In Re Conduct Of Baer

688 P.2d 1324 (1984)

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Nature of the Case

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Facts

The Petersons owned a home. Mrs. Baer, wife of the accused, visited the Petersons residence and became interested in purchasing the property. Negotiations were commenced, and Mr. Baer (D) suggested that if they let him do the legal work they would save several thousand dollars. The original sales price was $62,500, and that was reduced to $59,500 to reflect the savings in legal costs. D did not disclose that he was representing only his wife's interests but did tell the Petersons they could have another attorney check his work if they chose to do so. D did not clarify the need for independent legal advice nor did he inform the Petersons that he was not representing them. They thought that D was representing them. They asked legal questions during the transaction and D answered them. D also gave them tax advice. D prepared all the documents for the transaction and acted as escrow agent in closing the property. During the closing, D told the Petersons that if anything went wrong, they could look to his malpractice insurance. According to the earnest money agreement, Mrs. Baer was to make a down payment at closing, assume the Petersons' mortgage and pay the remaining balance of $29,500 no later than April 2, 1981. Upon payment of the $29,500, Mrs. Baer was to receive a warrant deed previously signed by the Petersons and left in escrow with D. D told the Petersons that if the final payment was not made that they would get their house back and keep the money. Mrs. Baer was not able to sell her former residence and was thus unable to make the final payment. The Petersons attempted to repossess the house but were advised by D that the agreement was not a contract for sale but a simple, earnest money agreement. D then advised the Petersons that Mrs. Baer held an ownership interest in the house and if they wanted the house back they would have to sell it and refund his wife her money. The Petersons hired an attorney, and that attorney gave D a chance to settle the matter immediately due to the severe conflict of interest. D filed suit on behalf of his wife. D was charged with a violation of DR 5-101(A) and 5-104(A). D was found guilty and was recommended to receive a public reprimand and take and pass the legal ethics exam. D was then recommended to be suspended for 30 days and to take and pass the legal ethics exam. D appealed.