaintiff, then the threatening attorney would run afoul of Cal. Bus. & Prof. Code, § 6068(c), which provides that it is the duty of the attorney to counsel or to maintain such actions, proceedings, or defenses only as appear to him legal or just. In addition, California Rule 2-110 prohibits an attorney from accepting employment to prosecute or defend a case solely out of spite or solely for the purpose of harassing any person. If the threatened cause of suit is not one in the nature of a cross-complaint, then threat of such suit could result in a finding of harassment, violative of Rule 2-110. In a somewhat analogous situation, the Illinois State Bar Association has held a similar threat to be improper. See Illinois Opinion No. 163 (July 12, 1957), cited at § 924 of the Digest of Bar Associations Ethics Opinions (Olavi Maru, Ed., American Foundation, 1970), wherein they held that "where A sues B and it is grossly improper for B's counsel to approach C and threaten, if C doesn't settle with A, B will sue C in an unrelated matter." By analogy, it should also be improper for defendant's counsel in the questioned situation to threaten to sue the plaintiff in an unrelated matter, regardless of when the action is brought. Such an act could also be considered as unjust within the meaning of Cal. Bus. & Prof. Code, § 6068 and in violation of California Rule 2-110.
In addition, the insertion of counsel into a small claims proceeding, for purposes of escalating the controversy would give rise to an appearance of professional impropriety since it may be reasonably inferred that the lawyer has stirred up additional litigation to secure employment. In fact, if the tactic in question is suggested by the lawyer, it would be tantamount to stirring up of additional litigation and would be improper. Conversely, if the defendant himself insists upon suit of a legitimate cross-complaint in a higher court, then the attorney is bound by his duty to his client to bring such action.
An argument might be made that even if the defendant doesn't suggest it, it would be proper for the attorney to advise the takeover of his client's defense merely in the protection of the client's interests. However, this runs counter to the intent of the small claims procedure whereby the legislature has sought to remove attorneys from the process of settling such actions. In addition, there is little reason to assume that insertion of an attorney into the suit, via a filing of a claim in higher court, can further the client's interests. If the defendant loses in small claims court, either on plaintiff's cause of action or on a cross-complaint, he may then appeal in "regular" court and have a hearing de novo. Thus, the only purpose for the attorney to become prematurely involved (i.e., before the small claims court judgment has been rendered is simply to assure the attorney of a fee. Therefore, when the defendant's cross-complaint is less than the jurisdictional limit of the Small Claims Division or there is no cross-complaint, the questioned act is improper. Otherwise, it would appear that the attorney has initiated an action merely to provide employment for himself, as prohibited by the California Rules of Professional Conduct. See Mitton v. State Bar of California, 297 P.9 _? 2 Cal.113 (1931).
Assuming that the defendant does have a legitimate cross-complaint in excess of the small claims jurisdictional limit, thus causing a removal of the action from the Small Claims Division per Cal. Code. Civ. Proc. § 116.8, and further assuming that the attorney has satisfied himself that plaintiff has not retained counsel or is otherwise represented by counsel and assuming further that the defendant has authorized his attorney to drop the cross-complaint if plaintiff drops his suit, the attorney may properly correspond with the plaintiff and suggest such a settlement of the matter in controversy. He may still act improperly, however, unless he is careful in the way he communicates with the plaintiff. As noted above, per A.B.A. EC 7-18 and DR 7-104(A)(2), it is not only unethical, but violative of the disciplinary rule for an attorney to give any legal advice to a lay adversary. It has been held in Informal Opinion No. 1140 of the A.B.A. Committee on Ethics and Professional Responsibility that it was improper, for example, for an attorney to request an opposing party not represented by counsel to sign a waiver when the form waives the issuance of service, waives any right to contest the jurisdiction or venue of the court and agrees that the case be submitted to the court without further notice to the defendant. (However, a less sweeping waiver was found permissible in Informal Opinion No. 1269 where an unrepresented defendant was asked only to sign a waiver of the issuance and service of summons and entry of an appearance. The Committee held such to be proper under DR 7-104(A)(2) as long as the documents were not accompanied by or coupled with the giving of any advice to the defendant.)
Assuming that the defendant does have a legitimate cross-complaint in excess of the small claims jurisdictional limit, thus causing a removal of the action from the Small Claims Division per Cal. Code. Civ. Proc. § 116.8, and further assuming that the attorney has satisfied himself that plaintiff has not retained counsel or is otherwise represented by counsel and assuming further that the defendant has authorized his attorney to drop the cross-complaint if plaintiff drops his suit, the attorney may properly correspond with the plaintiff and suggest such a settlement of the matter in controversy. He may still act improperly, however, unless he is careful in the way he communicates with the plaintiff. As noted above, per A.B.A. EC 7-18 and DR 7-104(A)(2), it is not only unethical, but violative of the disciplinary rule for an attorney to give any legal advice to a lay adversary. It has been held in Informal Opinion No. 1140 of the A.B.A. Committee on Ethics and Professional Responsibility that it was improper, for example, for an attorney to request an opposing party not represented by counsel to sign a waiver when the form waives the issuance of and service of summons, waives any right to contest the jurisdiction or venue of the court and agrees that the case be submitted to the court without further notice to the defendant. (However, a less sweeping waiver was found permissible in Informal Opinion No. 1269 where an unrepresented defendant was asked only to sign a waiver of the issuance and service of summons and entry of an appearance. The Committee held such to be proper under DR 7-104(A)(2) as long as the documents were not accompanied by or coupled with the giving of any advice to the defendant.)
The offer of "settlement" by the attorney must avoid the appearance of coercion and should not frighten the unrepresented party. Also, Formal Opinion No. 58 of the A.B.A. Committee held that it was improper for an attorney representing a party seeking a divorce to confer with an adverse party for the purpose of persuading the adverse party to agree to the divorce. Informal Opinion No. 74, involving a situation concerning a complaint about two collection letters, states that it was improper for an attorney to communicate with a layman in such a manner as to give the appearance of threatening additional proceedings which had no direct connection with the action to collect the debts, even though the letters were adroitly worded to avoid any direct statement or advice as to the final result of the threatened remedies. Perhaps the most analogous prior opinion of the A.B.A. Committee is that in Informal Opinion No. 1034 which involved a letter sent by claimant's counsel to an insured party prior to institution of suit. The letter informed the insured that suit would be filed and offered to settle for the lesser of his insurance coverage or an amount stated in the letter. Here, however, the lawyer who wrote the letter had not taken the time to determine whether or not defendant was represented and the letter contained legal advice to the effect that an award of money damages in excess of the insurance coverage would render the recipient of the letter personally liable on such amount. The lawyer also attempted to settle the case and gave other advice as to the course of conduct which the lawyer thought the recipient should pursue, all of which was held by the committee to be improper. Therefore, it would appear that even in the limited situation wherein a communication on the subject in point is proper, the attorney must refrain from any threat of additional proceedings having no direct connection with the action involved, he must refrain from giving any advice (other than advice to seek counsel), including any advice to settle the case or drop the suit. The communication should be limited to a simple statement to the effect that if plaintiff proceeds with the action, then the defendant will file a cross-complaint in Municipal or Superior Court, as applicable, leaving any inferences to be drawn to the plaintiff, and, if authorized, offering (rather than advising) to settle the suit.
This opinion is advisory only. It is not binding upon the State Bar, the Board of Governors, its agents or employees.
Disclaimer: This opinion was issued by the Legal Ethics Committee of the San Diego County Bar Association. It is advisory only and is not binding upon any member of the SDCBA, any other member of the State Bar of California, the State Bar of California or its Board of Governors, or any persons or tribunals charged with regulatory responsibilities. The SDCBA, its officers, directors, agents, and the Legal Ethics Committee members assume no responsibility or liability in rendering this opinion.