In Re Robbins

Facts

D was admitted to the District of Columbia Bar in May 2001 and has no record of professional discipline. D was a partner at a law firm and responsible for one of the firm's clients, Persaud Companies, Inc. (Persaud), a government contractor and construction company founded and owned by its CEO Andy Persaud. D invited his friend and client, Gary Day, to serve as an indemnitor for Persaud's surety bonds on future projects. Hudson Insurance Company agreed to remain as surety on future projects with Persaud on two conditions. Hudson wanted Persaud to engage an escrow agent to receive and disburse funds from the government agencies with which it contracted. Hudson suggested Chesapeake Escrow Services, which D had formed with his sister earlier that year. Chesapeake agreed and D formally disclosed his conflict of interest to gain consent for his representation. Hudson wanted Persaud to add a third indemnitor. D knew Gary Day through the work D's firm had done for Day's family and the work D had done for Mr. Day, and D and Day had since become friends. D approached Day about this opportunity and explained the requirements.  D assured Day that Persaud and Andy Persaud had sufficient assets to protect Day in the event that Hudson paid a claim and sought indemnification. Day was not aware of D's interest in Chesapeake, whereas D testified that Day was aware because Day had seen the escrow agreements. Day understood that D would represent Day's interests in negotiating the terms of the indemnification agreement. Day wanted a contract where Hudson would look to Persaud and Andy Persaud before turning to Day. Day also requested a provision that would require his explicit approval before he indemnified future contracts, as well as a provision that both he and D would be notified of any future indemnifications. D did not obtain the provision in the agreement that would ensure that Hudson looked to Persaud and Andy Persaud before turning to Day. Based on reassurances from D, Day signed the indemnity agreement without reading or understanding it and did so again with each revised copy D sent him. Day trusted D. Day believed D was his lawyer, despite never receiving an invoice for services. Persaud began having financial problems and D did not inform Day. Persaud fell behind on its performance on one of the contracts on which Day was an indemnitor, became subject to a federal criminal investigation, and stopped escrowing funds with Chesapeake as required by its agreement with Hudson. D did not convey any of this information to Day. Hudson sent Day a demand letter for $1,215,242. Day emailed D the letter. D replied, 'It's all good . . . . I am working out with Hudson. You do not need to be concerned.' Day wrote back, 'Yeah, figured. Thanks for the update.' They also spoke over the phone. D failed to inform Day of any incidents related to the contract. In January 2013, Hudson filed suit against Persaud, Andy Persaud, and Day. Hudson sent a letter to the parties informing them that he was delaying service in hopes of working out a resolution. The letter referred to D as their 'former counsel.' D texted Day to say 'the Persaud crap is not good . . . . I think you are going to need to hire an atty to deal with the surety.' Day ultimately hired an attorney and paid $1.7 million to resolve the litigation. The Hearing Committee concluded that D had entered into an attorney-client relationship with Day and that he violated Rules 1.7 (b)(2), 1.7 (b)(4), and Rule 1.4 (a). The Committee recommended a sixty-day suspension and a four-hour CLE requirement for reinstatement. Virginia Bar Counsel filed identical charges against D in Virginia. The Virginia court dismissed the case with prejudice upon determining that the evidence of an attorney-client relationship between D and Day fell short of clear and convincing evidence, 'but barely so.'  D takes exception in part to the finding of an attorney-client relationship between him and Day

Issues

Rule of Law

Holding and Decision

Legal Analysis

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