STATEWIDE GRIEVANCE COMMITTEE

Patricia Feeley, Complainant vs. Hale Sargent, Respondent

Grievance Complaint #97-1033B

DECISION

Pursuant to Practice Book §2-35, the undersigned, duly-appointed reviewing committee of the Statewide Grievance Committee, conducted hearings at the Superior Court, 1061 Main Street, Bridgeport, Connecticut on January 13, 199 and July 7, 1999. The hearings addressed the record of the complaint filed on June 24, 1998, and the probable cause determination filed by the Stamford/Norwalk Judicial District Grievance Panel on September 24, 1998, finding that there existed probable cause that the Respondent violated Rules 1.4(a) and (b), 1.7(a) and (b), 1.15(a), 2.2(a) and 8.4(3) of the Rules of Professional Conduct.

Notice of the January 13, 1999 hearing was mailed to the Complainant and to the Respondent on November 30, 1998. Notice of the July 7, 1999 hearing was mailed to the Complainant and to the Respondent on June 8, 1999. The Complainant and the Respondent appeared at the hearings and testified. Attorney Lawrence P. Weisman represented the Complainant at the January 13, 1999 hearing. The Complainant appeared pro se at the July 7, 1999 hearing. Attorney Thomas Sargent testified for the Respondent and Dr. Jonathan E. T. Kelley testified for the Complainant at the hearings. Exhibits were admitted into evidence.

At the time this reviewing committee heard this matter, it also heard Grievance Complaint #97-1033A, Patricia Feeley v. Thomas Sargent. Reviewing committee member Michael Goodman was unavailable for the January 13, 1999 hearing but reviewed the transcript of that hearing as well as the entire record prior to his participation in the decision of this case.

This reviewing committee makes the following findings by clear and convincing evidence:

The Respondent and his brother, Thomas, are partners in the Westport law firm of Sargent & Sargent. The Complainant was a longtime client of the Respondent's firm, and from time to time the Respondent had provided specific legal services to the Complainant. In August of 1990, the Respondent applied for a conservatorship of the Complainant with the Norwalk Probate Court. At that time, the Complainant had become reclusive and her home was threatened with imminent foreclosure. The Norwalk Probate Court granted the application and appointed the Respondent as the Complainant's conservator in or around October, 1990. Thereafter, the Respondent, assumed control of the Complainant's considerable finances. The conservatorship lasted until November, 1996. In the interim, the Respondent provided the Complainant with periodic accountings of his work and prepared a final accounting in 1996 that was approved by the Norwalk Probate Court.

In March of 1992, the Respondent loaned $59,180.00 of the Complainant's money to a cash strapped client, Mr. Drew Friedman. At that time, the Respondent represented Mr. Friedman in litigation with Ms. Gertrude Restivo of Westport. The Respondent represented both the Complainant and Mr. Friedman in this transaction. A portion of the loan went to settle the litigation and $12,000.00 of the loan went to Sargent & Sargent to pay down Mr. Friedman's outstanding legal bill with the firm. The loan was evidenced by two promissory notes that together equalled the above figure and was secured by a mortgage on property in Westport. The loan paid monthly interest only at the rate of twelve percent per annum, with the principal due in March, 1994. The principal was not paid until February, 1998, although Mr. Friedman continued to pay monthly interest until that time. Apart from a letter to Mr. Friedman encouraging him to pay off a portion of the principal, the Respondent took no other substantive steps to enforce the loan principal's payoff schedule after March of 1994.

This reviewing committee also considered the following evidence:

The Respondent testified that prior to the loan he spoke in person with the Complainant and obtained her consent to make the loan. The Respondent testified and presented evidence that as early as April 1991 it was his opinion that the conservatorship was no longer necessary. Nonetheless, the Respondent remained the Complainant's conservator at her request until 1996. The Complainant denied any in person conversation with the Respondent regarding the loan. Dr. Jonathan Kelly testified that the Respondent and the Complainant talked on the telephone once and the Respondent asked if he could loan $20,000.00 to someone.

The Respondent testified that he believed that the loan was in the Complainant's best interest because it paid her a higher rate of return than the rate made in its prior position, a NOW account. The Respondent admitted that he should have better explained the terms of the loan to the Complainant, including the fact that Sargent and Sargent would be paid legal fees from the loan. The Respondent testified that since he had known the Complainant for many years, and considered her a friend as well as a client, that his efforts at obtaining her consent were more lax than was appropriate.

This reviewing committee finds the following violations of the Rules of Professional Conduct by clear and convincing evidence:

We conclude that the Respondent violated Rules 1.4(b), 1.7(b) and 2.2(a) of the Rules of Professional Conduct. There was clear and convincing evidence that the Complainant was a longtime client of the Respondent's firm and had every reason to believe that the Respondent would protect her legal interests during the period of her conservatorship. There was clear and convincing evidence that the Respondent failed to adequately explain the nature and extent of the loan to the Complainant, in violation of Rule 1.4(b) of the Rules of Professional Conduct. We also conclude that the Respondent violated Rule 1.7(b) by failing to obtain the Complainant's consent to the use of a portion of the loan to pay down legal fees and by failing to address the failure of Mr. Friedman to pay off the principal when it was due in 1994. Finally, we conclude that the Respondent violated Rule 2.2(a) of the Rules of Professional Conduct by acting as the intermediary between the Complainant and Mr. Friedman for purposes of this loan without obtaining the proper consent from the Complainant.

We do not believe that the Respondent made this loan with a deceptive or fraudulent intent, and thus find no violation of Rule 8.4(3). We also conclude that there was not clear and convincing evidence that the Respondent failed to safeguard the Complainant's assets in violation of Rule 1.15(a) or to keep her informed of their status in violation of Rule 1.4(a). Finally, the legal representation of both the Complainant and Friedman, without more, was not a conflict of interest in violation of Rule 1.7(a).

This reviewing committee acknowledges with appreciation the blunt candor exhibited by the Respondent at our hearings. The Respondent readily admitted that he should have gone to far greater lengths to obtain the Complainant's consent to this transaction. We find credible the Respondent's explanation that the loan was made, in part, to provide a longtime client and friend with a steady monthly income. The efforts to obtain the client's consent, however, fell short of the criteria required by the Rules of Professional Conduct.

We reprimand the Respondent for his violations of Rules 1.4(b), 1.7(b) and 2.2(a) of the Rules of Professional Conduct.

Attorney Lewis Hurwitz

Attorney Alfred Belinkie

Mr. Michael Goodman